As of: February 1, 2024, 7:02 p.m
By: Amy Walker
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Consumer advocates have been warning about the unregulated prices of district heating suppliers for years.
Even the Federal Cartel Office is now investigating.
Berlin – The heat transition places great hopes on district heating.
It offers the potential to supply countless households with environmentally friendly energy.
However, setting up a heating network is a challenge: it requires laying huge pipes from power plants to individual households below the respective settlement - an enormous infrastructure project.
Nevertheless, the investment can pay off - both financially and in terms of time - if it helps to decommission millions of gas and oil heating systems.
At least in the long term, because many district heating customers are currently still supplied with energy from gas power plants.
However, a major disadvantage of district heating that customers are currently feeling particularly strongly is the price.
Many media outlets are currently reporting on enormous additional payments being made to district heating customers, often amounting to thousands of euros.
How the price is made up is often unclear.
Even customers of district heating suppliers who do not use gas receive high bills.
The Federal Cartel Office has also brought this to the fore.
District heating has a natural monopoly
Consumer protection centers have been warning about this major problem for years.
The energy companies' monopoly is hardly regulated.
District heating is a so-called “natural monopoly”.
This means: In a postal code there is only one district heating provider, if any.
It would be completely unrealistic and uneconomical to build multiple networks.
But this natural monopoly also means that there is no competition.
Customers cannot switch to a cheaper provider if the price increases.
They are, as consumer advocates put it, “captive customers.”
It is therefore not uncommon for contracts with very long terms, for example over ten years, to be concluded.
Consumer advice center, the German Tenants' Association and the Federal Association of the New Energy Industry have been criticizing this situation since at least 2016. They are calling for better regulation of the prices of district heating suppliers to protect consumers.
They also require that the price composition be presented on the Internet in a comprehensible and accessible manner.
Since they made this demand, however, nothing has changed politically.
Federal Cartel Office is investigating energy suppliers
The energy crisis has led to significantly higher prices across all energy sources.
However, district heating customers cannot understand how the new, very high prices come about.
In November 2023, the Federal Cartel Office therefore declared that it was “opening proceedings against a total of six municipal utilities and district heating suppliers on suspicion of abusively excessive price increases in the period from January 2021 to September 2023.”
District heating pipes from the Wedel thermal power plant site run through a forest into Hamburg's district heating system.
© Christian Charisius/dpa
Andreas Mundt, President of the Federal Cartel Office, added: “District heating prices must be based on the development of the suppliers' actual costs and the general price development in heat supply.
For example, it raises questions if a company has adjusted the district heating price to the development of the gas price, even though other cheaper alternatives were actually used to generate heat.”
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Der
Spiegel
reports that politicians could now take action.
When asked by the magazine, Robert Habeck's (Greens) Ministry of Economic Affairs confirmed that it was considering adjusting the district heating regulation "to protect customers".
So could what consumer advocates have been demanding for years now finally become a reality?
There are not many concrete signs of this yet, but the traffic light groups basically agree that transparency needs to be improved.
Ultimately, customers have to be kept on track so that they decide in favor of district heating and against installing a new gas heating system.
District heating bills could soon fall again
However, politicians are also aware that they have to keep district heating attractive for energy companies.
Ultimately, according to the government's wishes, they should invest massively in the construction of additional district heating networks in the coming years.
That will cost a lot of money.
Money that has to come from somewhere.
The investments must be worthwhile for the utilities.
It is therefore a balancing act for politicians.
However, customers can hope that the price will fall again, at least in the short term.
The invoices currently arriving mostly come from 2022, before the price cap for district heating was introduced.
So the next bill is likely to be lower.