Too good for the basement It’s time that highly efficient heating technologies were finally in the spotlight of climate policy. Without them, Germany’s envisaged energy transition can’t succeed. Thankfully, some are leading the way.

Executive Summary

1. Consumption Almost one-quarter of the total energy consumption 
in Germany is used for the 
provision of heat – both for 
indoor heating as well as 
for hot water – in residential buildings.

2. Objectives Reduce the heating requirements of the building stock by 20 percent by 2020, and its primary energy consumption by 80 percent by 2050. New buildings should be climate-neutral by 2020.

3. Incentives Since March, the federal government has granted higher subsidies for on-site consultations – up to €800 for single and two-family homes, and up to €1,100 for buildings with three apartments or more.

4. Number one Three-quarters of building contractors choose natural gas, meaning this environmentally friendly energy source is number one on the heating market. Comfort and reliability are added advantages.

Viessmann, one of the world’s leading makers of heating 
systems, has just launched a fuel cell heating system based on natural gas for one- and two-family homes which will go into series production – the first of its kind in the world. Companies such as Viessmann are pioneers of the “heating transition.” They are sorely needed, for while the energy transition is in full swing in Germany’s electricity sector, in the heating sector it can’t seem to get off the ground. And yet it would certainly be worthwhile. Heating and hot water account for a huge proportion of energy consumption in Germany, no less than 40 percent, according to the German association of Energy and Water Industries (BDEW). Furthermore, the heating market is responsible for around 30 percent of Germany’s CO2 emissions.


The micro-CHP system Vitovalor 300-P is a fuel cell heater with a natural gas condensing boiler. It reduces energy costs by up to 40 percent.

And this is precisely where the German federal government aims to make savings. It wants existing building stock to devour 20 percent less heat in 2020 than in 2008, and for 2050 it has even set the target of being “almost climate-neutral.” Three-quarters of the some 20.7 million heating systems are not in line with current standards of technology, according to the Federation of German Heating Industry (BDH). “Heating systems are extremely inefficient, and also harmful to the climate,” says BDH CEO Andreas Lücke. “If energy systems were modernized, that alone would produce final energy consumption savings of about 13 percent.”

If we want to ensure the German energy transition succeeds, energy in the heating sector must be used more efficiently. This would require a scaling up of renewable energies and environmentally friendly natural gas. So why hasn’t this happened? “One problem is that the heating market is more fragmented and more decentrally structured than the electricity market,” says Martin Pehnt, scientific director of the Institute for Energy and Environmental Research Heidelberg (ifeu). “The heating transition has to take place in every building, so a huge number of potential stakeholders have to be activated.” But because fuel costs are currently so low, many homeowners don’t see the need to invest in more efficient heating systems. “So they need other incentives.” The tax deductibility of modernizing energy systems would have been one such incentive. “That this project has already failed twice is making homeowners feel insecure – they 
prefer to wait and see,” 
says the BDH CEO. Moreover, the heating sector was neglected by policy – makers for too long because of the complexity of the energy transition in the electricity sector. “And the interdependence of the electricity transition and the heating transition – for example, using the gas grid to store electricity – is not sufficiently recognized at the political level.”

Existing state financial assistance schemes by the German KfW Development Bank and the German Office of Economics and Export Control (BAFA) have proved workable, but must be expanded further, believes ifeu scientific director Pehnt. For example, low-threshold individual measures should receive more financial support because “many homeowners cannot afford full renovation including insulation.”

But progress can also be made with individual measures. The simplest and most economical way of reducing energy costs is to replace old heating systems with modern and efficient heating technologies. Currently, the most affordable option in the new building sector is a natural gas condensing boiler heating system with solar power, as a new study by the industry initiative Zukunft ERDGAS has shown.

For Pehnt, the modified market incentive 
program on the use of renewable energies in the -heating market are a step in the right direction. In April, investment subsidies for solar thermal plants, heat pumps and combined heat and power (CHP) were increased. But that’s not all. Now German -homeowners get at least €2,000 for installing a solar thermal power system to support their heating 
system. “It makes sense that the incentive program now also rewards the improvement of heating systems and promotes more energy-efficient technologies such as heat pumps or solar thermal power in combination with gas condensing boiler technology,” Pehnt explains.

In addition, all companies, not just small and medium-sized enterprises, are now entitled to apply for the new market incentive scheme. Companies and local authorities can apply for investment subsidies for smaller renewable energy systems for their own heating or cooling requirements, and low-interest loans and repayment subsidies if they want to invest in larger plants or in the construction of new district heating networks via the section looked after by the KfW. The German government has earmarked more than €300 million a year for the new program. In 2014 the volume of financial assistance already approved was €123 million. The application figures shot up just three months after the new incentive program began.

