In 2014 in the north of the Netherlands, the Groningen Municipality joined forces with the Groningen Water Company to give the city a publicly owned district heat grid company with the public’s interests at heart. Striving to make the city CO2 neutral by 2035, the company draws on different sources and applies various techniques to ensure affordable security of supply for its customers. It’s a partnership that sets an example for other municipalities and energy companies in the Netherlands – and maybe further afield.
By Theo Venema, Senior Business Developer, WarmteStad and Marco Attema, Senior Strategic Advisor for Energy Transition, Municipality of Groningen
“Some 20 years ago,” explains Theo Venema, Senior Business Developer at WarmteStad, “the municipality of Groningen set a goal to be carbon neutral by 2035. Putting the city onto a sustainable heat grid seemed an obvious way; the question was how best to do it. Groningen’s decision to develop a heat grid as a municipality was ahead of its time for the Netherlands, so we needed to look abroad, specifically to Denmark, for inspiration and best practices.
Denmark’s system, however, is well-established and has developed over decades. In contrast, Groningen lacked the time, the infrastructure, and the supportive legislation, and had to deal with a completely different sociological background.”
In the 1960s, the Netherlands switched from coal heating to gas-fired boilers. It was cheap, relatively clean, and provided a reliable and affordable heat source. Even as consumers have become more aware of climate change and become increasingly keen to make a difference, switching away from gas has been difficult.
Affordability is one obstacle; habit, the sociological factor, is another. So how can WarmteStad’s experience help other municipalities, government organizations, energy companies, and housing associations start to make the shift even more quickly than they did in Groningen? Theo Venema and Marco Attema, Senior Strategic Advisor for Energy Transition at the Municipality of Groningen, have four tips.
1. Start with small steps.
The municipality of Groningen was one of the first to develop a heat transition plan, aiming to connect 50 to 75% of its households to the heat grid before 2035. This would mean 50,000 to 75,000 homes would be on the grid. The goals were aimed high, and the time frame was short, yet there was a clear realization that they could only be attained by taking small steps and leading the initiative themselves.
In 2014, the municipality joined forces with the Groningen Water Company to create WarmteStad. As a public company, it aims to produce, supply, and exploit sustainable heat at manageable costs for socially responsible returns. “The water company could share its experience regarding grid infrastructure and 24-hour services,” explains Attema, “while the municipality offered stability and had the trust of the city’s first movers. Both parties had extensive expertise in the field, knew each other well, and were committed to heat transition.”
WarmteStad started with small projects and new urban developments, which meant the sociological hurdle didn’t play a role as there was no history of gas-fired systems. They proved to the housing associations that WarmteStad was committed, eager to learn, and could deliver what they promised to do. And with each project, the municipality and the water company got to know each other better and drew on each other’s strengths.
When competence, trust, and capacity have been created, it is time to move towards larger and more complex steps, like connecting privately owned single-family houses and making good use of the experiences and learnings of the less complicated connections of apartment buildings. By the time the Dutch national government shifted the task of planning and executing the heat transition from natural gas to renewable ways of heating to the municipalities in 2019, Groningen was already well on its way.
2. Ensure multiple sources.
In 2016, they got the go-ahead to build the district heat grid. Venema: “We knew we needed to avoid a monoculture like gas had grown to be, so we set about choosing the right alternative energy sources. Biomass was suitable, but public support had dropped.
Geothermal drilling was considered by the mining authority to be too risky as Groningen is sensitive to seismic activity caused by the depletion of what was once Europe’s largest natural gas field.
The obvious alternative with strong public support was a heat grid using the residual heat from data centers located next to the heating plant. Towards the end of 2023, we’ll add a large solar thermal plant as an additional source with a seasonal storage system, so we’ll then have three renewable energy sources connected to our heat grid.”
“We have three renewable energy sources connected to our heat grid.”
Attema: “To provide a good, stable network, you must have multiple sources. Ideally, you should be able to choose which source of heat you use to best suit your consumers at that moment, whether it’s wind, thermal, solar, or biofuel. If you’re flexible, you can anticipate change.”
