## 2 Thematic Review and Analysis
### Implementation Strategies
#### 2.6.1 Tariff Structures
The tariff set a threshold at 42.9 \({}^{\circ}\)C, with pricing for both bonuses and penalties calculated at EUR 0.098 per GJ per \({}^{\circ}\)C. Middelfart Fjenvarme, a DH operator affiliated with TVIS, adopted this incentive structure, projecting savings of EUR 51,000 per degree Celsius reduction in heat purchase costs and EUR 14,700 per degree Celsius in DH network operational costs, translating to a cost reduction of up to 20% and a surcharge increase of up to 205%. Additionally, a dynamic threshold for the return temperature was established, adjusting according to the DH supply temperature, as illustrated in Figure 16 [94; 133; 134]. [PERSON] et al. [135] report that Goteborg Energi AB employs a similar tariff structure. [PERSON] et al. [92] further detail that a comparable tariff is used in the Copenhagen area, where the reference threshold for the average return temperature is set at 33 \({}^{\circ}\)C, with a natural band of 10 \({}^{\circ}\)C (ranging from 28 \({}^{\circ}\)C to 38 \({}^{\circ}\)C). The pricing for bonuses and penalties is set at EUR 0.71 per MWh\({}_{\text{th}}\) per \({}^{\circ}\)C, based on an exchange rate of DKK/EUR = 0.106. In Sweden, the incentive tariff is determined using a formula that considers both the flow rate and heat consumption during a monthly metering period. The approach involves establishing a reference temperature level based on annual theoretical analysis. Each consumer substation is then evaluated based on recorded heat and flow consumption to determine the applicable reward or penalty. The Malmo DH system in Sweden is noted as a success story with this tariff. Prior to its implementation in the early 1990s, the supply-return temperature differential was below 30 \({}^{\circ}\)C between November and March. Overthe next 10 to 12 years, the incentive tariff improved this differential to 43 \({}^{\circ}\)C. The Malmo DH company did not gain financially from penalties; rather, the true benefit came from the reduced supply-return temperature differential. However, the tariff's effectiveness was diminished due to inadequate consumer education, highlighting the critical role of customer awareness in maximizing the benefits of such incentive schemes [46]. Alternative Pricing Models  
When selecting pricing models as alternatives to incentive tariff systems, several strategies warrant consideration. One approach involves basing the pricing model on the internal energy of the delivered volume, specifically the thermal capacity of the DH water, irrespective of how it is utilized or cooled at the consumer site. In this model, the cost of DH water is determined by the quantity consumed, with higher prices associated with higher supply temperatures. The onus of managing thermal capacity usage falls on the consumer ([PERSON], personal communication in an internal meeting on 7 June 2017). [PERSON] et al. [129] propose a novel heat meter unit that measures mass flow, supply temperature, and optionally outdoor temperature. This unit calculates the expected return temperature based on outdoor conditions, offering a method analogous to the previously described approach. Additionally, [PERSON] [136] suggests a pricing strategy based on flow measurement to incentivize reductions in flow rate, potentially leading to improved cooling at consumer installations. This cost-effective approach is particularly applicable in DH systems with high linear density, such as those examples commonly found in Iceland [129]. Tariff in Network Cascading  
Attention must also be given to the tariffing of cascading DH networks, particularly as the trend of connecting low-temperature consumers to the return pipelines of high-temperature DH systems becomes more prevalent (see Section 2.1.3). [PERSON] et al. [81] report that some Austrian DH systems currently employ a tariff structure that accommodates cascading.