Oulun Energia's district heating the most affordable in Finland—why are there regional differences in district heating?

04.04.2022

When it comes to district heating, it is often thought that the generation structure and, for example, the price development of district heating companies are similar throughout Finland. In reality, each energy company's district heating generation is unique, which is why regional differences in district heating are also significant. The most typical gauges of the regional differences of district heating are its price and the carbon dioxide emissions released from its energy generation.

Oulun Energia has worked long term to develop the generation structure of district heating, which is why we stand out in our favor in regional comparisons as most affordable district heating producer when the 13 largest cities in Finland are compared. So what have we done differently in Oulu than elsewhere, and why are there regional differences between district heating companies?

The price and environmental impact of district heating go hand in hand

Oulun Energia's district heating generation is largely based on the use of renewable energy sources and the utilization of waste heat, which allows for an affordable price of district heating now and in the future. Switching to renewable energy sources is both an environmentally friendly and cost-effective choice for energy companies, as they buy expensive emissions allowances to compensate for the use of fossil fuels, which in turn is directly reflected in consumer prices.

When comparing the total price of district heating energy for different property types, the heat produced by Oulun Energia has long been the cheapest among the 13 largest cities in Finland. Based on a regional price comparison carried out at the beginning of 2022, the district heating generated by Oulun Energia for apartment buildings was 15.72% cheaper than the average among the group. In the same price comparison, district heating in Oulu was more than 32% cheaper than in Helsinki. We are constantly working to ensure that district heating in Oulu will continue to be affordable for all different property types.

Oulun Energia's position in the city comparison of district heating pricing for apartment buildings on January 1, 2022. The price shown includes the fixed fee and the energy fee. Source: Finnish Energy.

Currently about 70% of the district heating generated by Oulun Energia is completely carbon neutral. Environmentally friendly generation of heat is constantly being developed and in the coming years, peat, for example, will be increasingly replaced by renewable and recycled fuels.

Oulun Energia has steadily increased the use of renewable energy sources, and by 2035, all of the district heating generated will be completely carbon neutral. District heating customers can already purchase carbon-neutral district heating generated completely with renewable energy sources that is certified by an external and independent party. During April 2022, Oulun Energia will apply for the district heating system of guarantees of origin, after which the Energy Authority will be responsible for ensuring the origin of district heating.

The condition of the district heating network is crucial

Regional differences are also affected by the condition, extent, and development of the district heating network. Oulun Energia is proactively developing its generation structure, which together with an efficient district heating network will allow for moderate price development and provide it better opportunities in the future as well.

A new district heating network will be built in conjunction with growing residential and business districts, and the condition of the old network is constantly monitored. During each year, Oulun Energia has an average of more than 200 district heating network renovation and new construction sites underway. Indeed, the district heating network is in excellent condition in Oulu and the integrity of the heat distribution is monitored around the clock. In 2021, the security of district heating supply was a whopping 99.957%.

The district heating network is available throughout the Oulu urban area, and the heating network also covers significant neighboring areas in Haukiputaa, Jääli, Kiiminki, and Oulunsalo. Today, the length of the district heating network is a massive 870 kilometers, which is equivalent to the distance from Helsinki to Pello by road!

Waste heat is utilized as a source of energy for district heating

The price of district heating reflects not only the fuel used and the condition of the heating network, but also how efficiently the heat generated can be utilized along the district heating network. Examples of the excellent utilization of waste heat include the condensate heat generated by and recovered from industry and grocery store equipment. The collected waste heat is recycled in the district heating network, from where it is used to heat the homes of the area, for example. In the future, innovative solutions for the recovery and utilization of heat will play an increasingly important role as part of Oulun Energia's district heating generation.