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State Budget Independent, Market-Based Instruments to Finance Renewable Heat Strategies

Author

Listed:
  • Jan Steinbach
  • Friedrich Seefeldt
  • Edmund Brandt
  • Veit Bürger
  • Ulf Jacobshagen
  • Markus Kachel
  • Michael Nast
  • Mario Ragwitz

Abstract

At present, expanding the use of renewable energy sources for heating (RES-H) relies predominantly on publicly funded support instruments. As these are subject to subsidy cuts and suspensions, these instruments do not provide long-term security for investors and technology suppliers. Although feed-in tariffs and quota-based systems are the major support schemes for renewable energy sources in the electricity sector, similar policy designs have not been applied to RES-H. This paper presents and evaluates three different policy instruments which have the potential to finance RES-H without using public funds: A physical quota system for biomass, a technology-based quota system ( Portfolio Model ) and a remuneration-based system ( Premium model ). The assessment suggests that while the Portfolio Model and the Premium Model are both promising policies to enhance RES-H deployment, there is greater acceptance among stakeholders for the Premium Model .

Suggested Citation

  • Jan Steinbach & Friedrich Seefeldt & Edmund Brandt & Veit Bürger & Ulf Jacobshagen & Markus Kachel & Michael Nast & Mario Ragwitz, 2013. "State Budget Independent, Market-Based Instruments to Finance Renewable Heat Strategies," Energy & Environment, , vol. 24(1-2), pages 195-218, February.
    • Handle: RePEc:sae:engenv:v:24:y:2013:i:1-2:p:195-218
    DOI: 10.1260/0958-305X.24.1-2.195
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    References listed on IDEAS

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    1. Berry, Trent & Jaccard, Mark, 2001. "The renewable portfolio standard:: design considerations and an implementation survey," Energy Policy, Elsevier, vol. 29(4), pages 263-277, March.
    2. Haas, Reinhard & Resch, Gustav & Panzer, Christian & Busch, Sebastian & Ragwitz, Mario & Held, Anne, 2011. "Efficiency and effectiveness of promotion systems for electricity generation from renewable energy sources – Lessons from EU countries," Energy, Elsevier, vol. 36(4), pages 2186-2193.
    3. Bürger, Veit & Klinski, Stefan & Lehr, Ulrike & Leprich, Uwe & Nast, Michael & Ragwitz, Mario, 2008. "Policies to support renewable energies in the heat market," Energy Policy, Elsevier, vol. 36(8), pages 3140-3149, August.
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    Cited by:

    1. Popovski, Eftim & Fleiter, Tobias & Santos, Hugo & Leal, Vitor & Fernandes, Eduardo Oliveira, 2018. "Technical and economic feasibility of sustainable heating and cooling supply options in southern European municipalities-A case study for Matosinhos, Portugal," Energy, Elsevier, vol. 153(C), pages 311-323.

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