The effect of fuels and other variables on the price of district heating in Finland

Tapio Ranta, Antti Karhunen and Mika Laihanen

Renewable and Sustainable Energy Reviews, 2025, vol. 209, issue C

Abstract: District heating is the most common form of heating in Finland. In 2020, approximately 45 % of the heating energy in residential and service buildings in Finland was produced by district heating. The use of biomass has doubled, and waste heat tripled in the 2010s as they have replaced fossil fuels and peat. This study examined how the use of fuels and other variables have affected the price of district heating. The price of district heating varies widely between different companies, which is assumed to depend mostly on the fuel options. The arithmetic average of district heating companies' taxable sales price of district heat in January 1, 2023 was 91.2 €/MWh. This price was for an apartment building customer, who is the most typical district heating customer. The cheapest district heating was produced with wastes and with peat and the most expensive with fossils and pellets. The study found that the price of district heating varies widely between different companies (52.8–137.5 €/MWh). At its largest, the price difference for average fuel-specific category prices was 16 % (13.6 €/MWh). The price difference compared to fossil fuels has increased with the energy crisis. The price of wood fuels has also risen, as their use has increased, and Russian imports have ended. Therefore, the higher average price of the fossil fuel category was expected, together with higher taxation and price of emission allowances.

Keywords: District heating; Combined heat and power generation (CHP); Fuel; Competitiveness; Forest chips (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1016/j.rser.2024.115086

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