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Documentation of two Consultation workshops on
“A common framework for a coordinated/ harmonised policy on Renewable
Heating”
D16 of WP5 from the RES-H Policy project
A report prepared as part of the IEE project "Policy development for improving RES-H/C penetration in
European Member States (RES-H Policy)"
March / December 2010 Assembled by Johann Steinbach ([email protected]), Fraunhofer ISI Mario Ragwitz ([email protected]), Fraunhofer ISI
The project "Policy development for improving RES-H/C penetration in European Member States (RES-H Policy)" is supported by the European Commission through the IEE programme (contract no. IEE/07/692/SI2.499579).
The sole responsibility for the content of this report lies with the authors. It does not represent the opinion of the European Communities. The European Commission is not responsible for any use that may be made of the information contained therein.
© Fraunhofer ISI, March 2010
Supported by
First consultation workshop on “A common framework for a coordi-
nated/harmonised policy on Renewable Heating”
Part I of D16 of WP5 from the RES-H Policy project
A report prepared as part of the IEE project "Policy development for improving RES-H/C penetration in
European Member States (RES-H Policy)"
March 2010 Assembled by Johann Steinbach ([email protected]), Fraunhofer ISI Mario Ragwitz ([email protected]), Fraunhofer ISI
RES-H Policy Attendance list of the first WP5 consultation workshop
RES-H Policy Project
Policy development for improving RES-H/C penetration in European Member States
Workshop on “A common framework for a coordinated/harmonised policy on Renewable Heating”
Attendance list of the first consultation workshop of WP 5
Date: 10 February 2010
Location: Renewable Energy House, Brussels
External participants:
Xavier Noyon ESTIF - European Solar Thermal Industry Federation
Sabine Froning EuroHeat & Power
Philippe Dumas EGEC - European Geothermal Energy Council
Theresa Doersch EGEC - European Geothermal Energy Council
Uwe Trenkner Trenkner Consulting
Milou Beerepoot IEA Renewable Energy Unit
Alexandros Nikolian EUBIA- European Biomass Industry Association
Simone Landolina EUREC-European Renewable Energy Research Centres Agency
Eleanor Smith EREC-European Renewable Energy Council
Stefaan Vanderstraeten DAIKIN EUROPE NV
Zoe Wildiers European Commission - EACI
Frank van Erp NL Agency
Tom Howes European Commission - DG TREN
Participants of the project team
Veit Bürger Öko-Institut e.V.
Liv A. Becker Öko-Institut e.V.
Luuk Beurskens ECN
Marijke Menkveld ECN
Argyro Giakoumi CRES
Ryszard Wnuk KAPE
Peter Connor UNEXE
Lei Xie UNEXE
Karin Ericsson ULUND
Lukas Kranzl EEG
Jan Steinbach ISI
Mario Ragwitz ISI
1/1
Workshop of the RES-H Policy project: "A common framework for a coordinated/harmonised policy on Renewable Heating (RES-H)"
Date: 10th of February
Location: Renewable Energy House, 63-67 Rue d'Arlon, B-1040 Brussels
Agenda
10:00 - 10:20: Overview of RES-H Policy project; Veit Bürger (Oeko-Institut - Institute for Applied Ecology, Germany)
10:20 - 10:50: Directive 2009/28/EC – implications for policy harmonisation for RES-H Tom Howes / Andrea Hercsuth (European Commission, DG TREN)
10:50 - 11:00: Discussion
11:00 - 11:20: General questions on RES-H policy harmonisation & coordination Mario Ragwitz (Fraunhofer ISI, Germany)
11:20 - 12:30: Best practice examples from target countries – important design ele-ments
Pellets and solar thermal in Upper Austria Gerhard Dell (O.Ö Energiesparverband, Austria)
District heating in Sweden Karin Ericsson (Lund University, Sweden)
Solar thermal program in Greece Argyro Giakoumi (Centre for Renewable Energy Sources, Greece)
Planned RES regulation in UK Peter Connor (University of Exeter, United Kingdom)
12:30 - 13:30: Lunch break
13:30 - 14:30: Two presentations on pros and cons of harmonisation for RES-H Veit Bürger (Oeko Institut) & Mario Ragwitz (Fraunhofer ISI)
– No need and no added value of any harmonisation for RES-H
– Substantial advantages can be expected from harm. for RES-H
14:30 - 15:00: General discussion on pros and cons of harmonisation for RES-Heat
15:00 - 15:30: Potential design criteria for a harmonisation of policies
Jan Steinbach (Fraunhofer ISI, Germany)
15:30 - 16:00 Final discussion
1
RES-H Policy Minutes of first WP5 consultation workshop
RES-H Policy Project
Policy development for improving RES-H/C penetration in European Member States
Workshop on “A common framework for a coordinated/harmonised policy on Renewable Heating”
Minutes of the first consultation workshop of WP 5: Summary of discussion and conclusions
Date: 10 February 2010
Location: Renewable Energy House, Brussels
For all agenda items, see the PowerPoint Presentations in the annex of these minutes.
1 Welcome, Introduction to the RES-H policy project
Mario Ragwitz welcomes the participants to the 1st consultation workshop of work package 5 of the
RES-H Policy project and presents the agenda of the day.
Veit Bürger gives an overview of the project, the objectives and the contents of the different work
packages.
Overview of the project see presentation (RES-H Policy WS(10-02-10)-Overview project.pdf)
2 Directive 2009/28/EC – implications for policy harmonisation for RES-H
Tom Howes (European Commission, DG TREN) introduces the Directive 2009/28/EC and outlines the
policy process which finally resulted in the new Renewable Directive.
Comments and discussion:
1. Question: The Directive defines minimum conversion efficiency for biomass conversion technologies. How are they calculated, are there any specific definitions? Tom Howes: It refers to EUROSTAT and / or other eco-labels defined in EU legislation.
2. Question: What are the next steps following the submission of the National Renewable Energy Action Plans (NREAPs)? Tom Howes: 1) Evaluation of the quality of the report by the Commission 2) Assessment of the credibility of the NREAPs 3) Taking actions in case a NREAP is not appropriate. Possible actions include: giving recommendations to MS; taking action if MS cannot follow the targets; demanding a revised NREAP.
1/4
RES-H Policy Minutes of first WP5 consultation workshop
3. Comment: The experience with authorities of different MS (e.g. Greece/ Bulgaria) show that they are not aware of how to set up the National Renewable Energy Action Plan, especially in terms of setting up targets for RES-H. Tom Howes: MS have a broad basis of assistance and information available both from the EC directly and from EU financed projects. MS are encouraged to use this opportunities.
3 General questions on RES-H policy harmonisation & coordination
Mario Ragwitz presents the objectives of WP5, general background information for policy
harmonisation and the general questions on harmonisation and coordination of RES-H/C policy.
See presentation M. Ragwitz (RES-H Policy WS(10-02-10)-Harmonisation Definition.pdf)
Comments and discussion: 1. Comment: The role of seasonal thermal storage technologies should be addressed. What is its
quantitative contribution in 2020? What is its the value in terms of shifting heat production and heat consumption on the time curve? Mario Ragwitz: Seasonal thermal storage is an important future technology in particular for beyond 2020. However, it is still in the very first phase of a diffusion curve and thus for the 2020 targets less relevant.
2. Comment: An important issue is the poor data quality of heat produced by RES. A harmonisation of data collection + harmonised methodology to determine the renewable output of RES-H installations are first essential steps towards any form of harmonisation. Mario Ragwitz: Different sources are consulted for the modelling work in this project (e.g Europe Observer and EUROSTAT). The project team is in contact with EUROSTAT in order to exchange data and provide additional data collected for this project.
4 Best practice examples from target countries – important design elements
The following best practice examples with regard to national RES-H policy support framework design
features are presented from target countries/regions:
Gerhard Dell represented by Lukas Kranzl: Upper Austria – Pellets and solar thermal in Upper
Austria, see presentation (RES-H Policy WS(10-02-10)-BestPractice_UpperAustria.pdf)
Karin Ericsson: District heating in Sweden – Karin Ericcson,
see presentation (RES-H Policy WS(10-02-10)-BestPractice_Sweden.pdf)
Argyro Giakoumi: Solar thermal program in Greece
see presentation (RES-H Policy WS(10-02-10)-BestPractice_Greece.pdf)
Peter Connor: Planned RES regulation in UK,
see presentation (RES-H Policy WS(10-02-10)-BestPractice_UK.pdf)
Comments and Discussion: 1. Comment: An important success factor for the market diffusion of RES-H technologies is the
reference heating structure. The high share of oil boilers in Upper Austria has facilitated the switch to pellets.
2/4
RES-H Policy Minutes of first WP5 consultation workshop
5 Two presentations on pros and cons of harmonisation of RES-H support policies
Veit Bürger and Mario Ragwitz present two opposite views on harmonisation of RES-H support
policies. The first presentation points out potential advantages of a fully harmonised policy approach
whereas the second presentation argues against any added value of a fully harmonise policy
framework. The presentations aim in stimulating the discussion and do not represent the presenters
view.
see presentation (RES-H Policy WS(10-02-10)-Pros and cons harmonisation.pdf)
Comments and discussion:
1. Comment: The presentations were more about the pros and cons of technology specific vs non-technology specific policies rather than full harmonisation against no harmonisation of overall policy approaches.
2. Comment: When discussing RES-H policy harmonisation the experiences of similar discussions in the RES-E sector should be completely ignored because of the big differences between the two sectors. Also lessons learnt of a quota system for the RES-E sector cannot be referred to for the RES-H sector.
3. Comment: An optimal resource allocation is not the important factor for RES-H since all potentials have to be deployed in the long-term.
4. Comment: Urban/ infrastructure planning in terms of heat density or the issue of gas grids vs. heating networks are one of the most important factors, which should be addressed by a RES-H policy.
5. Comment: The standardisation of calculation of efficiency rates should be addressed by harmonisation.
6. Comment: Barriers to harmonisation are the different existing national motivations as already seen in the RES-E sector.
7. Comment: There must be a technology paradigm change with respect to RES infrastructure planning which should address all stakeholders (installers, architectures, technicians etc), this paradigm shift should be addressed by harmonisation.
8. Comment: Every approach has to be measured against system efficiency. An overall strategy is required for RES-H in combination with energy efficiency issues including building regulations. There is the need for a harmonisation of RES and building regulations.
9. Comment: Harmonised policy vs. different national policies: The benefit of a harmonised policy is that it forces those MS which haven’t done anything in terms of RES-H policy yet to introduce policy measures. However, harmonisation also restricts MS which have already different policies in place, which might already have proven to be effective. Setting harmonised standards or minimum support levels could hinder frontrunners (e.g. Upper Austria) to go ahead.
10. Comment: By thinking of different policy frameworks, the main question should be: Where does a certain measure have the highest impact? Where can the instrument be used most effectively?
6 Potential design criteria for a harmonisation of policies
Jan Steinbach sums up the current state of harmonisation introduced by the Renewables Directive
(2009/28/EC) and outlines possible next steps in the harmonisation process of RES-H/C policy.
see presentation (RES-H Policy WS(10-02-10)-DesignCriteria.pdf)
3/4
RES-H Policy Minutes of first WP5 consultation workshop
4/4
1. Comments: A bonus model is not suitable as a policy instrument for addressing RES-H in district heating. For new district heating networks, the main barrier is the investment in the grid, which is not addressed by this measure. For existing heating networks, a bonus model would mostly replace waste heat from CHP plants, which would then generate surplus heat and lower efficiency of these plants.
Supported by
www.res-h-policy.eu
The RES-H Policy Project
Workshop of the RES-H Policy ProjectBrussels, 10th of February 2010
Veit BürgerÖko-Institut e.V.
