EU greenlights €2.98bn German scheme to promote district heating networks

It is expected to support the installation of 681MW of renewable heat generation capacity per year

Net Hero Podcast

The European Commission has given the green light for a €2.98 billion (£2.5bn) German scheme to promote district heating networks based on renewable energy and waste heat.

The scheme will run until 30th August 2028 and will be open to district heating network operators and operators not currently providing this service on the market, with the aid taking the form of direct grants.

It will support feasibility studies and transformation plans for the construction and decarbonisation of district heating networks, covering up to 50% of their costs.

Developers will be able to receive state aid for the construction of new district heating systems with a share of renewable and waste heat of at least 75% and the decarbonisation and upgrade of existing district heating systems to operate on renewable energy and waste heat.

In addition, they will be able to receive investment aid for the installation of renewable heat and solar thermal generation facilities, heat pumps and heat reservoirs as well as the integration of waste heat in district heating systems.

The scheme is expected to support the installation of around 681MW of renewable heat generation capacity per year, reducing greenhouse gas emissions by around four million tonnes of CO2 per year.

Executive Vice-President Margrethe Vestager, in charge of competition policy said: “This €2.98 billion scheme will contribute to greening the district heating sector in Germany, by supporting the construction of more efficient district heating systems and the decarbonisation of existing ones. With this measure, Germany will be able to increase the share of renewable energy and waste heat in the heating sector, thereby considerably decreasing its emissions.

“The German aid measure we have approved today will contribute to achieving the EU Green Deal objectives and help Germany meet its environmental targets, while limiting possible distortions of competition.”