This article is based on a Coasian approach, where information costs and concrete institutional structures are at the centre of the analysis. This approach is applied for the purpose of understanding the role of consumer ownership in the district heating sector. An ownership model which has been shown to be the most efficient in Denmark. Through a detailed empirical case study, it is shown how private commercial companies have avoided the state regulatory monopoly price regulation and inflated consumer prices. The case study also describes how changes in ownership immediately led to price reductions. It is concluded that the consumer ownership model has played a vital role in getting price regulation to succeed and thereby consumers to trust and accept the district heating systems in Denmark. This result is an important contribution to heating policy development as well as monopoly regulation theory.
Søren Djørup, Ole Odgaard, Karl Sperling and Henrik Lund