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.
Is it a barrier?
Yes
Type of Barrier
Regulatory gap
Assessment Severity
3
Assessment
The legal framework in Italy is complex and cumbersome. Typically, the support frame and the subsidies to energy installations, and moreover in the case of cogeneration, due to its complexity, lack of clearness and contradictory aspects, results in an administrative burden for the company operators that turns to be a deterrent to consider the installation of a cogeneration plant and even any remaking. Although the introduction of White Certificates has been very decisive for the success of any energy saving intervention and still constitutes a major contribution in the development of energy saving systems towards greater Energy Efficiency, especially in case of cogeneration plants, is often required the presence of external experts to fill the necessary documents, because of the complexity of the mechanism of registration and approval. Furthermore changes to regulations affecting WhC and especially variation in White Certificates price which should follow the market, tend to make difficult the assessment of the long–term return for investors.

Questions:

Question 1 Does the FC benefit from this form of support:: a - feed-in tariff
a - Feed in tariff is not available for FC
Question 1 Does the FC benefit from this form of support:: b - feed-in premium
b - Feed in premium is not available for FC
Question 1 Does the FC benefit from this form of support:: c - quota obligation and certification scheme
c - “Certificati Verdi” (Green Certificate) are not provided for FC, “Certificati Bianchi” (White Certificate) are provided but the advantages are related to the plant size (is convenient for big size plant and not convenient for small size plant. White Certificates or TEE Energy Efficiency Certificates, are one of the most relevant tools to promote the energy efficiency in Italy. It has become an effective mechanism, mostly based on measured energy savings, to promote and implement energy efficiency in industry. It acts both as an energy efficiency obligation scheme and as an incentive, due to the presence of a market to trade white certificates. These savings can be achieved through energy efficiency actions among end–users and are assessed using tons of oil equivalent (toe) as measurement unit. Almost every project involving an improved efficiency in the final consumption of energy is eligible under the scheme – from boilers to lighting systems, from solar thermal to cogeneration from electric motors to industrial process projects – with the exception of projects aimed at increasing efficiency in electricity generation. If the project is approved the proponent receives a number of WhC corresponding to the recognized savings on its account (one White Certificate equals to one toe of additional savings).
Question 1 Does the FC benefit from this form of support:: d - CAPEX support
d - CAPEX support is not available for FC
Question 1 Does the FC benefit from this form of support:: e - tax incentives
e - For the purchase and installation of micro-cogenerators to replace existing plants, incurred from 1 January 2018 to 31 December 2018 (extended to 2019), up to a maximum deduction of 100,000 euros. For being able to benefit, the interventions must lead to a primary energy saving (PES) to at least 20 %, as defined in Annex III of the decree of the Minister of Economic Development of 4 August 2011, n. 218 of 19 September 2011.
Question 1 Does the FC benefit from this form of support:: f - incentives to self-production (net-metering)
f - Tax exemption on the gas related to the electrical energy produced
Question 1 Does the FC benefit from this form of support:: g - others
g - n/a
Question 2 Techno comparison: a - FC benefit from specific treatment?
a - No (it means other techno are advantaged)
Question 2 Techno comparison: b - FC benefit same treatment cogeneration techno?
b - Yes, but treatment is different if cogeneration is working with renewable energy, for example with biogas from biomass or waste. In this case green certificates can be achieved.
Question 2 Techno comparison: c - FC benefit same treatment as solar PV (and other means of self-production of electricity)?
c - No
Question 2 Techno comparison: d - Explain how Stationary FC support (or absence of support) compare with the comparison technology identified above.
d - Other technologies directly benefit of tax incentives (it is too simple with PV system receive tax incentives); other technologies benefit from specific feed in tariff or feed in premium, quota obligation and certification scheme
Question 3 Explain here the administrative steps necessary to benefit from the support mechanism(s)
Depending on the different support/incentives; generally for the FC mCHP is not so simple. Is required: a project from a qualified technician with an energy audit, the submission of the payment invoices and the analysis of the objectives in energy saving achievements (ref. to the whole building) after works. In this framework a mCHP is not always able alone to reach this energy saving objectives, but others investments (i.e. thermal insulation, new windows) must be associated.
Describe the comparable technology and its relevance with regard to hydrogen
The comparable technologies are: gas heating solutions, heat pumps, ICE CHP, stirling CHP, solar thermal.N/a

National legislation:

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.