Heat as Capacity: How Denmark’s Thermal VPPs Could Redefine U.S. Grid Flexibility

By Greennex Frontier

⚡ The Grid Flexibility No One’s Using

Across the U.S., grid operators are searching for new ways to manage peaks, reduce emissions, and ride through weather shocks. Yet one of the most abundant — and overlooked — flexibility resources is already wired into the buildings we live in: thermal systems.

From HVAC to water heaters, America’s buildings consume more energy for heating and cooling than for lighting or appliances. But while batteries and EVs dominate the flexibility conversation, the thermal layer remains passive, running on schedules rather than signals, disconnected from the grid it strains.

Meanwhile, in Denmark — a country with long winters, district heating, and a 15-year head start in real-time energy markets — that thermal layer is being actively orchestrated. And the results may hold a crucial clue for American utilities now staring down a surge of electrified loads.

🇩🇰 A Cold Country That Thinks Warm in Systems

Denmark didn’t stumble into thermal grid flexibility — it designed for it.

With over 60% of Danish households connected to district heating and strong national coordination between energy, heating, and building sectors, Denmark began treating thermal inertia as dispatchable capacity. Instead of relying solely on batteries, Danish energy players built Virtual Power Plants (VPPs) that integrate heat pumps, electric boilers, thermal storage tanks, and district systems into coordinated, grid-responsive fleets.

These aren’t pilots. They’re revenue-generating market participants. Aggregators now bid thermal flexibility into Denmark’s ancillary markets daily — turning the heat stored in a school, supermarket, or hot water tank into real-time balancing power.

The result is a system that can absorb excess wind, respond to frequency drops, and shave evening peaks — all without touching electricity demand directly.

🧠 The Innovation Layer: Turning Heat Into Dispatch

Denmark’s thermal VPP landscape is not just a climate policy story. It’s an infrastructure innovation story.

Companies like Energi.AI are using building-level data to forecast heating demand across commercial and municipal sites, identifying when flexibility can be released without compromising comfort. Their SaaS platform integrates with both grid and building systems, allowing cities to monetize flexibility without additional capex.

PlanEnergi, one of Denmark’s leading district heating consultancies, has developed planning tools for regional utilities that simulate how thermal storage tanks and hybrid boilers can be optimized for both cost and carbon — becoming dispatchable assets in electricity markets, rather than passive thermal sinks.

Tomorrow, a Copenhagen-based startup best known for electricity carbon tracking, is now supporting utilities in aligning real-time emissions signals with thermal system operation — creating new price signals that reward clean-hour heating and time-shifted demand.

These aren’t fantasy products. They are pieces of a system where buildings are no longer just passive heat consumers, but interactive energy nodes, responding to signals the same way a battery would — just slower, longer, and often cheaper.

💰 Where the Money’s Going: U.S. VCs Are Warming Up

While Denmark’s thermal grid logic is built on public-private coordination, U.S. capital is starting to notice.

Recent moves include:

• Harvest Thermal, a California-based startup designing smart thermal storage for homes, raised $11M in Series A funding from Clean Energy Ventures and City Light Capital.

• Electriq Power, a U.S. firm integrating battery + thermal control for residential communities, closed $45M in growth equity to expand grid services partnerships.

• GridX and Virtual Peaker, both focused on demand flexibility software, have begun exploring thermal asset layers — citing Danish and German frameworks as market models.

Investors aren’t just funding batteries anymore. They’re starting to fund orchestration — and Denmark’s thermal coordination playbook is increasingly viewed as a proof point that could scale into U.S. climate zones.

🧭 Lessons for the U.S.: Flexibility Is More Than Just Electricity

The U.S. doesn’t need more heating tech. It needs a new operating model for the heating systems it already has.

Denmark’s thermal VPPs offer four key lessons:

• Thermal capacity is already there — it just needs the software, standards, and incentives to be activated.

• Long-duration flexibility can come from systems that were never designed as batteries — like tanks, boilers, and HVAC loops.

• Comfort doesn’t have to be compromised to deliver value to the grid — but it does require real-time coordination.

• The best storage isn’t always electric. Sometimes, it’s heat held in water, walls, or buildings — invisible but valuable.

In a U.S. grid now facing seasonal stress, heat pump proliferation, and urban load clustering, this logic isn’t just interesting. It’s necessary.

🔚 Final Note: When the Heat Grid Becomes the Smart Grid

Denmark didn’t wait for electrification to cause a crisis. It built a framework where thermal energy could participate in the grid like any other asset — not through revolution, but through coordination.

For the U.S., where heating accounts for 42% of residential energy use and thermal peak management is still reactive at best, this model offers a roadmap for turning load into leverage.

Because the next frontier in grid flexibility may not come from batteries. It may come from how we control the heat we already make.