Large local utilities in Germany stall on heating transition – media report

Many of Germany’s large local utilities continue to bet on fossil gas for heating and stall the transition to more climate-friendly ways to heat homes, found business weekly Wirtschaftswoche and investigative outlet Correctiv in a joint report. The two outlets surveyed Germany’s eleven largest local utilities and found that more than half have continued to connect new housing developments to the local gas grid.

One reason for lagging progress is recent legislation, the outlets reported. The government introduced a law on municipal heat planning last year, according to which large cities have until 2026 to come up with a plan for the transition to climate-neutral heating in their jurisdiction, which can include an expansion of district heating. Today, district heat is mostly produced from fossil fuels like gas and coal, but it provides a relatively easy way to switch hundreds of homes at the same time to renewables-based heating by converting one larger facility.

“Unfortunately, we have taken the pressure off to act quickly due to the long deadlines in municipal heating planning,” said Green Party MP Bernhard Herrmann. The fossil gas business often accounts for up to 50 percent of earnings of local utilities, Henry Otto, partner at consultancy PwC, told the outlets. Municipal utilities sell heat and electricity generated with gas to households and companies, generate usage fees for gas networks, and the larger ones trade the fuel on the stock exchange.

Europe's homes are fossil fuel guzzlers – a big hurdle on the path to greenhouse gas neutrality. But the continent is struggling to initiate the shift to climate-friendly heating. The necessary technologies are available today, but getting them into peoples' boiler rooms is proving to be a complicated and highly controversial process. Many people strongly resist the necessary investments and behaviour changes.