About half of all households connected to a district heating network in the Netherlands could see higher bills as a new regulatory system takes effect, according to a warning from the Authority for Consumers and Markets (ACM).
District heating systems currently supply heat and hot water to roughly 700,000 homes across the country, including large housing blocks and newer residential developments in Amsterdam.
Shifting away from gas price caps
The anticipated price changes stem from the upcoming Collective Heat Act, known as the WCW, which changes how consumer tariffs are calculated.
Under current rules, district heating prices are capped based on the average cost of heating a home using a traditional gas boiler. The new law phases out this maximum ceiling and allows the regulator to set tariffs based on the actual costs of running each specific local network.
Significant increases for some households
Estimates from ACM economists indicate that about 10 percent of affected households could experience a bill increase of 71 percent, which amounts to roughly 740 euros more per year.
In the most extreme cases, annual heating costs could rise by up to 1,500 euros unless additional government measures are introduced to cushion the impact.
The impact will not be negative for everyone, as the regulator estimates that the 10 percent of consumers who benefit most from the cost-based approach will see their annual heating bills drop by an average of 29 percent.
A balancing act for regulators
The consumer watchdog noted that the legislation still leaves room for ministers to step in with policy adjustments to keep heating affordable for residents.
The ACM is currently preparing for the transition while analyzing potential solutions to prevent severe price shocks.
The regulator stated that the revised law aims to ensure consumers pay strictly for the real costs of their own heating network while providing network operators with enough certainty to invest in necessary local infrastructure.
