Incentives for energy conservation in rental houses in smart energy systems

In Denmark the official policy is to reduce heat loss in buildings by 40-50% and the consumption of fossil fuels by 100% before 2050. This means that at the supply side we are changing from stored fossil fuels to largely fluctuating renewable energy in combination with some biomass. In order to implement large shares of fluctuating renewable energy sources, mainly wind and solar energy it is necessary to integrate power production with heat and transportation. This means that when there is a lot of wind power for instance, this can be stored in hot water tanks for later use as heat. Or in batteries for later use in cars. Concurrently some wind power is transformed, to different fuels and syngas as energy supply for periods with no wind and or no sun. And in order to integrate fluctuating wind power into the smart energy system, it is economical to have large hot water tanks, which only are useful in district heating systems. The questions now is; how can reduction in the heat loss of buildings be combined with the development of integrated smart energy systems? This has to be done in the right way, by which we mean by developing low temperature district heating systems that fits to the introduction of an efficient heat supply systems mainly based on the use of large heat pumps. So the improvement of the houses should be introduced in such a way that the houses can be heated by means of low temperatures. This fits well with insulation of the houses, as better insulated houses can get heated with less heat which in the same pipes can be supplied with lower temperature. So it is possible, but it requires a planning where the house insulation is synchronized with the new heat supply district heating systems. What also is important is that the improvement of the energy efficiency of the houses is done in time, so that the energy supply systems are dimensioned to the future energy standards. If this time synchronization of house improvements and the investments in the supply system is not done, we risk a supply system that is oversized and therefore to expensive. But it is not from a policy point of view easy to establish incentives that furthers this optimal time synchronization of supply and demand measures.As a conclusion in the article, we will recommend policies that both make sure that the right type of house improvements are implemented and that this is done in such a way that investments in the supply and demand systems in an optimal way.