Providers of modern 
heating systems and 

Just a few hundred meters from the ultra-modern main administrative headquarters of the heating, industrial and cooling systems manufacturer Viessmann, there is a huge pile of compost, and an unmistakable smell of fresh country air. A wheel loader is in the middle of shoveling a mixture of horse and pig manure, green waste, corn, and turnips over to the biogas plant – or rather four separate tightly sealed fermenters. They look like garages. “The substrate stays there for four weeks, during which it produces biogas,” explains Hans-Moritz von Harling, biomass project manager at Viessmann in Allendorf, 100 kilometers north of Frankfurt, in the middle of Germany.

Hans-Moritz von Harling, project manager for biomass at Viessmann, only uses biomass generated nearby, such as organic waste, compost, or solid dung.
Photo: Katrin Binner

The biogas plant, which also has a photovoltaic plant on the roof, supplies the site with around 2.7 megawatt hours (MWh) of heat and electricity a year – an important part of the Efficiency Plus energy concept of this globally active family business. In the mid-2000s, Viessmann began trimming back its energy supply, buildings, production, and working processes in the spirit of sustainability. “We wanted to show that we can accomplish the federal government’s energy and climate policy goals for 2020 much sooner,” says Bram Peters, head of product management at the Viessmann factories. Indeed, the company has already achieved the energy policy targets for 2050. In the last ten years, it has gradually 
reduced CO2 emissions at its Allendorf headquarters by 80 percent, and increased energy efficiency by more than 20 percent. Renewable energies currently account for more than 60 percent of the energy required for the heat supply – and this figure is set to rise still further.

To achieve its goals, Viessmann focuses primarily on biomass from the local region, and only uses as much as grows again in the same time period. A wood chip heating system provides the additional heat needed at the site during the winter. The majority of the wood chips come from poplar trees that Viessmann plants itself on a short rotation forestry area of 170 hectares and harvests every three years. “It starts right here beside the production hall,” von Harling says and points eastwards. The forester helped set up the forest and still looks after it.

Energy is generated 
from everything

The company has also invested in the energy-efficient use of gas by means of combined heat and power and condensing boiler technology, solar thermal power, and photovoltaics, as well as air and geothermal heat pumps. “For example, we even use the heat generated by the combined heat and power unit in the biogas plant for our heat supply,” says Gerd Specht, who is responsible for gas devices and renewable energies in the company’s own academy.

The grounds of the Viessmann operations in 
Allendorf cover a good 20 hectares. Some 4,300 people work here, which is almost as many as live in Allendorf. As well as the administrative headquarters, there is an Infocenter with the academy, large production halls, the central goods distribution system, and from 2017, a research and development center. The company is currently building this center at a cost of €50 million. And then, of course, there are all the plants in the power house. “Its installed boiler 
capacity amounts to 12 megawatts,” Specht says. “That is enough to supply our entire site with heat and a considerable proportion of electricity.”

Viessmann is counting on two innovative developments called Vitovalor and Vitosorp to ensure the future success of the company. “Vitovalor is a fuel cell module combined with a natural gas condensing boiler,” product manager Peters explains. In fuel cells, hydrogen and oxygen combine to form water, and in the process heat and electricity are created. In contrast to internal combustion engines or turbines, the cells in the fuel cell don’t burn the gas; rather, the energy is generated naturally through an electro-chemical reaction. That not only makes the facilities extremely quiet and energy-efficient, but they don’t emit any greenhouse gases either. The only time the condensing boiler in Vitovalor is switched on is in winter when it is particularly cold. “If you contrast that with condensing boiler technology, which is 
already efficient, that saves another 40 percent of 
energy and half of CO2,” Peters says.

The innovation behind Vitosorp is a gas adsorption heating device that combines condensing boiler technology with solar thermal power or geothermal power. The environmental heat is generated by a heat pump. By integrating solar or geothermal power, energy consumption falls by up to 25 percent. But it also increases the efficiency rates compared to conventional condensing boiler devices – to 132 percent (geothermal heat) and 149 percent (solar). 

as a storage solution

This March, Viessmann commissioned a power-to-gas system in another biogas plant – every year 
it generates some 1.6 million cubic meters of 
biogas, which is processed into natural gas and 
fed into the main grid. “With this plant we are demonstrating how surplus electricity from renewable 
energies such as the sun and the wind can be converted into hydrogen with electrolysis and then into methane with the CO2 from the biogas plant, before being stored in the gas grid,” project manager von Harling explains.

