Government plans to boost the use of city heating schemes as an alternative to gas threaten to leave the sector in the hands of virtual monopolists, local councils have told economic affairs minister Eric Wiebes.

The government sees city heating – in which homes are kept warm using surplus heat from industry or waste incinerators – as having a key role in its plans to phase out gas.

Some 400,000 homes are currently connected to city heating grids, but the government wants to increase this to some 750,000 by 2030, the Financieele Dagblad said on Friday.

The draft legislation includes giving companies between 20 and 30 years to produce and deliver heat – it is thought they will need at least 20 years to make a profit and Wiebes is keen that commercial companies compete for contracts.

Once signed up, households are unable to change supplier and there have been many complaints from consumers already connected to city heating schemes about high bills.

Local authorities association VNG is opposed to the plans as they now stand, saying affordability and sustainability will not be sufficiently guaranteed.

In addition, consumer and tenants groups have raised objections to the creation of local monopolies which, they say, remove any scope for local or citizen’s initiatives.

There are currently three players in the sector – Swedish state-owned Vattenfall, Eneco, recently sold to two Japanese companies, and Ennatuurlijk, which is part of Germany’s E.on group.