Germany is to achieve net greenhouse gas neutrality by 2045, according to targets set by the German government. In this context, the Building Energy Act (GEG) sets requirements for the operation of newly installed heating systems. In a recent EWI analysis, scenarios for the development of the building and heating stock were calculated, taking into account these GEG requirements and current renovation and heating system replacement rates. These scenarios show that, by the end of 2044, oil and gas heating systems installed before 2024 could still account for around 20 percent of the heating stock in Germany. This would correspond to more than 5 million heating systems. In order to achieve net greenhouse gas neutrality by 2045 as planned, these heating systems would then have to be operated with climate-neutral biogenic or synthetic fuels. Alternatively, heating systems could be replaced earlier than is currently the case. This may require policy measures that go beyond the GEG.
In the analysis “Illustrative development paths of the building and heating stock – scenario-based analysis up to 2044”, a team from the Institute for Energy Economics at the University of Cologne (EWI) examined the development of the building and heating stock in the residential sector up to the end of 2044. The analysis provides an overview of the current building and heating stock and classifies the short-term development of the stock observed since 2023. Based on this, the analysis illustrates the potential long-term development of the building and heating stock based on selected scenarios and current renovation and heating replacement rates. The calculation takes into account the requirements of the GEG, which stipulates that from 2024, newly installed heating systems must be operated with at least 65% renewable heat. Exceptions to this rule, as specified in the GEG, were also taken into account. The scenarios are also based on the German government’s targets for district heating connections and heat pump sales. The analysis was funded by the “Förderinitiative Wärmewende” of the Gesellschaft zur För-derung des Energiewirtschaftlichen Instituts an der Universität zu Köln e.V.
In 2023, the heating market was characterized by special and pull-forward effects. According to the Federal Association of the German Heating Industry, fears of a gas short-age initially led to record sales of heat pumps. In the second half of the year, the debate surrounding the GEG led to an increase in demand for oil and gas heating systems. These effects are quantified in the analysis of the short-term development of the heating stock. The magnitude of the effects can be estimated from the deviations between the model results and the real developments in the heating sales market in 2023: In 2023, 465,000 more heaters were sold in reality than would have been expected based on the model due to special and pull-forward effects.
From 1 January 2024 and before the municipal heating plans come into force, new gas and oil-fired heating systems from 2029 onwards must have a defined share of renewable energy in accordance with Article 71(9) of the GEG. A good 450,000 oil and gas heating systems that fall under these requirements are expected to be installed in 2024. “Due to the new requirements in the GEG for the use of renewable energies in heating systems installed from 2024 onwards, an early demand for biogenic and synthetic heating oil and methane is to be expected,” says Maximilian Walde, Research Associate at the EWI, who prepared the analysis together with Tobias Sprenger, Antonie Reinecke, Tobias Leibfritz and Dr. Fabian Arnold.
If the German government’s targets goals of the heat pump sales were reached, they would account for around half of the heating stock in 2044. This corresponds to more than 10 million heat pumps. If the replacement rates of existing heating systems remain the same as in the past, the heating system stock in 2044 in all scenarios would have a share of about 30 percent of oil and gas heating systems that cannot be fully powered by hydrogen. This would correspond to just over 6 million heating systems. Oil and gas heating systems already installed in 2023 or earlier would still account for a good 20 percent of the heating stock in 2044, or just under 5 million heating systems. In 2044, the scenarios considered would result in a final energy demand of 22-28 TWh for heating oil and 90-105 TWh for methane.
To achieve greenhouse gas neutrality from 2045, the remaining oil and gas heating systems would have to be operated with biogenic or synthetic fuels. It is also expected that further oil and gas heating systems will be installed under the requirements of the GEG, as demonstrated by the approximately 450,000 oil and gas heating systems in-stalled in 2024. “In order to reduce the demand for biogenic and synthetic methane and heating oil, the replacement cycles of oil and gas heating systems would have to be shortened. Possible drivers could include higher fuel and emission costs, the decommissioning of gas distribution networks and other policy measures,” says Maximilian Walde.
