Policy framework for promoting biomass in Austria

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1 Policy framework for promoting biomass in Austria Dipl. Ing. Gottfried Lamers Federal Ministry for Agriculture, Forestry, Environment and Water Management Seite

2 Content Status Goals Achieving the goals Norms and legislation Subsidies households Industry and enterprises Effects Seite 2 Gottfried Lamers

3 Status Seite 3 Gottfried Lamers

4 Status in Austria Source: Gross inland consumption 2008: GWh Development: Increase to 2007: 0,3% Share of renewable energy on the gross inland consumption 2008: 26,6% = GWh Development: Increase to 2007: 1,2 % Energy consumption per sector Agriculture Industry Private households Services Traffic Seite 4 Gottfried Lamers

5 Gross electricity generation by source Seite 5 Gottfried Lamers

6 Renewable energy by source Development Hydro 44,8 % constant Biomass solid 38,5 % constant Biomass liquid (bio fuels) 6,0 % increasing Waste incineration 4,4% increasing Wind 2,3 % constant Thermal solar power 1,5 % increasing Heat pumps 1,4 % increasing Biomass gas 0,6 % increasing Geothermal energy 0,2 % constant Sewage gas 0,1 % constant Photovoltaic solar power 0,02 % increasing Seite 6 Gottfried Lamers

7 Goals Seite 7 Gottfried Lamers

8 Kyoto goal Increase of 11,3 % instead reduction Deviation from the goal: 19,2 Mio. t Seite 8 Gottfried Lamers

9 Goals for Austria Kyoto goal: 13 % reduction of climate relevant emissions (= 16 Mio. t CO2) for the period (reference year: 1990) Renewable energy directive 2020 of the EU (20 % reduction of climate relevant emissions, 20 % increase of energy efficiency, 20 % more renewable energy) Austrian commitment to the EU goals: 16 % increase of energy efficiency (reference year 2005) 34 % renewable energy Seite 9 Gottfried Lamers

10 Renewable energy in the EU Seite 10 Gottfried Lamers

11 Achieving the goals Norms and legislation Bio fuels Construction norms Subsidies Households Green tariffs Fossil district heating Environmental subsidies Seite 11 Gottfried Lamers

12 Norms and legislation Traffic: share of biofuels within the sold fuels (earlier than requested by EC) Bio fuels made of domestic crops (mainly sugar beet, wheat, corn) Households: Energy efficiency norms for new buildings Implementation by the regions Tends towards low energy and passive house standard for new buildings Seite 12 Gottfried Lamers

13 Subsidies Insulation and renewable energy in existing residential buildings Green electricity act Fossil energy district heating and cooling act Environmental subsidy act Biomass district heating Renewable energy for enterprises Seite 13 Gottfried Lamers

14 Subsidies for private households New houses Strict licensing criteria for new buildings Insulation criteria Request for solar heating Reconstruction of existing buildings Insulation New windows Fuel switch towards renewable energy systems Managed by the 9 Austrian regions Different priorities by region but common commitment regarding the goals In total approx. 2 bn per year as subsidies Strong driver towards insulation, solar and biomass Seite 14 Gottfried Lamers

15 Heating demand by households Two contradictorily trends comfort environment Reduction of the energy demand primarily by Mittlere thermisch-energetische Sanierungsraten insulation Main driver for the increased efforts in insulation is the subsidy. Subsidy rate for privates up to 50 % Seite 15 Gottfried Lamers

16 Heating technologies of households 2,2 Mio. central heating systems 22 % wood 35 % oil (decreasing) 40 % natural gas Fast increase of pellets fired heating systems ( new installations) Seite 16 Gottfried Lamers

17 Green electricity act Law in force since with several amendments Compulsory share of renewable energy in the electricity production Electricity companies may raise their prices and shift the financial burden to the end consumer Feed in tariff is fixed for 13 years (15 for technologies which depend on natural resources) Different tariffs by technology, size and type of resource Seite 17 Gottfried Lamers

18 Development of installations: Example Biomass Seite 18 Gottfried Lamers

19 Environmental Funding system of the Ministry for Agriculture, Forestry, Environment and Water Management Seite 19 Gottfried Lamers

20 Environmental subsidy act First parts of the act since the 50ies Contains 4 different subsidy schemes (with own guidelines) Water management (water supply, waste water treatment, waste water treatment for enterprises) Remediation of old dumping sites Joint implementation/clean development mechanism Environmental support in Austria Administration of the subsidies by Kommunalkredit Public Consulting ( Appraisal, preparation for committee and minister, contract, payment and control Seite 20 Gottfried Lamers

21 Austrian federal system of environmental support We have four sections in our funding system: Water Management fund Recultivating of contaminated sites Joint implementation/clean Development mechanism (own presentation) Environmental fund Seite 21 Gottfried Lamers

