District heating is a key factor in the energy and heating transition. It can utilise various renewable energy sources. It is efficient because it distributes waste heat across different households. And, last but not least, local district heating projects make local authorities more resilient and independent. However, the non-fossil share of the district heating mix remains low at around 20 per cent. To change this and drive forward the heating transition, innovative ideas, long-term investment and clear risk structures are needed. The institutions of the Savings Banks Finance Group are making an important contribution here, as demonstrated by two projects from different regions of Germany.
Local heating supply
Energy from the earth
Olching: Geothermal energy meets waste incineration
In Olching, in the Upper Bavarian district of Fürstenfeldbruck, a facility unique in Germany is being built on the site of a waste-to-energy plant: a symbiosis of waste incineration and geothermal energy – in other words, the use of energy stored in the Earth’s crust. Following initial test drilling in 2025, the plant is set to come on stream shortly thereafter. In a closed-loop system, thermal water is pumped to the surface from a depth of around 2,000 metres. The water, which is approximately 70 degrees Celsius, transfers its heat via heat exchangers and is then returned to the extraction layer. The heat recovered is fed into the waste-to-energy plant’s existing district heating network, thereby supplementing the process heat from waste incineration with a fuel-independent energy source.
The project is financially secured by a registered bond issued by BayernLB for 15 million euros with a term of 30 years, arranged by Savings Bank Fürstenfeldbruck. The funds are channelled to a joint municipal enterprise of the districts of Fürstenfeldbruck and Dachau, which have established the subsidiary Amperland Thermalwärme GmbH to implement the project. This ensures that financial risks do not ultimately result in higher waste collection charges for local residents.
Around 20%
of district heating is generated from renewable energy sources.
Hildesheim: Sewage sludge incineration meets raw material recovery
In Hildesheim, Landesbank Hessen-Thüringen and Hamburg Commercial Bank have jointly provided the financing for a sewage sludge incineration plant. The financing package amounts to just over 122 million euros. The plant generates heat intended to cover around one-third of the city’s heating requirements, thereby making a significant contribution to the local energy supply.
In addition to heat production, the plant offers a further environmental benefit: the scarce raw material phosphorus can be recovered from the sewage sludge for use in fertiliser production and agriculture. The combination of energy generation and circular economy is groundbreaking. This is because around 1.6 million tonnes of sewage sludge are produced in Germany every year. Furthermore, from 2029 onwards, sewage treatment plant operators will be required to thermally treat this sludge and recover the phosphorus anyway.
Olching and Hildesheim demonstrate how district heating can be made sustainable through innovative, locally adapted concepts: technical synergies, raw material recovery and clear financing structures reduce risks for residents and increase the resilience of municipal energy systems. They can thus serve as models for other local authorities and are compelling examples of how the Savings Banks Finance Group supports the success of the transition.