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Renewable heat policy ^9° ^4* „сры „рФ ^Ч1 ,рФ „cfP,^0° ^СЛ – ^СЛ» |
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Instruments
Carrot. Between 1981 and 1985, interest-free state loans were available to single family and multifamily dwellings in support of geothermal heat-pumps (GHPs). Direct reimbursement subsidies and income tax reductions were also offered in step with the total cost of installations (EGEC, 2006).
Carrot. From 1991-1996 CHP subsidies were provided for investment in biomass-fired plants. In order to be eligible, the CHP plant was required to use at least 85% biomass for a period of five years for a total of €440 /kWe (SEK[89] 4 000 /kWe). Existing heating plants that were retrofitted to CHP based on biomass were eligible for 25% of retrofit costs up to a maximum of €440 /kWe. Fossil fuel CHP plants that were converted to biomass were eligible to receive 25% of the conversion costs to a maximum of €440 /kWe. Funds for these subsidies were exhausted by 1994.
An additional €49.5 M was allocated in 1998 for a five year period (Helby, 1998) with a maximum of €330 /kWe available per installation. Subsidies were limited to new plants and CHP plants that were retrofitted for biomass. Within one month of the beginning of the programme applications had been filed for more than 3 times the amount of funding available.
Carrot. Substantial energy taxes have been employed since 1991. In addition, a carbon dioxide tax and a sulphur tax were introduced at this time to target environmental objectives. In the spring of 2000 €3.3 billion of tax revenue was transferred to focus on energy use over a ten year period. In other words, taxes on energy use and emissions were increased, offsetting a corresponding reduction in taxes on employment (Swedish Energy Agency, 2006). About €2.2 billion in revenue was collected in 2002 and €3 billion in 2003. The high CO2 taxes (around €100/t CO2 in 2006) had the most significant repercussions due to the exemption of bioenergy (see below) (Ericsson et al., 2004).
For district heating systems, a full CO2 tax and 50% energy tax is employed on fossil fuels used for heat and in CHP plants (Johannson et al., 2002). To maintain competitiveness, Swedish industry was exempted from the energy tax in 1993 and the CO2 tax was reduced to 25% for the industrial sector.
The Energy Taxation Exemption for Biomass when used in district heating created a cost competitive advantage for biomass since biomass-based heat can be produced at a much lower cost than heat from fossil fuels (Johannson et al., 2002). However, in industrial sectors that are not subject to the full CO2 tax, biomass based heat is not cost competitive with heat produced from coal and gas.
Carrot and Guidance. The Swedish National Board for Technical Development (NUTEK) issued a Technology Procurement in 1994 for heat pumps with the intention of promoting energy efficient technologies and assisting their market development. This system of support, first introduced in 1984, is managed by the Swedish National Energy Administration and reviewed periodically. €0.1 M was allocated to a heat pump procurement competition as a grant for the winning, most efficient technologies with guaranteed sales of 2 000 units. In addition, information campaigns were created as a follow-up (Olerup, 2001). Two designs of GHPs won this award and spurred the market for this technology.
Carrot. In 1997 grants were introduced for investment in district heating systems and connection of group and individual heating systems to reduce the amount of electric heating in Swedish residences. Subsidies were available to a maximum of €1 100-€3 300 per district heating system connection, dependent upon connection specifications and central boilers. These grants were temporarily withdrawn in 1999, reinstated, and then removed in 2002 (IEA, 2004).
Carrot. Grants have also been provided in support of biomass energy crops for use in energy systems. €550 /ha is provided for growing short rotation forest plantations such as Salix.
Carrot. An Investment Grant for Solar Heating has been available since June 1 2000. This grant of €0.27 /kWh of calculated yearly supply is available as a one-off payment to subsidize the cost of installations of solar heating systems for space heating and/or domestic hot water production. Grants, administered by the county councils and the National Board of Housing, Building, and Planning, are available to Swedish home owners, apartment buildings, and certain types of commercial premises (IEA, 2004; SNEA, 2006). A total of €1.1M was available in 2000 and increased to €2.2 M in 2001 (IEA, 2006e).
Guidance. In March 2001, the Eco-energy Municipality Programme began, providing information on renewable energy resources aiming to contribute to the decisions of Swedish Energy Policy. Through this programme municipalities are offered seven different educational packages (IEA, 2006e).
