Lessons learned from current policies

Подпись: 72It has been argued that a well-balanced set of focused, transparent and stable policies may be preferable for the successful deployment of renewable electricity, transport and heat technologies. The success of an individual policy depends on its design and the supporting levels of enforcement. In order to promote strong, substantial growth in each renewable sector, policies must be reliable and long-term (often quoted as “loud, long and legal”). Targets for definitive quantities or percentages of renewable energy should be clearly outlined and verifiable. This analysis did not assess the impact of policies over time and further work is recommended.

Policies to support REHC need to address the specific challenge of the distributed nature of local heat demand and variability of use, espe...

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Conventional deep geothermal

Different applications for which geothermal direct heat is used include ground heat pumps, bathing/ swimming, space heating (mostly provided by district heating), greenhouse and open-ground heating, industrial process heating, aquaculture pond heating and agricultural drying. There is also a very wide range of capacity factors (18 to >70%) for these uses. Consequently, the range in investment and calculated energy costs for deep geothermal direct use as presented below are large. They reflect some uncertainty as well as a real range of costs due to significant variations also arising from differences in the type of use.

In order to correct for the share in investment costs that is related to electricity production, only part of the investment costs is allocated to heat production...

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Biomass: Swedish tax incentives

Substantial energy taxes have been employed in Sweden since 1973 when the first tax was levied on oil following the first oil crisis. Through the 1980s there was a reduction in oil consumption and an accompanying increase in the use of coal, electricity and biomass, to a limited extent, as a result.

Подпись: 83Carbon dioxide (CO2) and sulphur taxes on fossil fuels were introduced in 1991 as part of an energy tax reform to target environmental objectives[15]. In 2006 CO2 tax levels were approximately €100/t CO2, being around 250% higher than when the policy was first introduced. These high taxes have had significant repercussions on the development of biomass because when used in district heating systems, it is exempt from the combination of oil, CO2, and sulphur taxes...

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In 1993 the Japanese government gave the responsibility of promoting new energy and energy conservation technology to the New Energy and Industrial Technology Development Organization (NEDO)[73].

Подпись: 173In June of 1997 a New Energy Law was introduced defining “New Energy” as an oil-alternative energy resource including hydrogen fuel-cells, renewables, waste power, and CHP facilities. The law was revised in 2002 to include biomass and cold energy from snow and ice. In May 2006 it was proposed that the definition include geothermal, small-scale hydro, and waste energy from fossil fuels. The New Energy Law acts as an umbrella policy under which a number of more specified policies exist. Incentives were designed as grants and subsidies, preferential tax treatment, and loan schemes...

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Soft loans and loan guarantees

Financial assistance in the form of low-interest or no-interest loans, long-term loans, and/or loan guarantees effectively lowers the cost of capital. Since the high up-front cost is often an important


consideration for potential REHC investors, lowering it can effectively bring down the average cost per unit and hence reduce the investment risk. Loans offered at subsidised interest rates, lower than the market rates (defined as soft loans), may also incorporate long repayment periods and/or payment holidays or deferments.

An advantage associated with this type of incentive is that it is easily implemented by banking institutions that normally provide investment support to developers...

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Bioenergy in New Zealand

The plantation forest estate of New Zealand (excluding the indigenous forests) covers around 1.6 Mha or 17% of total land area. To process the wood products a relatively large industry has developed
since the 1930s including sawmills, pulp and paper mills, panel board manufacturers and log exporters. Forest products are now the third largest export earner. In addition to the forests, many farms in this agricultural economy have small plantations or shelter belts from which woody biomass is also sourced as a result of regular pruning regimes, felling of old trees etc...

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A lesson can be drawn from the German Market Incentive Program (MAP) and its fluctuating budget for renewable heating (Annex B4). The policy was successful in stimulating the market for solar thermal and was supported by the majority of the financial subsidies available under the programme. However, fluctuations in the available budget were reflected in the varying number of applicants and therefore reduced the total number of projects supported. Once the budget remained stable, thereby ensuring investor confidence, the number of solar thermal installations would increase. This demonstrates the need to provide stable, long-term policies in order to maximize the development of REHC.

Подпись: 73The French experience with solar thermal offers a relevant example of the importance of ex-ante and ex-post i...

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Advanced deep geothermal

The applications for advanced deep geothermal systems are also very diverse, but costs are more widely spread than for conventional heat energy systems. All data in the overview (Table A9) are based on estimates by GIA (Mongillo, 2007). Costs in the year 2030 might have come down to €0.5 to 20 /GJ (average €2.3 /GJ) mainly due to expected lower investments.

A9. Shallow geothermal heating and cooling

Data for base year 2005






to 2030

Investment cost for CHP plant


1 230

2 400



Share investment cost for heating






Conversion efficiency






Auxiliary energy needed – cost O&M










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