Prices and costs of 5GDHC networks

Are 5GDHC networks an economical heating solution?

Despite all declarations of intent for a climate-neutral energy and heat supply, the question of economic efficiency is still the most important decision criterion when it comes to planning new energy systems. This also applies to 5GDHC networks: Since 5GDHC is not yet very widespread, there is often uncertainty as to whether the technology can compete economically with other heat supply solutions. This question cannot be answered in a general way, since the costs depend strongly on the local conditions of a neighborhood. For a description of which factors influence the economic viability of low-temperature networks, please refer to the article on the economic viability of 5GDHC networks.

Heat prices of existing districts with 5GDHC network

For some 5GDHC networks, the prices for the end customer can be viewed publicly and analyzed. Table 1 shows the price information for four heat suppliers in Germany: Basically, for all four examples, there is a one-time connection fee. This covers the cost of developing the heat source and often amounts to around €10,000. In addition, an annual base price is charged. This often includes an all-round service, which covers all operating and maintenance costs of the plant and network. An energy charge (price per kWh of heat) must be paid for the heat supplied. The cooling supply is either free of charge or charged at a flat rate with a basic fee per year. Table 1 also shows sample calculations for a typical single-family house, which are taken directly from the information provided by the energy supply companies.
In the price data sheet for the district Am Himmelchen in Engelskirchen (Germany), a comparative calculation is also made with other heating systems. In this district, the costs for the house connection amount to 4.64 €/(m² of property area). In addition, there are consumption-dependent costs of 6.9 ct/kWh (energy price) and a basic price of 132 €/month. The costs for a single-family house with 8 kW heating capacity are given as an example: For the 5GDHC network, the annual costs amount to 2481 €. In comparison, the costs for a decentralized heat supply are 2800 €/year (ground source heat pump) or 2200 €/year (air-source heat pump). In this case, the air-source heat pump is thus estimated to be more cost-effective, although this calculation does not take into account other disadvantages such as potentially disturbing noise emissions from the heat pump outdoor unit or a higher risk of failure. In the list of 5GDHC networks, you also find an overview of the pricing models for heat as well as the pricing models for cooling. The price data of the four example quarters are summarized in the table below.

What does heat from 5GDHC networks cost?

The table below shows example price data for four neighborhoods in Germany.

Price adjustment clause

Because the investments make up the largest share of the total costs for 5GDHC networks and the consumption-based costs are lower in later operation (electricity for circulation pumps and heat pumps), simplified pricing models are often used. An example of this is the 5GDHC network in the new development area in Gensingen. Here, the building owner pays only an annual flat rate of 80 €/kW (net, as of 2021) for connection to the cold heat network. For a connection capacity of 5 kW, this is 400 € per year. In addition, a price change clause is agreed: 20 % of the flat rate tariff increases linearly with the German index of collectively agreed hourly earnings in the overall economy: $$FR = FR_0 \cdot (0,8+0,2 \cdot \frac{L}{L_0})$$ This type of flat rate-based pricing of heat or cold is not uncommon for 5GDHC networks. In particular, the pricing of cooling supply is often not consumption-based, but is often done via an annual fee or is even completely free of charge. In particular, a no-cost cold supply can be useful to maximize waste heat input in the summer to regenerate a potential geothermal probe field over the summer.

Are 5GDHC networks more expensive?

Whether 5GDHC is more expensive or cheaper than conventional heating networks or decentralized heat pump solutions cannot be answered in general terms. The reason for this is that too many individual boundary conditions of the respective neighborhood influence the economic efficiency. These can be, for example, the type and size of the available heat sources. Basically, most technical planners dealing with 5GDHC are of the opinion that there is no systematic economic disadvantage of 5GDHC networks. In fact, some planners consider 5GDHC to be the more economical option compared to conventional heat networks or even decentralized solutions. However, depending on the assumptions made, this picture is not clear-cut, and there are also voices that do not consider 5GDHC to be fundamentally advantageous. Nevertheless, it can be assumed that in all realized 5GDHC projects an economic efficiency analysis preceded, in which the supply was also compared with a normal heating network or decentralized supply solutions. The fact that the 5GDHC networks were actually realized indicates that either the cold network was the most economical, or at least had only insignificant economic disadvantages. Table 2 shows an example calculation for a single-family house, comparing a 5GDHC network with decentralized solutions (decentralized geothermal borehole, air-source heat pump and pellet heating). The calculation is taken from a flyer for 5GDHC by Stadtwerke Warendorf.

Note: Operating and capital costs include: Base price, capacity price, energy price, financing costs, electricity costs, operation heat generation, service, maintenance, chimney sweep (pellets), fuel storage room (pellets). For the 5GDHC network, the cooling function is included here, as well as the renewal of the system at the end of its service life.

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