Variation of gas use for space heating: cost implications when switching from gas to district heating

Abstract For 35% of Dutch households, district heating (DH) is considered the least-cost option to phase out heating based on individual gas boilers. This outcome is grounded in neighbourhood averages that mask large differences in individual household heat demand, and leads to a risk that below‑average heat consumers are worse off in terms of relative energy bill increase compared to above-average heat consumers. This study explores this risk by analysing household‑level gas use variation and its impact on end‑user costs under 2025 Dutch DH tariffs. We use 2019 and 2022 microdata from Statistics Netherlands for over 230,000 homes (> 96% apartments) in 276 Amsterdam neighbourhoods for which DH is considered the least-cost option. We apply Kernel density estimation, Lorenz curves, Gini coefficients, and multinomial logistic regression to quantify the distribution of annual gas consumption, calculate percentage changes in energy bills if natural gas demand were replaced by DH, and characterize these households with building and household predictors of bill increases across four categories (< 25%, 25–50%, 50–75%, > 75% bill increase). Results reveal that there can be significant variation even within spatially homogeneous homes and 25–30% of the households would see their energy bill rise by more than 25% (of which 5% points would see a bill rise > 75%). 23.3% (2022 data) to 25.7% (2019 data) of the Amsterdam households belong to the low-income group, and part of them are considered energy poor. 27% (2019 data) to 33% (2022 data) of the low-income households will face an energy bill increase of more than 25% when switching from individual gas heating to DH. Also, the results indicates that small apartments, high-insulated buildings, low-income households and commercial renters are at a heightened risk of a more than 75% bill rise. These findings demonstrate that leaning on average heat demand in least-cost calculations, and using fixed annual DH tariffs for all user categories disproportionately harm low‑end heat consumers, including a significant share of low-income households, and households defined as energy poor. When striving for an equitable heat transition at the one hand and a viable business case for DH projects, this must not be overlooked.