What can we conclude? The observed variations in integral heat tariffs per MWh are rather high: the highest integral tariff (The Netherlands) is 65% higher than the lowest (Sweden). Identification of this difference is a first step towards under- standing it. Comparing heat tariffs is already tricky, let alone investigating the root causes of these reasons. The root causes probably include the costs of heat sources, capital, and net- works; these vary per heat network and per country. Other root causes are the used techniques and efficiencies. The type of buildings influences infrastructure costs: supplying detached houses is more expensive than supplying apartments. Local and national subsidies and taxes also play an essential role. Our ideas for further research In an ideal world for economists, the prices of a product reflect their costs. This research shows that average DH tariffs in the Member States differ considerably. A first question that arises is: do the costs of heat supply also vary to such an extent be- tween the Member States? Are they the result of differences in heat sources, capital costs, costs of the infrastructures, heat density, heat losses, differences in temperatures, the efficiency of companies, profit margins, and so on? Or are the differences the consequences of other factors, such as subsidies or taxes? An inquiry into the costs of heat networks in different Member States would be a valuable next step. Such a study will undoubtedly provide valuable lessons for all Member States. References This article is based on: Annelies Huygen, Jacob Janssen, Pieter Verstraten, Eva Winters (2021) Warmte in Nederland is een stuk duurder dan in andere Europese landen, ESB, 30 april 2021. Danish Energy Agency (2015) Danish experiences on district heating. www.ens.dk. Dansk Fjernvarme (2021) Varmeprisstatistik 2020: fjernvarmen er fortsat konkurrencedygtig. www.danskfjernvarme.dk. Eneco (2020) Nieuwe warmtetarieven Eneco: gemiddelde klant gaat minder betalen. nieuws.eneco.nl. Energiföretagen (2020) Fjärrvärmepriser. www.energiforetagen.se. Ennatuurlijk (2020) Tarieven. www.ennatuurlijk.nl. Heizspiegel (2020) Heizkosten pro Quadratmeter im Vergleich. www.heizspiegel.de. HVC (2020) Alles over warmtetarieven. www.hvcgroep.nl. Nils Holgersson (2020) Fjärrvärme 2019. nilsholgersson.nu. Segers, R., R. Niessink, R. van den Oever en M. Menkveld (2020) Warmtemonitor 2019. TNO Publicatie, 2020 P11264. StatBank Denmark (2021a) Energy account in GJ (detailed table) by use and type of energy, use and time. www.statbank.dk. StatBank Denmark (2021b) Households 1 January by region, type of household, household size and number of children in the household. www. statbank.dk. SVP (2020) Warmte ook in 2021 goedkoper dan aardgas! www.stadsverwarmingpurmerend.nl. Vattenfall (2020) Tarieven stadsverwarming. www.vattenfall.nl.
countries with lower temperatures in winter and higher de- mand have higher annual heat bills. This makes sense; buying more units of energy costs more. The Netherlands and Germa- ny have the lowest heating bills, reflecting their low demands. Annual heating bills do not give a good reflection of the cost of DH. The main reason for differences seems to be the differ- ences in heat demands. To have a fairer comparison, we com- pensate for the differences in heat demands. We divide the av- erage yearly bill by the associated demand to give us the tariff per MWh. Table 1 and Figure 2 show the results: the tariffs per MWh are the highest in the Netherlands (€144), followed by Germany (€104) and Denmark (€93), and lowest in Sweden (€ 87).
Countries
Heat demand (MWh/year)
Annual heating bill (€/year)
Integral tariff (€/MWh)
The Netherlands
7.2
€ 1,040
€ 144
Denmark
18.1
€ 1,679
€ 93
Germany
8.5
€ 890
€ 104
Sweden
12.8
€ 1,116
€ 87
Overview of the heat demand, annual tariff and integral tariff for the Netherlands, Denmark, Germany and Sweden. Sources: the Netherlands (Eneco, 2020; Ennatuurlijk, 2020; HVC, 2020; Segers et al., 2020; SVP, 2020; Vattenfall, 2020), Denmark (DEA, 2015; Dansk Fjernvarme, 2021; StatBank Denmark, 2021a,b), Germany (Heizspiegel, 2020), Sweden (Energiföretagen, 2020; Nils Holgersson, 2020)
Figure 2: The integral tariff of the Netherlands, Denmark, Germany and Sweden. For each country the heat demand is indicated.
Although these tariffs are standardized, the comparison is still somewhat sensitive to differences between countries. If the heat usage is high, the fixed part of the tariffs is divided over many units of heat, resulting in a lower average tariff per unit. Fixed costs then have a smaller effect on the unit price. Due to the variation in reporting, we were not able to account for these differences. However, the ratio between fixed and vari- able costs typically has a 30/70 distribution: 30% of the annual heating bill comes from fixed costs and 70% from variable costs. Therefore, the tariff differences in Table 1 and Figure 2 are unlikely to be fully explained by these differences in heat usage between countries.
For further information please contact: Pieter Verstraten, pieter.verstraten@tno.nl
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