The RES-H Policy Project
www.res-h-policy.eu 2
Overall objective of the RES-H Policy project
• To assist Member State governments in implementing the Renewables Directive (2009/28/EC) as far as aspects regarding renewable heating and cooling (RES-H/C) policy are concerned
• Focus of the project:
─ sectoral targets for RES-H/C
─ support policies aiming at stimulating the market penetration of RES-H/C
The RES-H Policy Project
www.res-h-policy.eu 3
Specific objectives of the project
• to develop a concise policy background for the implementation of RES-H/C support instruments at Member State (MS) level
• to assist selected MS governments in setting up national sector specific RES-H/C targets as required by the new RES Directive
• to assess selected policy options to support RES-H/C
• to develop tailor made country specific policy recommendations as well as policy implementation guidelines
• to investigate options of coordination and harmonisation of national RES-H/C policy approaches
• to communicate and disseminate the project results to relevant stakeholder groups across the EU
The RES-H Policy Project
www.res-h-policy.eu 4
Target countries
The RES-H Policy Project
www.res-h-policy.eu 5
Project consortium
The RES-H Policy Project
www.res-h-policy.eu 6
The RES-H Policy Project
www.res-h-policy.eu 7
WP2: Development of the Policy Background
• Overview of the current national/regional regulatory and market framework of the of the national heating and cooling markets in the target countries/regions
• Detailed overview of principle policy options (incl. pros/cons) to stimulate increased RES-H/C market penetration
• Analysis of the experience with the implementation of district heating systems in Sweden
The RES-H Policy Project
www.res-h-policy.eu 8
WP3: Fixing RES-H/C targets
• Analysis of existing RES-H/C scenarios and potentials in the target countries
• Top down assessment of RES-H/C targets (calculations based on the Green-X model)
• Bottom up approach to determine RES-H/C targets(focus: RES-H/C in buildings and industry)
• Stakeholder dialogue (stakeholder consultations, consultation workshops)
• Overall output of this WP: Overall and technology/sector specific options for RES-H/C targets (target ranges) for each of the target countries for 2020 and 2030
The RES-H Policy Project
www.res-h-policy.eu 9
WP4: Assessment of national RES-H/C policy options
• Selection and description of 3-5 support options for each target country
• Qualitative assessment of these support options against criteria such as stakeholder acceptance, investment security, market interaction, administrative synergies with other policies
• Assessment of the effectiveness and economic efficiency of 2 support options per target country─ costs: especially direct impact on the state budgets,
transaction costs─ benefits: reduced GHG emissions, growth in RES-H/C capacities
and avoided fuel costs
• Stakeholder dialogue (stakeholder consultations, consultation WS)
• Development of policy recommendations and implementation strategies
The RES-H Policy Project
www.res-h-policy.eu 10
WP5: Options for policy harmonisation
• Coordination / harmonisation – defining a common framework
• Assessment of costs & benefits of RES-H/C harmonisation
• Methodologies to share cost & benefits of a future harmonised European policy for RES-H/C
• Using Guarantees of Origin for the trade of the renewable attribute of RES-H/C between Member States
• 2 consultation workshops
• Overall output of this WP: Proposals for European harmonised policy to promote RES-H/C
The RES-H Policy Project
www.res-h-policy.eu 11
WP6: Communication and dissemination
• National dissemination conferences in target countries/regions: Presentation of the results of the policy analysis process to a broader stakeholder audience
• European Dissemination Conference
• Dissemination workshops in non-target countries: communication of the project results to target group representatives in countries which are not directly involved in the policy formulation process of the project
• Project website (www.res-h-policy.eu)
The RES-H Policy Project
www.res-h-policy.eu 12
Thank you for your attention
Contact
Veit BürgerÖko-Institut e.V.
tel.: +49-761-45295-25email: [email protected]
Supported by
www.res-h-policy.eu
General questions on RES-H policy harmonisation & coordination
Workshop of the RES-H Policy ProjectBrussels, 10th of February 2010
Mario RagwitzFraunhofer ISI
Harmonisation of RES-H/C policies
www.res-h-policy.eu 2
The challenge > 20% of
the (residual) heat demand (incl. also industrial processes, etc.)
Harmonisation of RES-H/C policies
The challenge:
■ Capacities of solar thermal / geothermal / grid-based biomass RES-H have to increase by a factor of ~ 10 / 8 / 3 until 2020 to reach targets of Directive 2009/28/EC
■ Long reinvestment cycles in the building sector limit diffusion rate of RES-H/C – many currently installed boilers in the building sector will still be operating in 2020.
■ Large share of high temperature heat demand in the industry sector, which cannot easily penetrated by RES-H as well as strong barriers to integrate RES-H in sensitive industrial processes limit diffusion rate of RES-H/C
■ A very high share of all potential RES-H/C investments needs to be actually realised!
www.res-h-policy.eu 3
Harmonisation of RES-H/C policies
General conditions:
■ Policy makers are looking for the right balance between a harmonisation of support and the continuation of national instruments in order to:■ not disrupt currently successful instruments by superimposing a
harmonised system that may or may not be optimally designed
■ increase the overall effectiveness and efficiency on a European scale
■ improve the compatibility of RES support with other community policies such as creating a single European energy market and establishing an effective CO2 abatement framework and
■ allow Member States to reach their national targets if efficient and effective national instruments are implemented
www.res-h-policy.eu 4
Harmonisation of RES-H/C policies
General questions:
■ What is meant by “harmonisation”?
Harmonising support schemes could range from defining generally binding (technical) framework conditions suitable for various instruments versus applying one common, precisely defined support scheme in the EU, as well as many discrete variations.
■ Which specific conditions apply to different support instruments in the heat sector that may affect the feasibility of any kind of harmonisation, e.g. tax measures?
■ Which limitations on harmonisation will be effected by different combinations of mechanisms?
www.res-h-policy.eu 5
Harmonisation of RES-H/C policies
General questions:
www.res-h-policy.eu 6
Harmonisation of RES-H/C policies
General questions:
■ Which level of harmonisation is already resulting from the Directive 2009/28/EC?
■ Which consequences can be derived from the Directive for national policy frameworks and what could be an optimised national implementation of the proposed heating obligation?
■ Which design features can be recommended from a national viewpoint?
■ Which implications can derive from the use of cooperation mechanisms?
■ Which could be the role of Guarantees of Origin, if they are introduced in the RES-H/C sector
www.res-h-policy.eu 7
Harmonisation of RES-H/C policies
General questions:
■ Which lessons regarding harmonisation of RES-H/C policy can be learned from efforts to harmonise RES-E policy at the European level and the likely efforts of Member States to subscribe to the harmonisation process?
■ Which implications are derived from the fact that physical trade of power does not exist in case of RES-H/C
■ Is there a specific need for harmonisation of industrialRES-H/C in industries in global competition?
www.res-h-policy.eu 8
Harmonisation of RES-H/C policies
WP5 Options for harmonisation of RES-H/C policies:
■ Elaborate on best practices of the main policy instruments at national level
■ Derive a set of generic criteria that could usefully apply to all main instruments in Europe, derive design criteria of one fully harmonised instrument
■ Analyse the technology deployment and the costs associated with the different policy strategies for RES-H/C based on the INVERT scenarios for policies selected
■ Conception of a methodology to share costs & benefits of a potentially harmonised future European policy
■ The role of GoO for RES-H/C development
www.res-h-policy.eu 9
Harmonisation of RES-H/C policies
Thank you for your attention!
www.res-h-policy.eu 10
Supported by
www.res-h-policy.eu
Biomass and solar thermal in Upper Austria
Workshop of the RES-H Policy ProjectBrussels, 10th of February 2010
Gerhard DellO.Ö. Energiesparverband
Capital: LinzPopulation: 1.4 mioArea: 12.000 km²Gross inland cons.: 305 PJ; 33 % renewableseconomic activities: industry, service sector, tourism,
25% of the Austrian exports
• regional energy agency• energy efficiency, renewable • energy & innovative technologies• main funding: regional government• services to private households, SMEs, public bodies
O.Ö. Energiesparverband
Oberösterreich – Upper Austria
Energy Action Plan of Upper Austria
1994 - 1999• 30 % renewable energy
(hydro, wood biomass, solar)
• energy consumption in new housing reduced by 30 %
• 15,000 jobs
2000 - 2010• double biomass & solar:
wood biomass 13 % (2007)
• 1 % energy saving/year• 1.5 % energy savings in
the public sector/year
2010-2030• 100 % space heating & electricity from renewable energy• reduction of heat demand by 39 %• minus 65 % CO2 emissions
• Grants for renewableheating & efficiencymeasures
• Pilot projects
• Contracting
• Regional R&Dprogramme
Upper Austria's sustainable energy strategy –example biomass heating
Legalmeasures
Financialmeasures
Information& training
• Renewable heatingobligations (publicbuildings & buildings> 1000 m²)
• Inspection of boilers& AC systems
• Energy performancecertificates
• Minimum require-ments heating &cooling
• Energy advice
• Training & educationprogrammes
• Campaigns &competitions, mediaactvitivies
• Local energy actionplans
• Publications
• Oekoenergie-Cluster
Policy Packages
RES-H obligations: Examples
Current policy:- user obligations for RES-h:
- public buildings - new construction + renovation- new buildings > 1000 m²
- obligation to connect to district heating in "district heating priority areas"- regular & "one-off inspections of boilers"
Future options:- RES-h obligations for new construction (independent of the buildings use) for all
heating and hot water demand - RES-h obligation for renovation, for either the whole heating or hot water
demand or a fraction of it- RES-h obligation if an existing heating system does not meet emission and
safety requirements (and this is detected in the course of a regular inspection) and/or if it reaches a certain age (e.g. 25 or 30 years).
Financial measures for RES-H - Examples Domestic sector - pellets heating:- 30% of the investment costs (max. 2,200 Euro) - plus max. 1,000 Euro (if switch from fossil fuels is made)- plus 500 Euro for the removal of an oil storage tank - in total, max. 3,700 Euro
Domestic sector - solar thermal collectors:- 1,100 Euro plus 100 Euro (140 Euro vacuum collector) per m²- in total, max. 3,800 Euro - solar keymark & heat meter required
Non-domestic sector – biomass heating (up to 400 kW):- 120 €/kW (0-50 kW) + 60 €/kW (per additional kW up to 400 kW)- up to 60% of the national subsidy (max. 15% of investment costs)
Non-domestic sector – solar thermal installations (up to 100 m²):- 100 €/m² (flat plate) / 150 €/m² (vacuum)- up to 60% of the national subsidy (max. 15% of investment costs)
target:doublingby 2010
0
500
1000
1500
2000
2500
-84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09v 10
cap
acit
y in
MW
< 100 kW 100 kW - 1 MW > 1 MW
• 14 % of total energy consumption
• > 40,000 biomass heating installations
• 280 biomass district heating plants
• > 40 % of the municipalities mainly usebiomass for heating
Biomass heating in Upper Austria
Solar thermal in Upper Austriacumulated
EU 2008: 0.05 m² per capita
Germany 2008: 0.14 m² per capita
Austria 2008: 0.48 m² per capita
Upper Austria 2009: 0.76 m² per capita
Upper Austria 2030: 2.2 m² per capita
0
100
200
300
400
500
600
700
800
900
1000
1100
8 1 8 2 8 3 8 4 8 5 8 6 8 7 8 8 8 9 9 0 9 1 9 2 9 3 9 4 9 5 9 6 9 7 9 8 9 9 0 0 0 1 0 2 0 3 0 4 0 5 0 6 0 7 0 8 0 9 v
target:1 million m²
by 2010
in 1000 m²
New domestic buildings – the end of the oil-era?
oil-heating
renewable energy technologies
32 %
36 %
1999
< 0.01 %
85 %
2009
Renewable Heating in Upper Austria
• covers 45 % of the heating demand • more than 100 million Euro investment in new
installations annually• reduces energy bill for imported fossil fuels by
more than 500 million Euro annually• employs more than 5,000
• to meet our objective of 100 % renewable heatingin 2030, heat demand has to be decreased by 39%
Success factors
• Policy packages
• RES-h policy is building, economic, agricultural, social etc. policy ->
- use different funding sources
- promote the benefits beyond climate protection
- link RES-h policy to energy efficiency policies
• Take a longer-term and "sustainable" approach – less can be more (high
quality standards, start with new construction)
• Information is key (product-independent energy advice, training as a
"public obligation")
• Observe the market and react
www.wsed.at
Wels / Austria3. – 4. 3. 2010
European Pellet Conference
European Pellets ConferenceBuilding Renovation – towards low Energy ConsumptionSolar Thermal ConferenceEnergiesparmesse - trade show(1,600 exhibitors, 100,000 visitors)
Supported by
www.res-h-policy.eu
Best practice examples - Swedish district heating
Workshop
Brussels, 10 February 2010
Karin Ericsson, Lund University
Best practice examples - Swedish district heating
www.res-h-policy.eu 2
Contents
• Why is Sweden an interesting case?
• History in brief
• DH production development - energy sources and deliveries
• Rationales and policy drivers in three development phases
• Lessons learned for possible harmonisation of support mechanisms
Best practice examples - Swedish district heating
www.res-h-policy.eu 3
Why is Sweden an interesting case?
