Berlin Politicians in the traffic light coalition are calling for the Federal Cartel Office to intervene in view of the sometimes drastically increased district heating prices. The Cartel Office must also ensure that competition is maintained in the district heating sector. “For this reason, a new sector inquiry should be carried out,” said the economic policy spokesman for the Liberals in the Bundestag, Reinhard Houben, to the Handelsblatt.
With the so-called sector investigation, the Bundeskartellamt can examine entire sectors if “rigid prices or other circumstances” suggest that competition there is no longer functioning properly. The SPD energy politician Nina Scheer also sees a need for action if necessary. “If there are indications of a non-legal, lack of price transparency, it must be investigated,” Scheer told the Handelsblatt.
The Greens economic politician Dieter Janecek expressed the expectation that the suppliers would react to the falling wholesale market prices of the last few weeks and pass these cost reductions on to the households “promptly”. “If this does not happen, the antitrust authorities should take action.”
The coalition politicians are reacting to information from the Federation of Consumer Organizations (VZBV). VZBV boss Ramona Pop attested to the district heating suppliers’ significant deficiencies in pricing and called on the responsible supervisory authorities at federal and state level to take action. “The antitrust authorities should take a very close look at the topic of district heating,” Pop told the Handelsblatt.
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Studies by her association on the district heating market have shown “incredible” price differences. The price increase of the providers was therefore between 28 and 92 percent. “The consumer advice centers are reporting horrendous additional payments for 2021, some district heating customers are paying twice as much, and correspondingly increased deductions in 2022,” said Pop.
District heating: Tenants’ association criticizes December emergency aid for customers as too late
District heating is becoming more expensive because it is a waste product from electricity generation, mostly from fossil fuels. According to the energy industry association BDEW, 67 percent of district heating comes from gas and coal combustion, and only 17 percent comes from renewable energies.
The Bundeskartellamt last carried out a “district heating sector investigation” in 2012. At the time, the authority had found indications of price abuse among some district heating providers. The final report of the investigation spoke of “clear competitive deficits on the district heating markets”. In some cases, the price difference between individual network areas is more than 100 percent.
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From the point of view of consumer advocate Pop, the situation has not really improved. Tenants are “largely at the mercy of the price demands and conditions of the suppliers”. They could neither defend themselves against an “excessive” price increase, nor could they avoid it.
Due to the crisis, the Bundestag recently decided on emergency aid for gas and district heating customers worth billions in December. The German Tenants’ Association, however, complained that affected tenants benefited from this far too late.
“Most tenants are supplied with natural gas and district heating, the December 2022 relief will only take effect here in the course of 2023 as part of the tenants’ utility bills,” said the President of the Tenants’ Association, Lukas Siebenkotten. The regulations are also far too complicated and hardly transparent, especially for tenants.
From the point of view of consumer advocate Pop, the situation is made more difficult by the fact that the pricing of the district heating suppliers is still difficult to understand. The providers acted “completely intransparent”, criticized the VZBV boss. In around a third of the networks examined by their association, “no complete information” on prices and the respective price composition could be found on the providers’ websites.
Every seventh apartment in Germany is heated with district heating
Since October 2021, district heating suppliers have had to publish certain information about their prices on the Internet in an easily understandable form. The suppliers not only have to inform their customers about the price, but also about network losses, i.e. what percentage of the heat is lost on the way from generation to the building in the pipe network. The VZBV determined, however, that the legal obligation to publish network losses had not been implemented in two thirds of the cases.
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The finding is also unfortunate for affected consumers because many do not have the opportunity to switch to cheaper providers. When it comes to district heating, there is no competition in many regions and in some cases there is even a legal obligation to connect to a specific network if you choose this form of energy.
As a rule, only so-called abuse proceedings by the Cartel Office can help. In the event of excessive prices in the industry, they serve to protect consumers. In the case of nationally active energy companies, responsibility lies with the Federal Cartel Office. If a supplier is only active in one federal state, the state antitrust authorities are responsible. As a rule, complaints about the level and design of district heating prices also fall under the responsibility of the federal states.
Measured against the importance of district heating, abuse proceedings would be of great relevance. After all, every seventh apartment in Germany is heated with district heating. This makes it the third most important type of heating after gas and oil boilers.
The more than 500 district heating producers are mostly municipal utilities
District heating is so called because the water for the heating system and tap is not heated at home, but rather comes through mostly underground pipes from a combined heat and power plant, which usually supplies entire streets or districts centrally. Many large settlements are among them, the vast majority of users are tenants.
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Most of the more than 500 producers are municipal utilities, but large suppliers such as RWE, Eon, EnBW and Vattenfall also offer district heating. Municipalities can oblige residents to connect to the district heating network.
The FDP politician Houben pointed out that district heating makes a contribution to climate-friendly heating and therefore has a good reputation. “The providers of district heating should not jeopardize this with high and non-transparent prices,” he said.
The Greens politician Janecek also warned the suppliers. In late summer they would have had to buy gas on the market, sometimes at greatly inflated prices, and are now passing these cost increases on to households. “However, the suppliers must not take advantage of the situation and push through excessive price increases.”
More: The federal government subsidizes district heating with billions – many municipal utilities are upgrading.
First publication: 22.11.2022, 04:00 a.m.