Germany expects the cost of transforming its natural gas and heating networks to reach as much as €14 billion ($15 billion) by the end of the decade, the first time an official estimate has been given.
The country wants to start using hydrogen and expand district heating to reduce its heavy fossil fuel dependency and cut overall carbon emissions by two thirds by 2030, according to an Economy Ministry document seen by Bloomberg. The cost will be about €1 billion a year for upgrades to each network for the next seven years.
Cleaning up heating systems and replacing gas are key areas to tackle if the government’s climate goals are to be met. While policy makers argue it’s more expensive to rely on fossil fuels in the long run, the cost of the energy transition is becoming a political issue. The government is being forced to water down a plan to ban boilers next year after pressure from the the Free Democrats.
The think tank Agora Energiewende warned that Germany’s plan to switch to renewable energy sources could lead to decommissioning of over 90% of its gas distribution network, with risks of €10 billion of stranded assets.