• High penetration rate of DH heating (50% of the heating of buildings)
• High proportion of RES and non-fossils─ 48% biomass
─ 12% fossil fuels
─ 40% heat pumps, MSW, peat, industrial waste heat
Best practice examples - Swedish district heating
www.res-h-policy.eu 4
History in brief
• 1948 first public DH system in Sweden
• After 1960 more rapid development
• Densely populated city centres, public buildings
• More recently: also one- and two-dwelling buildings
• Municipal initiatives─ Municipal ownership required by law until 1996
─ In 2004 58% of the district heat was produced by municipal companies
Best practice examples - Swedish district heating
www.res-h-policy.eu 5
District heating production development
Best practice examples - Swedish district heating
www.res-h-policy.eu 6
Rationales and policy drivers in three development phases
• 1950-1972: Municipal planning for increased efficiency
• 1973-1991: Oil replacement
• 1991- : Sustainable development and climate change mitigation
Best practice examples - Swedish district heating
www.res-h-policy.eu 7
1950-1972: Municipal planning for increased efficiency
• Little national energy policy (in general), although soft loans were granted to municipalities for building DHS
• The municipalities were already responsible for the local electricity distribution and sewage water supply.
• Economic means through taxation of inhabitants
• Municipal initiatives driven by:─ Opportunity to produce electricity efficiently through cogeneration
─ Economy of scale and fuel flexibility
─ Ambitions to improve local air quality
Best practice examples - Swedish district heating
www.res-h-policy.eu 8
1973-1991: Oil replacement
• The DHS were considered strategic due to their opportunity to use peat, waste, biomass, waste heat
• State subsidies and soft loans to DH utilities and housing organisations.
• Tax on oil products (previously only petrol).
• Dramatic decrease in oil heating
• Electric heating and district heating increased.
•The proportion of oil in DH production decreased from 100% to 11%.
Best practice examples - Swedish district heating
www.res-h-policy.eu 9
1991: Sustainable development and climate change• Energy tax reform in 1991 - introduction of
─ carbon tax
─ sulphur tax
─ nitrogen charge
• Two investment subsidy schemes targeting
─ Municipalities
─ Residential sector
Best practice examples - Swedish district heating
www.res-h-policy.eu 10
The carbon tax
• On fossil fuels used in heat production
• 101 EUR/tonne CO2
• 87 EUR/tonne CO2
• 21 EUR/tonne CO2
• 7 EUR/tonne CO2
2010
Best practice examples - Swedish district heating
www.res-h-policy.eu 11
Consequences of the energy and carbon taxes
• In the residential and service sector─ Increased competitiveness
of district heating, wood pellets and heat pumps.
• In DH sector─ Increased competitiveness
of biomass, waste and industrial waste heat
Best practice examples - Swedish district heating
www.res-h-policy.eu 12
Lessons learned for possible harmonisation 1(2)
• The Swedish DH development indicates that there is no particular need for harmonised support mechanisms─ local character of heat markets
• However, need for coordinated regulations due to the distorting effects of the ETS (does not address emissions in the residential and service sector)─ => without national taxation of fossil fuels, such as the
Swedish carbon tax, the ETS is currently favouring individual heating over DH
─ =>EU or national carbon tax is required to level the playing field
Best practice examples - Swedish district heating
www.res-h-policy.eu 13
Lessons learned for possible harmonisation 2(2)
• Standardisation of waste and biomass fuels, and possibly the development of joint technical standards of certain equipment
Supported by
www.res-h-policy.eu
Solar thermal program in Greece
Workshop of the RES-H Policy ProjectBrussels, 10th of February 2010
Argyro GiakoumiCentre for Renewable Energy Sources & Saving
Best practice examples from the target countries
Greece has a well developed solar thermal market, which has been active for almost 30 years, for many years Greece held one of the highest solar thermal capacities within Europe.
Statistics for solar thermal
(Newly Installed Capacity per Capita)
Source: European Solar Thermal Federation (ESTIF), “Solar Thermal Markets in Europe, Trends and Market Statistics 2008”
Best practice examples from the target countries
Description of promotion schemes in GreeceFirst steps
advertising campaign, supported by the Greek governmentlow interest loans & with tax credits
Development of a domestic market of solar thermal producers.
national standards were introduced, helping to improve the efficiency and reliability of the products
Only the most experienced and well organized market actors managed to continue.
Existing framework
Residential Sector
Tax deduction: 75% of the cost for buying and installing solar thermal applications was deducted from the taxable income (Law 2364 of 1995). In 2006 this percentage dropped to 20% (replacement Law 3522/2006) and in any case the tax relief cannot be above 700€.
– No differentiation in the amount of the tax deduction depending on the type of the system.
– The existing support is mainly used for thermosiphonic solar thermal applications for production of domestic hot water.
Tertiary and Industry SectorsInvestment subsidies for solar thermal applications, under the Operational Program of Energy - OPE (2nd Community Support
Framework 1994-2000) and the Operational Program of Competitiveness - OPC (3rd Community Support Framework 2000-2006)
– minimum efficiency requirements for the subsidized solar thermal systems. – different level of support depending on geographical & technological criteria.
These programs are now closed
Best practice examples from the target countries
Ανοιχτού κυκλώματος Κλειστού κυκλώματος
Ζεστό Νερό
Κρύο Νερό
Ζεστό Νερό
Κρύο Νερό
Εναλλάκτης Θερμότητας
Description of the Greek market
In the history of the Greek solar thermal market the main solar thermal product was, and still is, the thermosiphonic water heater. The breakdown of solar thermal applications in Greece for year 2002, according to the GSIA, was as follows:
• ~ 98% of installed collector area accounted to domestic hot water production (mainly thermosiphonic water heaters, including hotel studios, small commercial and industrial consumers).• ~1% of installed collector area accounted to large collective solar systems, which are installed mainly in hotels for hot water production.• Less than 1% of the installed collector area accounted to space heating, air conditioning and industrial process heating.
Thus, it can be seen that the great majority of solar thermal applications in Greece are limited till now to producing domestic hot water, and have not yet been expanded to the area of space heating and cooling.
Thermosiphonic water heater
Typical cost ranging from 1.000 – 1.600 euros
Best practice examples from the target countries
Description of the Greek market
Central systems
Cover only Domestic hot water production
Capability to cover more than one users
Cost: 400 – 500 €/m2
For a single household ~3.000€
Combi systems
Cover both domestic hot water production & space heating
Cost: 500 – 600 €/m2
For a house of 100m², 20m² collectors can cover ~ 40-50% of the total heat demand.
cost ~ 9.000€-12.000€
Best practice examples from the target countries
Identified problems in the existing support scheme
Weak existing support scheme, which favorites only cheaper applications such as thermosifonic solar thermal systems.
No differentiation of the amount of economic support depending on the type of technology.The amount of the tax deduction in the case of central solar systems, combi systems or solar cooling is negligible and
does not give a real incentive to choose such a technology.Investment subsidies in the tertiary and industry sectors are based on calls and are not available on a constant basis.
Non economic barriers
Another reason for the small penetration of solar thermal applications for space heating and cooling is the fact that such systems, as far as installation and design is concerned, require properly trained staff with technical skills. Unfortunately only few of the market actors have the technical skills to implement such projects.
Best practice examples from the target countries
Actions for further development
Necessary feature actions
Introduction of training programs for engineers and technicians/ installersCertification of systems and certification of installersCreation of a registry for the certified installers
Proposed support schemes
In the Energy Efficiency Action Plan use obligation measures have been proposed for solar thermal installations.
Compulsory installation of central solar thermal systems in buildings of the tertiary sector which are larger than 1.000m2, for the production of domestic hot water.
Compulsory installation of central solar thermal systems in buildings of the public sector and in tertiary buildings above 500m2 in the islands.
In the New RES Law which is now subject to consultation process, use obligations are also proposed:
Use obligation for covering part of the needs for domestic hot water production with solar thermal systems in all new buildings, independent of their use.
Supported by
www.res-h-policy.eu
Planned RES-H Regulation in the UK: The Renewable Heat Incentive
Workshop of the RES-H Policy ProjectBrussels, 10th February 2010
Peter ConnorExeter University
Best practice examples from the target countries
The Renewable Heat Incentive: As proposed
• A tariff based mechanism. Tariffs vary with:─ Technology
─ Size of installation
─ Allowed lifetime
• Tariffs can be deemed or metered
• The aim is to give a return of 12% on all technologies, with the exception of a 6% return for solar thermal.
• Tariffs will not initially degress, but it is expected that this will apply later.
• Oversight by the UK energy regulator, OFGEM
www.res-h-policy.eu 2
Best practice examples from the target countries
RHI Tariffs: small installations
www.res-h-policy.eu 3
Annual payments on installations up to 45kW
Best practice examples from the target countries
RHI Tariffs: medium installations
www.res-h-policy.eu 4
Quarterly payments on installations above 45kW
Best practice examples from the target countries
RHI Tariffs: large installations
www.res-h-policy.eu 5
Best practice examples from the target countries
RHI: Deemed and Metered Output
• Estimated output eligible for subsidy based on property and inhabitants.
• Stated Aim: To try to incentivise only energy efficient properties to access the RHI.
• Additional benefits:─ Avoids disproportional cost of metering smaller installations,
─ Addresses the problem of subsidising unneeded heat
─ Reduces the administrative costs of making more rather than fewer payouts to what is intended to be a large number of small stakeholders
• Deemed technology will be subject to certification under the Microgeneration Certification Scheme (MCS).
www.res-h-policy.eu 6
Best practice examples from the target countries
RHI: Transition arrangements
• Developers currently holding grants will have to return the grant funding to access the RHI tariffs.
• Renewable CHP online now or before 2013 will have to choose between 1,5 ROCs for RES-E output only OR 1 ROC for RES-E plus the RHI for heat output. This choice will apply for the life of the plant. Post 2013 only the second option will be available.
www.res-h-policy.eu 7
Best practice examples from the target countries
RHI: Regulatory oversight
• Office of Gas and Electricity Markets (OFGEM) will have oversight responsibilities. OFGEM already oversee the Renewables Obligation, and the gas sector which provides 85% of UK domestic heating and 55% of commercial heating.
• Responsibilities include:─ Registration of owners (via submission of proof of installation)
─ Making payments
─ Monitoring the operation of the mechanism
─ Enforcement
─ Data collection to be used in assessing RHI effectiveness
www.res-h-policy.eu 8
Best practice examples from the target countries
RHI: Please note!
• The RHI is a legal entity (adopted in the 2008 Energy Act) but the operational characteristics are proposed not actual as yet.
• The data comes from the consultation document.
• The timeframe for adopting the mechanism is April 2011.
www.res-h-policy.eu 9
Supported by
www.res-h-policy.eu
Pros and cons of harmonisation for RES-H policy
Workshop of the RES-H Policy ProjectBrussels, 10th of February 2010
Mario Ragwitz (Fraunhofer ISI), Veit Bürger (Öko-Institut e.V.)
Supported by
www.res-h-policy.eu
Advantages from harmonisation for RES-H
Harmonisation of RES-H/C policies
Setting the frame:
www.res-h-policy.eu 3
Harmonisation of RES-H/C policies
www.res-h-policy.eu 4
The challenge > 20% of
the (residual) heat demand (incl. also industrial processes, etc.)
Harmonisation of RES-H/C policies
The challenge:
■ Capacities of solar thermal / geothermal / grid-based biomass RES-H have to increase by a factor of ~ 10 / 8 / 3 until 2020 to reach targets of Directive 2009/28/EC
■ Long reinvestment cycles in the building sector limit diffusion rate of RES-H/C – many currently installed boilers in the building sector will still be there in 2020.
■ Large share of high temperature heat demand in the industry sector, which cannot easily penetrated by RES-H as well as strong barriers to integrate RES-H in sensitive industrial processes limit diffusion rate of RES-H/C
■ A very high share of all potential RES-H/C investments needs to be actually realised!
www.res-h-policy.eu 5
Harmonisation of RES-H/C policies
Compliance:
■ Barriers in the heating sector to implement RES-H can be much stronger than for electricity and transport because individual preferences of many small – medium scale investors are affected
■ Use obligations in the building sector only existing in two Member States and there only for new buildings the strongest need for RES in existing buildings is not addressed at all in the EU yet
■ Investment incentives and tax rebates, which are currently the by far dominating measures for RES-H in EU MS will be insufficient for commercially owned apartment and office buildings, where willingness to pay is low
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Harmonisation of RES-H/C policies
Compliance:
■ Investment in district heating infrastructure is currently by far too low to reach EU targets for 2020
■ Supply chain in Europe needs to get the signal for ramping up manufacturing capacity for new RES technologies
■ The administrative process in Europe has little experience with assuring compliance with strong heating obligations
www.res-h-policy.eu 7
Harmonisation of RES-H/C policies
Technical Standards:
■ Limited availability of biomass calls for high standards to assure most efficient conversion technologies, which is currently not the case in particular for decentralised plants
■ Performance coefficients for heat pumps are still too low in EU average
■ Technical standards also needed for solar thermal devices to assure a maximum heat output
■ How to assure the centralised use of biomass mainly in CHP systems as compared to separate district heating and electricity production?
www.res-h-policy.eu 8
Harmonisation of RES-H/C policies
Efficiency:
■ Standardisation of conversion technologies will lead to economies of scale and cost reduction
■ Only if a strong growth of RES-H can be reached at an early stage, the need for more costly measures towards the end of the period until 2020 can be avoided.
