Best practice policies to develop Renewable Heat markets

1
Best practice policies to develop Renewable Heat
markets

• Herbert Tretter (E.V.A.)
• Christian Rakos (SWS)

2
Current status of RES heat in EU-15
Source The share of renewable energy in the EU
SEC(2004) 547
3
Contribution of the member states
Source The share of renewable energy in the EU
SEC(2004) 547
4
What we need until 2010
Source COM(2004) 366 final evaluation of the
contribution of renewable energy sources in the
EU
5
Key findings

• Policies make a difference !
• many isolated success stories exist
• E.g. Solar Greece, heat pumps Sweden, Pellets
  Austria etc.
• Markets alone cannot do the job !

6
What makes policies successful ?

• Comprehensive approach (programs rather than
  measures)
• Continuity !
• Regional outreach
• Reasonable financial commitment

7
Why a comprehensive approach?

• Energy technologies are embedded in society
• Vast numbers of actors involved
• Highly complex relationships to be addressed
• Missing links lead to failure
• Key role of program management!

8
The need for continuity

• Markets need time to grow
• Especially energy markets !
• E.g. Plan Soleil 6-7y, Biomass Austria20y
• Stop go policies can ruin RES industries
• Continuity makes them flourish

9
Regional approach

• projects happen at the regional level
• coordination of actors is much easier at this
  level
• information, funding, skills etc. are necessary
  at the regional level
• successful program managers often active at the
  regional level (Swedish Finnish energy
  advisiers, Plan Soleil, Austrian DH..)

10
Reasonable financial support

• Annual Subsidies for fossil fuels in the EU15 24
  G
• Subsidies for RES in the EU 5 G
• LEVEL PLAYING FIELD ??
• Necessity for financial support of RES H
• at the program level (few 100 M over 7 years)
• to support investments (NOT running costs!) (3 G
  over 7 years investment subsity (1 k per unit,
  1600.000 units per year after 7 years, starting
  from 50.000)

11
Issues comprehensive RES H policies programs
must address

• Establishment of program management
• Quality of products and services
• Information promotion
• Economic incentives
• Regulation
• RD

12
The need for program management

• Why? Complexity of task, systems approach
  necessary
• Who? Sometimes industry associations (e.g. Greek
  Solar, Finish Heat pumps)
• Typically independent managers established by
  public initiative
• Can be best value for money (NL landfill gas)
• Often established at regional level
• Usually indispensable, needs sufficient funding

13
Quality of products and services

• The most basic issue for success
• Public initiative indispensable
• Testing certification of products
• Education, training certification of service
  providers
• Monitoring of realized systems incl. feedback

14
Harmonisation of quality requirements a future
need

• Necessary to establish a European market for high
  quality RES technologies
• Harmonised strict requirements for products
• Harmonised requirements for skilled
  servicesEuropean Solar Energy Drivers Licence
  (similar for heat pumps, biomass etc.)

15
Information and promotion

• Chicken egg problem RES heat industries too
  small to finance full scale marketing so they
  stay small
• Exception cooperation of competitors (Greece,
  Finland)
• Public financing for full scale marketing
• Present funding levels absolutely inadequate

16
Economic incentives

• Not one success story without them
• Subsidies, tax cuts or energy taxes can all be
  successful
• Dilemma continuity of incentive vs market growth
  
• Solutions
• predictable stepwise reduction of subsidies as
  market grows
• Conditions on existing subsidies (e.g. A RES
  obligations for construction subsidy, RES
  obligations connected to subsidies for fossil
  fuels ?!)
• tax cuts instead of subsidies

17
Smart subsidies

• easily accessible
• quickly available
• well communicated
• reliable
• support RES combination with energy savings
• performance based
• predictably declining

18
Regulation

• E.g. Spanish local building regulations for solar
  thermal
• Low impact on state budget
• Can be effective BUT market must be ready to
  deliver

19
RD

• Is not going to be key driver for RES heat
• Technologies ready for market
• Much RD is still needed, but not academic
  research !
• Industry driven research
• systems efficiency
• simplicity
• durability
• materials etc.

20
Conclusions

• Investigated cases show that adequate policies
  can lead to full scale market introduction
• However, adequate policies for RES heat seem to
  be the exception still
• Consequently RES H development is presently
  restricted to few hot spots in Europe
• An EU policy to call member states attention
  towards the opportunities in the RES H market is
  necessary ( RES H directive)
• The EU could launch a full scale program
  supporting member states to develop RES H markets