The heating transition is not possible without subsidies

23.09.2024

Pricing on the heating market is a sensitive issue. The participants in the panel discussion at the E&M Energy Manager Conference see a clear need for action.

"What I would prefer," said Christian Maaß, "is to have a framework in which we don't even need subsidy programs because the market regulates everything. But we are a long way from that." Just how right the Head of the Energy Policy - Heat, Hydrogen and Efficiency Department at the Federal Ministry for Economic Affairs and Energy (BMWK) is with this assessment became clear at the E&M Energy Manager Conference in Munich.
Maaß (Green Party) discussed pricing and market development together with Markus Kachel, Partner at the law firm Becker Büttner Held, which specializes in the energy industry, and Elke Temme, Managing Director of Stadtwerke Bochum.

Temme emphasized: "We calculate in such a way that we have heat production costs that we can pass on to our customers with a clear conscience. And we can't do that at the moment without subsidies. "When asked about the reason for this, legal expert Markus Kachel is also clear: there is a political goal, and this cannot be achieved without creating the appropriate incentives. "That's why subsidies are currently the be-all and end-all."
Maaß made it clear that there is no alternative to pursuing this political goal - achieving a low-emission electricity and heat supply: everything that is happening today - extreme weather conditions, waves of migration, severe weather damage - is just a harbinger of what will happen if climate change continues to progress. "The longer we wait, the tougher the measures that will have to be taken".

The German government has already "tackled a lot", emphasized Maaß, referring to the Heat Planning Act, the Building Energy Act (GEG) and the Federal Promotion of Efficient Heating Networks (BEW). And many things are in the pipeline, such as the exploration insurance for geothermal projects or the amendment to the AVB District Heating Ordinance, the Heat Supply Ordinance or the reform of CHP legislation.

Control effect only through consistency

Lawyer Kachel also questioned whether regulatory requirements alone would be enough to achieve the political goals with regard to European legislation. Many players are involved here at many levels. But whether this has a direct steering effect on the development of the national heating market in the sense that investment decisions are made based on the burden of the CO2 price, "I would put a very big question mark over that," said Kachel.
In the long term, these instruments would certainly have a steering effect. However, perhaps not as expected: Kachel sees the determination of the limit for CO2 emissions that may be emitted until 2045 as a decisive factor. According to calculations, this budget of available CO2 certificates will already be used up by 2038, meaning that climate neutrality will almost inevitably have to be achieved earlier than planned.

In principle, these instruments can only be effective if politicians allow them to be. This means that if production processes, electricity or heat, for example, become significantly more expensive as a result of politically desired CO2 pricing, then politicians must also stand by this so that the corresponding control effects can unfold.
BMWK representative Maaß, on the other hand, spoke out in favor of using such instruments, but not exhausting them. As a politician, you cannot create the world on the drawing board, but must take many things into account, including social realities. For example, he hopes that the price will steer the market in the right direction. But that it does not rise so much that it is politically regulated again: "If the CO2 price is 200 instead of 60 euros, then it will take a maximum of three months before the instrument is collected."

Regaining trust

The Managing Director of Stadtwerke Bochum also has an eye on social realities and is particularly concerned about how to regain the trust of citizens, which has fallen significantly as a result of the massive upheavals on the energy markets.
"District heating is the best way to provide green energy. That is why we must do everything we can to ensure that district heating regains the good reputation it had". This is particularly true in view of the competition with heat pumps, but also with fossil fuels. "Customers must have the feeling that they are not making a bad choice when they opt for district heating."
One way to regain this trust is through transparency. BMWK representative Christian Maaß referred to the upcoming revision of the AVBFernwärmeV. According to this, suppliers should indicate what the main determining factors are in their district heating pricing, so that customers can ideally work out for themselves what impact changes to individual parameters will have. However, he qualifies that price escalation clauses will always have a "certain complexity". "But we are now very far on one side. And we want to go far on the other side".

Author: Katia Meyer-Tien
Source: Energy & Management Powernews