German local utilities urge “clear rules for orderly gas exit” as many lack grid transition plan
Clean Energy Wire
As Germany moves towards its goal of a climate neutral economy by 2045, local utilities are struggling to develop plans to decommission or repurpose their networks of gas pipelines, a survey by utility association VKU found.
“For 46 percent of municipal utilities and local energy suppliers, it is still unclear what will happen to their gas network,” said VKU. The association surveyed more than 600 companies, and one fifth stated that they would fully decommission their gas networks and switch to district heating and heat pumps. Almost one in four municipal utilities intend to combine decommissioning and conversion to green gases such as hydrogen or biomethane.
Germany aims to be climate neutral by 2045, which means that fossil gas will have to be largely phased out by that time. However, fossil fuels continue to dominate the heating market for existing buildings in the country. Germany’s 43 million apartments were heated mainly with gas (56%) in 2024. 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 building heating, so the think tank Agora Energiewende anticipates the net zero transition to render more than 90 percent of the country’s gas grid useless.
VKU 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. The closer the climate neutrality deadline and the end of fossil gas supplies looms, “the greater the risk of a patchwork [of rules and solutions] and considerable uncertainty among consumers,” said VKU chief executive Ingbert Liebing.
“The federal government can prevent this by establishing clear rules for an orderly phase-out of natural gas,” he said.
As the number of households and small businesses with gas boilers falls, the more each would have to pay grid operators to maintain the network. “If there’s only ten percent of demand for gas, and the same total cost of maintaining the entire gas grid, the remaining households will have to pay ten times more to maintain it, provided there is no regulation for social cushioning,” Gabriël Clemens, chief executive of Mannheim’s energy supplier MVV Energie AG had told Clean Energy Wire earlier this year.
