Heat transition

In the short term, there is a need for clarity about the exact method that will be used to calculate heating tariffs. It is important that only efficient costs are passed on to the customer. Subsidies and connection costs paid by the customer are not included in the depreciation costs of the capital goods.

It is important that there is transparency in costs and prices. A good example of this is drinking water tariffs. These are set annually by the drinking water companies and published by VEWIN (the trade association for drinking water companies). The Netherlands Authority for Consumers and Markets (ACM) supervises this process. It does not set the rates, but can assess or evaluate the basis for the rates, either on request or on its own initiative.

Residents must be able to rely on a national methodology that determines the costs of heating (and cooling) for an average household. A methodology from which consumer rates are derived. The same parameters must always be used for these calculations. Denmark has a clear methodology for this that helps residents and local authorities make choices about heat supply.

Heating companies must strive to provide residents with heating at the lowest possible costs. A heating network will only be installed if it fits within the municipal transition vision on heating and if it has been demonstrated that it is the most attractive option for residents.

There is a need for a national cost catalogue so that all heating companies and local authorities can share their experiences regarding the investment and operating costs of heating networks. This catalogue can also be used to develop new investment plans. A large procurement organisation such as Rijkswaterstaat has such a system for investments in road and water infrastructure. Something similar must be made available for investments in heating infrastructure.

In many sectors, technical standards have been established that investments must comply with. These standards contain guidelines for service life, maximum heat loss, and maintenance. This is important in order to give local authorities, residents, and financiers confidence that investments are sound and based on a long-term vision.

Once the decision has been made to provide the most efficient possible heat supply in an area, it is desirable that taxes and subsidies support the investment in heat supply for residents. This means that no subsidies should be used for alternative heat supplies in areas where a heat network is the best solution. Conversely, heat networks should not receive support if they are not the cheapest solution for residents. The same applies to the use of energy taxes.

A national guarantee fund for investments in heat networks significantly reduces the capital costs of heat networks. This also means that the rates for residents can be considerably lower. A national scheme backed by the central government makes the financing challenge for municipalities considerably more manageable. Moreover, it offers the same conditions throughout the Netherlands and makes investments more predictable.

Residents' energy cooperatives should also be able to make use of the guarantee fund. They also need additional support with financing during the preparation and development phase.

In order to keep the price of heat stable, it is desirable to develop a diversified source strategy. If multiple (potential) heat sources and heat storage options are available, fluctuations in energy prices can be better absorbed. This can prevent major shocks in supply. At the same time, it is easier to make the source mix more sustainable more quickly.