A recent survey conducted by the Association of Municipal Companies (VKU) involving 757 utility providers has revealed significant skepticism among regional energy suppliers regarding the goal of achieving greenhouse gas-neutral heating by 2045. Three out of the four surveyed municipal heating providers deem this target unattainable largely because policymakers have not yet established the necessary framework. Furthermore, four in ten city utilities criticized the new “Heating Act” as a hindrance to achieving low-carbon heat.
Ingbert Liebing, CEO of the VKU, called on the federal government to finally provide “planning and investment certainty.” Speaking to the “Neue Osnabrücker Zeitung” (noz), he stated that the industrial sector expects the Federal Ministry of Economic Affairs to deliver “an autumn of decisions with concrete draft laws that create clarity and enable investments.” Liebing affirmed the companies’ complete support for the energy transition, noting that it strengthens supply security and makes them less reliant on fossil fuel imports, thereby insulating the economy and consumers from volatile gas and oil prices.
The VKU is holding a municipal utility congress in Berlin on Wednesday and Thursday. For this poll, the association contacted 757 municipal utilities and energy providers in August, achieving a participation rate of nearly 30%. A central focus of the survey was identifying what factors are currently dictating the companies’ ability to invest in the heating transition. A large majority-86 percent-cited the Heat Supply Ordinance, the amendment to the Energy Industry Act (EnWG) concerning the transformation of gas networks, and the planned amendment to the Heat Planning Act as crucial prerequisites.
In contrast, the new Building Modernization Act, which replaced the controversial “Heating Act” proposed by former Economic Minister Robert Habeck (Greens) in July, performed poorly in the survey results. Fifty percent of respondents saw neither progress nor decline, primarily because essential legal questions remain unresolved. Moreover, 36 percent judged the law as a step backward, with 40 percent reporting negative effects on investments within their own regions. The elimination of the 65-percent rule-which mandated that 65 percent of energy for heat generation had to come from renewable sources-was specifically identified as a reason for this apprehension.
Liebing described the current debate over “technology openness” as a dilemma. While heat pumps, heat networks, combined heat and power (CHP), or climate-neutral gases could be optimal solutions depending on local conditions, he stressed that freedom of choice does not mean every solution can be offered everywhere. He argued that requiring parallel infrastructure for all technologies nationwide would be neither affordable nor economically efficient. Therefore, it is vital that citizens, municipalities, and utilities reliably know which technology is feasible and economically sound for their specific location.
The survey also illuminated the substantial investment requirements facing the sector. Every second company anticipates that its investment volume will more than double by 2030 compared to 2024. However, many businesses feel that the financing for the energy transition remains insufficient, with 56 percent finding the current funding and subsidy conditions inadequate. Furthermore, 61 percent rated the legal framework as unclear.
The respondents stressed the need for long-term, reliable support. Seventy-two percent requested stable funding programs, such as the Federal Funding for Efficient Heat Networks (BEW), the Federal Funding for Efficient Buildings (BEG), and the Combined Heat and Power Act (KWKG). Liebing asserted: “The federal government should provide long-term support for the expansion of heat networks. This requires approximately 3.5 billion euros annually within the Federal Funding for Efficient Heat Networks. This subsidy must be secured by law.” He criticized planned cuts in the federal budget regarding future authorizations for commitment as counterproductive.
The VKU CEO also deemed the current state of new financing instruments, such as guarantees and sureties, to be insufficient. While the German Fund (Deutschlandfonds) represents an important initial step, Liebing noted that its expansion to include additional financing tools, particularly for bolstering equity and attracting private capital, is currently far below what is needed, urging the federal government to accelerate its pace.
