Germany aims to connect 100,000 buildings to district heating every year

The high-profile political spat over the end of fossil fuel boilers in Germany may benefit demand for connections to city-wide heating grids similar to those currently deployed in Berlin, with plans to connect 100,000 buildings every year.

Germany is embroiled in a fiery debate over heating, with a planned 2024 ban on fossil fuel boilers causing a months-long government coalition spat.

Now, attention is turning to district heating – massive city-wide hot water grids – which look poised to play a significant role in heating the country beyond 2030.

“Heat grids can be a particularly cost-effective climate-neutral solution for supplying heat to buildings, neighbourhoods and entire communities,” said Robert Habeck, Germany’s vice-chancellor and minister of economy and climate action, following a district heating summit on Monday (12 June).

“They make it possible to cover the heat demand without major conversion of the buildings,” he argued.

District heating systems are networks of hot water pipelines that distribute heat directly to people’s homes. Unlike individual heat pumps, which require tailor-made installation in each dwelling, they can deliver clean heating to thousands of households at once.

The first district heat networks were deployed in Europe during the communist era, and most of them are still running on highly-polluting coal or gas. But they are versatile and can be fed with any locally-available energy source, such as waste heat from nearby factories or renewables.

In Germany, 6.1 million homes are connected to a heat network, representing 14.2% of the country’s heating. Berlin has taken pole position, with more than a third of the city supplied with centrally-heated water – or more than 1.4 million homes. The German capital boasts Western Europe’s biggest district heating network, beaten only by Warsaw and Moscow on the entire continent.

Now, the German government wants to get the rest of the country on board.

“To achieve this, we have set ourselves an ambitious target: 100,000 buildings are to be connected to district heating systems every year,” Habeck said.

Gas crisis accelerates energy transition in district heating

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Consumer concerns

A new law to kickstart this process is currently in the works and would require municipalities to submit “heat plans” as of next year.

These plans will look at available waste heat sources, such as aluminium factories whose process heat would otherwise go unused, and signal to consumers whether they will be connected to a heating network in the foreseeable future. 

A final deadline will be December 2028 for municipalities with more than 10,000 inhabitants.

Already, municipal utilities – which provide everything from swimming pools to fossil gas – eye a business opportunity. 

“We also have to talk about mandatory requirements. Where municipal planning provides for heat grids, the state must not at the same time promote the installation of heat pumps,” Ingbert Liebing, president of the municipal utility association VKU, told NOZ on 9 June.

Households connected to district heating networks can leave the renewable energy obligation to the utility company while benefitting from economies of scale that come with the number of customers, he explained.

“Therefore, it is not unreasonable to talk about an obligation for households to connect to an existing heating network,” he added.

This idea resonated with Rainer Semet, spokesperson for municipal policy at the liberal FDP party. For “newly planned districts,” an obligation to connect to the heating grid “could be economically sensible”, he said. However, “we are firmly opposed to compulsory connection in existing buildings,” the FDP politician added.

For consumer advocates, district heating can also be a problem – they are natural monopolies after all, with one company owning the pipeline infrastructure.

“Expansion and regulation [of district heating] belong together and must go hand in hand,” said Ramona Pop, chairwoman of the German federation of consumer organisations, following the district heating summit.

District heating pricing suffers from a lack of transparency – oftentimes, companies rely on a diverse fuel mix that is hard to keep track of – and consumers can’t change suppliers. 

“We need a reasonable control over prices, in the best case a systematic nationwide price supervision,” the consumer advocate added.

Dirty heat

District heating is also far from being all ‘clean’. The heat that is transported to households is currently mostly generated by burning gas, coal, biomass or household waste.

In 2021, 77% of Berlin’s district heat was generated from burning fossil gas, and 14.6% by anthracite coal, with a variety of other energy sources covering the remainder, according to its operator, Vattenfall.

In Germany, the share of renewables in heating grids sits at a mere 20%, far from the 65% requirement that the government wants to implement for individual households.

By 2030, 50% of district heating in Germany will have to run on renewables, with large-scale heat pumps emerging as winning technology in other European capitals like Helsinki. Activists, meanwhile, fear networks will be supplied by burning biomass, which they argue is not sustainable.

Gas crisis causes rethink of energy sources for district heating

In recent years, energy companies operating large combined heat and power plants were looking to switch from coal to gas as a stepping stone towards decarbonisation. Now, soaring gas prices have put question marks over how to lower emissions from these energy and heat-producing installations.

[Edited by Nathalie Weatherald and Frédéric Simon]

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