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District heating: alternative to heat pumps or cost traps?

2023-12-04T10:28:01.817Z

Highlights: District heating is a key to the energy transition in Germany. From 2045, all heating networks must be climate-neutral. Consumers cannot choose the supplier for district heating, but can only obtain it from a single supplier. Consumer advocates are particularly critical of the lack of transparency in district heating prices. Six district heating suppliers are now facing abuse proceedings on suspicion of excessive price increases. The Bundeskartellamt is investigating the price increases of the district heating providers Eon and Hansewerk Natur.



Status: 04.12.2023, 11:12 a.m.

By: Lisa Mayerhofer

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The expansion of district heating is a fundamental component of the Federal Government's energy transition plans. (Archive photo) © Thomas Banneyer/dpa

The expansion of district heating is a fundamental component of the Federal Government's energy transition plans. However, a survey by the consumer advice centres suggests that there are large price differences.

Berlin – District heating is a key to the energy transition in Germany. From 2045, all heating networks must be climate-neutral. In many municipalities, the heating networks are therefore to be expanded or newly built. Do homeowners have to or should get involved? And how much will it cost?

Survey: Large price differences for district heating

This is because district heating has a major disadvantage. In contrast to electricity or gas, consumers cannot choose the supplier for district heating, but can only obtain it from a single supplier. Consumer advocates are particularly critical of the lack of transparency in district heating prices. A survey by the Federal Association of Consumer Organisations (VZBV) on district heating prices, which is available to the Frankfurter Allgemeine Zeitung, shows considerable regional differences.

According to the study, district heating in Cologne was the most expensive of the large city grids in the third quarter of 2023 – at an average of 27 cents per kilowatt hour. For a single-family house, this is a total cost of 4855 euros, according to the FAZ. District heating, on the other hand, was cheapest in Halle, at 12 cents per kilowatt hour. In this case, a single-family house would only have a total cost of 2230 euros. The price differences between the cities were even greater at the beginning of the year. The formulas according to which the municipal utilities would calculate the prices are hardly comprehensible, even for experts, writes the FAZ.

Consumer Advice Centre: Class action lawsuits against district heating providers

The consumer advice centre wants to take action against this and recently sued the district heating providers Eon and Hansewerk Natur for allegedly illegal price increases. Class action lawsuits are intended to obtain refunds for customers, the Federation of German Consumer Organisations (vzbv) announced.

It is about price increases of several hundred percent. Many customers of the two district heating providers currently have to pay many times more for heating their homes compared to 2020. Previously, the Funke media group had reported on the class actions. According to the vzbv's assessment, the price increases of the past years are invalid because the price change clauses do not meet the legal requirements.

Abuse proceedings: Bundeskartellamt investigates price increases

The two companies denied the allegations and each stated that they were relaxed about the lawsuit. "Our district heating prices follow the legal requirements and adapt to cost and market developments," explained an Eon spokesman in Essen. The pricing is based on price components, which are based on basic data from the Federal Statistical Office that can be viewed at any time. The company is aware of the burdens placed on customers. "However, the historically high energy prices of the last two years were beyond our responsibility. Our prices were and are fair, transparent and comply with all legal requirements," the Eon spokesperson continued.

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Price increases by district heating suppliers have also recently come to the attention of the Federal Cartel Office. Six are now facing abuse proceedings on suspicion of excessive price increases. Last week, the authority had not announced exactly which providers these are. In particular, the Authority intends to examine the specific application of price adjustment clauses. It is unclear when the Cartel Office will conclude its investigation.

What are the costs of district heating?

In order to understand the costs of district heating, it is important to know how the price is composed: "It consists of a basic price and an energy price," explains Alexander Steinfeldt, energy expert at the non-profit consulting company co2online. The basic price covers all costs that arise regardless of the actual consumption.

For example, the costs of the generation and transport facilities as well as the personnel costs for the operation and maintenance of the networks. The amount depends on the connected load or the connected load and is around 20 to 30 euros per kilowatt of connected power per year.

Good to know for owners of a particularly energy-efficient property: "Customers have the option of having the connected load and thus the basic price reduced in the current contract if they consume less district heating than agreed," says Martin Brandis, energy expert at the Federation of German Consumer Organizations.

In turn, suppliers use the energy price to settle the actual consumption costs. It is generated for every kilowatt hour that consumers draw from the grid.

So how much does district heating cost?

An example: In 2022, the cost of district heating for a single-family house with 110 square meters of living space was between 1145 and 2540 euros, according to the heating mirror.

The large cost differences are therefore mainly related to the energy condition of the respective house. Regional weather differences and the heating habits of the house occupants are other factors that influence the price.

Currently, the district heating price for 80 percent of consumption is capped at 9.5 cents per kilowatt hour. Interested parties can obtain information and decision-making aids with regard to district heating from independent energy consultants and also from the consumer advice centres.

With material from dpa

Source: merkur

All news articles on 2023-12-04

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