Price cap could limit district heating tariffs to get more homes off gas

The minister in charge of Dutch climate change and sustainability policy wants to examine the possibility of setting a maximum tariff for smaller-scale consumers using heating networks or district heating systems. Sophie Hermans, who is also the VVD’s deputy prime minister, wrote about the issue in a letter sent to Parliament on Monday.

Heat networks are part of the energy transition as an alternative for homes instead of natural gas. There are currently 600,000 connections to such systems.

However, the development of heat networks and district heating is stagnating. This is partially due to uncertainty among households about heat rates.

The Cabinet had already announced that it would investigate such a tariff ceiling in its four-year plan for a full term. "A tariff cap can be used to limit the supply tariffs for small consumers to a maximum yet to be determined,” Hermans wrote.

“This authority can be exercised if it is expected that unacceptably high supply tariffs will arise.” She still has to look deeper into how the government can finance such a plan.

The 2019 Climate Accord stipulates that the number of connections to the heat network must increase by half a million by 2030. The agreement calls for greenhouse gas emissions in the Netherlands in 2030 to be half of what they were in 1990.