Dutch District Heating Networks Cost Households 15-25% More Than Gas

2026-02-28 green

Netherlands, Saturday, 28 February 2026.
Households connected to district heating in the Netherlands pay significantly more than those using gas, with fixed costs over 75% higher at €650 annually versus €369 for gas. The pricing structure leaves 700,000 customers unable to choose suppliers or influence tariffs, while 29% express dissatisfaction with value for money according to market regulators.

Price Mechanisms Drive Consumer Disadvantage

The cost disparity stems from fundamental differences in pricing structures between district heating and gas connections. District heating customers face fixed annual costs of approximately €650, plus an additional €180 per year for rental of the “afleverset” delivery equipment, compared to gas customers who pay fixed costs averaging €369 annually [1]. Beyond fixed costs, district heating users pay €40.97 per gigajoule, equivalent to €1.25 per cubic meter of gas, while new gas contracts cost approximately €1.20 per cubic meter [1]. The Autoriteit Consument & Markt (ACM) sets maximum district heating prices annually on January 1st, linking them directly to gas prices [1]. However, this timing creates additional disadvantages for heat network customers, as Robert Harmsen from Utrecht University explains: “Gas prices in January have often been among the highest of the year in recent years. As a result, district heating customers may end up paying 20 cents more per cubic meter than households who signed their gas contract at a favorable moment” [1].

Consumer Choice Limitations Amplify Cost Concerns

Unlike gas customers who can shop between suppliers and influence tariff determination, district heating customers cannot choose their supplier or negotiate pricing [1]. This monopolistic structure has contributed to widespread dissatisfaction, with 29% of consumers expressing displeasure with the value for money offered by district heating networks according to ACM data [1]. The pricing gap becomes more pronounced for low-usage households, where some customers using significantly less heat pay up to 50% more than comparable gas users [1]. Recent price increases have exacerbated consumer concerns, with Eneco raising district heating costs by over 30% in 2024, pushing the average household’s annual heating bill to €2,039 [7]. Energy expert Isabelle van den Ende noted that while total energy costs for average households reach approximately €2,200 for both heating systems, district heating customers face less risk of repair costs for heating installations [7].

Policy Changes Reshape Market Structure

The Dutch government implemented the “Wet collectieve warmte” (Collective Heat Act) in 2025, introducing cost-based tariffs for district heating networks to replace the previous “Niet Meer Dan Anders” (No More Than Otherwise) principle [2]. Consumer reception of these changes remains mixed, with 37% of homeowners viewing cost-based tariffs positively while 27% express negative opinions [2]. The legislation includes instruments like tariff limits to reduce large price differences between networks, though it allows for tariff variations that could incentivize efficiency improvements [2]. Meanwhile, government support continues through the Warmtenetten Investeringssubsidie (WIS), which provides investment subsidies for energy-efficient district heating networks serving at least 250 small consumer connections, with applications accepted from August 1, 2025 through August 31, 2026 [3].

Alternative Solutions Emerge Amid Cost Pressures

As district heating costs create affordability challenges, alternative sustainable heating solutions are gaining attention. Geothermal energy presents a potentially more cost-effective option, with annual costs ranging from €1,200 to €1,600 compared to natural gas costs of €1,750 to €2,250 for average households [6]. The economic advantage stems from geothermal energy’s free heat source, reducing dependence on volatile international energy markets [6]. However, the high initial investment requirements—tens of millions of euros for geothermal projects—necessitate spreading costs across thousands of connections over decades [6]. The broader energy transition faces significant financial pressures, with an Ecorys report commissioned by the Nederlandse Vereniging Duurzame Energie indicating that insufficient sustainable energy production could cost the Dutch state €2.6 billion by 2034 [4]. These mounting costs underscore the importance of developing economically viable alternatives to traditional gas heating while maintaining consumer affordability during the transition to sustainable energy systems.

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energy transition district heating