Germany to let local utilities close gas grids where demand declines permanently
Germany’s economy ministry is working on a law reform that would enable local utilities to shut down gas grids and cut off consumers from gas supplies. Currently, utilities are obliged to connect customers seeking gas supplies to the grid and cannot cut existing connections.
The amendment would allow utilities to disconnect users from the gas grid if they do not see a future for the infrastructure, even without the consent of the end consumer, the economy ministry said in the draft law. Under the proposal, utilities would need to draft so-called network development plans for their gas grids, detailing how they plan to repurpose or decommission these, and inform consumers years in advance about plans to disconnect them.
The network development plans should be drawn up as soon as a permanent reduction in gas demand is expected within the following ten years, which would make the conversion or the decommissioning necessary. The plans would form the legal basis for the conversion to green gases such as hydrogen or biogas, or decommissioning. Utilities would need to inform consumers about their alternative options for heating and available subsidies.
Moreover, the law reform stipulates that long-term gas supply contracts may not have a duration beyond the end of 2049, with the exception of contracts that can guarantee carbon capture and storage (CCS).
Move to net-zero to make majority of gas grid obsolete – think tank
As Germany nears its 2045 net-zero deadline, fossil gas will have to be largely phased out. However, fossil fuels continue to dominate the heating market for existing buildings in the country. Theoretically, Germany’s gas grid could be repurposed to carry climate-neutral fuels such as biogas or hydrogen. But these are expected to be prohibitively expensive and inefficient when it comes to heating buildings. Think tank Agora Energiewende therefore anticipates the net-zero transition to render more than 90 percent of the country’s distribution gas grid useless.
Local utilities are struggling to develop plans to decommission or repurpose their networks of gas pipelines, a recent survey by utility association VKU found. The association said that a lack of rules governing the phase out of gas grids or their conversion, as well as the question of who pays, remain major obstacles for utilities to make plans. Local utilities today generate large amounts of their revenues with the gas system.
Clear planning reduces costs – utility
In an ideal situation, utilities would decommission gas grids neighbourhood by neighbourhood, the head of local utility MVV Energie, Gabriël Clemens, told CLEW earlier this year. That way, it could steadily reduce its maintenance costs, minimising households’ grid fees. This would only be possible if all households in one neighbourhood forgo gas around the same time. If this is not the case, utilities would have to maintain the entire gas grid just to keep a few households warm – with the running costs falling on fewer hands.
Social protection mechanisms and legal frameworks would be needed to ensure a few households do not bear the whole cost or prevent entire sections of the grid from shutting down.
Large German cities have until mid-2026 to present their municipal heating plans, detailing where what kind of heating systems will be available, and by when, such as district heating networks.
The EU has given member states until August 2026 to introduce plans to legislate the decommissioning of gas grids. The directive states that, if countries choose to phase out gas to achieve climate targets, it should be possible for them to refuse access to or disconnect users from infrastructure that will be decommissioned – though affected users should be adequately protected.