■ Distortions between Member States and a competition for the highest subsidy can be avoided through a harmonised obligation
■ In many countries insufficient competition in the business of installers is observed – international firms in this sector could help operating under the same conditions in all MS could help
www.res-h-policy.eu 9
Harmonisation of RES-H/C policies
Industries under international competition:
■ RES-H/C also needs to show strong growth in the industry sector, which is often under strong international competition
■ Therefore a similar ambition level throughout the EU is suitable to avoid distortions
■ Interaction with the ETS for large plants calls for a harmonised approach in order to assure a maximum CO2 reduction
■ A coordinated (tax) policy in non-ETS sectors could reduce (unnecessary) biomass transport in the EU
www.res-h-policy.eu 10
Harmonisation of RES-H/C policies
Conclusion:
■ A central coordination is most likely insufficient to create the development needed for RES-H/C in the building and industry sector.
■ Existing buildings, the industry sector and district heating based on RES-H will not get sufficient attention in a purely national approach.
■ Stronger reduction of generation costs can be expected from standardisation of requirements
■ A strong harmonisation either through obligations or price based incentives is needed.
www.res-h-policy.eu 11
Harmonisation of RES-H/C policies
No need and no added value of a fully harmonised RES-H policy in Europe
Harmonisation of RES-H/C policies
www.res-h-policy.eu 13
Differences to the RES-E sector
• Discussion about a European harmonisation of RES policies is driven by the
• respective discussion in the RES-E sector, however both sectors differ
• significantly
• Heat production is highly decentralised, in many Member States the domestic heat demand is mainly covered by on-site generation
• Cross border trade of heat is marginal
• Member States differ significantly in climate conditions, applied RES-H/C technologies, heat infrastructures, structure of the building sectors etc.(see next slides)
• Member States do not run country-wide transmission grids for heat
→ Harmonisation framework developed for the RES-E sector does not automatically work for RES-H/C
→ Transfer of the harmonisation approach is linked to several problems
Harmonisation of RES-H/C policies
www.res-h-policy.eu 14
Potential economic benefits of harmonisation must be questioned (1)
• Main criteria for the idea of full harmonisation are
─ Maximisation of economic benefits vs costs (especially through leading investments to where it is most profitable)
─ Minimisation of transaction costs
─ Avoidance of market distortions (e.g. in order to support the ideaof a harmonised European wide internal market)
• For each instrument or instrument category targeting RES-H/C the concept of harmonisation needs to be assessed against these criteria
→ Necessary: Instrument specific view on the potential benefits of full harmonisation
→ Relevant perspectives: different sectors (especially buildings and industry), different project sizes (small scale vs large scale), different types of investors
Harmonisation of RES-H/C policies
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Potential economic benefits of harmonisation must be questioned (2)
• How could full harmonisation look like for different instruments?
• Use obligation: e.g. all owners of new buildings in Europe have to ensure the same minimum level for the use of RES-H (e.g. 15% of the overall heat demand)
• Subsidies: e.g. all investors in RES-H would receive the same European wide harmonised technology specific investment support (e.g. X EUR/kW)
• Bonus system: e.g. all European RES-H operators are entitled to receive a European wide harmonised technology specific bonus per kWh heat produced
• Quota system: e.g. all European fossil fuel suppliers/ non-renewable heat suppliers have to purchase or sell a minimum amount of heat products produced from renewable energies
Harmonisation of RES-H/C policies
www.res-h-policy.eu 16
Potential economic benefits of harmonisation must be questioned (3)
• From the harmonisation perspective most economic benefits seem to be linked to a European wide quota mechanism, but
─ Lesson learnt from RES-E: There is an increasing body of evidence that this mechanism does not offer the cheapest policy option (discrepancy between theoretical concept and empirical evidence)
─ Technology diversification: Quota systems favour the "cheapest" technologies, technologies which are less competitive are unlikely to be able to attract investments and may fail to further develop(in contradiction to long-term goals and requirements)
Harmonisation of RES-H/C policies
www.res-h-policy.eu 17
Long-term climate goals
• Long-term climate protection goals (e.g. 2050) require that all existing RES-H potentials are more or less completely deployed in all Member States
• Idea of full harmonisation is to ensure least cost allocation of potentials (short-term optimisation of benefits/costs), however this might lead to
─ sub-optimal developments in view of the long-term needs (that would require to support the development of technologies or system solutions adjusted to the specific framework conditions in a country)
─ potentially higher long-term policy costs
→ Long-term goals require a country specific policy mix that is adjusted to e.g. the country specific needs of different RES-H technologies, existing and required infrastructures, the institutional set-up of the different sectors using RES-H/C (e.g. buildings, industry)
Harmonisation of RES-H/C policies
www.res-h-policy.eu 18
Competiveness (economic needs) of RES-H/C technologies differs among Member States
• Heat demand (especially for space heating) varies essentially between Member States depending on the climate conditions
• The performance of many RES-H systems is depending on the climate conditions they are operating in (e.g. air sourced heat pumps <-> ambient temperature, solar thermal <-> solar radiation)
• Member States apply different RES-H technologies, e.g.
─ Solar thermal: passive vs active systems
─ Biomass: different sophisticated conversion technologies
→ Competiveness of RES-H technologies differs significantly between Member States -> support must be designed as to be adjusted to the (condition) specific economic needs of each technology
→ Setting harmonised standards or minimum support levels could hinder frontrunners to go ahead
Harmonisation of RES-H/C policies
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Consumer perception/expectation
• Full harmonisation (e.g. European wide RES-H quota) is aiming at minimising economic costs (by leading financial support to RES-H potentials that can be exploited at lowest cost)
• Facilitation could only be organised through cross border trade of attributes (no physical trade!) e.g. in form of certificates or guarantees of origins
• Harmonised quota (e.g. on fuel/heat suppliers) fulfilled through investments in other countries might be in contradiction to what consumers expect to happen (deployment of regional RES-H potentials-> impact on regional economy)
Harmonisation of RES-H/C policies
Thank you for your attention!
www.res-h-policy.eu 20
Supported by
www.res-h-policy.eu
Potential design criteria for a harmonisation of policies
Workshop of the RES-H Policy ProjectBrussels, 10th of February 2010
Jan SteinbachFraunhofer Institute for Systems and Innovation
Research ISI, Germany
Harmonisation of RES-H/C policies
The issue of RES-H/C policy harmonisation
www.res-h-policy.eu 2
Degree of harmonisation
No harmonisation
Full harmonisation
Sup
port
sc
hem
e grants
use Obligation
GrantsMS1
Des
ign
Grants MS2
UOB MS3
UOB MS4
TAX MS5
TAX MS6
tax related instruments
One support scheme
Same design in all Member States
Directive 2009/28/EC
Which degree of harmonisation is already achieved by the Directive?Which are reasonable next steps in the harmonisation process?
Harmonisation of RES-H/C policies
www.res-h-policy.eu 3
Contents
• Harmonisation resulting from the Renewable Directive
• Next Steps for a harmonisation of policies
• Conclusion
Harmonisation of RES-H/C policies
General scopes of RES-H/C policy harmonisation addressed by the Renewable Directive 2009/28/EC
www.res-h-policy.eu 4
Postulating support mechanisms which should be introduced in the Member States
Technology-specific design criteria to comply with support mechanisms
Determination of joint standards in terms of the efficiency for RES technologies
Provision of information, training of professionals and minimum requirements for qualification system
Policy instruments
Technology
Standardisation
Information and training
Harmonisation of RES-H/C policies
Harmonisation resulting from the new Renewable Directive 2009/28/EC
www.res-h-policy.eu 5
Policy instruments
Technology
Standardisation
Information and training
Harmonisation of RES-H/C policies
Harmonisation resulting from the new Renewable Directive 2009/28/EC
www.res-h-policy.eu 6
Policy instruments
Technology
Standardisation
Information and training
Harmonisation of RES-H/C policies
Harmonisation resulting from the new Renewable Directive 2009/28/EC
www.res-h-policy.eu 7
• General standardisationMS should set clearly defined technical specification for all RES installations which are subject to a support schemeExisting European Standards (eco-labels, energy labels) must be considered
• Technology-specific standardisationBiomass: Minimum conversion efficiencies are set by DirectiveHeat pumps: Minimum ecological criteria by referring to the Community eco-labelSolar thermal: Referring to European eco-labels
Policy instruments
Technology
Standardisation
Information and training
Harmonisation of RES-H/C policies
Harmonisation resulting from the new Renewable Directive 2009/28/EC
www.res-h-policy.eu 8
Policy instruments
Technology
Standardisation
Information and training
Harmonisation of RES-H/C policies
www.res-h-policy.eu 9
Contents
• Harmonisation resulting from the Renewable Directive
• Next Steps for a harmonisation of policies
• Conclusion
Harmonisation of RES-H/C policies
Potential for a future policy harmonisation
www.res-h-policy.eu 10
1 • Addressing the district heating sector with a harmonised policy instrument
3 • Defining binding design criteria for the exiting harmonised policy instrument
4• Accentuation of joint standards, technical
requirements, information provision
2 • Addressing the industry sector with a harmonised policy instrument
Harmonisation of RES-H/C policies
Potential and reasonable next steps for a harmonised policy framework
www.res-h-policy.eu 11
• Tax related instrument Swedish carbon tax• Bonus/ tariff based system as a harmonised policy instrument for the
district heating sectorFixed bonus for the amount of energy from RESComparable to the electricity sector with grid-based heating supply
• National designTechnology-specific bonus level Supported technology Bonus level
1 • Addressing the district heating sector with a harmonised policy instrument
Harmonisation of RES-H/C policies
Potential and reasonable next steps for a harmonised policy framework
www.res-h-policy.eu 12
• General obstaclesMain barrier for renewable penetration in industry is the high cost
• Policy optionsUse obligation Consideration of the competitiveness of Europe’s industry
• Subsidy / grant schemeThe economic efficiency of renewable technologies could be approached Depending on financial position of national authorities Not appropriate for harmonisation
2 • Addressing the industry sector with a harmonised policy instrument
Harmonisation of RES-H/C policies
Potential and reasonable next steps for a harmonised policy framework
www.res-h-policy.eu 13
• Strengthen the regulation in the building sector “where appropriate”• Possible harmonised design criteria
Defining technologies which can be applied to meet the regulationDefining minimum shares of RES deployment for each technology
• Arguments for a national designDifferent environmental condition in the Member States (biomass potential vs. solar energy insolation)Different heating and building structureDifferent infrastructural requirements, e.g. existing heating network
3 • Defining binding design criteria for the existing harmonised policy instrument (use obligation)
Harmonisation of RES-H/C policies
Potential and reasonable next steps for a harmonised policy framework
www.res-h-policy.eu 14
• Setting joint standards based on state of art technological developmentEconomics of scale of best available technologies
• Following best practice experiences for information provisionFree energy advices for building owners
4 • Accentuation of joint standards, technical requirements, information provision
Harmonisation of RES-H/C policies
Conclusion
• With the Renewable Directive a certain degree of harmonisation has already been achieved
• The harmonisation results in a harmonised policy instrument (use obligation), technical standardisation and information and qualification requirements
• Thereby, the building sector is addressed by the required use obligation
• The next steps in the harmonisation process should address the district heating and the industry sector and strengthen the incentives/ regulation in the building sector
• A potential harmonised policy instrument could be a “bonus system” for RES in the district heating sector
www.res-h-policy.eu 15
Harmonisation of RES-H/C policies
Thank you for your attention!
Workshop of the RES-H Policy ProjectBrussels, 10th of February 2010
Jan SteinbachFraunhofer Institute for Systems and Innovation Research ISI, Germany
Second consultation workshop on “A common framework for a coordi-
nated/harmonised policy on Renewable Heating”
Part II of D16 of WP5 from the RES-H Policy project
A report prepared as part of the IEE project "Policy development for improving RES-H/C penetration in
European Member States (RES-H Policy)"
December 2010 Assembled by Johann Steinbach ([email protected]), Fraunhofer ISI Mario Ragwitz ([email protected]), Fraunhofer ISI
RES-H Policy Minutes of the second WP5 consultation workshop
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RES-H Policy Project
Policy development for improving RES-H/C penetration in European Member States
Workshop on “Cost and benefits of coordinated/harmonised policy on Renewable Heating (RES-H)”
Minutes, registrations and attendance list of the second consultation workshop of WP 5
Date: Thursday 2 December 2010
Location: Permanent Representation of North Rhine Westphalia, Brussels
External participants:
Surname Institution Registered Attended Frank Baumeister CEETP Yes Yes
Lex Bosselaar NL Agency, Ministry of Economic Affairs, Netherlands
Yes Yes
Philippe Dumas EGEC - European Geothermal Energy Council Yes Yes
Dörte Fouquet EGEC - European Geothermal Energy Council Yes No
Tom Howes European Commission - DG TREN Yes Yes
Luca Miraglia G.S.E. s.p.a. Yes Yes
Jochen Penker Federal Ministry (BMWFJ), Austria Yes Yes
Christoph Pfemeter Austrian Biomass Association Yes Yes
Andros Racchetti G.S.E. s.p.a. Yes Yes
Fanny Rateau EHPA Yes No
Lucie Tesnière EREC-European Renewable Energy Council Yes Yes
Frauke Thies Greenpeace Yes No
Claude Turmes European Parliament Yes No
Peter Vernon Euro Heat & Power No Yes
Participants of the project team
Name Institution Veit Bürger (VB) Öko-Institut e.V.
Liv A. Becker (LAB) Öko-Institut e.V.
Luuk Beurskens (LB) ECN
Jaap Jansen (JJ) ECN
Argyro Giakoumi (AG) CRES
Katarzyna Jozwiak KAPE
Peter Connor (PC) UNEXE
Dalius Tarvydas (DT) LEI
Marcus Hummel (MH) Vienna Technology University EEG
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Jan Steinbach (JS) ISI
Mario Ragwitz (MR) ISI
Minutes of the second consultation workshop of WP 5: Summary of discussion and conclusions
For all agenda items, see the presentations in the annex of these minutes.
1 Welcome, Introduction to the RES-H policy project and recent development in renewable heating policy
Peter Connor welcomes the participants to the 2nd consultation workshop of work package 5 of the
RES-H Policy project and presents the agenda of the day.
Tom Howes (European Commission, DG TREN) gives a short welcome note and speaks about the
recent development in renewable heating policy. He reports from the assessment of the already
submitted NREAPs. Thereby, Member States focus on the electricity sector in terms of target
achievement, whereas renewable heating is mostly not addressed to the extent as it should be
considering the cost effective potential compared to RES-E. He is convinced that a project like RES-H
Policy is very helpful; he looks forward to the results.
Veit Bürger (VB) briefly introduces the RES-H Policy project, its background, tasks and objectives
Overview of the project see presentation (RES-H Policy WS(10-12-02)-Buerger_Overview
project.pdf)
2 Common framework for RES-H policy
Mario Ragwitz (MR) presents the objectives of WP5 and introduces to the concept of policy
harmonisation in the RES-H sector. He presents the key issues to be discussed at today’s workshop
for RES-H/C policy.
See presentation M. Ragwitz (RES-H Policy WS(10-12-10)-Ragwitz_Common framework.pdf)
Comments and discussion: 1. Comment: Lex Bosselar wonders why not all countries see the benefits of harmonisation.
MR explains that the main interest of the counties is reaching their targets and this can be assisted by harmonisation (enforced target compliance = first benefit). A second benefit might be cost efficiency & third benefit harmonisation for RES-H/C in industry LB: For the industry sector, there is with ETS already a harmonised instrument in force (at least for large plants) More practical approaches for policy design are needed (especially in the New Member States). A more practical approach could be to look in detail into how to provide the necessary framework, as well as quality enforcement (medium to long term) MR: agrees; and refers to the first part of the WP starting with the derivation of best practice policies in the target countries
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3 Assessment of cost and benefits of RES-H/C harmonisation
Jan Steinbach presents the assessment of cost & benefits of policy harmonisation, methodology and
results
see presentation (RES-H Policy WS(10-12-02)-Steinbach_Assessment policy harmonisation.pdf
Comments and Discussion: 1. Comment: Shorter time scale, up to 2020, would be more practically for the quantitative
assessment since EU policy is also focussing on 2020 and major policies will be revised after 2020. MR: RES-H diffusion in the building sector with long investment cycles and learning curves of technologies speaks for longer observation period
2. Comment: The analysis only considers a use obligation (for new buildings and buildings that are subject to major renovations); however, the heating market is very diverse and complicated, biomass might need different policies than heat pumps, district heating is different to decentralised on-site supply. A single harmonised policy instrument cannot cover the entire market specifications and requirements.
4 Cooperation mechanisms as vehicles for Member States to mutual agree on redistributing costs and benefits of RES deployment
Luuk Beurskens (LB) presents some qualitative input on cooperation mechanism
see presentation (RES-H Policy WS(10-12-02)-Beurskens_Cooperation Mechanisms.pdf)
5 The role of Guarantees of Origin within a harmonised policy framework for RES-H/C and general discussion
Veit Bürger presents some thoughts on the potential role of Guarantees of Origin (GoO) within a
harmonised policy framework for RES-H/C
see presentation (RES-H Policy WS(10-02-10)-Buerger_Guarantees of Origin.pdf)
Comments and Discussion: 1. Comment: The idea of GoOs within a use obligation as market based support scheme might
turn out to be problematic because of potential leaks: Supply of GoOs must be limited to those RES-H installations that have been implemented in buildings that are subject to the obligation. VB agrees that it depends on the system design (eligibility to receive GoOs). Such a GoO system should probably not be opened to all market participants. Certificate trade on the level of household owners is also problematic; here e.g. the transfer should be facilitated by the installers.
2. Comment: End users connected to district heating networks want to know the share of RES in their product, but a potential benefit of a GoO system for this applications is not really seen VB agrees that for the whole grid a certain certification system might be needed, but agrees that GoO does not seem to fit the role; however GoOs would allow for allocate the RES share to those consumers that are actively asking for it. VB: Difference to RES-E in terms of potential trade or certificate system is that there is no physical connection of produced RES-H and consumer purchasing it. A certificate system would be of a purely virtual nature. (it is not that someone takes out a share of RES-H out of the grid & someone else feeds the same amount in another place -> different to RES-E or biogas market).
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3. Comment: The large market share of huge fossil fuel or waste heat based district heating networks and the further increase of it in the heating supply of some eastern Member States could be an obstacle to an expansion of RES. Once connected, consumers have to pay a fine in order to abandon the grid. Furthermore, these grids will still last for quite long time and have therewith determined the structure of the heating supply in these countries for the next decades (lock-in).
4. Comment: Harmonisation in terms of technology standardisation and requirements is the
crucial issue since the supplier markets for RES-H are still rather localised. JS: .There are already some harmonisation measures in the Directive (e.g. Solar Keymark); and of course there is the Ecodesign Directive which is setting up minimum quality and efficiency standards for certain technologies.
The RES-H Policy Project
Consultation WorkshopConsultation Workshop"Cost and benefits of coordinated/harmonised policy
on Renewable Heating (RES-H)"B l 02 D b 2010Brussels, 02 December 2010
Veit Bürger, Öko-Institut e.V.
www.res-h-policy.eu
The RES-H Policy project
Policy backgroundI M b St t t f bl h ti d li• In many Member States support for renewable heating and cooling technologies (RES-H/C) is still lacking appropriate legislation even though this sector is offering a largely cost-effective potential for the use of renewables
• With the Renewables Directive (2009/28/EC) Member States agreed on country specific binding and final energy related renewable energyon country specific binding and final energy related renewable energy targets for 2020
• The Directive requires Member States─ to set up (indicative) sector specific targets for RES-H/C─ to report on measures and instruments for achieving these targets
• For new buildings and existing buildings that are subject to major• For new buildings and existing buildings that are subject to major renovation the Directive defines some minimum policy requirements (use obligation or other approaches with equivalent effect)
www.res-h-policy.eu 2
The RES-H Policy project
Overall objective of the RES-H Policy project
• To assist Member State governments in implementing the Renewables Directive as far as aspects regarding RES-H/C policy p g g p yare concerned
• Focus of the project: ─ sectoral targets for RES-H/C─ support policies aiming at stimulating the market penetration of
RES H/CRES-H/C─ options to coordinate or even gradually harmonise national
RES-H/C policy approaches
www.res-h-policy.eu 3
The RES-H Policy project
Target countries target countries
dissemination countriesdissemination countries
partner countries
www.res-h-policy.eu 4
The RES-H Policy project
Working PlanWP1: Project Management
WP2: Development of the Policy Backgroundp y g
WP3: Fixing RES-H/C targets
WP4: Assessment of national RES H/C policy optionsWP4: Assessment of national RES-H/C policy options
WP5: Options for policy harmonisation
WP6: Communication and dissemination
WP7: Common dissemination activities
www.res-h-policy.eu 5
The RES-H Policy project
WP3Fixing RES-H/C targets
WP4Assessment of national
RES-H/C Policy O
WP3Fixing RES-H/C targets
WP4Assessment of national
RES-H/C Policy O
cy
Optionscy
Options
P2 of
the
Pol
icro
und
GR LTAT
5 onis
atio
n
P2 of
the
Pol
i cro
und
GR LTAT
5 onis
atio
n
WP
velo
pmen
t B
ackg
r
National/Regional Policy Processes
UKPLNL
WP
5P
olic
y H
arm
WP
velo
pmen
t B
ackg
r
National/Regional Policy Processes
UKPLNL
WP
5P
olic
y H
arm
De
WP6 Communication and Dissemination
P
De
WP6 Communication and Dissemination
P
WP1 Project Management
WP7 Common Dissemination Activities
WP1 Project Management
WP7 Common Dissemination Activities
www.res-h-policy.eu 6
The RES-H Policy project
Development of the Policy Background (WP2)
• Overview of current national/regional regulatory and market framework of the national heating and cooling markets in the target countries g g
• Overview of principle policy options to stimulate increased RES-H/C market penetration • Working document on the experience with the implementation of district DH systems in SE
Fixing RES-H/C targets (WP3)Fixing RES-H/C targets (WP3)
• Different modelling approaches + stakeholder consultations -> Overall and technology specific 2020/2030 RES-H/C target ranges for each of the target countries
Assessment of national RES-H/C policy options (WP4)Assessment of national RES-H/C policy options (WP4)
• Qualitative assessment of 3-5 RES-H/C support options against criteria such as stakeholder acceptance, investment security, market interaction, administrative synergies with other policies p
• Different modelling approaches -> Assessment of the effectiveness and economic efficiency of 2 support options per target country (RES-H/C capacity growth, public budget requirements, avoided fuel costs, GHG emissions, gross employment effects, public administration costs)
Policy coordination/harmonisation (WP5)
• Assessment of different levels of coordinating/harmonising national RES-H/C policy approaches
www.res-h-policy.eu 7
The RES-H Policy project
Partners & ContactProject consortium:• Öko-Institut e.V., Germany• University of Exeter, United Kingdom• Polish National Energy Conservation Agency, Poland• Vienna University of Technology, Institute of Power Systems and Energy Economics,
Energy Economics Group, Austria• Fraunhofer Society for the Advancement of Applied Research Germany• Fraunhofer Society for the Advancement of Applied Research, Germany• Centre for Renewable Energy Sources, Greece• Lund University, Sweden• Lithuanian Energy Institute, Lithuaniaua a e gy s u e, ua a• O.Oe. Energiesparverband, Austria• Energy Research Centre of the Netherlands, The Netherlands
Project website: www res h policy euProject website: www.res-h-policy.euProject coordinator: Veit Bürger, Öko-Institut e.V., [email protected]
www.res-h-policy.eu 8
The RES-H Policy project
Thank you for your attention
Contact
Veit BürgerVeit BürgerÖko-Institut e.V.
tel.: +49-761-45295-25email: [email protected]
www.res-h-policy.eu 9
Common framework for RES-H/C policy p y
Consultation workshop of the RES-H Policy ProjectBrussels, 2nd of December 2010
Mario RagwitzFraunhofer ISI
Supported by
www.res-h-policy.eu
Harmonisation of RES-H/C policies
The challenge > 20% of
the (residual) heat demand (incl. also industrial processes, etc.)
100
120ea
r] Historical development F d l
p
80
100
pu
t [M
toe/
ye
Solar thermalh t
development Future development
40
60
ner
gy
ou
tp heat
Geothermal -heat pumps
20
40
RE
S-H
- e
n
Geothermal -non heatpumps
0
1997
1999
2001
2003
2005
2007
2009
2011
2013
2015
2017
2019
p p
Biomass heat
www.res-h-policy.eu 2
Harmonisation of RES-H/C policies
The challenge:
■ Capacities of solar thermal / geothermal / grid-based■ Capacities of solar thermal / geothermal / grid based biomass RES-H have to increase by a factor of ~ 10 / 8 / 3 until 2020 to reach targets of Directive 2009/28/EC
■ Long reinvestment cycles in the building sector limit diffusion rate of RES-H/C – many currently installed boilers in the building sector will still be operating in 2020the building sector will still be operating in 2020.
