Energy prices: “Absurd” district heating prices of Stadtwerke München – district of Munich

Those who heat their homes with district heating from biomass or geothermal energy are currently among the lucky ones. It does something for the climate, and it should also be protected from massively rising energy prices. At least that’s the assumption. In fact, in the Munich region, customers of Stadtwerke München (SWM) in particular have to accept massive price increases in some cases. The southern district heating network stands out, i.e. the former network of Bioenergie Taufkirchen, which SWM took over in January 2020. A comparison shows: Since January 1, 2023, consumers there have been paying a good twice as much as district heating customers of the geothermal energy suppliers in Grünwald or in Pullach.

The Munich public utilities are currently under a lot of pressure. Criticism from all sides recently rained down in the city council’s economic committee, because after months of research by the Die Linke/Die Party parliamentary group, it is slowly dawning on everyone that a supplier is just reaching into the pockets of its customers. The CSU criticized “dramatic management errors”, the SPD complained that energy was “far too expensive” and the FDP lacked transparency. It’s about electricity, gas and also district heating. For the latter, SWM raised the consumption price in the Munich supply area from January 2021 to January 2023 from 55 euros to 210 euros per megawatt hour. That’s 282 percent more. According to the list, it is 153 euros in Cologne and 106 euros in Hamburg.

But the comparison between the supply areas operated by SWM also raises questions from the point of view of the Munich city politicians. There are four networks in three supply areas, with major differences: One is the Munich area with the city network, which also includes Unterföhring and Martinsried, and the geothermal network in the trade fair city. There is also the south-east network, which SWM took over from the former Energieversorgung Ottobrunn (EVO) in 2018, and the south network from the former Bioenergie Taufkirchen.

With the expansion into the southern and south-eastern environs, SWM is looking forward to making the geothermal power plants in Sauerlach, Kirchstockach and Dürrnhaar usable for Munich by expanding the lines. The connecting line from Neubiberg to Perlach was laid last October. Ottobrunn, Neubiberg, but also Hohenbrunn, Brunnthal and Höhenkirchen-Siegertsbrunn hope to benefit from the network expansion of the public utilities in the slipstream, so to speak. They rely on many new connection options along the new main lines in their towns.

But what about those who already use district heating, some of them for many years? SWM has taken over existing customers with the Southern and Southeastern networks. They have their own price sheets with prices that differ greatly. According to calculations by the left, customers in the southern network in Taufkirchen and parts of Ottobrunn pay 3,845 euros a year with an assumed consumption of 15 megawatt hours. That’s a bit more than the Munich customers, who come to 3836 euros. Customers travel significantly cheaper in the Southeast network with 2051 euros. The differences are even clearer when compared to the networks of geothermal energy operators in the Munich district. Assuming 15 megawatt hours per year, Garching is 2238 euros, Unterhaching 2166 euros, the AFK in Aschheim, Feldkirchen and Kirchheim 2052 euros.

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It is even cheaper at 1985 euros in Ismaning, 1841 euros in Unterföhring, 1675 euros in Pullach and 1584 euros in Grünwald. The customers of Geothermie Grünwald do not even pay half as much for the heating as customers in the former network of Bioenergie Taufkirchen. Stefan Jagel, spokesman for The Left/The Party in the Munich City Council, says: “The absurd district heating prices of SWM in their different networks make one thing very clear: the high prices in Munich and Taufkirchen cannot be justified.”

The astonishment also has to do with the fact that the pricing formula for the respective networks would actually lead one to expect something different. The formulas, which according to the law must be made public for the respective networks, each contain different indices with fixed values ​​for the primary energy used or for wages or investments. As Christian Schwarzenberger explains, who examined pricing at the Munich public utility company for Die Linke, there are around ten different gas price indices alone. It is not always clear which index is used. The current district heating formula for the city lacks a waste incineration index, although waste is burned in the Unterföhring thermal power station.

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It stands out that the supply area south, which is comparatively expensive for customers, to which parts of Taufkirchen and Ottobrunn are connected to the west of the railway, claims that more than 90 percent of its thermal energy comes from the wood-fired thermal power station in Taufkirchen, from biogas and also a share from the Laufzorn geothermal power plant. Unlike in grids with a high proportion of gas, power generation there should not have become much more expensive recently, says Schwarzenberger. In the inexpensive south-east network, which mainly supplies customers in Ottobrunn to the east of the railway line, the gas share in the pricing is high. But the price is low.

Stadtwerke spokesman Michael Silva says that the differences, which are incomprehensible to outsiders, have to do with the old contracts that were taken over from EVO and Bioenergie and that continue to form the basis of pricing. “There is no other explanation,” he says flatly. The aim is to harmonize prices in the future. But that doesn’t happen from one day to the next. Among other things, new sliding clauses were introduced in Taufkirchen in 2020, which are now in accordance with the law. The prices would be adjusted there on a quarterly basis. Different in the Southeast supply area. According to Silva, the annual price adjustment there initially has a price-dampening effect. “All the distortions that have arisen because of the war are arriving with delays.” In the delivery year 2022, the gas prices from October 2020 to September 2021 were the basis for pricing, among other things. The gas price in the south-east network was still at “pre-crisis levels”. On January 1, 2023, the energy price in the south-east supply area rose by a good 30 percent – in the south area by a good six.

Nevertheless: From the point of view of the critics, the calculations of the municipal utilities are hardly comprehensible for customers and outsiders, especially in the case of district heating. One detail, for example: just as in the southern supply area for a long time, geothermal energy has also played a role in the southeast supply area for a long time. Because the power plant in Kirchstockach feeds in warm water there and supplies customers in Hohenbrunn, Ottobrunn, Putzbrunn, Riemerling and Neubiberg, as SWM announced in July 2021. However, there was and is no geothermal energy index in either the south or south-east grid. SWM spokesman Silva says that the geothermal share is included there via the electricity index. And it actually has a price-dampening effect.

The left in the Munich city council are asking Mayor Dieter Reiter to create clarity

Now, according to Die Linke/The Party, Munich’s Lord Mayor Dieter Reiter (SPD) should help create more clarity. City councilor Stefan Jagel has launched an inquiry to the mayor and wants to know how it can be explained that customers in the district heating network in Taufkirchen “have to pay such extreme prices” despite a high proportion of renewable sources in the energy mix. He asks whether the price change clause corresponds to the actual costs of district heating production. And he wants to know whether the public utility company is pursuing different purchasing strategies for gas for the city network and for the south-east network because the prices are so high here and so low there.

In any case, against the background of the prices for Ottobrunn in the south-east network, Jagel sees the floodgates open to arbitrariness. He also sees evidence of this in the fact that the municipal utilities have recently taken the liberty of raising the prices for district heating in the city more moderately than would have been announced – in favor of their customers there, contrary to a calculation approach based purely on the indices . The left also attributes this to political pressure.

Left spokesman Jagel warns of a social imbalance, despite the price cap now guaranteed by the federal government. Because customers in the southern supply area could expect extremely high back payments from consumption in 2022 next year compared to other areas in the Munich district. Jagel reproaches the public utilities for not having early on exploiting geothermal energy like many surrounding communities. Many suppliers in the district could offer a relatively cheap, price-stable and secure heat supply. Jagel: “We need a social and transparent energy price policy!”