The company informed all employees this morning. The Council of Ministers will decide on the long-awaited new Heat Act on Friday. According to Vattenfall, Minister Rob Jetten (D66, Energy) has had it laid down that heat networks in the Netherlands must all come under public ownership and management. This would be a major victory for congregations, which have lobbied for this for a long time. Vattenfall is furious about this ‘expropriation’ and will stop investing immediately.
More than half a million Dutch households are connected to heat networks, also known as district heating. They do not have a gas connection, but receive hot water directly into their home via pipes through the street.
As part of the energy transition, 1.2 million households will have to be connected to new heat networks over the next seven years, mainly by removing existing homes from gas. The idea is to use more and more energy from sustainable(er) sources, such as residual heat, biomass, wind and geothermal energy, to heat houses.
About 90 percent of these heat networks are now in the hands of private companies, of which Vattenfall, Eneco and Ennatural are the largest. In fact, they have a monopoly on supplying heat to households. However, strict rules apply to prices and profit, which are supervised by the Netherlands Authority for Consumers and Markets.
Public property
Municipalities, which are responsible for the large-scale operation, want these networks to come under public ownership. Firstly, many municipalities that already have projects to connect houses to heat networks find it uncomfortable that they now have to force citizens to buy their energy from one commercial company. Moreover, they expect that the resistance among citizens will be less if they know that the heat network is in public hands.
Municipalities also state that it is now very difficult to predict how the energy transition will take place and what exactly that means for the design of heat networks. They also expect that it will ultimately also be financially better for heat users if their grid is in the hands of municipalities. The municipalities mainly want to be able to choose how they set up heat networks.
Municipalities would like commercial companies to remain involved in the operation of old and future heat networks, but then as a minority shareholder in a company in which at least 50 percent plus a share is owned by public parties. Energy companies have strongly opposed this proposal in recent months. They find it unworkable to give up control over heat networks, while remaining financially and operationally responsible.
Energy Minister Jetten seemed inclined to opt for the position of the municipalities for a long time. But after the summer there was a report that stated that municipalities would have neither the money nor the expertise to be able to install all the necessary heat networks on time – something the municipalities themselves are fighting.
‘Very worrisome’
The cabinet must therefore make a formal decision on this on Friday, but based on Vattenfall’s press release, it is clear that Jetten still opts for the municipalities. Vattenfall is now giving the cabinet another shot by putting it ‘on hold’. Vattenfall finds it very worrying that the minister is still going through with his intentions,’ the company said. ‘As a result, the heat transition will seriously slow down, the climate targets will come under further pressure and the implementation and financing of heat networks therefore threaten to end up with Dutch municipalities themselves.’
Vattenfall says that starting next week it will start discussions with municipalities and housing associations about the impact of the decision of the Council of Ministers on all current heat networks and the networks that are currently being constructed. ‘Obviously Vattenfall will honor the existing agreements as much as possible and will continue to take care of the existing heat customers.’