Few would dispute that a green transition is urgently needed to minimise the serious consequences of climate change, which are already evident today.
The district heating sector, like all parts of the energy system, has a clear responsibility to play its part in this transformation. But success will depend on looking beyond narrow, national perspectives and recognising that Europe’s energy transition must be planned and managed across borders.
By Lars Gullev, Founder and CEO, Gullev DH Advisory
Published in Hot Cool, edition no. 5/2025 | ISSN 0904 9681 |
From energy policy to security policy
Only a few years ago, energy policy was largely a national matter, focused mainly on supply and price. That changed dramatically on 24 February 2022, when Russia launched its full-scale invasion of Ukraine. Since then, it has become clear that energy and climate policy are inseparably linked to security policy.
The green transition is no longer just about reducing emissions – it is also about ensuring that Europe is no longer dependent on Russian fossil fuels. The EU has already made significant progress: Russian pipeline gas imports have fallen from over 40% in 2021 to around 11% in 2024, and total Russian gas imports (including LNG) now account for less than 19% of the EU’s total. The goal is a complete phase-out, with spot market purchases ending by 2025 and long-term contracts by 2027.
A smarter, stepwise transition
The decarbonisation of the district heating sector must be done intelligently. The quickest and cheapest way to cut energy use is not to consume it – energy efficiency should be the first step. Next, we must reuse what we already have, such as industrial and data centre waste heat. Finally, the remaining heat demand must be met with renewable sources such as geothermal, large-scale heat pumps, solar thermal, and sustainable biomass.
Put simply: Reduce → Reuse → Renewable.
Alongside this roadmap, future district heating must solve the “trilemma” of being reliable, cost-competitive, and green. Only two of these three factors can be fixed at any one time – the third will inevitably be shaped by the other two. For example, if prices are uncompetitive, customers will switch to other heating options, undermining the economic viability of the network.
Transition takes time – and planning.
In an ideal world, we would rapidly replace fossil fuels – natural gas, coal, and oil – with fully electrified district heating, powered by waste heat, geothermal, and renewable electricity from solar and wind. But total electrification requires massive expansion of the electricity grid, as well as new renewable generation capacity. That takes time.
Many fossil-based heating plants are also not yet technically obsolete. Scrapping them now would mean wasting assets that could still serve for years. For these reasons, it can make sense to take an intermediate step: replacing coal with biomass or natural gas, then converting to green electricity when the grid and generation capacity are ready.
This is not a one-step solution, but a phased transition that maintains both security of supply and competitive prices during the changeover.
The Danish dilemma in the EU context
Denmark’s case shows why national decisions have European consequences. In June 2022, four months after the Russian invasion of Ukraine, a large majority in the Danish Parliament agreed that all gas in Denmark should be green by 2030, and that from 2035, no gas would be used for home heating. Existing natural gas customers would be converted to green district heating or individual heat pumps. This would allow Denmark to export surplus green gas to EU countries less able to switch to district heating.
However, three years later, the political will to commit to this gas phase-out appears to be weakening. The government now argues that because gas will be green in 2035, a complete phase-out for heating is unnecessary. This delay is slowing conversions from individual gas to green district heating, and in some areas, projects have been abandoned entirely.
From a broader EU perspective, this is illogical. Denmark has the technical and economic capacity to meet its own heating needs with green heat, freeing up green gas for export to other member states that lack similar district heating opportunities.
A call for European solidarity
Energy systems do not stop at national borders. If we are to end reliance on Russian energy, reduce emissions, and ensure affordable heating for all Europeans, we must coordinate our strategies. That means recognising when one country’s resources can be better used elsewhere – and having the political courage to act on it.
Leaving behind the insular mindset is not simply about altruism; it is about building a stronger, more resilient Europe. If we act in isolation, we risk undermining both our climate goals and our collective energy security. If we act together, we can make the green transition faster, smarter, and fairer for all.
“Breaking the Insular Mindset – THE GREEN TRANSITION NEEDS CROSS-BORDER THINKING” was published in Hot Cool, edition no. 5/2025. You can download the article here:
