Hamburg Votes in Favour of Remunicipalisation of Electricity, Gas and District Heating Distribution Grids

Together with the Federal election on 22 September 2013, the citizens of Hamburg were asked to vote in a referendum whether the City of Hamburg should remunicipalise in total the distribution grids for electricity, gas and district heating. A narrow majority of 50.9% voted in favour. Social Democrat mayor Olaf Scholz vowed to accept the vote.

The city of Hamburg presently holds shares of 25.1% each in the three networks.

The vote is seen as a setback for the mayor, who had canvassed together with the Conservatives, Liberals, trade associations and unions against the remunicipalisation. The grids were privatised between 1997 and 2002. In 2012 the City of Hamburg under mayor Scholz (re-)acquired shares of 25.1%. Mr Scholz had called a complete remunicipalisation too costly, citing costs of EUR 2 billion. Besides he had argued it would impair the energy transition (Energiewende) towards a mainly renewable energy supply as the utilities were not involved (Vattenfall Europe AG and E.ON Hanse AG own 74.9% of the grids).

The head of the SPD parliamentary group in the parliament of Hamburg (Bürgerschaft) announced to launch the process preparing the remunicipalisation this coming Wednesday, the magazine Stern says. Frist of all, E.ON Hanse AG, who owns a 74.9% share in the gas grid, and Vattenfall Europe AG, who owns 74.9% shares in the electricity and the district heating grids, shall be asked whether they are willing to sell their shares.

As this is considered not very likely, a company shall be established, which shall bid in the upcoming tenders for the concession rights for the electricity grid (in 2014) and the gas grid (in 2016). Concession agreements regulate in particular the use of public property for laying and operating power and gas lines and the consideration paid in return. According to Section 46 para. 2 sent. 1 and 2 Energy Act, concession agreements may be concluded for a duration of up to 20 years. If after this period the former concessionaire does not win the tender, he is obliged to transfer the installations necessary for the operation of the grid to the new concessionaire in return for adequate compensation.

The district heating grid is not subject to the same tender procedures. However, it is disputed among Vattenfall and the City of Hamburg whether Hamburg has the right to buy back the grid.

Source: Statistical Office for Hamburg and Schleswig-Holstein; Stern; Spiegel

Related posts:

39 Responses to “Hamburg Votes in Favour of Remunicipalisation of Electricity, Gas and District Heating Distribution Grids”

Comments are currently closed.