By Stefan Kleimeier, Wärme Hamburg
Why ownershipmakes a difference
On the 3rd of September 2021, the city-owned district heating company Wärme Hamburg will celebrate its second birthday. Two years ago, Hamburg repurchased the remaining 74.9% stake in the former joint venture with Vattenfall, following a decision in a political referendum in 2013. At that time, a majority, 50.9% of the population of Hamburg, voted in favor of re-municipalization of the power grid, the gas grid, and the major district heating (DH) business. The Hamburg senate promised to honor the result and undertake all efforts to buy back the grids. Since then, a lot has changed, and the question is: Was it worth it? For more than a hundred years, the major DH grid in the German city of Hamburg was part of the city-owned utility Hamburgische Elctricitaetswerke HEW. HEW was operating the nuclear power plants Krümmel and Brunsbüttel, operating the power grid, and selling electricity to households, SMEs, and the Hamburgs industry. It was also operating the city DH grid, powered by the HEWs coal-fired combined heat and power (CHP) plants. In the 1990s, the liberalization of the German power market started. Within a few years, the mergers and takeovers happened. The city of Hamburg decided in parallel to follow a German economy trend and sell parts of the HEW to the Swedish utility Vattenfall. Within the next decade, more and more shares changed hands, and finally, all shares went to Vattenfall. The name HEW consequently disappeared. A decision most people of Hamburg did not appreciate. In the 2000s, the Swedish utility experienced a rapid decline in its reputation in Hamburg after unfortunate handling of two fire incidents in the nearby nuclear power plant of Krümmel, poorly communicated increases in electricity prices, and a decision to build a new 1,600 MW coal-fired power plant within the city limits. As a result, people began asking whether the HEW's privatization was the right decision. Joining a popular trend of re-municipalization in Germany, a people's initiative was formed and demanded the repurchase of the three grids (power, gas, and DH). Whereas the power and gas grid are regulated in Germany, the initiative emphasized the opportunities a buyback of the DH business would offer. Namely, the swift replacement of coal-fired heat generation by a more environmentally friendly alternative. The Hamburg senate denied the request to buy back the grids. But the people's initiative collected enough signatures to enforce a political referendum.
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