3. Involve the stakeholders.
The choice of energy source isn’t necessarily the one with the best technology. For the Groningen heat grid, the stakeholders were asked for their opinion, including the general public, housing associations, the city’s university, consulting firms, and businesses. The high public support for using the waste heat from the data centers led to that choice.
The next stage for the heat grid is to get private households on board, and, again, the involvement of the stakeholders is key. One of the ways WarmteStad will achieve this is by working with an energy cooperative, in this case, Grunneger Power. The cooperative is the contact with the households. They are going door to door, promoting, and selling the concept of the heat grid, and inviting homeowners to become members.
Attema: “Being a member is important because it means the energy cooperative represents you as a homeowner, and WarmteStad is simply the supplier.
This is an innovative approach as the cooperative benefits from not having to invest in energy supply sources yet does have an influence on the tariffs, the communication, and, to an extent, even the technology. And it means the grid continues to be a socially responsible venture rather than commercial.”
4. Anticipate change.
Legislation is changing, but there are limitations to how far it can go. The Netherlands aims to be gas-free by 2050, but the government can’t make it a legal requirement for homes. What it can do is put in legislation that allows municipalities to dismantle gas pipe networks. “We expect this to come into effect in the next five years,” says Venema. “It will mean households will be quickly forced to think about where their heat will come from.
They’ll still have a choice of sources because they can always opt to install their own heat pump, but joining a heat grid like WarmteStad’s will be far more affordable – and is aesthetically more pleasing. And it gives them access to the power company’s multiple sources, with no lock-in, so they get constant heat whatever the season.”
“We’re also working very closely with the Dutch Ministry of Economic Affairs, the Netherlands Enterprise Agency (RVO), the Dutch Association of Municipalities (an organization in which all the Dutch municipalities work together), and the BNG, the Dutch public sector bank,” explains Attema.
“We’re one of the few municipalities working this closely with the national government on finding financing solutions. And one of the innovations we’re developing is a guarantee fund for heat district networks which will enable public heating companies to get financing at a lower interest rate, with lower initial reserves, and with much of the paperwork already completed.
We’re very pleased we’re working closely with the Ministry, the Dutch Enterprise Agency (RVO), and the Dutch Municipal Bank (BNG). The collaboration is very important to us and to future developments in the rest of the Netherlands. Once this arrangement is in place, district heat grids can be developed faster in other municipalities.”
Attema: “Groningen is setting the example and trying to make conditions as healthy as possible for us and other municipalities, with the proper legislation and access to finance. We can’t progress if we take away the gas supply and still not be able to invest in heat grids. It all has to come together.
If we take Denmark’s example, we see heat grids are successful because they are supported. There are good financial conditions, so that the heating company can borrow the necessary funds.”
“You carry a responsibility to others if you want to pave the way.”
The future for WarmteStad
WarmteStad expects developments to accelerate even faster in the coming years. Real progress was made after 2017, and some 1,000 households a year are connected to the heat grid. If legislation changes in the way WarmteStad hopes and expects it to, then progress can be even faster. The company has proved to the municipality, its partners, and the Dutch national government that the system works, and so now hopes to be able to at least double – or even quadruple – efforts.
The aim is then to connect 4,000 to 5,000 houses annually to the heat grid. But this is all on condition that policymakers are on board. Without policy and legislation changes, Groningen’s heat grid and other cities and provinces cannot be as successful as they need to be. Attema: “This is what being a frontrunner involves. Setting the example, identifying the hurdles, and looking back to those behind you to see what they need to be able to catch up. You carry this responsibility if you are to pave the way.”
WarmteStad is a public corporation providing sustainable heat to the city of Groningen. It aims to aid the shift from fossil fuels to a sustainable heat supply in the city by producing, supplying and exploiting sustainable heat grids at manageable costs for socially responsible returns. Its ambition is to provide the equivalent of at least 30,000 households through its district heating grid by 2035.
Theo Venema is Senior Business Developer at WarmteStad. Marco Attema is Senior Strategic Advisor and Project Manager for Energy Transition at Groningen Municipality.