District heating capacity charges: the figure that stays for a year.

What is on a district heating invoice?

District heating looks like a simple product. You buy heat, you pay per megawatt-hour, and the rest is detail. On most invoices the energy is only one of four lines, and the other three behave entirely differently.

Take out the invoice and look for them. The energy charge per megawatt-hour follows how much heat you drew. The standing charge sits there regardless. The capacity charge is set by how high your draw has been at its peak, and the flow charge by how many cubic metres of water passed through the undercentral, your district heating substation. That last one is easy to miss, and it has no counterpart on the electricity grid.

Which of them you have depends on the supplier. Across the price lists of 128 district heating suppliers with tariffs for apartment buildings, 441 tariffs in total, the components appear this often:

Almost everyone charges for the energy. After that the suppliers choose freely, and 99 of the 128 have a capacity charge on at least one of their tariffs. That is the line that tends to surprise people. Unlike the energy charge it does not follow consumption month by month; it is usually locked by a handful of days and then stays put. 55 of the 128 also have a flow charge.

On 12 of the 441 tariffs the price list records no pricing structure at all.

A few suppliers have a fifth component: a surcharge or credit that follows the return temperature. We find it on 8 tariffs across 7 suppliers, among them Göteborg Energi and Stockholm Exergi. It rewards the same thing the flow charge does, cooling the water.

The flow charge, which has no equivalent on the grid

The flow charge is district heating's own construction, and it rewards something different from the other components.

You pay per cubic metre of water passing through your district heating substation, the undercentral. How much water you need depends on how much heat you manage to extract from each cubic metre, in other words on the difference between the supply and return temperatures. A building that cools the water properly needs less flow for the same heat and therefore pays less.

That makes the flow charge the one of the four that most directly reflects how well the heating system is balanced and how good the cooling is. Poorly balanced radiators and misadjusted throttle valves show up here before they show up anywhere else.

What does a kilowatt cost?

We converted every priced capacity line in our tariff material to kronor per kilowatt and year including VAT, 1 094 lines across 83 suppliers. Taken per supplier, the median lands around 990 kronor.

That makes the district heating capacity element dearer per kilowatt than the grid's, where the equivalent median is around 760 kronor. A tenth of suppliers sit below 418 kronor per kilowatt and year and a tenth above 1 658, so the spread is wide here too, if less dramatic than on the grid.

Every kilowatt you shave off the dimensioning period is therefore worth on the order of a thousand kronor a year. The difference from the grid is that the figure stays put.

How often is the charge reset?

This is the sharpest difference from the electricity grid.

Of the 274 district heating tariffs that charge for capacity, 221 set the charge annually and only 6 monthly. On 47 the price list does not state the period. Of those where it is stated, 97 percent are annual.

In the electricity grid it goes the other way, though less uniformly: there 107 of the tariffs with a stated period are monthly and 46 annual. The difference is practical. A cold week in January can set your district heating capacity charge for the whole coming year, while the same week on the grid usually only affects January.

That is also why the district heating capacity element is worth taking seriously. The price per kilowatt already covers a whole year, and the kilowatt figure that a handful of cold days set stays in force for all twelve months. There is no next month to correct it in.

One term, five different ways of counting

The term capacity charge hides several different methods, and two suppliers with the same price per kilowatt can still produce very different invoices. These five occur, and we name a supplier as an example only where that supplier's own price list says so explicitly.

Highest daily mean

A day's heat consumption divided by 24 hours, then the highest value across a rolling twelve-month period. C4 Energi calculates this way.

A single cold night therefore does not hit as hard as a single cold hour would. It is the day as a whole that counts.

Mean of several peaks

The same principle, smoothed across several days. Göteborg Energi's standard tariff for business and property customers uses the mean of your three highest daily means over the most recent rolling twelve-month period. The same supplier also has an alternative tariff where you instead subscribe to a capacity you choose yourself, which is the last method below.

That makes isolated exceptional days less dangerous, and at the same time means a pattern of recurring peaks costs more than a one-off event.

Highest daily mean inside a temperature window

Borlänge Energi reads off a peak, but only within a narrow temperature band: the highest daily mean over twelve months, counting only days between −20 and −14 degrees.

The supplier is explicit that this is neither an ordinary peak measurement nor a regression method, but something of its own.

Temperature calculation, energisignatur

Instead of reading off a peak, the supplier calculates what the property would need at a given outdoor temperature. Norrenergi calls it värmesignatur and fits a linear relationship between your daily mean load and the daily mean temperature at SMHI's measuring point in Bromma. If your readings show no clear relationship, the mean of the two most recent heating seasons' highest daily mean is used instead.

An agreed or recommended level

Here no peak is measured. Instead a level is set in advance, either one you subscribe to yourself or one the supplier calculates for you. Stockholm Exergi starts from what the property is calculated to need at −10 degrees, Stockholm's reference temperature according to SMHI, and sets that as a recommended capacity based on weekday measured load.

On such a tariff the capacity charge does not change because of one cold week. It changes when the level is recalculated, usually once a year, and because Stockholm Exergi recalculates it from measured load, a sustained reduction reaches the invoice the following year. The week can still cost you: if your daily mean load exceeds the supplier's capacity limit at −3 degrees while the daily mean temperature is actually below −3 degrees, an extra energy cost applies to the volume above the limit.

What you can do with that

The methods reward different things. Against a highest daily mean it helps to avoid the single worst day, and against a mean of several peaks to smooth the whole winter. A temperature window moves the question to a handful of cold days, but inside the window the peak counts just as it otherwise would. A temperature calculation factors the weather out, so there only a real change in how the building uses heat helps. On an agreed level there is no peak to shave.

So the first step is finding out which method applies to you, and unfortunately it is not always written in the price list.

Why does heat cost different amounts by season?

Just under a quarter of the tariffs, 100 of 441, price energy differently by season. The winter price per megawatt-hour can be several times the summer price, so the same consumption costs different amounts depending on when it happens.

Price changes are negotiated at many suppliers within Prisdialogen, which also publishes which suppliers take part.

This is related to the capacity element but is not the same thing. The seasonal price applies to all consumption during the period, not only to the peaks.

How to find out what applies to you

1. Take your district heating invoice and see which of the components appear on it. Look in particular for a line in kronor per cubic metre, the flow charge, which is easy to miss.
2. Check whether the capacity line covers a year or a month.
3. Look for how the billed capacity is calculated. If it is not on the invoice it is often in the price list or the delivery terms, and otherwise it is a reasonable question for customer service.
4. Look the supplier up in Effekttariffkollen, where we have collected current price lists for 275 grid and district heating companies with a source reference for every tariff.

If you also have grid charges to go through, the equivalent is in the guide to grid capacity charges.

Is the capacity element worth chasing for you?

The district heating capacity element is often the line on the heating bill you have most control over, precisely because it is set by a handful of days and then follows you for twelve months.

PropSaver controls heating on measured indoor temperature rather than a fixed heating curve, which smooths the draw across the day. On tariffs that measure a peak, that lowers the billed capacity. On an agreed level you chose yourself it does nothing to the capacity element, and the gain lies in the energy charge and, if you have one, the flow charge. Where the level is recommended and recalculated from measured load, a sustained reduction does reach the capacity element, but a year later. We would rather say that than claim a saving that is not there.

The board always sets the limits, for instance the lowest permitted indoor temperature. We do not sell electricity or heat.

If you want to know which method applies to you, we go through the invoice, the price list and the delivery terms, look at your cooling and what the flow charge costs you today, and produce an assessment for your specific property. Start by looking the supplier up in Effekttariffkollen or fill in the form below, and we will come back to you at no cost or obligation.