Germany needs €43.5 bln district heating investment by 2030 to meet climate goals – report

The planned expansion of district heating in Germany will require 43.5 billion euros in investment by 2030 to help the country reach its climate targets, said a report by analysis and consulting firm Prognos AG. The report, commissioned by the German Energy Efficiency Association for Heating, Cooling and CHP (AGFW) and the German Association of Local Utilities (VKU), said that the majority of funds (60%) would be needed for the expansion of heating grids, and the rest for renewable heat plants and their connection to the grids. The report highlights that annual state support worth 3.4 billion euros would be necessary for investments and the operation of district heating in the years until 2030.

Currently, however, public support for district heating is funded through the Federal Funding for Efficient Heating Networks scheme, with only 3.5 billion euros earmarked in total untill 2028, said VKU. “The report illustrates the high investment volume that the industry will have to manage in the coming decades,” Werner Lutsch, managing director of AGFW, said. “A suitable funding framework is a central requirement.”

By 2045, 3.6 million buildings corresponding to 14 million living units will be warmed by district heating, said the report. The aim is to gradually convert the energy mix to climate neutrality by the same date through utilising a mix of renewable energies and unavoidable waste heat, for example from industrial processes. Municipalities have to draw up plans on how Germany's cities can be heated in the future by 2028 at the latest.

A report from earlier this month found that district heating already supplies more than a third of houses in Germany’s three largest cities of Berlin, Hamburg and Munich. The government has previously stated the aim of connecting 100,000 buildings to district heating every year, with the AGFW claiming about half of German households could be heated in a climate-friendly way through the method.