Dena calls for more market in district heating generation

28.03.2025

Source: E & M powernews

The German Energy Agency has worked with two partners to develop a proposal that should help accelerate the heating transition and reduce costs at the same time.

Together with the Fraunhofer Institute for Manufacturing Technology and Applied Materials Research (IFAM) and the consulting firm ERA Consulting, the German Energy Agency (Dena) has presented a concept for access to the existing German district heating network. This concerns the right of third parties to feed heat from their own sources into the district heating network.

The partners' work, which is documented in a 136-page presentation, is based on municipal heat planning. This in turn is based on an analysis of the current situation and potential as well as a target scenario.

The proposal by Fraunhofer IFAM, ERA and Dena envisages supplementing municipal heating planning with a structured market survey in order to identify the potential of third-party suppliers. At this stage, the district heating supplier should publish information on heat demand and the technical market characteristics of the network and connection points. In turn, the suppliers provide technical information on the heat generators in question. At the end, the results of the market survey will be published and declarations of intent will be signed by the third-party providers.

In a second step, a regulator, who has already supervised the market survey process, is to be involved. Based on a transparent and binding methodology, it will determine a reference price for third-party providers. "If there are several providers, FWV, third-party providers and the municipality will consolidate the offers at a round table and create one or more generation portfolios in the sense of a technically and economically feasible combination of heat sources," states the joint proposal of the three partners.

Regulator to oversee the process

Finally, in the third step, the competition-based "selection of the best solution" is to take place. The district heating supplier should then make a cost-based and demand-oriented selection from the offers submitted with a binding heat feed-in price. The authors point out that the reference price acts as a price cap. However, proven subsequent deviations could be remunerated through so-called cost-plus elements. The regulator would then have the task of checking the legality of the selection procedure.

The proposal from ERA, Fraunhofer IFAM and Dena has its origins in the EU's latest Renewable Energy Directive (RED III). This recommends that member states improve third-party access to district heating networks.

"More than half of the final energy in Germany is used to heat buildings and for heating and cooling applications in trade and industry. Measurable progress in the heating transition must be a central goal in the future," says Corinna Enders. In addition to the continuation of state investment, this requires new approaches, according to the Chairwoman of Dena's Management Board. Easier third-party access to district heating could accelerate the decarbonization of heating networks and reduce costs at the same time. "Third-party access offers the opportunity to strengthen competition in the renewable heat supply and to activate private capital for the energy transition," emphasizes Enders.

She is convinced that the introduction of such market structures will strengthen the supply of climate-neutral heat. "We shouldn't waste any time. All players need planning security and the adaptation of the relevant regulations quickly," the Dena boss appeals to all those involved.

Details on the concept for third-party access to district heating networks can be found on the Dena website.

Author: Fritz Wilhelm