A review of the pricing mechanisms for district heating systems

Heating represents the largest proportion of energy use as supplied to consumers across all end energy uses. Therefore, there is huge potential for energy savings in the heating sector in order to reduce the emission of CO2. District heating (DH) has been considered an efficient, environmentally friendly and cost-effective method for heating in buildings, and is playing an important role in the mitigation of climate change. In the interest of fairness and in the highly competitive market the DH companies operate, there is a strong need to develop a novel heat pricing mechanism in order to promote sustainable development of DH systems. In this paper, existing methods and models regarding heat pricing have been reviewed. The features of different pricing mechanisms have been analysed, including advantages and disadvantages. Insights into developing an advanced pricing mechanism for DH systems have been offered. (C) 2014 Elsevier Ltd. All rights reserved.