■ Large share of high temperature heat demand in the industry sector, which cannot easily penetrated by RES-H as well as strong barriers to integrate RES-H in sensitive industrial processes limit diffusion rate of RES-H/C A er high share of all potential RES H/C in estments■ A very high share of all potential RES-H/C investments needs to be actually realised!
www.res-h-policy.eu 3
Harmonisation of RES-H/C policies
General conditions:
■ Policy makers are looking for the right balance between a■ Policy makers are looking for the right balance between a harmonisation of support and the continuation of national instruments in order to:■ not disrupt currently successful instruments by superimposing a
harmonised system that may or may not be optimally designed ■ increase the overall effectiveness and efficiency on a European■ increase the overall effectiveness and efficiency on a European
scale ■ improve the compatibility of RES support with other community y y
policies such as creating a single European energy market and establishing an effective CO2 abatement framework and
■ allow Member States to reach their national targets if efficient■ allow Member States to reach their national targets if efficient and effective national instruments are implemented
www.res-h-policy.eu 4
Harmonisation of RES-H/C policies
General questions:
■ What is meant by “harmonisation”?■ What is meant by harmonisation ?
Harmonising support schemes could range from defining generally binding (technical) framework conditions suitable for various instruments versus applying one common, precisely defined support scheme in the EU, as well as many discrete variationsas well as many discrete variations.
■ Which specific conditions apply to different support instruments in the heat sector that may affect the yfeasibility of any kind of harmonisation, e.g. tax measures? Whi h li it ti h i ti ill b ff t d b■ Which limitations on harmonisation will be effected by different combinations of mechanisms?
www.res-h-policy.eu 5
Harmonisation of RES-H/C policies
General questions: type of scheme
applied
Degree of
Use obligation (UOB)
Renewable heat
incentive (RHI)
Grants/ investment
subsidy
Tax-related
technology-specific harmonisation
harmonisation( )
"Central co-ordination" (harmonised, binding framework conditions, minimum
1 technologyInc
design criteria independent of the type of support) ...
UOB RHI Grants Tax"Convergence"
creasingd
harmoni
.
.
(one support system, national design)UOB RHI Grants Tax
"Full harmonisation"
degreeof
sation
all technologies
Full harmonisation(one support system, same design in all MS)
www.res-h-policy.eu 6
Harmonisation of RES-H/C policies
General questions:
■ Which level of harmonisation is already resulting from■ Which level of harmonisation is already resulting from the Directive 2009/28/EC?
■ Which consequences can be derived from the Directive for national policy frameworks and what could be an optimised national implementation of the proposed heating obligation?proposed heating obligation?
■ Which design features can be recommended from a national viewpoint?p
■ Which implications can derive from the use of cooperation mechanisms?
■ Which could be the role of Guarantees of Origin, if they are introduced in the RES-H/C sector
www.res-h-policy.eu 7
Harmonisation of RES-H/C policies
General questions:
■ Which lessons regarding harmonisation of RES-H/C■ Which lessons regarding harmonisation of RES H/C policy can be learned from efforts to harmonise RES-E policy at the European level and the likely efforts of M b S b ib h h i iMember States to subscribe to the harmonisation process?
■ Which implications are derived from the fact that■ Which implications are derived from the fact that physical trade of power does not exist in case of RES-H/C
■ Is there a specific need for harmonisation of industrialRES-H/C in industries in global competition?
www.res-h-policy.eu 8
Harmonisation of RES-H/C policies
WP5 Options for harmonisation of RES-H/C policies:
■ Elaborate on best practices of the main policy instruments■ Elaborate on best practices of the main policy instruments at national level
■ Derive a set of generic criteria that could usefully apply to all main instruments in Europe, derive design criteria of one fully harmonised instrumentAnal se the technolog deplo ment and the costs■ Analyse the technology deployment and the costs associated with the different policy strategies for RES-H/C based on the INVERT scenarios for policies selected p
■ Conception of a methodology to share costs & benefits of a potentially harmonised future European policy
■ The role of GoO for RES-H/C development
www.res-h-policy.eu 9
Harmonisation of RES-H/C policies
Th k f tt ti !Thank you for your attention!
www.res-h-policy.eu 10
Assessment of cost & benefits of RES-H/C policy harmonisationRES-H/C policy harmonisation
Consultation workshop of the RES-H Policy ProjectBrussels, 2nd of December 2010
Jan SteinbachFHG-ISI
www.res-h-policy.eu
RES-H policy harmonisation
Contents
BackgroundBackgroundScope and MethodologyResultsConclusion
RES-H policy harmonisation
Implications of Directive 2009/28/EC on different levels of RES-H/C policy harmonisation
• Minimum renewable extension levels have been deri ed for each MS
“Common target setting” 1
Directive 2009/28/ECHarmonisation levels
been derived for each MS • Targets presented in the NREAP (§4)
satio
n
Different policy frameworks
Statistical transfer between Member States
• Information and training requirements• Criteria for qualification schemes (§14(3))• Technical standardisation/ sustainability criteria
“Central co-ordination”Harmonised, binding framework conditions, minimum design criteria independent of the type of supportha
rmon
is a e o s2
• Minimum use of RES in new and majorly renovated buildings (§13(5))RES-H use obligation
“Convergence of instrument type”One support system, national design
Degree of
3
g
“Convergence of instrument design”One support system, same design in all MS,
D
4
www.res-h-policy.eu 3
RES-H policy harmonisation
General evaluation of RES-H/C policy harmonisation
• Is a more coordinated or full harmonised policy framework able to address the main
Main issue
barriers to an expansion of RES-H/C more effectively and economical efficiently than an uncoordinated policy on Member State’s level?
Main criteria to evaluate potential cost & benefits of RES H/C policy harmonisation
1. Enforced target compliance
• Without a harmonised policy framework, Member State would only
Main criteria to evaluate potential cost & benefits of RES-H/C policy harmonisation
continue the current policy mix2. Cost optimal resource allocation
• Maximisation of economic benefits by leading investments to where it i t fit blit is most profitable
3. Minimisation of transaction costs4. Avoidance of market distortions
www.res-h-policy.eu 4
RES-H policy harmonisation
Subject and scope definition of this analysis
• Quantitative assessment of cost & benefits of different levels of RES-H/C harmonisation
Convergence of instrument type g ypConvergence of instrument design
• RES-H use obligation as harmonised policy instrument• Sectoral limitation of the analysis to the building sectorSectoral limitation of the analysis to the building sector• Period from 2007 to 2030• Geographical limitation to the six target countries within the RES-H policy project
being representative for EU 27 in terms of policy harmonisationg p p yAustria Greece LithuaniaLithuaniaThe NetherlandsPolandUnited KingdomUnited Kingdom
www.res-h-policy.eu 5
RES-H policy harmonisation
Methodology to assess cost & benefits of RES-H/C harmonisation
• The bottom up simulation model Invert/EE-Lab (Vienna Technical University) , is applied to model
Exogenous scenarios growth of building stock
(t=t1 … tn)
Database heating and hot water sector
(t=t0, input of simulation results for t1 … tn)
Building stock data‐U‐values‐Geometry
Installed heating and hot water systems‐ η/COP/solar yield
different harmonisation scenarios • Using country specific input data
Heating and domestic hot Space heating and hot water energy demand calculation
module
Climate data (HDD, solar irradiation …)
User behavior
‐Age‐ Regions‐ Type of use
‐ Type of energy carriers‐O&M costs
water systemsBuilding stock dataEnergy prices
module
O ti f th l
Technology data space heating and hot water
(t=t1 … tn)
Energy prices (t=t1 … tn)
Policies (t=t1 … tn)
Diffusion restrictions (t=t1 … tn)
Biomass potentials(t=t1 … tn)
Simulation algorithm
Multi‐nominal logit approach
Logistic growthmodel
Climate dataPreferences for heating systems
Options for thermal renovation (t=t1 … tn)
Preferences for heating systems, , traditions, inertia
(t=t1 … tn)
Logistic growth model
Simulation results (t=t1 … tn)
‐ Installation of heating and hot water systems‐ Total energy demand by energy carriers (GWh)‐ Total investments (M€)
Support policies….
‐ Policy programme costs (M€) etc.
Source: Kranzl, Müller, and Hummel (2010)
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RES-H policy harmonisation
Methodology to assess cost & benefits of RES-H/C harmonisation
• Definition of harmonisation scenarios in the model ‘Convergence of instrument type’ with a RES-H use obligation in national design based on respective national targetsg p g‘Convergence of instrument type’ with a uniform RES-H use obligation in all countries‘No policy’ scenario as referencep y
• Design elements of the use obligation applied in the modelObligated parties (new buildings, existing buildings in case of renovation)Minimum RES-H share which has to be installedLevel of penalty in case of opting out
• Assessment criteria for RES-H policy harmonisation RES-H diffusionRES H diffusion Total generating costs (capital costs, OM costs, fuel costs)Total penalties
www.res-h-policy.eu 7
RES-H policy harmonisation
Contents
BackgroundBackgroundScope and MethodologyResultsConclusion
RES-H policy harmonisation
Comparison of the current situation with regard to RES-H deployment and competiveness in the selected Member States
‐H5 .5 TWh
10 .4 TWh25 .4 TWh
ness of R
ES‐
30 .3 TWh
g competiven
7 .4 TWh
4 .9 TWh
Increasing
Increasing competiveness of RES‐H
Size expresses total RES‐H energy demand in the building sector Source: Fraunhofer ISI
www.res-h-policy.eu 9
RES-H policy harmonisation
Results in terms of enforced target compliance – RES-H diffusion in ‘no policy’ and ‘convergence of instrument type’ scenario (low price)
RES-H diffusion total (all selected MS) • The effect of introducing a use obligation instrument in all target countries is measured against a „No policy scenario“ 18.4%
18%
20%70
and
Wh
] Source: Fraunhofer ISI
• The obligation is set in a national design (minimum res share, penalty) modelled according to national targets
11.0% 12%
14%
16%
18%
40
50
60
al e
ner
gy
dem
a
ey d
eman
d [
TW
according to national targets
• In total the RES-share rises to 18.4% assuming a use obligation in all countries
4%
6%
8%
10%
20
30
-H s
har
e in
to
t
al R
ES
-en
erg
e
compared to 11% in the “no policy” scenario
• In total the use obligation accounts for a
0%
2%
4%
0
10
2007 2012 2017 2022 2027
RE
S
Ad
dit
ion
a
In total the use obligation accounts for a additional RES-demand of 630 TWhfrom 2007 to 2030
Additional RES-H demand in total
No Policy Scenario
Convergence of instrument type
www.res-h-policy.eu 10
RES-H policy harmonisation
Results in terms of enforced target compliance – cost comparison between ‘no policy’ and ‘convergence of instrument type’ scenarios (low price)
3 8304,500
Additi l O ti d f l15% Increase of total cumulative
Additional generating costs Increase in cumulated generating costs
2,726
3,830
3,000
3,500
4,000Additional Operations and fuel consumption cost per yearAdditional capital costs per yearAdditional generating costs per year 0 1%
2.7%1.1% 0 1% 0 6%
1.8%5%
10%generating costs 2007 to 2020
1,043
1,709
1,500
2,000
2,500
[€m
illio
ns
]
year 0.1% 1.1% 0.1% 0.6%0%
AUT GR LT NL PL UK
15% Increase of total cumulative
0
500
1,000
6.7%
2.8%1 1%
3.4%5%
10%
Increase of total cumulative generating costs 2007 to 2030
-500
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
0.2% 0.5% 1.1%
0%AUT GR LT NL PL UK
Source: Fraunhofer ISI Source: Fraunhofer ISI
www.res-h-policy.eu 11
RES-H policy harmonisation
Results in terms of cost optimal resource allocation (low price)
T t l RES H diff i i th b ildi t• National designed compared to
harmonised use obligation 18.4%18.7%
16%
21%Use obligation‐national designNo Policy ScenarioHarmonised use obligation
Total RES-H diffusion in the building sector
• Harmonised use obligation with uniform design elements in all countries
• Cost optimal approach
11.0%
6%
11%
Source: Fraunhofer ISI
Change of RES-H diffusion between scenarios
Cost opt a app oac
• Constraint is overall RES-H diffusion• Change of RES-H diffusion among
M b St t i h i d
6%
2007 2012 2017 2022 2027
4000Member States in a harmonised use obligation
Higher RES-H diffusion in UK, AUT, PL 1000
2000
3000
4000
GWj]
AUT
GR
LT PLLower RES-H diffusion in GR, NL
‐2000
‐1000
0
2007 2012 2017 2022 2027
[GNL
PL
UK Source: Fraunhofer ISI
www.res-h-policy.eu 12
2007 2012 2017 2022 2027
RES-H policy harmonisation
Results in terms of cost optimal resource allocation (low price)
200cumulated to 2030 Cumulated to 2020
Differences in total generating costs Differences in generating costs country
1,000
-222
-1,300
-800
-300
200
ons] -500
0
500
AUT GR LT NL PL UK
ion
s]
-3 300
-2,800
-2,300
-1,800
[ €m
illio
-2,000
-1,500
-1,000
[€m
ill
-3,280-3,800
3,300
-2,500
2,000
Cost savings up to 2030 are attributed to
Source: Fraunhofer ISISource: Fraunhofer ISI
g pHarmonisation gains through an cost optimal resource allocation among MSDifferent technological diffusion within MS strengthened national policies
www.res-h-policy.eu 13
RES-H policy harmonisation
Results in terms of strengthened nation policy (low price)
• Differences between the two harmonisation scenarios in terms of diffusion of RES-H technologies (example United Kingdom)
Biomass
UK UK
Use obligation- national design (2030) Harmonised use obligation (2030)
Solid Biomass1%
district heating4%
Biogas and Bioliquids
17% Solar thermal 26%
l d
Biomass district heating4%
Biogas and Bioliquids
19%
Solar thermal 42%
Ambient energy
6%
Ambient energy
Solid Biomass1%
energy36%
energy50%
Source: Fraunhofer ISISource: Fraunhofer ISI
www.res-h-policy.eu 14
RES-H policy harmonisation
Results in terms in terms of strengthened nation policy (low price)
• Differences between the two harmonisation scenarios in terms of diffusion of RES-H technologies (example Greece)
Use obligation- national design (2030) Harmonised use obligation (2030)
GR GR
Solid BiomassSolid Biomass
26%
Solar thermal 60%
32%
Solar thermal 72%
Ambient energy2%
26%
Ambient energy8%
Source: Fraunhofer ISISource: Fraunhofer ISI
www.res-h-policy.eu 15
RES-H policy harmonisation
Contents
BackgroundBackgroundScope and MethodologyResultsConclusion
RES-H policy harmonisation
Summary and Conclusion
• Model based assessment of potential cost & benefits of RES-H policy harmonisation• Results are based on a theoretical approach determining an optimal policy design • RES-H use obligation for new and majorly renovated buildings is chosen asRES H use obligation for new and majorly renovated buildings is chosen as
harmonised policy instrument• Analysis of the effects of RES-H policy harmonisation in terms of
─ Enforced target complianceEnforced target compliance─ Cost optimal resource allocation
• Enforced target compliance through a national policy design based on target achievement in each MS─ Model results show the effect of use obligation in terms of induced RES-H
diffusion in the selected MS
www.res-h-policy.eu 17
RES-H policy harmonisation
Summary and Conclusion
• Achievement of overall RES-H target through a harmonised use obligation determined under a cost optimal approach─ Cost savings in terms of less overall generating costs g g g─ Change of RES-H deployment among MS ─ Change of RES-H technologies applied within MS─ Cost savings can be attributed not only to a different distribution of RES-HCost savings can be attributed not only to a different distribution of RES H
deployment among MS, but also to different technological diffusion within certain MS
• Further question:─ How can potential harmonisation gains be distributed among MS?
