An emergency solution for heating networks appears to be failing in the House of Representatives

The Heat Act, which is intended to revise the organization of the market for heating networks, has been in the works for years and the hope is that it can finally be introduced in the course of next year. But the debate took on a topical significance last week because Minister Jetten sent an emergency memorandum to the House in which he wants to moderate the increase in heat rates before the introduction of the law.

Jetten came up with that proposal in response to the conflict surrounding the Amsterdam heating network. In that city, about 15 percent of the homes are already heated with water supplied via pipes from, among other things, the waste plant and the power plant. Amsterdam wants to connect approximately ten thousand additional homes to the heating network by 2027. But in Amsterdam-Noord, where the municipality, together with housing associations and energy company Vattenfall, is removing gas from hundreds of social rental homes and connecting them to heating, development is now at a standstill.

Vattenfall states that the costs of laying the pipes have become a lot higher due to inflation. That is why the company increased the standing charge for heating customers at the beginning of this year from approximately 600 euros per year to around 800 euros. This displeased the housing associations, who had actually promised to pay an increase in fixed costs for tenants. The corporations canceled their cooperation in the heating project.

Uncertain investments

The Amsterdam municipal council tried to remedy the situation by covering part of the costs. And at the same time, Minister Rob Jetten hoped to bring some peace with his emergency law towards next year. In it, he limits the maximum cost increase that Vattenfall and other heat providers may request from January 1, 2025.

It was precisely this measure by Jetten that prompted Vattenfall on Monday to completely pull the plug on the development in Amsterdam. The energy company says that the investment in the networks is becoming too uncertain due to these types of changes in rates.

“What does this whole discussion do to support for heating networks?” MP Suzanne Kröger of GroenLinks-PvdA asked rhetorically on Wednesday. She emphasized once again that heating networks are an important link in the national strategy to switch Dutch homes completely off gas by 2050. ‘But that can only work if it is also affordable for citizens.’

Apart from the PVV, which considers heating networks too expensive by definition and would rather see the Netherlands continue to burn gas, all other parties are also concerned about the impact of Amsterdam on the heat transition. They all also believe that heating networks should remain affordable for everyone.

However, many parties have major reservations about Rob Jetten’s quickly chosen solution. Especially after Vattenfall decided to stop rolling out heating networks altogether. “Breaks of this are coming,” CDA leader Henri Bontenbal warned.

Previous energy transition

In their contributions, both VVD MP Sylvio Erkens and Pieter Grinwis of the Christian Union referred to the last time a major energy transition took place in Dutch households. There was also resistance at the time, Erkens said. A club of satisfied coal burners was not ready for the transition to gas. ‘Nice, people burn coal’ was their slogan.

But Grinwis emphasized that it was mainly thanks to a very strict and well-orchestrated action by the government that that resistance was overcome very quickly. ‘Within 5 years, 80 percent of all houses in the Netherlands were connected to natural gas.’

Grinwis would therefore prefer that an important part of the new Heat Act be introduced as of January 1 next year. Namely one in which the maximum rate of heat is no longer linked to the price of gas, but is based on the actual cost of heat. Other parties found this too hasty and drastic.

Although the discussion in Parliament is far from settled at the end of the evening, one thing is already clear. The unity with which the Dutch government rolled out the gas network in the 1960s is hard to find when rolling up the same network.