Around half of all households on a Dutch heat network could end up paying more to heat their homes under new cost-based pricing, some to the tune of €740 extra a year.
The analysis comes from Lars Wittrock and Paul Adriaansen, economists at the ACM (the Dutch consumer and market authority), writing in the economics journal ESB.
More than 700,000 Dutch homes get their heat from a shared warmtenet (heat network) rather than their own boiler, and the rules protecting what they pay are now being rewritten. Here’s what to know.
What’s actually changing?
Right now, there’s a cap on what your heat can cost, and it’s tied to gas prices under the “niet-meer-dan-anders” (no more than others) principle. In plain terms, this means that your heat bill can’t be higher than what a comparable home with a gas boiler would pay.
However, that price link is now being scrapped.
Under the newly adopted Wet Collectieve Warmte (Collective Heat Act), heat prices will gradually be based on the actual costs of each network rather than following the gas market.
On paper, this sounds reasonable enough: you pay the real cost of your own network, and investors get greater certainty about a fair return. Helaas, the issue is that some networks are far more expensive to run than others, and that cost will be passed on to consumers.
But before you start stressing about energy bills, there’s a small slice of good news. The law hasn’t taken effect yet, and rolling out the new system is expected to take several years, so you (and your wallet) can breathe easy for now.
What does this mean for your bill?
Unfortunately, nobody can tell you that right now.
What you’ll pay depends on which network heats your building, and that varies a lot from one provider to the next. The difference in pricing comes down to factors such as the heat source and the size and density of the network.
According to the journal, “about half of the customers would pay less than they do now, while the rest would actually pay more.”
Those with the strongest decrease in price will see their bills drop by 29%, while those with some of the highest increases will see their bills rise by a whopping 71%. If you’re unlucky enough to belong to the latter group, you could expect an extra €740 tacked onto your bill.
Meanwhile, the absolute hardest-hit thousand households could see increases of around 225% to their bill, or more than €1,500 extra a year.
What can you do about it?
For now, you’ll need to sit tight.
A heat network is a single shared system fed by a single source, so unlike with gas or electricity, there’s no rival supplier on the line for you to switch to. Landlords, housing corporations and owners’ associations typically won’t allow you to install an alternative, like your own boiler or a heat pump, so if your costs climb, you’re largely stuck with them.
However, the good news is that the new pricing can’t go live until the government decides how to cushion it. As the law requires affordability to be safeguarded, the ACM economists modelled what different solutions would actually do.
The main ideas are a cap on the most expensive networks, so their prices can’t run too far above the sector average, and a price guarantee that sets a ceiling on what you pay per unit of heat.
A third option copies Denmark, where heat companies aren’t allowed to make a profit, which lowers their costs and, in turn, your bill.
Of course, whether the Dutch government goes through with any of these solutions is still up in the air.
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