Economy & Jobs
Energy & Environment
By Nikolaus J. Kurmayer | EURACTIV.com
The German government has kicked off a subsidy scheme to support the construction of green district heating grids. [EPA-EFE/CLEMENS BILAN]
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The German government has announced the start of a €3 billion subsidy scheme put in place until 2026 that will support the construction of district heating grids that use at least 75% renewable energy.
District heating, where pipes are laid from a central heating facility to individual houses, is more efficient than households heating themselves. Towns across Europe rely on district heating to become climate neutral ahead of the continent, like the Danish town of Sonderborg .
A majority of district heating is fuelled by coal, gas and waste. Germany hopes to speed up its own path towards climate neutrality by providing generous funding for “green” district heating.
“Heat grids are the key if we want to make heating greenhouse gas neutral. They tap into climate-friendly heat sources that cannot be used by decentralised heating systems in the home – including deep geothermal energy,” explained Robert Habeck, minister of economy and climate action, on Thursday (15 September).
The International Energy Agency considers district heating an “important solution for decarbonising the heating sector.”
The subsidies had required the green light from Brussels, which took longer than some in the government hoped for. On 2 August, Brussels gave the go-ahead.
“This €2.98 billion scheme will contribute to greening the district heating sector in Germany, by supporting the construction of more efficient district heating systems and the decarbonisation of existing ones,” said Competition Commissioner Margrethe Vestager then.
Space heating is responsible for around 30% of Germany’s final energy use. Much of the heat used is produced using gas, supplies of which have become more fraught following Russia’s invasion of Ukraine.
“With green heating grids, we contribute to security of supply and reduce our dependence on [Russian] fossil energy imports,” Habeck noted. In theory, offering 100% gas-centric district heating is preferable to heating 1000s of homes with a gas boiler each, due to the greater efficiency inherent.
The European Commission said on Tuesday (2 August) it had approved the German government’s €3 billion scheme to support renewable energy and waste heat-based district heating programs, which it said would help Germany and the EU achieve their climate change targets.
Supporting new technologies The German subsidy scheme aims to boost two technologies explicitly: geothermal energy and large-scale heat pumps.
“Geothermal energy is one of the heat sources that we need to strengthen massively in order to replace fossil fuels,” the minister said.
The use of heat pumps could allow for the production of heat “at a high capacity.”
“The federal funding for efficient heat grids (BEW) makes them economical for heat grid operators and thus moves them forward,” Habeck explained.
Sønderborg, a small Danish town lying just beyond the border with Germany, is a living example of a possible future for decarbonised towns – and a blueprint for study by policymakers the world over.
Newly built district heating grids must run on at least 75% renewable energy to qualify for funding, although the expansion or maintenance existing grids running on fossil fuels can also be subsidised.
The German government will even provide operating cost support once the new grids are constructed. Investment cost subsidies will be capped at 40%.
Special beneficiaries are large-scale heat pumps and solar thermal installations, whose operations will be supported for ten years.
The European Commission is due to table plans on Wednesday (18 May) to break free from Russian fossil fuels but, apart from a renewed push for heat pumps, there are major oversights when it comes to decarbonising heating and cooling, according to industry representatives.
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