Carrot. A Tax Deduction for Installation Costs of Biomass Heating Systems (Proposition 2003/2004:19)
was in place from January 1 2004 through to December 31 2006. This tax credit, applicable to income tax returns for 30% of the equipment and installation costs of biomass heating systems (IEA, 2004), was available to household space and water heating distributed via a central piping network and was limited to roughly €1,600 per household (European Biomass Association, 2006). A formal action plan for biomass was introduced in December 2005 and adopted in June 2006 (COM2005 628).
Carrot. A conversion grant was introduced on January 1 2006 aimed at reducing the use of oil and electricity for heating purposes in residential and commercial buildings. It is available through 2010 for conversions to district heating, biomass-fired heating systems, GHPs and/or solar heating (SNEA, 2006).
Evaluation
In 2006 the demand for space heating and domestic hot water was about 306.0 PJ of which 10% was consumed by industry, 57% by the residential sector, 29% by commercial and public services, and less than 1% by agriculture and forestry (Figure B26). Roughly 4% of heat is lost in the substantial district heating network (IEA, 2007a).
Overall the Swedish heating system is exemplary in its use of renewables, primarily biomass. Although solar thermal and geothermal contributions have been comparatively small, the markets have shown growth in recent years (Figure B27).
Sweden has developed an extensive district heating sector, influenced by grants offered in support. Between 1990 and 1999 there was a fourfold increase of the use of bioenergy district heating systems (Johansson et al., 2002). Today district heating accounts for approximately 40% of the heat market.
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Figure B27 • Renewable heat generation in Sweden by sector from 1990 till 2006
Biomass
Geothermal
Solar
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Figure B28 • Generation of solar thermal heat in Sweden from 1990 till 2005
Heat generated (TJ)
250 200 – 150 – 100 – 50
0
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 Source: IEA, 2006b.
Solar thermal
Historically the market for solar thermal systems in Sweden has not been strong although growth has been evident in recent years. Between 2001 and 2005 the installed capacity of solar thermal increased from 135 MW (192 157 m2)[90] to 145.8 MW (220 000 m2) (Figure B28) (ESTIF, 2006c).
Investment grants for solar thermal introduced in 2000 were an important support mechanism. Following the implementation of this financial incentive scheme, the declining trend in the solar thermal heating market was reversed.
Biomass
The forest industry is a major economic sector in Sweden which may have had a significant role in the success of the political support for biomass. Utilization of forest by-products for heat was supported by this strong industrial lobby.
The use of biomass for heat has increased significantly since 1990 (Fig. B27), primarily coming from wood fuels including short rotation Salix, black liquors in pulp mills, peat, MSW, straw, and energy grasses (IEA, 2004). Most of this heat production is from solid biomass utilized in CHP plants that increased from more than 50% of total fuel by energy in 2004 to more than 62% in 2006. The gross biomass heat production was 92.1 PJ in 2004, 32.7 PJ of which was generated in dedicated biomass plants and 60.3 PJ in CHP plants. Biomass utilization in CHP declined slightly from 60.3 PJ in 2004 to 59.0 PJ in 2005 (EurObserv’ER, 2005).
Support for biomass heating from the Swedish government has been largely indirect through the exemption from the high energy and CO2 taxes employed making it the least cost option for heat production in many instances. Subsidies offered for biomass based CHP since 1999 have successfully led to a majority of heat production originating from biomass.
Geothermal
Sweden has more installed GHP capacity than any other EU nation (EC, 2006b), gaining in popularity since the 1980s. Most heat pump sales in the 1980s and early 1990s were ambient resource (air) heat pumps. In 1994 however, the total 47 MW installed capacity for ground-source GHPs began to grow substantially (Figure B29) to reach 377 MW in 2000 and 3 840 MW by 2005, and accounting for approximately 36 PJ/yr (Lund et al., 2005). However in 2005 the market stagnated from an annual increase of 47% to only 1%. Overall GHPs have become an important export product.
About 30% of all single-family houses in Sweden use a GHP (Hellstrom, 2006). Residential geothermal heating applications are the most common with an average size of 12 kW, but several large-scale installations for district heating networks have also been constructed with an average size of 900 kW (Lund et al., 2005).
Government subsidies and interest-free state loans provided for geothermal heating installations from 1981 to 1985 contributed to an increase in heat pump sales (EGEC, 2007). The growth of the heat pump market, however, truly began in the early 1990s as a result of the government procurement scheme and competition that promoted the technology (Olerup, 2001).
Conclusions
Strong support measures for renewable heating in Sweden have brought the country into an exemplary position. Exemption of biomass from the high energy taxes resulted in bioenergy deployment, direct investment grants for solar thermal have stimulated the market, and GHPs have been extensively deployed to meet domestic heat demands.
