Enormous price differences for district heating
A warm home is currently in demand. For example, by heating with district heating. This is considered comfortable and environmentally friendly. Unfortunately, however, pricing for consumers in the district heating market is completely opaque. As a result, in some places they have to pay twice as much as elsewhere.
The prices for district heating in Germany vary considerably from region to region. For example, private households with a single-family home in the largest heating network in Cologne paid 27 cents in the third quarter of 2023, more than twice as much as in the largest network in Halle (Saale) at 12 cents. This was determined by the Federation of German Consumer Organizations (VZBV) based on an analysis of price data from 31 district heating networks.
For example, the effective price per kilowatt hour in a typical single-family home in the district heating network examined in Erfurt fell from 36 cents in the first quarter to 20 cents in the third quarter of 2023. By contrast, the effective price per kilowatt hour in the network examined in Hanover rose from 13 to 19 cents during the same period.
This is also related to the source of the district heating. If a provider operates several district heating networks, each network area often has a different price, which can lead to different prices even within the same city. Due to a lack of comparison options, district heating customers are currently unable to assess whether the price of heat in a network is high or low. This will become particularly relevant in future when more and more consumers have to replace a defective oil or gas heating system in accordance with the requirements of the new Heating Act.
Lack of transparency and no option to switch
In the view of the VZBV, the district heating market in Germany is still too intransparent for consumers. For this reason, the consumer advocates' market observation has been collecting price data from 31 district heating networks across Germany on a quarterly basis since January 2023.
The district heating prices are usually made up as follows
- the working price in cents per kilowatt hour
- the basic price per kilowatt of connected output (also known as the "connected load" or "output price")
The actual heat consumption is billed via the energy price. The basic price is a fixed price per year and includes the pro rata costs of the power plant, networks, personnel and maintenance. On average, the basic price accounts for around 25 percent of the total costs and the working price for around 75 percent. According to consumer advice centers, the average price for district heating per kilowatt hour is currently around 16 cents, although there can be significant upward and downward deviations. New customers can currently conclude gas contracts for around 10 cents per kilowatt hour, while the basic supply recently averaged 16 cents. So far, district heating costs have been higher than those for gas, oil or pellet heating.
How high the costs actually turn out to be naturally also depends on individual consumption. As with all other types of heating, this is significantly influenced by the condition of the building (new or old, large or small), individual heating behavior and the need for hot water.
However, district heating customers do not have the option of switching suppliers if they are dissatisfied with the prices or service of their provider. Against this background, it is all the more important that they are able to assess the offer of a district heating supplier, warns the VZBV.
- As an advisor, I often recommend district heating to tenants due to its environmental friendliness, but they express concern about the varying gas price across different regions.
- Consumer centers are advocating for more transparency in the district heating market, as many consumers are unaware of the intricacies involving the gas price, basic price, and connected load.
- The Heating Act will require landlords to replace outdated oil or gas heating systems, and with the higher energy supply costs, district heating might prove to be a more cost-effective option for some tenants.
- Some energy suppliers are offering competitive gas prices for new customers, which is causing consternation among district heating consumers who cannot switch suppliers due to lack of options.
- The high operating costs of district heating networks are a major factor contributing to the significantly higher energy prices compared to gas, oil, or pellet heating.
- The Federation of German Consumer Organizations (VZBV) advises district heating customers to carefully evaluate the offers of their energy supplier, as they have no option to switch if dissatisfied with prices or service.
Source: www.ntv.de