www.res-h-policy.eu 18
RES-H policy harmonisation
Thank you for your attention!
Consultation workshop of the RES-H Policy ProjectBrussels, 2nd of December 2010
Jan SteinbachFraunhofer Institute for Systems and Innovation Research
ISI GermanyISI, [email protected]
Cooperation mechanisms as vehiclesCooperation mechanisms as vehicles for Member States to mutually agree on redistributing costs and benefitson redistributing costs and benefits
of RES deployment
Brussels, 2 December 2010
Luuk Beurskens, Jaap JansenEnergy research Centre of the Netherlands (ECN)
www.res-h-policy.eu
Cooperation mechanisms as vehicles for Member States to mutually agree on redistributing costs and benefits
Cooperation mechanisms
• Facilitate Member States (MS) that a) are expecting to be under-compliant with respect to their respective renewables target orwith respect to their respective renewables target or b) face high marginal compliance cost and c) other MS with more favourable target compliance conditions to transact target accounting units.
• Based on ex ante mutual agreement between the governments concerned.
• Moreover, the European Commission should be notified on the use of the cooperation mechanisms: Directive 2009/28/CE: Art 6.2; Art. 11.2
www.res-h-policy.eu 2
Cooperation mechanisms as vehicles for Member States to mutually agree on redistributing costs and benefits
Cooperation mechanisms
1. Statistical transfers between Member States.
2. Joint projects between Member States.
3. Joint projects between Member States and third countries.
4. Joint support schemes.4. Joint support schemes.
Application of the last three mechanisms imply the explicit or implicit use of the statistical transfers mechanism.
Joint projects with third countries only refers to RES-E.
www.res-h-policy.eu 3
Cooperation mechanisms as vehicles for Member States to mutually agree on redistributing costs and benefits
Characteristics of cooperation mechanisms
• Creation of a new valuable commodity: (cross-border) transferable target accounting units (TAU) transacted between Member Statetarget accounting units (TAU), transacted between Member State (MS) governments.
• Renewable energy target accounting statistics are de-linked from the actual renewable energy performance of Member States.
• The mechanisms enable to reallocate available investment resources to MS with the cheapest RES(-H/C) resource potentialsresources to MS with the cheapest RES( H/C) resource potentials
• Offer opportunities to involve the private sector of cooperating MS (varying among distinct mechanisms).
• Might entail transfer of know-how from investing MS to host MS.
www.res-h-policy.eu 4
Cooperation mechanisms as vehicles for Member States to mutually agree on redistributing costs and benefits
Characteristics of a harmonised obligation
• Costs• Cost incidence• Cost incidence• Variation of costs across Member States• Benefits• Options and accounting measures• Regulation costs• Geographical scope• Equity• Political acceptability• Political acceptability
www.res-h-policy.eu 5
Cooperation mechanisms as vehicles for Member States to mutually agree on redistributing costs and benefits
Costs• Investing MS (and/or investing private-sector entities) might agree to
transfer financial resources and/or physical production factors and/or know-how to the host MS concerned in exchange of the agreed share i th t i l di TAUin the returns including TAU.
• Especially in the cases of applying joint projects between MS and joint support schemes, a given aggregate volume of RES-H/C in the participating countries might be produced in a more cost-effective way than in the without case.
• This among others depends on the level of the occurring regulation costs of using the cooperation mechanisms concerned.
• Under certain special circumstances, application of the statistical transfers mechanism in isolation may also trigger, in an indirect way, enhanced cost-effectiveness of RES-H/C deployment.
www.res-h-policy.eu 6
Cooperation mechanisms as vehicles for Member States to mutually agree on redistributing costs and benefits
Cost incidence• Who is bearing the (additional) costs?
• This question relates both to the cost incidence among:q g─ the co-operating MS concerned on aggregate
─ public and private economic entities within each of the co-operating MS.
• A cooperation mechanism can be implemented in different ways with divergent implications for incidence of the cost burden among distinct actors,
hsuch as:─ tax payers─ household energy end-users─ penalty-paying energy-using companies─ energy supply or building companies facing certain standards, e.g. use
obligations among their customers.
www.res-h-policy.eu 7
obligations among their customers.
Cooperation mechanisms as vehicles for Member States to mutually agree on redistributing costs and benefits
Variation of costs across Member States
• Some RES-H/C technologies might be significantly cheaper to be applied in a selection of Member States.
• For instance, with a harmonised use obligation and uniform technical requirements, costs for obligated investors could differ due to different
f ff f S /C fskill levels of installers, differences in market maturity of RES-H/C or for geographical reasons.
• Are MS with low marginal cost prepared to share their perceived marginal cost advantage with MS devoid of cheap marginal RES-H/C resources?
• And if so, to what extent and under which conditionality?
www.res-h-policy.eu 8
Cooperation mechanisms as vehicles for Member States to mutually agree on redistributing costs and benefits
Benefits• Aspects include:
─ Nature of the benefits─ (Real and perceived) magnitude of the benefits─ Incidence of the benefits between MS and stakeholders within MS
• For instance, eventually a harmonised EU-wide subsidy scheme for RES-H/C with harmonised (ambitious) efficiency standards might be envisaged.
• Yet, MS with already high penetration of advanced technology would potentially benefit less than MS with predominantly less efficient technology in place.
• This could strongly impact the negotiations on MS contribution shares in the common fund on which such subsidy scheme has to operatecommon fund on which such subsidy scheme has to operate.
• Another benefit may be that the so far nationally oriented building sector in the distinct MS might get a broader geographical orientation and start operating in other MS, leading to accelerated cross-border dissemination of best practices. , g p
• Co-operation might also yield new RES-H/C innovations and fasten its spread.
www.res-h-policy.eu 9
Cooperation mechanisms as vehicles for Member States to mutually agree on redistributing costs and benefits
Options and accounting measures
• Which are possible options and accounting measures to share the additional costs and benefits E g what would be the accounting rules foradditional costs and benefits. E.g. what would be the accounting rules for running joint subsidy schemes?
• How could a possible income from statistical transfers be re injected in• How could a possible income from statistical transfers be re-injected in support schemes of the host MS? ─ probably rather easy for investment incentive programmes ─ but very difficult for use obligations.
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Cooperation mechanisms as vehicles for Member States to mutually agree on redistributing costs and benefits
Regulation costs
• For the public sector the following costs might occur: preparation, introduction compliance enforcement monitoring and supervising theintroduction, compliance enforcement, monitoring and supervising the measure.
• For market participants: partner search, risk assessments, contract negotiations incremental regulation cost to comply with all publicnegotiations, incremental regulation cost to comply with all public requirements, including staff hours spent to comply with the measure.
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Cooperation mechanisms as vehicles for Member States to mutually agree on redistributing costs and benefits
Geographical scope
• Can the measure be implemented EU-wide ?
• Or has it a more limited geographical coverage
─ limitations due to climatic conditions─ co-operation between ‘willing countries’ only
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Cooperation mechanisms as vehicles for Member States to mutually agree on redistributing costs and benefits
Equity
• Practicability and acceptability of cost reallocation mechanism among MSMS.
• The mechanism should have a kind of automatism upon implementation that does not give rise to periodic squabbling among MS governmentsthat does not give rise to periodic squabbling among MS governments.
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Cooperation mechanisms as vehicles for Member States to mutually agree on redistributing costs and benefits
Political acceptability
• Political acceptability within MS:which stakeholders gain?─ which stakeholders gain?
─ which other groups loose?
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Cooperation mechanisms as vehicles for Member States to mutually agree on redistributing costs and benefits
Market information on target compliance
Based on the National Renewable Energy Action Plans (NREAPs) it is possible to see which countries are overcomplying and which countries arepossible to see which countries are overcomplying and which countries are undercomplying
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Cooperation mechanisms as vehicles for Member States to mutually agree on redistributing costs and benefits
Estimatedd fi it
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Belgium n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a.Bulgaria 0 0 0 0 0 0 0 0 0 0 0
Czech Republic n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a.Denmark n.a. 0 0 0 0 0 0 0 0 n.a. 0deficit
according to
Denmark n.a. 0 0 0 0 0 0 0 0 n.a. 0
Germany n.a. 0 0 0 0 0 0 0 0 n.a. 0Estonia n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a.Ireland 0 0 0 0 0 0 0 0 0 0 0
Greece n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a.Spain n a 0 0 0 0 0 0 0 0 n a 0NREAP
[ktoe]
Spain n.a. 0 0 0 0 0 0 0 0 n.a. 0
France 0 0 0 0 0 0 0 0 0 0 0Italy 0 0 0 0 0 0 0 0 0 284 1127
Cyprus n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a.Latvia n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a.
Lithuania 0 0 0 0 0 0 0 0 0 0 0Luxembourg 0 45 23 38 10 45 22 75 39 66 93Hungary n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a.
Malta n.a. n.a. 0 n.a. 0 n.a. 0 n.a. 0 n.a. 0Netherlands 0 0 0 0 0 0 0 0 0 0 0
Austria 0 0 0 0 0 0 0 0 0 0 0Poland n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a.
Portugal n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a.Romania 0 0 0 0 0 0 0 0 0 0 0Slovenia 0 0 0 0 0 0 0 0 0 0 0
www.ecn.nl/nreap
Slovenia 0 0 0 0 0 0 0 0 0 0 0
Slovakia n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a.Finland 0 0 0 0 0 0 0 0 0 0 0
Sweden n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a.United Kingdom n.a. 100 n.a. 200 n.a. 300 n.a. n.a. n.a. n.a. 0
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Total 0 145 23 238 10 345 22 75 39 350 1220
Cooperation mechanisms as vehicles for Member States to mutually agree on redistributing costs and benefits
Estimated2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Belgium n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a.
