Hidden inequalities in District Heating: Evidence from household gas consumption data

District heating (DH) has been identified as the least-cost option for decarbonizing space heating in about 35% of Dutch households. However, this conclusion is based on average heat demand at the neighbourhood level, which masks substantial variation between households. As a result, given the high fixed cost of DH compared to natural gas, low-consumption households may face higher energy bill increases than high-consumption households once connected to DH systems. This study examines this distributional risk by analysing household-level gas consumption and its implications for energy costs under the 2025 Dutch DH and gas tariff structures. We use microdata from Statistics Netherlands (CBS) covering more than 230,000 households in Amsterdam, for which DH is identified as the least-cost option for phasing out natural gas. We quantify household gas-use heterogeneity using Kernel density estimates, Lorenz curves and Gini coefficients; calculate household-level bill changes under an overnight switch to DH under the standardized 2025 DH tariff, holding consumption and building quality fixed; and use multinomial logistic regression to characterize households at risk of different bill changes. Results reveal large disparities: Roughly a quarter of the households, consuming less than 500 m3 of gas per year, would experience a bill increase above €300 per year, equivalent to a relative bill increase from 35% to above 70% per year. More than 25% of these households have low-incomes. Highly insulated dwellings are particularly affected. The findings demonstrate that relying on average heat demand in least-cost assessments and applying uniform DH tariffs disproportionately burden low-consumption and often vulnerable households, thereby exacerbating inequality in heating costs. A socially equitable and financially viable heat transition therefore requires smart policies that reflect consumption differences and targeted measures to protect vulnerable households.