District heating network ownership and prices: The case of an unregulated natural monopoly

Abstract

The price of district heating in Sweden is unregulated and differs substantially among different networks. This paper investigates if the price variation can partly be explained by whether the district heating network is privately or municipally owned. The empirical analysis is based on district heating prices, ownership status, and network characteristics for the 2012–2017 period. The results show that prices are higher in privately owned district heating networks than in municipally owned networks, especially in the fixed component of the price. Municipal and private providers' divergent objectives may be part of the explanation for these differences.

Topics & Concepts