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Supplier obligation can be a cost effective model for more renewable energies in the heat sector

About a year ago the EU Commission put its highly regarded proposal for a heating and cooling strategy forward in order to support the use of renewable energies comprehensively.

The Fraunhofer Institute for Systems and Innovation Research ISI - a partner in the progRESsHEAT project - coordinated a consortium which supports the EU Commission with scientific studies in further developing the heating and cooling strategy.

About 50%, the largest share of energy consumption in the European Union, is accounted for by the provision of heat and cold; even the share for mobility is with 35 per cent significantly lower. At the same time the use of renewable energies is only slowly increasing in most member states; particularly heat production is still dominated by the use of fossil fuels, such as natural gas, oil and coal.

In the first part of the project “Mapping EU heat supply“ the consortium consisting in Fraunhofer ISI, TU Vienna, IREES (all three are part of the progRESsHEAT project), TEP Energy and Observer compiled a comprehensive energy balance for the heat and cold sector in all EU countries. This sound data was the basis for the EU Commission’s blueprint of the heating and cooling strategy. The second part of the study, which has now been published, contains scenarios on the development of energy supply for heating and cooling in the EU until the year 2030. A particular emphasis lies on possible funding instruments to increase the share of renewable energies.

Source: Mapping and analyses of the current and future
(2020 - 2030) heating/cooling fuel deployment - Executive summary

Energy suppliers should provide more renewable energies

The study also investigates the impacts which may occur when gas and oil suppliers are obliged to bring a certain amount of renewable energies for the provision of heat on to the market each year. Energy suppliers would be free to decide for themselves which technologies fulfill their quota or which incentive they create for the end customer. One example is to directly fund heat pumps, biomass boilers and solar thermal collectors in buildings or for process heat supply in industrial enterprises. Another possibility would be to buy certificates from energy service providers who specialize in implementing respective projects.

Jan Steinbach, one of the coordinators of the project at Fraunhofer ISI, points out, “The basic concept of the supplier obligation is to make the expansion of renewable energies as cost-effective as possible and to treat all available technologies equally. Our model calculation shows that the quota can only be fulfilled when different technologies are being used as the economic viability very much depends on the respective installation situation.“