Policy Updates 12/09/22

New support scheme to fund growth of District Heating in Germany

In August Commission services approved the new Funding Guidelines for District Heating (Bundesförderung effiziente Wärmenetze (BEW). The new scheme is part of the implementation of Directive 2018/2001 on renewable energy sources and will start to operate this month. The decision is good news for AGFW and will support further development of our sector on the German market. In the light of current developments associated to Ukraine, the new scheme will be instrumental to decouple the heat market from imported fuels.

The new scheme is divided in four blocks:

  • Grants for feasibility studies and transformation plans
  • Investment aid for both new systems with high shares of renewable and waste heat and the decarbonisation of existing systems
  • Simplified funding requirements for individual measures that can be implemented quickly, including renewable and waste heat sources and all investments that allow systems to perform efficiently
  • Operating aid for production based on solar thermal and heat pumps

On the basis of the available budget, the scheme is expected to mobilise over €1 billion yearly of new investments leading to the establishment of 681 MW renewable heat new capacity annually, be it a reduction of 4 million tCO2/y until 2030.

The Euroheat & Power Market Intelligence Unit will soon organise a webinar on the new scheme, once all information on these new measures is publicly available.

For more information, please contact Eloi Piel at [email protected]

Energy Crisis: Emergency Intervention and Reform of the Electricity Market

Following previous packages of measures targeting the EU dependency on fossil fuels and in particular natural gas, the European Commission (EC) is currently working on emergency intervention to combat soaring electricity prices.

The EC is currently exploring ways to curb the increasing electricity prices. The possible proposals on the table focus on market design elements which could deliver an immediate impact:

  1. Reduce (peak) electricity demand: Binding targets for Member States including a reduction of at least 10% in net monthly electricity consumption, as well as a 5% reduction of electricity consumption during peak periods
  2. Cap the price of inframarginal technologies (limit of 200 EUR/MWh) to reduce the excess profits of certain energy companies. Saved revenues to be used to reduce energy bills of households and SMEs
  3. Solidarity contribution (windfall tax) applied to fossil fuel companies that have made considerable profits during the energy crisis.
  4. Liquidity in the financial markets for energy: Financial measures may be needed in the event of default by energy supply companies
  5. Cap the price of Russian gas: determine a price beyond which Europe does not buy

An extraordinary meeting of the Energy Council to discuss these options took place in Brussels on 09 September 2022. Member States ministers kicked off discussions ahead of the Commission official presentation of a new regulation to cap electricity prices. Energy Ministers supported the cap for inframarginal technologies, the solidarity contribution and emergency liquidity measures. Ministers also asked the EC for a price cap on all natural gas and a proposal for coordinated electricity demand-reduction across the EU. There is no cap specifically for Russian gas at this point.

A new set of measures should be announced by the Commission on 13 September, including a regulation that could be adopted later this month or at the beginning of October, during an extraordinary Energy Council meeting.

A structural reform of energy markets will take place in early 2023, with stakeholder consultations starting as early as October.

This topic will be debated at Euroheat & Power's upcoming EnerPol Committee meeting, on 13 September. For more information, please contact Pauline Lucas - [email protected]

Call for participation: Renewable & Waste Heat Working Group

Euroheat & Power is launching a new group - the Renewables and Waste Heat Working Group (RWH WG) - reflecting the growing importance of renewable and waste heat for our sector, as the two spearheads of DHC transition.

Focusing on the development of business intelligence (fact sheets, case studies…) on renewables and waste heat for DHC, it will raise awareness on the benefits of sustainable DHC systems and profile district heating & cooling as an indispensable technology to deliver climate-neutrality.

RWH WG will both contribute to and build on DHC+ R&I activities, its members’ expert knowledge, site visits, to deliver material and activities that provide insights to the industry and support EHP’s advocacy work towards EU institutions, cities, etc.  

It will also be a forum for its members to monitor and exchange on latest trends and developments around renewable and waste heat based DHC.

In this perspective, the secretariat will need to rely on experts from EHP’s membership. Interested members can appoint a representative (maximum of one per organisation) to the WG by replying to this email.

For more information, please contact Jack Corscadden ([email protected]).

2023 Market Outlook: Invitation for member contributions

The most prominent objective of our new Market Intelligence department is to improve and professionalize our DHC Market Outlook, making this publication an annual flagship report for our industry. To achieve this goal, we will need input and support from you, our members. Please contact Crélida ([email protected]) if you are interested in contributing to our new data-gathering efforts.