Half of Dutch Households on District Heating Could Pay More Under New Pricing Rules
Around half of the 700,000 Dutch households on district heating could pay more, as prices shift to the actual cost of each network under a new law. the hardest hit could pay 740 euros more a year.
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Around half of the households in the Netherlands that heat their homes through a district heating network could end up paying more, in some cases much more, under new rules on how heat is priced. The warning comes from the Authority for Consumers and Markets (ACM), the Dutch consumer and competition regulator.
What district heating is, and who it affects
District heating, known in Dutch as a warmtenet or stadsverwarming, supplies homes with heat from a shared source, such as waste heat from industry or waste incineration, or heat drawn from the ground, rather than each home burning its own gas. It is a growing part of the country’s plan to move away from natural gas, and it currently heats around 700,000 households.
For many of those households, this is not a market they can shop around in. Most cannot switch to another heat supplier, because a district heating network is a fixed piece of local infrastructure, so they are directly exposed to whatever the rules decide their heat should cost.
What is changing
At the moment, the price of district heating is capped. The maximum tariff is based on what it would cost to heat the same home with a gas connection and a boiler, a long-standing principle known as “not more than otherwise”. In effect, district heating customers are protected from paying more than gas users would.
That cap is being phased out under the new Collective Heat Act (Wet collectieve warmte, or WCW), which takes effect from 1 January 2027. In its place, the ACM will gradually set tariffs based on the actual costs of each individual heating network. The idea has two goals: that customers pay only for the costs of their own network, and that companies investing in heat infrastructure have more certainty of a reasonable return.
Because those costs vary a great deal from one network to another, depending on the heat source, the size of the network and how densely packed the homes are, moving to cost-based pricing means prices will diverge. Some networks are cheaper to run than others, and bills will start to reflect that.
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The winners and losers
The ACM’s economists worked out what this would have meant if it had applied in 2024, the most recent year for which detailed cost data is available. Roughly half of customers would have paid less under the new system, and the other half more.
At the extremes, the differences are large. The 10 percent of households who benefit most would see their bills fall by an average of 29 percent. But the 10 percent who lose most would pay about 71 percent more, which works out at over 740 euros a year. In the most extreme cases, and if the government takes no action, annual costs could rise by as much as 1,500 euros.
It is important to be clear about what these numbers are. The regulator stresses that this is a snapshot of what would have happened in 2024, not a prediction of future bills, and that the precise method for setting cost-based tariffs has not yet been worked out. The figures are an indication of the impact of the new approach, not a forecast for any individual household.
Can anything soften the blow?
The ACM says the law still leaves room for the government to bring in extra measures to keep heat affordable, and that it is studying the options and preparing for the change. The law itself specifies that the switch to cost-based tariffs can only happen once affordability is sufficiently safeguarded.
Possible measures floated by analysts include capping the biggest increases, for example at 125 percent of the average tariff, spreading costs between networks, or giving financial support to particular groups. There is a specific worry about the fixed part of the bill, the standing charge you pay regardless of how much heat you use. Under cost-based pricing this could range from a few hundred euros to nearly 2,000 euros a year on some networks, which would hit people who use little heat, including many social housing tenants, particularly hard, and give them less reason to save energy.
What households can do now
For the moment, there is little that individual customers can do to prevent a possible increase, since switching supplier is usually not an option. The practical advice from consumer commentators is to find out now which heat company and which network your home is connected to, and to keep your annual heating statements, so that you can later see clearly whether your fixed charges, usage costs and total bill really do change. Anyone renting or buying a home with district heating is also advised to look beyond the rent or mortgage and check what the heating arrangement will cost.