Last gas-heated homes in Germany could face extra costs of 4,000 euros per year – analysis

Households that continue to rely on gas heating systems in Germany may face additional costs of more than 4,000 euros per year by 2045 due to rising grid fees, an analysis by research institute Fraunhofer IFAM has found. As more and more households are expected to switch to other heating technologies over the next 20 years, the remaining gas customers could see their costs rise by a factor of ten, as fewer customers would foot the bill for maintaining distribution grids, the researchers said.

To avoid skyrocketing costs for the last gas users, cities and municipalities need to plan their phase-out of gas well in advance and prepare households to transition to renewable heat sources, commented the Umweltinistitut München (Munich Environment Institute), which commissioned the analysis.

Grid operators have already announced an average ten-percent increase in gas grid fees for 2026. The Fraunhofer IFAM researchers found that this trend will gain “massive traction” by 2045, the year in which Germany plans to become climate neutral. A typical three-person household could see its annual grid costs rise to as much as 4,300 euros, compared to 300 to 400 euros today, said Umweltinstitut München. 

Decommissioning gas infrastructure “district by district” would allow the most cost-efficient transition for cities and municipalities, the NGO argued. While this currently runs into legal challenges, the economy ministry plans to propose to allow grid operators to cut off individual households and reject requests for new connections. The ministry said it would introduce a notice period of ten years, but municipality lobby groups have argued that the period should be halved to give operators more leeway.

Fraunhofer IFAM researcher Roland Meyer also said that a notice period of one decade is too long: “This would make an orderly and gradual retreat from gas supply more difficult,” he argued. Modelling of phase-out scenarios showed that excessive costs could only be avoided if operators decommission underused parts of the grid “early on in a targeted manner.” Meyer also criticised that the ministry does not currently plan to make gas grid phase-out plans mandatory. “If grid operators were obliged to present their plans by 2027, this could save billions in additional costs.”

The Umweltinstitut München warned that grid operators had no intrinsic incentive to prepare an orderly exit. “Additional costs can just be passed on to customers. In order to cling to their business model for as long as possible, they bet on the state stepping in during an emergency with new subsidies,” the institute said. “The government has a responsibility to avoid this.”

The decarbonisation of the heating sector has been a controversial topic in Germany in recent years. The government of chancellor Friedrich Merz has promised to weaken a law adopted by the previous government that bans the installation of new fossil heating systems, but has so far not presented a draft, or a concept for how to reach climate targets in the sector by other means. Cities and municipalities are required to present detailed plans for how they aim to decarbonise heating supply in individual districts within the coming years.