New German heating law boosts local heating and cooling planning

Mandatory local heating and cooling planning is the best tool to decarbonise the 50% of the EU’s energy consumption that goes to heating and cooling our buildings. However, it can pose major challenges, especially for small municipalities. The shortage of skilled workers, including in the planning area, is a major obstacle and the financial strength of smaller communities is often very limited. This situation was already underlined in the LocalStaff4Climate campaign. 

Germany’s new law target heating decarbonisation by 2045

The German Bundestag recently passed a law for heating and cooling planning and the decarbonisation of heat networks to achieve the 2045 climate neutrality target. The revised Building Energy Act (GEG) and the new Local Heat Planning Act (WPG) aim to completely decarbonise the heating sector by 2045 and to transpose the new Energy Efficiency Directive, in particular its art 25.6 on local heat planning. 

“Decarbonising heating and cooling is a massive undertaking and detailed planning is not just important – it is vital. Without planning things will move too slowly, inefficiently and expensively,” said Christine Kugler, Munich’s Head of Climate and Environmental Protection Department.  “Munich’s heating and cooling planning are well underway but this law brings welcome support and clear obligations for all cities that are vital if we are to meet our climate targets.” 

The law obliges: 

• Building owners to switch from fossil to renewable heating technologies;  
• Operators of district heating networks to ensure the use of climate-friendly heat sources and; 
• Municipalities to identify and describe which heating technologies are or may become available, particularly with regard to gas, hydrogen and district heating networks.  

For municipalities, the level of requirement is based on the total population: 

• Municipalities and cities with a population of more than 100,000 are mandated to draft heat plans by June 30, 2026 at the latest.  
• For smaller municipalities, the deadline applies two years later, June 30, 2028. Municipalities with fewer than 10,000 inhabitants can also use a simplified procedure.  

Municipalities that are now embarking on this journey will receive financial support for the planning process. 500 million euros are available, as the Federal Government assured the Bundesrat in October 2023. 

 “The support of the Federal government is of course very welcome but it falls drastically short of what will be needed to ensure that German cities develop good plans and have the resources to implement them,” said Ms. Kugler. “There is a lot that other EU countries can learn from Germany with this law but we must be realistic in not underestimating the size of the challenge ahead – and that means acknowledging the resources that will be needed.”

Local plans for renewable heating and cooling networks

The aim of the local heating and cooling plans is to define whether future heat supply should be decentralised, via heating networks or using climate-compatible gases (biomethane, “green hydrogen”). By 2030, existing heating networks must be supplied with 30% renewable energy or unavoidable waste heat, 80% by 2040 and 100% by 2045. New heating networks from 2024 must be fueled by at least 65% renewable energy or unavoidable waste heat. 

Municipalities must follow a three-step approach, including:  

• In the first phase, an inventory analysis. In this phase, building types are analysed and recorded. Existing heating networks and heat sources are identified. This data is logged into a digital map of the area. 
• In the second phase, an analysis of the potential for heat production through renewable energies. This analysis includes:  the production of biogas, solar thermal energy and geothermal potential. In addition, other heat sources such as waste heat from industrial plants or waste incineration plants are considered. 
• In the third phase, scenarios for the future heat supply must be developed. The scenario must take into account the climate objectives as well as the affordability.  

Challenges 

A component that is not yet mandatory, but still relevant, for the development of a comprehensive strategy for future energy supply is the analysis of the effects that heat planning has on the development of the power grid and the associated infrastructure. Investments in the electricity grid will be required (this challenge was also recently highlighted in the Netherlands). Additional studies will therefore have to supplement municipal heat planning. Energy Cities recently published a paper on presenting which changes in regulation are needed for a quick and just phase-out of natural gas. 

“Access to excellent data is not a luxury for heating and cooling planning. It is absolutely vital. Munich has worked very hard to base our plans on the best available data but smaller cities especially will struggle to reach their potential if more isn’t done to ensure they can access the data they need,” concluded Ms. Kugler.

Data collection and centralisation play an important role in the energy transition. Although the new law includes provisions on a nation-wide obligation for third-party data accessibility (Section 3 Data Processing §§ 10 – 12), it lacks the means of implementation for data collection. 

Sources: DENA, ZEBAU (Energy Equilibrium project), District heating, heat pumps and hydrogen – how Germany plans to decarbonise its heating sector (Ruth Losch , Linklaters LLP)