Landlords see rising prices as social explosives

energy crisis

Tenants are not always regularly informed about the amount of their energy costs.

(Photo: dpa)

Berlin Landlords in Germany have warned of the social consequences of the sometimes drastically increased district heating prices. “The price increase makes living more expensive and is social explosives,” said the director of the Association of North German Housing Companies (VNW), Andreas Breitner, the Handelsblatt.

It raises questions when energy suppliers announce that district heating costs will triple or even quadruple in one fell swoop. “Even with the best will in the world, a price explosion of this magnitude cannot be conveyed, even in times of generally rising energy prices,” emphasized Breitner.

The Federal Association of Consumers (VZBV) had recently complained about significant shortcomings in the pricing of district heating providers. “The consumer centers report partly horrendous additional payments for 2021, some district heating customers pay twice as much, correspondingly increased deductions in 2022,” said VZBV boss Ramona Pop. However, tenants could neither defend themselves against excessive price increases nor avoid them.

In addition to gas and electricity, district heating has also become more expensive in many places this year. That’s because it’s a waste product of 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.

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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, criticized the fact that affected tenants will only benefit from the relief in the course of 2023 as part of the ancillary cost settlement.

Housing industry calls for permanent control of district heating prices

From the point of view of the consumer advocates, this is made more difficult by the fact that the pricing of the district heating suppliers is still difficult to understand. The tenants’ association also criticizes this. “The lack of price transparency in district heating has been known for years and has so far hardly been addressed politically,” said the federal director of the association, Melanie Weber-Moritz, to the Handelsblatt.

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VWW director Breitner emphasized that price increases must be explainable and understandable. “Where this is not understandable, action must be taken.” Politicians in the traffic light coalition had recently spoken out in favor of intervention by the Federal Cartel Office. The FDP called for a new sector inquiry in this area.

During the last review in 2012, the authority found price differences between individual network areas of more than 100 percent in some cases. According to a recent study by consumer advocates, the price increase from various providers between April 2021 and April 2022 was between 28 and 92 percent.

In the case of district heating, it is practically impossible for customers to switch to cheaper providers. In many regions there is no competition and in some cases there is even a legal obligation to connect to a specific grid if you choose this form of energy. The more than 500 district heating producers are mostly municipal utilities, but also large suppliers such as RWE, Eon, EnBW and Vattenfall.

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The tenants’ association was open to any measure that helps to better protect the 6.1 million households supplied with district heating. “The proportion of district heating is particularly high in the metropolises,” explained association director Weber-Moritz. In Berlin, every third apartment is connected to the district heating network.

Andreas Breitner, whose association represents a total of 406 housing cooperatives and housing companies in Hamburg, Mecklenburg-Western Pomerania and Schleswig-Holstein, does not consider the Cartel Office to be suitable for investigating the abuses. In his view, the authorities intervene too seldom and too late. “We need an independent authority that constantly monitors and controls the prices for district heating and intervenes immediately if consumers are made to suffer,” he said.

Breitner sees an urgent need for action. “Sooner or later, anyone who is supposed to live in a cold apartment will no longer be able to reach them even with climate protection requirements,” he said. So if district heating is to remain an essential part of the energy transition, action must be taken now.

More: This is how much a heat pump, district heating and pellet heating cost in comparison

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