Bulgaria 81 105 163 160 313 309 427 330 380 346 335
Czech Republic n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a.
Denmark n.a. 694 834 1123 1106 833 928 552 619 n.a. 63excess according to
Denmark n.a. 694 834 1123 1106 833 928 552 619 n.a. 63
Germany n.a. 5703 7065 5507 7105 4761 6453 4130 5976 n.a. 3065
Estonia n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a.
Ireland 0 168 168 233 233 211 211 136 136 0 0
Greece 257 408 513 686 812 856 842 737 743 683 529
S i 2986 3596 3056 4163 3379 4296 3180 4166 2649NREAP [ktoe]
Spain n.a. 2986 3596 3056 4163 3379 4296 3180 4166 n.a. 2649
France 0 0 0 0 0 0 0 0 0 0 0
Italy 2839 2077 2157 2220 2143 1843 1511 1092 465 0 0
Cyprus 36 33 39 34 46 30 42 57 34 21 0
Latvia n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a.
Lithuania 0 36 37 123 126 178 182 231 235 0 61
Luxembourg 0 0 0 0 0 0 0 0 0 0 0
Hungary n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a.
Malta n.a. n.a. 2 n.a. 8 n.a. 8 n.a. 16 n.a. 1
Netherlands 0 0 0 0 0 0 0 0 0 0 0
Austria 0 0 0 0 0 0 0 0 0 0 0
Poland n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a.
Portugal n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a.
Romania 0 0 0 0 0 0 0 0 0 0 0
Slovenia 0 0 0 0 0 0 0 0 0 0 0
www.ecn.nl/nreap
Slovenia 0 0 0 0 0 0 0 0 0 0 0
Slovakia n.a. 181 240 228 313 305 364 269 349 190 143
Finland 0 0 0 0 0 0 0 0 0 0 0
Sweden 162 194 227 259 291 324 356 389 421 453 486
United Kingdom n.a. n.a. n.a. n.a. n.a. n.a. n.a. 0 n.a. n.a. n.a.
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Total 3375 12585 15041 13629 16659 13029 15620 11103 13540 1693 7332
Cooperation mechanisms as vehicles for Member States to mutually agree on redistributing costs and benefits
Excess and deficit according to Action Plans
• In 2020 23 Members States have an aggregate RES deficit of 1.2 Mtoe (Italy and Luxembourg) totalling approximately 0 6% of expected amount(Italy and Luxembourg), totalling approximately 0.6% of expected amount of energy from renewable sources.
• In 2020 23 Members States have an aggregate RES excess of 7 3 Mtoe• In 2020 23 Members States have an aggregate RES excess of 7.3 Mtoe, (Bulgaria, Denmark, Germany, Ireland, Greece, Spain, Italy, Cyprus, Lithuania, Malta, Slovakia, Sweden) totalling approximately 3.4% of expected amount of energy from renewable sourcesexpected amount of energy from renewable sources.
• However: the estimates can be adjusted the closer the year 2020 comes.
www.ecn.nl/nreap
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p
Cooperation mechanisms as vehicles for Member States to mutually agree on redistributing costs and benefits
Future uncertainty
www.res-h-policy.eu 19
J2
Folie 19
J2 upside risk ==>maximum upside potential 2x
downside risk ==> maximum downside risk 2x
No policy ==> Baseline 3x
Middelste No policy ==> projected baseline performanceJansen, 25.11.2010
Cooperation mechanisms as vehicles for Member States to mutually agree on redistributing costs and benefits
Conclusions • The urgency of enhancing economic efficiency through use of the cooperation• The urgency of enhancing economic efficiency through use of the cooperation
mechanisms – notably but not only in the RES-H/C subsector – is high.
• With special reference to economic efficiency, proposed main use criteria include:
1. The marginal cost (per target accounting unit) of the RES-H/C measures concerned should compare favourably to the marginal cost of measures undertaken in the RES-F and the RES-E subsectors of TAUs importing MS.
2 Th i l RES H/C t MS h ld h ffi i tl l i ti2. The marginal RES-H/C cost among MS should show sufficiently large variation to at least completely offset the regulatory cost of applying (one or more of) the cooperation mechanism considered.
3 Use of the cooperation mechanism considered lowers the aggregate social3. Use of the cooperation mechanism considered lowers the aggregate social cost burden the aggregate RES-H/C targets of the cooperating MS.
4. Equity concerns for the cooperating MS:
o each MS perceives the net benefits to be acceptably high.
o each MS perceives the internal distributive impacts politically feasible.
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Cooperation mechanisms as vehicles for Member States to mutually agree on redistributing costs and benefits
Thank you for your attention
www.res-h-policy.eu 21
The potential role ofG f OGuarantees of Origin within a harmonised policy frameworkp y
for RES-H/CConsultation WorkshopConsultation Workshop
"Cost and benefits of coordinated/harmonised policyon Renewable Heating (RES-H)"
B l 02 D b 2010Brussels, 02 December 2010
Veit Bürger, Öko-Institut e.V.
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The Guarantee of Origin for RES-H/C
Overview
• What is a Guarantee of Origin (GoO)?
• Specific regulations for the GoO for RES-H/C following Directive p g g2009/28/EC
• Potential roles of the GoO for RES-H/C (considering the differences b t th RES E d RES H/C t )between the RES-E and RES-H/C sector)
• Potential benefits of introducing the GoO for RES-H/C GoO for decentralised small scale RES H/C installations─ GoO for decentralised small-scale RES-H/C installations
─ GoO for large-scale grid-connected RES-H/C installations─ Use of the GoO within different support instrument optionspp p
• Conclusions
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The Guarantee of Origin for RES-H/C
What is a GoO?
Directive 2009/28/EC defines a GoO as
an electronic document which has the sole function of providing proofto a final customer that a given share or quantity of energy wasproduced from renewable sources as required by Article 3(6) ofDirective 2003/54/EC [Electricity Market Directive ] [ y ]
The concept of and specifications for the GoO for RES-H/C are i t d d b A ti l 15 f th Di tiintroduced by Article 15 of the Directive:
Member States may arrange for guarantees of origin to be issued in response to a request from producers of heating and cooling fromresponse to a request from producers of heating and cooling from renewable energy sources. […]
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The Guarantee of Origin for RES-H/C
Specific regulations for the GoO for RES-H/C (1)
• Member States are allowed but not obliged to introduce a scheme for the GoO for RES-H/C
• Provided a GoO scheme for RES H/C is in place each producer running an• Provided a GoO scheme for RES-H/C is in place each producer running an eligible RES-H and RES-C installation would be entitled to request a GoO
• GoO schemes may be restricted tol RES H RES C i t ll ti (i h l d i th t─ large RES-H or RES-C installations (in such a case only devices that are exceeding the capacity limit would be eligible to the GoO system)
─ RES-H/C production that does not receive any form of public support• In order to avoid double counting of the environmental benefit associated to
RES-H/C─ each kWh should be reflected by one GoO onlyy y─ the value linked to a GoO must be cancelled once it has been used
• The lifetime of a GoO for RES-H/C would be limited to a period of 12 months
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The Guarantee of Origin for RES-H/C
Specific regulations for the GoO for RES-H/C (2)• Main GoO system activities (issue, transfer, cancellation) must be
supervised by either a governmental body or a designated competent body (that has to be independent from the RES-H/C market players). For each geographical region only one body should be in place
• The GoO should be an electronic document and should hold an identification number that allows for an unambiguous identification of the gproduction plant
• The minimum information displayed by a GoO for RES-H/C:─ energy source (e g biomass solarthermal)energy source (e.g. biomass, solarthermal)─ production period─ type, capacity and installation date of the production plant─ whether and which kind of public support was givenwhether and which kind of public support was given
• A GoO from other Member States can only be rejected if there are doubts about the reliability of the GoO scheme under that it was issued
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The Guarantee of Origin for RES-H/C
Potential roles of the GoO for RES-H/CThe guarantee of origin shall have no function in terms of a MemberState’s compliance with Article 3. Transfers of guarantees of origin […] shall have no effect on the decision of Member States to use statisticaltransfers, joint projects or joint support schemes for target compliance […].
• The GoO does not have any function for target accounting• The GoO does not have any effect on the decision to use the
flexibility mechanismsflexibility mechanisms
→ Thus a potential use of the GoO for RES-H/C could only lie in o the trade of RES H/C products on the voluntary market1 o the trade of RES-H/C products on the voluntary market
(analogous to the use of the GoO on the RES-E market?)o administering public RES-H/C support instruments
1
2
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The Guarantee of Origin for RES-H/C
Differences between the RES-E and RES-H market in view of potential benefits of the GoO
• Heat and cold is mostly consumed near the place where it is produced• Marginal cross border trade of heat and cold which is resulting in a
lack of country-wide transmission grids• Existing heating and cooling grids are generally limited on a local or
regional geographical scaleregional geographical scale
Consequences for RES-H/C
─ Benefit of the GoO in the RES-E sector (to be a reliable1 Benefit of the GoO in the RES E sector (to be a reliable accounting tool for keeping track of the green attributes associated to RES-E especially in the case of cross-border trade) not really given for RES H/C
1
not really given for RES-H/C─ Use of the experience gained from running GoO schemes in the
RES-E sector is rather limited2
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The Guarantee of Origin for RES-H/C
GoO for decentralised small-scale RES-H/C installations
GoO for large-scale grid-connected RES-H/C installations
1. Producer and consumer is generally the same actor (e.g. space heating is produced onsite)
1. In a district heating grid RES-H/C producers are clearly separated from the consumeris produced onsite)
2. Risk of double counting can more or less be excluded (heat is consumed at the place of its production)
from the consumer2. In larger DH grids (also fed by heat
from fossil sources is) the GoO would allow for a clear allocation ofat the place of its production)
Implementation of a GoO system d t t id
would allow for a clear allocation of the RES-H share to consumers
Large DH grids: GoO might be a f l ti d ll tidoes not seem to provide any
practical benefituseful accounting and allocation toolSmall DH grids: GoO system costs might overweigh benefits
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The Guarantee of Origin for RES-H/C
GoO within a subsidy scheme?
P i i l I t i RES H/C i t ll ti i fi i l tPrinciple: Investors in RES-H/C installations receive financial support e.g. in form of an upfront investment grant, which the investor has to apply for
Application requirements:• proof that the investment is done (generally in form of an invoice)• proof that the production facility is operating (e.g. in form of a
statement by the installer)• proof of fulfilment of technological minimum criteria (e g certificationproof of fulfilment of technological minimum criteria (e.g. certification
of a solar collector with the label "Solar Keymark")• Generally, no ongoing documentation of the amounts of produced
h t ld i dheat or cold required
No practical benefit of a GoO
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The Guarantee of Origin for RES-H/C
GoO within a RES-H/C Use Obligation?
Principle: Building owners are obliged to source a certain share oftheir total thermal energy use from renewable energy sourcessources
Proof of compliance:• volume of consumed (and produced) RES H• volume of consumed (and produced) RES-H
-> could be delivered by GoOs• total thermal energy demand for the entire building (reference)
additional building specific data needs to be collected to verify compliance
i ifi t i lifi ti f th ifi ti d bno significant simplification of the verification procedure byusing GoOs
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The Guarantee of Origin for RES-H/C
Variant: Use obligation with compensation mechanism Backgroundg• A use obligation commits all participants in the same way• Thus a fixed use obligation provides no incentives to optimally exploit the
e g building specific RES-H/C potentialse.g. building specific RES H/C potentials
Introducing a mechanism of compensation between the obliged actors could provide incentives to over-fulfil the minimum obligation• Building owners that over-fulfil the minimum RES-H share would be entitled
to sell these surplus volumes to those obliged parties, which have to deal with minor conditions (and for which the purchase of such surplus volumes
S )would be cheaper than installing a RES-H device)• Consequence: the same overall quantitative target could be reached at
lower costs• Such a system could be jointly implemented by different Member States
GoO could facilitate the transfer of surplus volumes between obliged parties within one country or in different countries
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p y
The Guarantee of Origin for RES-H/C
Summary and Conclusions
• The GoO does not seem to provide any practical benefit for decentralised small-scale RES-H/C installations
• Potential benefits could be exploited in larger heating grids that are partly fed by RES-H/C
F t i t t ti th G O ld b f l t l• For some support instrument options the GoO could be a useful tool for administering the system
• All in all dislike the RES-E sector the GoO for RES-H/C seems to• All in all, dislike the RES-E sector, the GoO for RES-H/C seems to deliver only limited benefits
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The Guarantee of Origin for RES-H/C
Thank you for your attention
Contact
Veit BürgerVeit BürgerÖko-Institut e.V.
tel.: +49-761-45295-25email: [email protected]
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