European Commission approves $3B German plan funding District Heating Decarbonization and Expansion
The European Commission this week approved a €2.98 billion ($3.04B U.S.) German plan to expand and decarbonize its district heating through renewable energy and waste heat projects.
The EU State Aid ruling will contribute to German’s National Energy and Climate Plan. Direct grants will be made available through August 2028 to district heating network operators and prospective market entries.
Germany mainly relies on natural gas for its heating needs during the winter, with much of that historically coming from Russian pipelines. The backlash over Russia’s invasion and war with Ukraine has pushed European Commission members to seek supplies elsewhere, including liquefied natural gas (LNG) imports from the U.S. and elsewhere.
German ports, however, are not as ready for LNG import and regasficiation as other nations. The new funding will help finance construction of new district heating plants and increase the participation of renewable and waste heat resources.
Solar thermal is growing as a resource to support district heating. In fact, more than 30 large-scale solar thermal plants are installed in Germany with a total capacity of more than 44 MW, according to reports.
“With this measure, German will be able to increase the share of renewable energy and waste heat in the heating sector, thereby decreasing its emissions,” Margrethe Vestager, executive vice president with the EC, said in a statement. “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.”
Overall, the German district heating plan is expected to support installation of about 681 MW of renewable heat generation capacity per year while reducing greenhouse gas emissions by 4 million metric tons annually.
The nation and European continent are striving for carbon neutral energy goals by 2050 or earlier.
The grants will cover portions of the feasibility and construction costs. In the case of operating aid, the aid will be calculated based on the amount of renewable heat produced, according to the EC release.
