Germany's district heating networks should be planned more efficiently in the long term, and operators need stronger financial incentives to transform infrastructure so that this technology can fully contribute to the decarbonisation of the heating sector, researchers concluded in the government-backed project Ariadne.
As district heating transitions to non-fossil energy sources, the authors recommended interconnecting municipal heating planning, network conversion, and consumption digitalisation, while adding that there is a "significant financing problem" associated with the necessary network conversion. On average, lowering network temperatures, which is necessary to effectively increase the share of renewable energy sources in the system or to utilise waste heat, costs a city district heating company approximately 135 million euros. Energy suppliers across the country will need about 13 billion euros to transform district heating networks into renewable energy networks, the study authors calculated. So far, "district heating network operators have to cover 90% of the conversion costs themselves and cannot offset them with subsidies or price increases" for their customers, the study states. However, investment costs can be reduced by carrying out network densification, digitalisation, and consistent, accelerated, and territorial heating planning in municipalities.
Germany will need to use a variety of technologies and solutions to make the heating sector climate-neutral, as the country's regions have very different starting conditions, according to a report published last year by the Fraunhofer Institute for Solar Energy Systems (ISE). The German construction sector has missed its emission reduction targets for three consecutive years because most homes are heated using fossil fuels and the modernisation of the existing building stock is lagging behind. Germany plans to de facto ban the installation of new fossil fuel-based heating systems from 2024, as the country takes steps to become climate-neutral by 2045.