Study on future heat supply in Breda

Breda municipality wants to be climate neutral by 2044. To achieve this, an important role is reserved for the heat transition and new heat networks. However, the proposed Collective Heat Act (Wcw) requires a public majority stake for heat companies, which presents the municipality with an important choice: What role can the municipality play in a future heat company?

Background

The Collective Heat Act (Wcw) replaces the current Heat Act. The aim of the new Act is to facilitate the development of new heat networks and thus promote energy transition. The Wcw also aims to ensure the affordability, reliability and sustainability of collective heat supply.

The new law regulates that heat companies, such as district heating and large heat transport networks, will now be owned by municipalities through a public majority stake. This means that at least 50% of the shares of a heat company are directly or indirectly owned by the municipality, the province, the state or another public institution.

Ecorys was asked to investigate which organisational forms are possible for heat companies, what role the municipality can play in them, and how public interests can best be safeguarded. The public interests on which the organisational forms are tested are 1) reliability, 2) affordability, 3) sustainability, 4) safety, 5) quality of our living environment, 6) participation, 7) justice, and 8) economic strength.

The study consisted of five steps: 1) mapping the current situation and future expectations, 2) identification of relevant public interests, 3) exploration of organisational options, 4) assessment of these options based on the public interests, and 5) formulating a recommendation to the municipality.

Key findings

In our research, we see several promising organisational models for heat supply, each with unique advantages. We list these below for public, municipal and private heat companies alike.

Public heat companies without provincial or municipal involvement score excellent on affordability and reliability, making them a solid choice for stable and cost-efficient heat supply. A provincial-level public heat company offers a balanced score on all public interests, making it an ideal option if all public interests are considered equal.

Municipal heat companies, on the other hand, offer maximum local influence and control, making them attractive to municipalities with strong ambitions to direct heat supply locally. This model also scores high on equity. A municipal heat company in the form of a private limited company further reinforces these advantages, although it also carries more risks, such as investment risks and the disadvantages of limited scale and carrying capacity.

A public heat company as a democratically elected body offers a good balance between influence and risk, and is ideal for municipalities that value democratic control and local embeddedness. The heat community excels in participation, making it an excellent choice for municipalities that want to harness the power of citizen participation. Finally, private heat companies offer high reliability and efficiency, making them a valuable option when other models fail to take off sufficiently.

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