Socialization of the grid costs of heat grids

Consequences for household expenditure and economic arguments

In the gas and electricity market, grid costs are allocated across all parties connected to the grid, i.e. they are socialized. As a result, consumers in various regions all pay approximately the same grid tariff. In the heat market, grid costs are borne largely by those consuming the heat, with a ceiling indexed to the gas price. In the case of heat supply, grid costs account for a greater fraction (70%) of the costs than with gas heating. As things currently stand, district heat suppliers often find it hard to make an acceptable business case based on the tariffs laid down by law.

This study shows that the way heat grid costs are allocated is a major factor in business cases and heat tariffs. A different allocation method would lead to financial savings for consumers, suppliers, or both, making it more appealing to switch from gas to heat. Introduction of a more similar allocation of grid costs would create a level playing field in choices for local green energy systems.

The effects of socializing the heat grids in the province of South Holland and the Amsterdam Metropolitan Region were calculated for four variants. This exploratory study was carried out for the Amsterdam Economic Board (Amec) and assesses the effects of socializing the costs of the two heat grids currently planned.