District heating price comparison: Consumer advocates are calling for more transparency in the market

District heating price comparison: Consumer advocates are calling for more transparency in the market

According to a report by www.heise.de,

District heating has a high priority in the federal government's energy concept. The Federal Association of Consumer Organizations (vzbv) believes that it is all the more important for consumers to be able to compare prices here - but that is hardly possible, there are hardly any comparison options. Therefore, consumer advocates have been monitoring the district heating market since January 2023.

It turned out that the prices for district heating differ significantly in the various German regions. To obtain this information, vzbv collected price data from 31 district heating networks. Accordingly, private households with single-family homes, for example, paid 27 cents per kWh in the largest heating network in Cologne in the third quarter of this year, and 12 cents in the largest network in Halle (Saale).

“Difficult to understand price development”

How prices are formed in the district heating market is difficult for consumers to understand, says vzbv. In addition, customers are not able to change supplier if they are dissatisfied with their provider's prices or service. It is therefore important to be able to assess the offer of a district heating supplier before a consumer decides on a delivery contract.

The prices not only vary regionally, they can also develop differently regionally, the vzbv further announced. For example, the effective price per kWh in a typical single-family home in an Erfurt district heating network fell from 36 cents in the first quarter to 20 cents in the third quarter of 2023. In a Hanover network, however, the effective price per kWh rose from 13 to 19 cents during the same period.

Price supervision, heating network database

However, vzbv believes that district heating could become anti-consumer and receive little acceptance; long contract periods, a lack of competition and low transparency standards could ensure this. The federal government must therefore amend the district heating regulation in a consumer-friendly manner, set up price supervision and a Germany-wide heating network database.

A lack of price transparency is a reason for the vzbv to sue the energy companies E.on and Hansewerk Natur. With class action lawsuits, the consumer advocates want to ensure that the two companies refund money to customers because their price increases in recent years are illegal due to invalid contractual clauses.

The large price differences and lack of transparency in the district heating market could have long-term effects on consumers. Many households rely on district heating and can be financially burdened if prices and contract conditions are unfavorable. The vzbv's demands for price supervision and a heating network database could lead to more transparency and consumer protection, which would ultimately improve the situation for consumers. However, it remains to be seen how the federal government will respond to these demands and what concrete measures will be taken to improve the situation on the district heating market.