BERLIN (dpa-AFX) - The municipal utilities association VKU has spoken out in favor of state aid for the decommissioning of gas networks. VKU CEO Ingbert Liebing told the German Press Agency that so far, decommissioning has been financed by the network operators, who then have to pass this on to gas customers via network charges. "However, if it becomes foreseeable that gas prices will rise immeasurably due to fewer customers and increased gas network costs, then we will also have to discuss whether we need a state compensation account as a safeguard. The state is using tax revenue to finance the ramp-up of the new world, but decommissioning the old world also costs something."

VKU warns of higher grid fees

According to Liebing from the German Association of Local Utilities (VKU), the state could compensate the network operators for some of the costs caused by decommissioning and shortened depreciation periods, which would have to be passed on to customers via the network charges, via a compensation account. "Gas customers would thus be spared the costs of decommissioning. Ultimately, the aim is to avoid unacceptable cost increases for customers."

Many municipalities are currently working on municipal heating planning. According to the VKU, there are basically two options for the gas networks in towns and municipalities: convert to "green gases" or shut down.

There is a need for regulation in cases where gas networks could not be converted to "green gases" but are shut down, said the VKU Managing Director. "If more and more people opt for district heating or heat pumps and fewer and fewer customers are connected to the gas grid, these infrastructure costs will be passed on to fewer and fewer shoulders." Grid fees would then rise drastically. "That's why it makes sense to manage and finance this transition in good time. After all, gas network operators will have a high need for depreciation if gas networks have to be decommissioned earlier than previously stipulated by regulations." With a compensation account, municipal utilities could focus their financial resources on switching to alternatives such as district heating and heat pumps as well as green gases.

Paper from the Ministry of Economic Affairs

In mid-March, the Federal Ministry for Economic Affairs and Climate Protection presented an ideas paper on the future of gas distribution networks, which is now being followed by a public consultation. With a view to the goal of climate neutrality in 2045, the paper states that the phase-out of fossil natural gas must be completed by then. Gas distribution networks are primarily used to supply natural gas for heat generation in households, industrial companies and other businesses as well as local power plants. It can be assumed that the length of these networks, currently over 500,000 km, will decrease significantly. The extent to which the gas distribution networks will still be needed after 2045 will depend, among other things, on the extent to which they could and should be used to distribute hydrogen.

Liebing said that the Ministry of Economic Affairs' paper focuses too much on decommissioning the gas grids and too little on converting them to hydrogen grids. "It is unrealistic to simply write everything off and shut it down and believe that everything will now magically go electric and the electricity grids will take care of themselves. We have to invest massively in the electricity grids, otherwise the ramp-up of heat pumps will get stuck before it has really taken off."

And there are currently 1.8 million commercial and industrial SMEs in the gas network. In surveys of gas network operators, around 75 percent of commercial and industrial customers said that they would continue to need gases in the future because they could not manage processes electrically on their own. "They will therefore be dependent on hydrogen."/hoe/DP/zb