In contrast to other storage solutions, such as large-scale batteries or pumped storage, the gas grid could store the synthetic methane gas in 
its pipes and subterranean caverns for several months. It could then be used for heat supply, electricity production, or in natural gas vehicles 
regardless of where it is generated. The whole plant is no bigger than three shipping containers, “but the principle has the potential to make a vital contribution to the success of the energy transition,” von Harling adds.

A fuel cell 
for the bakery

Since March 2014, a very energy-efficient, gas-powered fuel cell plant for generating power and heating has taken its place alongside the gas heating in the basement of the Theurer wholesale bakery in Ludwigshafen am Rhein, in the southwest of Germany. Not much bigger than a washing machine, the small power plant is barely noticeable between the gas boiler and the warm water boiler. The only noise you can hear is the soft whirring of the ventilation. The mini-CHP facility of the BlueGen brand made by the company Ceramic Fuel Cells has a thermal 
capacity of 0.6 kilowatts (kW) and an electrical output of 1.5 kW. It provides the bakery with up to 300 kilowatt hours (kWh) of heat and around 1,000 kWh of electricity monthly. “That reduces our energy costs by about €2,000 a year,” says bakery boss Wolfgang Theurer. But when you consider their enormous energy consumption, this is just the beginning, he says. It all becomes clear when you take a look round the approximately 1,000-square-meter hall of the bakery. Here you find work benches, mills, and kneading machines, shelves for bread and rolls, cakes and pastries all lined up next to each other. At the back of the enormous hall, there are eight large ovens, the heart of the operation. “Our bakers begin every day between 10 and 11 pm, on Fridays at 8 pm,” Reinhard Bühler, the bakery’s electrician, explains. They are there working the whole night, kneading, shaping, and baking, until ten in the morning. Then the finished baked products are delivered to the 21 branches in Ludwigshafen, Mannheim, and the surrounding region.

Bakery boss Wolfgang Theurer prefers to use modern energy technology.
Photo: Johannes Vogt

The family-run business, which employs 150 staff in the bakery, branches, and office, applied for a pilot project run by the municipal utility Technische Werke Ludwigshafen (TWL) and WINGAS to test the use of fuel cells. With its program Fuel Cell Partner Bonus, WINGAS took on the costs of this and seven other fuel cell devices, including a two-year full maintenance agreement. The various models were installed at selected customers by partner utility companies such as TWL. “We installed the facility in the bakery and also look after the operations,” explains Achim Gropp, team leader for heating devices customer service at TWL. The aim of the pilot project is to gain practical experience with extremely efficient fuel cell technology – the overall efficiency rate is as high as 80 percent – and to pave the way for its market launch.

Achim Gropp, team leader heating devices customer service at TWL (left), explains to Theurer how the mini-CHP plant works.
Photo: Johannes Vogt

“At the moment the devices are still much too expensive,” Gropp acknowledges. For the bakery the costs without subsidies were about €26,000 net. “Smaller businesses or multi-family homeowners, to which these devices are especially well-suited, cannot afford those sums without financial support,” Gropp says. However, he sees enormous potential in this technology, also as regards CO2 savings: “The plant at the Theurer bakery has already saved 2.7 tons of CO2 between March 2014 and August 2015 compared to generating heat and electricity separately with a new gas condensing boiler.” Wolfgang Theurer was also impressed with the small power plant. “It runs 
without a hitch.” When the pilot project ends in March 2016, he wants to keep it and take on the 
amaintenance contract.   

New technology in old walls

You notice the Goldene Löwe immediately when you walk along the main street at the market in the little town of Lübben, close to Berlin. The restaurant, which opened in 1719, is not just the oldest in Lübben, it is also the only house with an old red-brick facade. “It is a listed building because of the facade,” says Marc Schubert, the manager of the restaurant and guesthouse. Some 80 percent of the town was destroyed in the last few days of World War II. The facade of sand-colored stone and redbrick survived; everything behind the facade is new. While they had replaced the interiors, at first the Schuberts were keen to stick with their old gas -turbo-heater – which was already getting on a bit – until one day it gave up the ghost. “One morning I suddenly found several angry guests standing in front of me because there was no warm water to shower with. That’s when I knew we needed new heating,” the father, Edgar Schubert, remembers. He passed the business on to his son Marc, but still helps out in the kitchen.

When the temperature rises in restaurateur Marc Schubert’s kitchen, the intelligent heating system automatically switches itself off.

