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District heating (DH) can become a key infrastructure for achieving climate targets in the heating sector. In order to support the uptake of renewables in the DH sector, the European Commission proposed to open DH infrastructures to third parties. This will allow independent heat producers to supply heat produced from renewable energy sources and from waste heat to consumers connected to the grid. This paper develops a better understanding of the complexity associated with the introduction of third party grid access (TPA). We will analyse the heterogeneous institutional set-up of DH markets in the EU and discuss competition and market boundaries in the heat market. Based on this, the paper investigates the technical, regulatory and economic challenges that arise from the practical implementation of TPA. We conclude that TPA alone will not be sufficient to support the expansion of renewables in the DH sector. Complementary policy measures will be necessary to transform the DH sector towards 4th generation DH systems that will become an integrated element of a smart energy system.

The EU Renewable Energy Directive (RES-Directive) establishes a policy framework for the promotion of renewable energy in the EU. Under the framework of the RES-Directive, EU Member States have adopted national renewable energy action plans including sectorial targets for electricity, heating and cooling, and transport. While the RES-Directive outlines the methodology for calculating the renewable energy shares for electricity, heating and transport, it does not offer any indications on how to account for renewable cooling. Due to the lacking methodological guidelines, Member States can currently not report renewable cooling and cooling does therefore not play a role for target achievement. At the same time, the energy demand for cooling is growing rapidly and the inclusion of renewable cooling can potentially have a large impact on the renewable energy shares that Member States report. Based on an overview of available cooling technologies, this article explores various strategies for including cooling in the RES-Directive and investigates the impact on target achievement. We find that the potential impact of including cooling is considerable and conclude that ambitious minimum efficiency requirements are needed in order to maintain the ambition of the RES-Directive and to stimulate the development of policies to support low-carbon cooling technologies.

In order to contribute to the German Energiewende (energy transition) adequately, the building sector has to be almost completely decarbonised in the long term. Our analysis investigates how the German building stock can be transformed into a nearly climate-neutral state by 2050. Using a stock modelling approach based on a typology of the German residential and non-residential building sector, we develop different visions (target states) of what a nearly climate-neutral building stock could look like. All developed target states achieve the overall goal of reducing the non-renewable primary energy demand in 2050 by at least 80%. In order to span a broad target corridor, the target states differ in the two central target dimensions: efficiency (reduction in final energy demand) and energy/technology supply mix (especially the herein contained share of renewable energies). Additionally, using the energy system model REMod-D, the interactions of the building stock with the energy system as a whole are investigated. We explore the differences between a target state focussing on efficiency measures and a target state where efficiency is partly compensated for by an increased use of renewable energies. We learn that from a private cost perspective no clear recommendation can be derived as to which target state should be given priority. This means that other criteria become more relevant, such as social acceptance regarding the different measures, or the challenges that arise from rolling out additional renewable energy capacity on top of what is necessary to achieve the climate goals in other sectors.

While it is widely acknowledged that carbon pricing plays an important role in driving the transition towards a low-carbon energy system, its interaction with complementary instruments is discussed controversially. The analysis of combining carbon pricing with complementary policies has been mostly focused on the electricity sector, while the role of carbon pricing in the buildings sector has received only minor interest. In view of the newly introduced carbon pricing scheme for the buildings and transport sector in Germany, we analyze the interactions between the carbon pricing scheme with the existing policy instruments and assess the consistency of the policy mix for decarbonizing the buildings sector. Our analysis finds that the introduction of carbon pricing has a reinforcing effect on the instrument mix and adds to the consistency of the policy mix. The results highlight the importance of complementary policies in order to achieve deep decarbonization in the buildings sector. We conclude that carbon pricing, preferably implemented as a tax with a predictable and increasing price level, needs to be supplemented with a powerful mix of complementary measures.

Renewable energy sources of heat offer the substantial economic, environmental and social benefits associated with renewable electricity but policy to support their expansion is considerably less advanced. The potential for applying various support instruments to renewable heat is considered with advantages and disadvantages discussed. (c) 2012 Published by Elsevier Ltd.

In order to limit global warming to 2 °C, industrialised countries like Germany are obliged to de-carbonise their energy systems extensively by the middle of the century. The building sector – particularly the building stock – plays a pivotal role in the long-term climate protection strategies for Germany. Key control variables in this context are building standards, heat supply technologies and the sector allocation of limited renewable energy potentials. Based on existing normative long-term scenarios for the heating sector and using the residential building sector as a case study, this article assesses the current German policy framework for the building sector against the modelled long-term development needs.

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.

This paper compares two flagship policies in the area of energy efficient building refurbishment, the German CO2-Building Rehabilitation Programme and the Green Deal in the UK. Although both policies are essentially loan programmes to finance energy efficiency measures, the nature of the two policies is very different regarding scope, financial architecture, integration with other policies, and carbon reductions. The paper draws out the main differences of the programmes as well as similarities.

This article describes and evaluates a number of different financial support instruments for the energy refurbishment of the building stock based on the example of Germany. The key focus is on policy instruments which are not counter-financed by public budgets or where, by other means, investment and planning security for investors is assured. Through such instruments the typical disadvantages of public budget-financed support programs (e.g. insufficient support funds, frequent changes to support conditions) should be alleviated. Five different policy instruments are examined in terms of their legal viability and evaluated according to functionality criteria. The article closes with a recommended time frame for the implementation of an effective set of policy instruments.

Best practice policy design and harmonisation of support schemes for electricity from renewable energy sources (RES-E) within the European Union have been discussed controversially for years. In contrast, policies for improving renewable heating (RES-H) penetration in the European Member States and options for best practice instruments are still being developed. The objective of this paper is to analyse different levels of policy harmonisation for target compliance and the economics of renewable heating and cooling. After presenting the degree of RES-H policy harmonisation resulting from Directive 2009/28/EC , a quantitative assessment is performed of the costs and benefits of different harmonisation scenarios. This selects the obligation to use renewable heating in buildings as the common policy instrument against which the effects of harmonisation are analysed. The paper shows that economic benefits can result from implementing best practice design options for use obligations in EU Member States.

The 2020 RES-targets of the EU until 2020 require substantial growth of RES-technologies and sectors. Solar thermal energy can provide an increasing share of this amount, in particular looking on the period beyond 2020. However, this will need corresponding ambitious policy instruments and support. This paper provides scenarios for solar thermal energy in selected European countries (AT, GR, LT, NL, PL, UK) up to 2030. A techno-economic bottom-up model is applied for simulating the impact of different policy instruments (and design options of these instruments). In particular, the focus is on the following policy instruments: economic incentives and RES-Heat obligations. The results are based on a comparison of these different scenarios and provide insight into barriers, challenges and opportunities for solar thermal energy in the selected regions. The paper ends with discussions regarding the role of the solar thermal targets in NREAPs and provides conclusions for the design of solar thermal support instruments. The paper is based on the work done within the IEE project RES-H Policy (www.res-h-policy.eu).

Whereas the contribution from renewable energies in the electrical power market is increasing rapidly, similar progress in the heat market is yet to be made. A prerequisite for progress is the development of innovative support instruments that transcend the usual support through public subsidies or tax reductions. We present an overview of the various classes of possible instruments. Some particularly interesting instruments will be selected and evaluated, comparing them qualitatively and quantitatively for the case of Germany. The most favourable model is found to be a new, allocation-financed 1 model known as the Bonus Model. This model will be described in more detail.