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
Economic barriers
Assessment Severity
3
Assessment
A FC MCS is not classified as a ‘Renewable’ technology and has a shortened FIT duration period of 10 years (versus 20 years for a renewable technology)Classification as a non–renewable technology means less favourable terms for FC micro CHP in FIT support duration

Questions:

Question 1 Does the FC benefit from this form of support:: a - feed-in tariff
a - yes – OFGEM administered FIT, but only if it has Microgeneration Certification Scheme (MCS) acceptance under the Micro combined heat and power FIT for systems up to 2kW. The MCS is an supported by the UK Department for Business, Energy & Industrial Strategy, which provides funding toward FITs and Renewable Heat Incentives. Achieving MCS acceptance requires that the technology is validated by a Certification Body (which itself has been accredited by the United Kingdom Accreditation Service (UKAS)) to assess products and installers to the MCS Standards.
Question 1 Does the FC benefit from this form of support:: b - feed-in premium
b - no – there is no premium – the FIT is a rate payable over time and adjusted annually in line with the UK Retail Prices Index RPI .
Question 1 Does the FC benefit from this form of support:: c - quota obligation and certification scheme
c - no quota currently applies for micro–generation. There is a certification scheme as referenced above to obtain MCS acceptance
Question 1 Does the FC benefit from this form of support:: d - CAPEX support
d - no CAPEX support is provided currently, unless the installation is part of the Warm Home Discount scheme (which is limited to £140 per installation in instances of ‘fuel poverty’)
Question 1 Does the FC benefit from this form of support:: e - tax incentives
e - no tax incentives are available
Question 1 Does the FC benefit from this form of support:: f - incentives to self-production (net-metering)
f - No – the net metering is the basis on which the self production is validated, and balance exported to the grid, in order to receive the FIT,
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 - Yes there is specific treatment in that the FC MCS is not classified as a ‘Renewable’ technology and has a shortened FIT duration period
Question 2 Techno comparison: b - FC benefit same treatment cogeneration techno?
b - yes, unless the cogeneration is biogas derived in which case it is classified as a renewable
Question 2 Techno comparison: c - FC benefit same treatment as solar PV (and other means of self-production of electricity)?
c - No – not a ‘Renewable; and the FIT runs for 10 years not 20 years for wind & solar
Question 2 Techno comparison: d - Explain how Stationary FC support (or absence of support) compare with the comparison technology identified above.
d - difference in FIT duration – shorter
Question 3 Explain here the administrative steps necessary to benefit from the support mechanism(s)
Process straightforward and managed via OFGEM the energy Regulator – requires first, use of an accepted / accredited technology; working with an OFGEM licensed network operator and installer; registration for FIT; net–metering compliant;
Describe the comparable technology and its relevance with regard to hydrogen
CHP system based and not necessarily H2 based

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.