Price of electricity and support mechanisms

This LAP analyses:
• The existing support mechanisms for stationary fuel cells (micro-CHP),
• The legal treatment of FC micro-CHP in comparison with other types of cogenerations and solar PV plants,
• The administrative steps necessary to benefit from the support mechanisms.

Glossary:

Does the use of a FC benefit from a support mechanism be it a general support for cogeneration, for self-consumption of electricity or a specific measure for stationary FC.

Pan-European Assessment:

The FC micro-CHP systems must compete with well-established technologies and therefore a non-discriminatory and technology open policy and legal frameworks at EU and national level are needed in order to overcome the market roll-out phase. The residential stationary fuel cells working on natural gas have to be treated in a same way as any other high-efficiency micro-cogeneration units. In case FC micro-CHP systems operate on green gases incl. hydrogen, they have to get the same preferential treatment as power units generating electricity from renewable sources.
The overview of the national policies and funding schemas reveals significant differences in commitment and support for FC micro-CHP systems among the partner countries.

The most of them do not provide any support mechanisms for FC-micro CHP systems. The existing support measures in the rest of the countries are very fragmented and unlikely to contribute substantially to the mass deployment of the residential stationary fuel cells. The most commonly used support measures available for all types of cogeneration units are feed-in tariffs, CAPEX support and incentives for electricity self-production.

select country:

Is it a barrier?

Yes

Type of Barrier

Economic barriers, Regulatory gap

Assessment Severity

Assessment

The required investment for the installation of fuel cells – in particular hydrogen “fired” fuel cells – is relatively high. In Japan the investment for a natural gas fired fuel cell installation in a common household amount to 11 000 US$. The Japanese government provides roughly 4000 US$ subsidies. The number of installed fuel cells in Japanese households amount to 250000 units. The investment for the same device amounts to 35000 – 40000 € in Europe – although most of the components are delivered by the same companies like in Japan – so Japanese companies. There are several reasons for this huge difference which – at least from my opinion – hampers the market uptake of fuel cells in Europe. Fuel cells should be treated as any other form of electricity generated by RES (so if the hydrogen is “green”), like wind, solar, biomass biogas etc. in order to enable the development of a business model.

Questions:

Question 1 Does the FC benefit from this form of support:: a - feed-in tariff

a - so far not

Question 1 Does the FC benefit from this form of support:: b - feed-in premium

b - so far not

Question 1 Does the FC benefit from this form of support:: c - quota obligation and certification scheme

c - so far not

Question 1 Does the FC benefit from this form of support:: d - CAPEX support

d - Investment grants shall apply to CHP systems in case of supply of public district heating with an electrical output of > 100 kW. In addition there is the environmental subsidies programme for enterprises. Highly efficient CHP plants – based on natural gas or LPG are subsidised within this programme for enterprises. This programme aims at CHP systems with an electrical output of max. 100 kW. Some of the key requirements are: a) the generated power must be utilised within the company by at least 80% b) the investment grants are only eligible in existing buildings; systems in new construction cannot be subsidised c) Only CHP systems in areas without access to a district heating grid can receive investment grants d) the investment grants are limited to max: 675 €/kWel be > 100 kW. t

Question 1 Does the FC benefit from this form of support:: e - tax incentives

e - so far not

Question 1 Does the FC benefit from this form of support:: f - incentives to self-production (net-metering)

f - so far not

Question 1 Does the FC benefit from this form of support:: g - others

g - so far not

Question 2 Techno comparison: a - FC benefit from specific treatment?

a - theoretically yes since the Electricity Act 2010 foresees reliefs of grid infrastructure tariffs if the plant was established before 2020 but the decree application is still missing

Question 2 Techno comparison: b - FC benefit same treatment cogeneration techno?

b - Investment grants shall apply to CHP systems in case of supply of public district heating with an electrical output of > 100 kW. In addition there is the environmental subsidies programme for enterprises. Highly efficient CHP plants – based on natural gas or LPG are subsidised within this programme for enterprises. This programme aims at CHP systems with an electrical output of max. 100 kW. Some of the key requirements are: a) the generated power must be utilised within the company by at least 80% b) the investment grants are only eligible in existing buildings; systems in new construction cannot be subsidised c) Only CHP systems in areas without access to a district heating grid can receive investment grants d) the investment grants are limited to max: 675 €/kWel

Question 2 Techno comparison: c - FC benefit same treatment as solar PV (and other means of self-production of electricity)?

c - so far not

Question 2 Techno comparison: d - Explain how Stationary FC support (or absence of support) compare with the comparison technology identified above.

d - there should be provisions for feed in tariffs, feed in premium or auctions should take place. Another possibility is the provision of investment subsidies. All the possibilities will have to be in line with the thereto related requirements (see staff working document of the EC)

Question 3 Explain here the administrative steps necessary to benefit from the support mechanism(s)

Fuel cells have to be incorporated in the RES–Ordinance – based on legal provisions (primary legislation) which have to be partially adapted

Describe the comparable technology and its relevance with regard to hydrogen

Micro–CHP

National legislation:

Green Electricity Act 2012
Not clarified yet. The issue is that there are no provisions in any act or regulation explicitly dealing with subsidies for FC but if there were any, they have to be determined in the Green Electricity Act 2012f
Subsidies for RES = Ökostromeinspeisetarifverordnung

EU Legislation:

Directive 2012/27/EU of the European Parliament and of the Council of 25 October 2012 on energy efficiency
This Directive establishes a common framework of measures for the promotion of energy efficiency within the Union in order to ensure the achievement of the Union’s 2020 20 % headline target on energy efficiency and to pave the way for further energy efficiency improvements beyond that date.

It lays down rules designed to remove barriers in the energy market and overcome market failures that impede efficiency in the supply and use of energy and provides for the establishment of indicative national energy efficiency targets for 2020.