The Death of Gas Heating: First Gradually, Then Suddenly

Gas heating is on its way out. No doubt about it. ??

And it’s about time frankly that this natural fossil gas is replaced by renewable heating. Be that electrification and heat pumps or sustainable biomass.

Some may say I’m rushing to conclusions and that it is too soon to party. ??

I’m not expecting this to happen immediately, rather it will happen suddenly and across the board. Reading the news over the last couple of weeks tells us an interesting story.

As gas becomes less appealing to consumers, it becomes even less appealing. ????

What do I mean by that? If you ever wondered how this giant will die, it’s not with a whimper, but with a bang!

Please allow me to explain my understanding so far.

Germany has pretty much been at the forefront of the transition away from gas heating.

The city of Augsburg recently announced plans to completely eliminate natural gas use within the next ten years as part of the country’s goal to achieve climate neutrality by 2045.

This is in line with a federal law aimed at gradually replacing fossil-based heating systems with more sustainable alternatives such as district heating and heat pumps.

As a result, utilities are gradually losing gas customers who transition to climate neutral solutions.

So far, nothing shocking.

However, this is leading to increased operational costs for the remaining customers or potential losses for grid operators. ?? ?? ??

So even though the city of Augsburg pushes for the elimination of natural gas usage by 2034, it is likely that consumers will start the switch sooner as they drop their gas provider like a hot potato. ?? ?? ????

The German government has also introduced a law to deny or cancel gas grid connections for customers on grounds of this transformation, triggering debates among gas providers over how to proceed with grid development.

As cities adapt their heating systems to other technologies, the gas pipeline network is set to become largely obsolete, necessitating an orderly retirement of the gas distribution grid to avoid significant costs for consumers and stranded assets for operators.

Energy companies like EnBW have also been launching large-scale heat pump installations capable of heating thousands of homes through district heating, marking a significant shift towards sustainable heating solutions.

This is further exacerbated by other policy changes such as Germany’s cancellation of the lower VAT rate for gas. April will be the first billable month for gas consumers that will have an 11% price increase. ??

So, it seems unlikely that gas will continue to exist as part of the heating mix in the state that it has over the last decade or so. Perhaps it will be limited to industrial applications, or certain commercial applications eventually.

But it seems that while the widespread gas infrastructure we are accustomed to now is deteriorating slowly, the mass migration of gas consumers to other alternatives may accelerate suddenly.

The great gas collapse will happen, first gradually, then suddenly.

Essentially, once it becomes uneconomical to safely maintain a gas distribution network for dwindling demand, consumers will not be willing to foot the more expensive bill. They will look for more economical alternatives and switch over to them.

And so, our collective journey towards electrified and sustainable heating continues.

?

Say hello to my little friend, the heat pump! ??

So where will consumers go? Heat pumps!

A new service was recently launched in the UK that allows prospective heat pump owners to visit households that have heat pumps installed.

This gives people the opportunity to see the heat pumps in action and ask questions to homeowners about their experience with the heating systems.

This is an interesting initiative that aims to build confidence in the effectiveness of heat pumps and encourage more households to make the switch to this sustainable heating solution.

Especially in the UK, I see this as a step in the right direction, (so long as the major installation kinks have been worked out in the installer pool!).

Nevertheless, heat pumps are the way forward.

Why?

Electrification is the key to decarbonization and heat pumps are the key to energy efficient heating.

?

Policies are universally going in that direction. The recent EPBD tells us this is the future. The EU’s Heat Pump Action Plan will eventually tell us the same.

It is inevitable - and only logical.

So, what are your thoughts on the great switchover?