Distribution supply in danger: criticism of cuts in the KTF and new regulations

Distribution supply in danger: criticism of cuts in the KTF and new regulations

On August 22, 2024, the recently announced cuts at the climate and transformation fund (KTF) caused discussions in the industry. The Association (VKU) expressed concerns about the financial means planned for the expansion of district heating supply. Only around 3.4 billion euros should be available from 2025 to 2029, while according to a study by the energy efficiency association for heat, cold and KWK (AGFW), the actual annual support requirement is already 3.4 billion euros.

The Prognos AG, which has drawn up the report, shows that a total of 43.5 billion euros would have to be invested in the expansion and conversion of the district heating by 2030 in order to achieve the ambitious goals of the federal government. VKU general managing director Ingbert Liebing emphasized that with this center equipment the declared goal of tripling the proportion of district heating by 2045 could not be achieved.

regulations and consumer protection in focus

The discussion about the future pricing of the district heating gains from driving. A recently submitted draft of the Federal Ministry of Economics on the amendment to the so -called AVBFernwärmev is intended to provide more transparency in the care of consumers: on the inside by district heating suppliers. The previous process is regarded as opaque, which is why publication obligations for price changes will be introduced in the future.

Werner Lutsch, Managing Director of the AGFW, demands a statutory price adjustment right. He argues that companies have to adapt the agreed prices in certain cases, especially if new investments are necessary caused by the transformation of the district heating systems. According to it, the current system is not suitable for meeting these requirements.

climate -neutral heat supply and new developments

The expansion of district heating represents a central component of municipal heat planning. The changeover of conventional gas networks to hydrogen is viewed critically. At the beginning of the year, the building energy law - also known as the heating law - was supplemented by the heat planning law. This obliges the federal states to guide their municipalities for heat planning that aims at climate -neutral heat supply by 2045.

A variety of cities relies on this trend. In Hanover, for example, a completely climate -neutral district heating supply is to be implemented by 2035. Berlin, on the other hand, already has the largest district heating network in Western Europe, which is to be expanded in the coming years. The aim is to convert the energy generation of fossil fuels such as gas and coal to more efficient large heat pumps that use waste heat and waste water.

Cost control in district heating is therefore a hot topic that affects both the supply companies and consumers: inside. The regulations that are to be introduced soon could have a decisive influence on future pricing and also on how transparently these processes are.

The challenges for the industry

The discussion about financing and the associated problems shows that the way to implement the climate goals for district heating is full of obstacles. The need to invest 43.5 billion euros by 2030 meets a reality in which defined funds remain far behind the actual requirements.

The coming months will be decisive to clarify how the statements of the various associations and the consumer advice centers are implemented in political decisions and whether it is possible to actually achieve the requirements for climate neutrality. The developments in district heating supply not only reflect the challenges of the energy transition, but also the need for transparent and fair pricing for everyone involved.

Effects of the cuts on energy generation

The cuts in the climate and transformation fund (KTF) not only have an impact on district heating supply, but also on the entire energy generation in Germany. The decline in funds could undermine the planned investments in renewable energies and modern energy infrastructure. A worrying aspect is that many municipalities are already dependent on funding because they have difficulty reaching their climate goals without sufficient resources.

In 2023, the proportion of renewable energies in electricity generation in Germany was around 42 percent. In order to fulfill the national climate goals, which provide for greenhouse gas emissions by 55 percent by 2030 compared to 1990, these shares must continue to increase. The sector coupling, which provides for networking heat, electricity and mobility sectors, is increasingly considered necessary in order to effectively implement the energy transition. Inadequate KTF could strongly inhibit these efforts. According to the Federal Environment Ministry, the energy transition could cost around 60 billion euros by 2030, which shows that funding is urgently necessary.

The role of the municipalities in heat planning

Communal heat planning is becoming increasingly important in Germany. Cities and municipalities are responsible for making energy supply sustainable and future -proof. District heating systems play a central role here, especially in urban areas where the density and the need for energy are high. Switching to climate -neutral technologies is a challenge that many municipalities have to face.

by legal requirements such as the building energy law. The importance of district heating is underlined by various initiatives at the state and federal level. However, it should be noted that the implementation of such programs often encounters resistance, especially when it comes to the changeover of existing infrastructure and the associated financial expenses. A comprehensive citizen information and participation is essential to ensure acceptance and understanding of the necessary steps.

Current statistics on district heating supply

A survey by the association for district heating shows that more than 50 percent of households in large cities are already connected to a district heating system. This illustrates the relevance of this type of supply in urban regions. However, there are significant price differences between the different providers, which is also an essential aspect for consumers.

A study by the Fraunhofer Institute predicts that the demand for district heating could increase by up to 30 percent by 2030 if the current climate protection strategy is consistently pursued. This underlines the need to invest in the expansion of the district heating frastructure and to make it sustainable. In view of the changing requirements, providers must develop innovative solutions in order to ensure both efficiency and sustainability.