22 Goals of the environmental fund Money provided : 803 M grants for projects and leveraging M of investments Main goal: CO2 reduction Increasing budget to 90 M per year Stable budget in the last years Additional budget for insulation of houses and enterprise buildings (economic recovery package) Seite 22 Gottfried Lamers

23 Beneficiaries Private companies (no municipalities) Competition rules of the EU Restrictions on the aid intensity, pay back conditions and eligible costs Seite 23 Gottfried Lamers

24 Management of the funds since 1993 All funds are managed by the Kommunalkredit Public Consulting (KPC) on behalf of the minister Kommunalkredit took over the tasks and the staff of the Funds 1993 (privatisation) KPC is a daughter of the Kommunalkredit Austria GmbH (founded 2003) Kommunalkredit is a bank, specialised in communal financing Rights and duties of the KPC are laid down in a contract with the Ministry Seite 24 Gottfried Lamers

25 Appraisal Applicant hands in the application to the Administration unit (KPC) reports (technical, economical, ecological) on projects to an Consulting body (interministerial committee) which gives advices to the Minister for approval. Seite 25 Gottfried Lamers

26 Administration Minister approves Administration unit (KPC): contract and payment, Beneficiary submits bills and reports on the fulfilment of the contract and the ecological success Administration unit (KPC) controls these reports Ministry controls the KPC Seite 26 Gottfried Lamers

27 Some of the funded technologies Seite 27 Gottfried Lamers

28 Funding policy Annual budget: 90,238 M 98 % of all funded projects are climate relevant Approx. 25 different priorities (with own information sheets and application forms Constant improvement of the cost benefit ratio of the subsidy per ton CO2 over the life time of the technology. Increased 2009 up to 10,9 /t Seite 28 Gottfried Lamers

29 Non-investment funding 5 % of the total budget is spent in consultancy programmes Intension: To mobilize those who don't even know that they have a problem Reason: The investment programme influences and attracts enterprises which have already a solution (after recognising that they have a problem) 2 programme lines Klima:aktiv: Climate programme with 23 modules under on programme management (Austrian Energy Agency) Regional programmes: In 7 (out of 9) Austrian provinces broad (and very different) programmes are financed Seite 29 Gottfried Lamers

30 Klima:aktiv 4 Categories, 23 modules In total about 4,5 M per year Cooperation with regional governments and economic partners Target group different by programme content Enterprises are target groups in: Ecofacility (energy efficiency in business buildings) Energy efficient enterprises e5 municipalities (for municipal enterprises) Solar energy Biogas Biomass heating in enterprises Quality management of biomass district heating Seite 30 Gottfried Lamers

31 Quality management of biomass district heating History of trial and error in the field of biomass district heating Good technical but bad economic performance of the financed projects. Common development of technical basics together with Germany and Switzerland. Requirement to hire a quality manager (one of the list of planners with special education) Forced discussion between QM and planner to avoid mistakes Funding administration relies on the comments of the QM. Increase of economic revenues by improved planning Ministry finances the programme management and defines the requirements but no additional financing of the QM. Seite 31 Gottfried Lamers

32 Results Seite 32 Gottfried Lamers

33 Macroeconomic revenues of RES Turnover of RES technologies: investment - operation Seite 33 Gottfried Lamers

34 Employment effects of RES Jobs, created by RES technologies: investment - operation Seite 34 Gottfried Lamers

35 Employment effects of biomass subsidies Due to an analysis of the economic research institute the effects of the subsidy is positive to the federal budget In total the 90 M created (or saved) approx jobs In the sector of biomass in 2004 a total amount of 43,6 Mio. (2009: 42 M ) leveraged: investments: 190,6 Mio. (2009: 238 M ) Job creation: jobs Direct tax income: 42,7 Mio. Indirect tax income: 3,2 Mio. Seite 35 Gottfried Lamers

36 Technology: biomass heating Seite 36 Gottfried Lamers

37 Technology: biomass district heating Seite 37 Gottfried Lamers

38 Added value for the forestry sector : 21,8 Mio. harvesting meter Increase to 2007: + 2,2 % Increase in 10 years average: + 29,8 % Even higher increase in small forestry enterprises ( + 35,1 %) Seite 38 Gottfried Lamers

39 Wood required for energy production Seite 39 Gottfried Lamers

40 Added value for the regions Added value for the agricultural sector because of increased wood harvest and wood markets Wide regional distribution Secures income in rural areas Seite 40 Gottfried Lamers

41 Added value for enterprises and technology development Strong home market secures the basis for technologic development Subsidies close the gap between science, demonstrati on and marketable product Important sector of the Austrian economy (global player) Seite 41 Gottfried Lamers

42 Thank you for your attention Biomass CHP and Biomass district heating (2006) Seite 42 Gottfried Lamers