Photo: Marc Beckmann/Ostkreuz

Since October 2014, a gas condensing boiler heating system has been providing heat and warm water – reliably – at the Goldene Löwe. The condensing boiler is installed right in the thick of it – in the kitchen. The way it hangs on the wall between the worktops and the sink makes it initially look more like a normal gas thermal heater. But it doesn’t make a sound. “It turned out to be the right move installing it in the kitchen,” Marc Schubert says. “We need a lot of warm water up here, and now it doesn’t have to be pumped up from the basement. And when there are pots and pans everywhere cooking and simmering away, it switches itself off automatically and saves energy.”

As a long-standing customer of the Lübben municipal utility (SÜW), the Schuberts noticed the scheme, offered by SÜW together with its gas supplier, -WINGAS, the previous year. With the Climate Partner Bonus Program, the two companies give building owners financial support for converting to efficient gas heating such as condensing boilers, fuel cell systems, micro CHP units, and gas heat pumps. In so doing, the companies want to create attractive regional incentives for implementing climate goals. “Municipal utilities have an important role to play in spreading the technology, in introducing consumers to efficient gas technologies,” says Detlef Mirsch, the head of technical services at WINGAS.

“The customers decide themselves which model and make they prefer,” Volkmar Schaaf explains. He is responsible for energy procurement and sales at SÜW. “The only requirement is that the customer’s system has a thermal output of maximum 25 kilowatts and a maximum electrical output of 1.5 kilowatts,” he adds. The Schuberts are in good company with the choice they made. “Ninety percent of people want condensing boiler systems,” Schaaf says. People are interested in other technologies as well. “But the procurement and installation costs are too high for many people.”

The system in the kitchen of the Goldene Löwe – a Vitodens 200 with 21 kW thermal capacity – cost €3,500. Including installation as well as alterations and fittings – for example, new radiators and pipes – it was about €7,000. The financial incentive from the energy supplier is initially provided for two years. “If we extend our cooperation with WINGAS, the converts will benefit for up to five years,” Schaaf says.

EU efficiency label Consumer protection agency criticizes energy ratings for heating

New Heating New heating systems with a heating output of up to 70 kilowatts must wear the EU efficiency label bearing the same ratings used for electrical goods from red G to green A++. The consumer protection agency in North-Rhine Westphalia has sharply criticized the efficiency label. It fears “pre-programmed confusion” instead of real efficiency competitiveness, and says that the heating label does not inform consumers of the running costs, unlike the efficiency label for electrical goods. The efficiency of heating systems, it continues, does not depend only on the device, as is the case with a fridge, and better efficiency does not necessarily mean lower operating costs. In fact, an air/water pump with A++ could generate higher heating costs than a gas condensing boiler with an A label.

Photo: Katrin Binner

The sticking point is that with the new label various types of device are lumped together in various efficiency categories. For example, all the oil and gas condensing boilers have rating A, while heat pumps are in A+ or A++ owing to the share of the heat generated from renewable energies. But there is no internal differentiation between devices which have varying efficiency rates within the different technologies, the critics say. The industry initiative Zukunft ERDGAS also considers the label not very helpful. A survey conducted by public opinion research institute forsa confirmed that consumers interpret the efficiency label in different ways. While 45 percent of those asked said that for them a “good efficiency rating” meant the very efficient conversion of the energy carrier into heat, 30 percent interpret it as a sign of very ecological heating, and another 19 percent understand it to mean cost-effective heating. However, a better label could be the poorer choice when it comes to costs and climate, it claims.

Another aspect criticized by the consumer rights agency is that heat pumps are tested under different conditions and with other tolerance values than condensing boilers, but the results are categorized according to the same efficiency ratings. How much energy a heating system needs also depends very much on the way it is installed. A label cannot provide this information, but it should be a factor in the purchasing decision. So consumers depend on other information sources, the consumer protection body said. The same was true of the efficiency label passed by the German cabinet for heating systems older than 15 years. It is supposed to apply from 2016, initially on a voluntary basis, and then from 2017 on a mandatory basis. Merely assessing a heating boiler is insufficient, according to the Association for Heat -Supply (VfW). Instead, the entire system – generation, distribution, and points of use – should be evaluated. Still, the government hopes that with the introduction of the new label more old heating systems will be replaced than previously.

Text: Kristina Simons

The heating transition is still in its infancy

75 percent of heat generators installed in German buildings are outdated.

13 percent of energy consumption in Germany could be saved if outdated systems were modernized.

20,7 million heating systems supply heat and warm water in German residential and non-residential buildings.

Graphic: C3 Visual Lab
Source:, die Zahlen beziehen sich auf das Jahr 2014

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