According to a new draft of the planned heating law prepared by Federal Minister of Economics Robert Habeck together with Federal Minister of Construction Klara Geywitz, citizens are to provide precise information about their energy consumption and the insulation of their houses in the future. The state wants to know how citizens heat their houses, how high their energy consumption is and how well their houses are insulated. According to the draft, this data is to be sent to the state for the past three years. Experts, however, warn against an encroaching state. The draft has sparked controversy. (NZZ, 24.05.2023)
New Heating Act: Municipalities to receive detailed data on energy consumption of buildings
According to the draft of the Heating Act, detailed data on the energy consumption of buildings is to be reported to the municipalities in the future. Information on the annual final energy consumption of the last three years in kilowatt hours per year as well as the type of heating system and the date of its commissioning are to be requested. In addition, the year of construction and the address of the buildings as well as their possible listed building status are to be recorded. This extensive information is needed because by 2045 all buildings in Germany are to be heated in an emission-neutral manner, i.e. they are no longer to use oil or gas heating systems. From 1 January 2024, according to the draft law, practically all newly installed heating systems in Germany must be powered by at least 65 percent renewable energy. In many cases, this is only possible with an electric heat pump that uses environmental heat from the ground, air or waste water.
The new draft law aims to drastically increase the pressure on tenants and landlords through government measures. Based on the collected data, the municipalities are to be obliged to prepare an “inventory analysis” and set “milestones” in order to achieve complete conversion in the heating sector. Federal Economics Minister Habeck also needs the data because the transformation of Germany into a country that relies mainly on heat pumps, which he is calling for, will lead to bottlenecks in the electricity supply. To avoid overloading the power grids, Klaus Müller, the head of the Federal Network Agency, plans to temporarily limit the power supply from January. “If it is proven that there could be this grid overload, then there is a right of the distribution grid operator to dim,” Müller explained in an interview with Bayerischer Rundfunk at the end of March. With the newly collected data, the state would know when and where power cuts would be necessary. (BR, 15.05.2023)
Economist expresses concerns about state data collection and advocates higher CO2 pricing as more effective approach
Economist Manuel Frondel of the Leibniz Institute for Economic Research (RWI) expresses concerns about data collection and sees it as a massive state intervention. He explains that banning fossil heating would require extensive state planning within a very short time. Energy grids would have to be drastically expanded and subsidy programmes for citizens would have to be set up in order to manage the German switch to heat pumps.
Frondel stresses that Habeck’s plan would fundamentally change the existing and well-functioning heating market within a few months. The state would have to invest considerable financial resources for this. Frondel therefore doubts the ministry’s approach and points out that a powerful and effective instrument already exists in the form of Germany’s CO2 pricing. Currently, the emission of each tonne of CO2 is taxed at 30 euros. For heating oil, this corresponds to 9 cents per litre. An increase in pricing would increase the motivation to save energy and to install climate-friendly heating systems in buildings. Frondel considers this to be a more effective measure and wonders why Habeck has chosen this path.
In contrast to an abrupt ban on fossil heating, citizens, businesses and the administration would be given more time to implement the heat turnaround. Manuel Frondel emphasises that especially people with low incomes would be considerably burdened by the replacement of heating systems. As a result, the state would have to provide high subsidies to counteract this, thus running a high risk of being overburdened both financially and bureaucratically. Paradoxically, economist Veronika Grimm warns that Habeck’s Heat Act could lead to many households continuing to use oil and gas heating instead of heat pumps. This would jeopardise the vision of a climate-neutral heat transition. Grimm argues that it was wrong to take citizens by surprise with this draft law and the short deadline. The result would be uncertainty and panic buying.
Traffic light coalition at odds over heating plans: massive opposition and demand for withdrawal of the bill
Despite massive opposition from the opposition and even from within the own ranks of the traffic light coalition, Habeck wants to have the bill passed by the Bundestag before the end of June. On Wednesday, a topical debate on Habeck’s plans was held in the Bundestag at the request of the CDU/CSU parliamentary group. The entire opposition gathered under the motto “Stop the federal government’s heating plans – restart the heat transition in a way that is open to technology and socially acceptable”. The unanimous opinion was that the present bill should be withdrawn completely. Jens Spahn of the CDU described the government’s plans as a “location threat for the Federal Republic of Germany”. His party colleague Andreas Jung added that the Building Energy Act was an “oath of revelation and the declaration of bankruptcy of the traffic light in climate policy”.
AfD MP Marc Bernhard went into detail, stressing that there were not enough heat pumps, tradesmen or electricity and that people did not have enough money to pay for this madness. Representatives of the government parties saw the CDU/CSU attacks as a “nasty populist campaign” and a “playing on fears”. Matthias Miersch of the SPD countered accordingly. The FDP apparently tried not to further burden the mood in the traffic light coalition. Christoph Meyer expressed confidence that a good law would be obtained, “calmly and with the necessary time”. The most remarkable moment, however, was when Green MP Andreas Audretsch publicly reached out to the liberal coalition partner for dialogue. He stressed that one could of course gladly talk about deadlines, exceptions and a broader openness to technology.
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