The implementation of European Directives and Regulations: Opportunities or threats for fuel cell systems?

Transcription

1 The implementation of European Directives and Regulations: Opportunities or threats for fuel cell systems? IEA AFC Annex 33, Subtask 3 Report 2016 SUBTASK REPORT Authors: Ing. Mag. Alfred Schuch David Presch, BSc DI Dr. Günter R. Simader Client: FFG BMVIT Date: Vienna, März 2017

2 This report was compiled within Annex 33 Subtask 3: The Implementation of the new Buildings and energy directives: Opportunities or threats for fuel cell systems Currently the following countries participate in this Annex: USA, Japan, Germany, France, Italy, Sweden, Swiss, Denmark, Australia, Israel and Austria. IMPRINT Published and produced by: Österreichische Energieagentur Austrian Energy Agency Mariahilfer Straße 136, A-1150 Vienna, Phone +43 (1) , Fax +43 (1) Internet: Editor in Chief: DI Peter Traupmann Project management: Dr. Günter Simader Produced and published in Vienna Reprint allowed in parts and with detailed reference only. Printed on non-chlorine bleached paper The Austrian Energy Agency has compiled the contents of this study with meticulous care and to the best of its knowledge. However, we cannot assume any liability for the up-to-dateness, completeness or accuracy of any of the contents.

3 FEL! ANVÄND FLIKEN START OM DU VILL TILLÄMPA ÜBERSCHRIFT 1 FÖR TEXTEN SOM SKA VISAS HÄR. Abstract The specific goal of this report is to identify and to analyse upcoming opportunities or possible threats for the market uptake of fuel cell systems through the implementation of various EU directives and regulations in different countries. The specific impact has been carried out among the participants of the IEA Advanced Fuel Cell Implementing Agreement Annex 33 Stationary fuel cells. The anticipated impact of the implementation of EU directives in different member states on the market uptake of fuel cell systems has been elaborated on the basis of the implementation in Austria and Germany. These two countries have been chosen as representative example cases for the implementation of different EU directives and regulations. The implementation of the Ecodesign and Labelling Directive encourages high efficient products. The Ecodesign Directive provides minimum requirements that appliances have to fulfil in order to be placed on the market. Generally it can be stated that those minimum requirements are fulfilled from state of the art fuel cell CHP systems. Through the Labelling Directive the efficiency of a product is now visible for the costumers. It is anticipated that especially highly efficient systems like fuel cell mchp`s can take advantages from the implementation of these two directives. Through the implementation of the Buildings Directive in Austria, the efficiency of the heating systems became more and more part of the requirements. This leads to an encouragement of highly efficient heating systems like CHP systems (incl. fuel cells). The Energy Efficiency Directive requires member states to adopt policies which encourage the due taking into account of the potential of using efficient heating and cooling systems in particular those systems using highefficiency cogeneration (incl. fuel cell). It is anticipated that this requirement led to a favourable framework in terms of investment grants and subsidies in both countries. Directive 2009/73/Ec on the common rules for the internal market in natural gas and directive 2009/72/EC on the common rules for the internal market in electricity provide a framework for the internal market in natural gas and electricity including rules for the tariffs for the usage of the gas- respectively eletricity infrastructure, like transmission and distribution grids. In case of a proper infrastructure tariffs-structure for gas as well as for electricity grids, strong incentives could be generated for the market introduction and further on significant market penetration (part of the business model) of fuel cells. Within the European Union, Germany has put in place the most extensive policy support for stationary fuel cell technologies both at federal and at state level. In addition to the present favourable framework for fuel cells in Germany the implementation of different EU Directives brought further benefits for fuel cell systems. One example is the requirement regarding renewables in buildings: For all new buildings, a certain share of renewable energy sources to cover the heating and domestic hot water demand is mandatory. The exact ratio depends on the chosen energy source and varies between 15% and 50%. Alternatively, the renewable energy heat act allows either an energy performance of 15% better than required by the Energy Saving Ordinance, or the use of district heating and combined heat and power (CHP incl. fuel cell) instead of renewable energy sources. The fact that the use of CHP heating systems neutralizes the requirements regarding renewable energy sources encourages the use of CHP systems. 1

4 THE IMPLEMENTATION OF EUROPEAN DIRECTIVES AND REGULATIONS: OPPORTUNITIES OR THREATS FOR FUEL CELL SYSTEMS? Contents 1 INTRODUCTION Methodology and report structure EU Climate and energy policy Fuel cell systems in the EU Stationary fuel cells in Europe s future energy landscape Critical challenges to overcome 11 2 POLICY FRAMEWORK IN THE EU Relevant EU Directives and Regulations Directive on the indication by labelling and standard product information of the consumption of energy and other resources by energy related products Directive for establishing a framework for the setting of ecodesign requirements for energy-related products Directive on the energy performance of buildings Directive on energy efficiency Directive on the promotion of the use of energy from renewable sources Directive 2009/73/EC on the common rules for the internal market in natural gas Directive 2009/72/EC on the common rules for the internal market in electricity Implementation of EU Directives in different Member States Austria Germany 29 3 POLICY FRAMEWORK IN OTHER WORLD REGIONS Japan Government Activities & Policy Framework Programs and Projects Stationary Fuel Cells United States of America Government Activities & Policy Framework Programs and Projects Stationary Fuel Cells Switzerland Government Activities & Policy Framework Programs and Projects Stationary Fuel Cells 61 2

5 FEL! ANVÄND FLIKEN START OM DU VILL TILLÄMPA ÜBERSCHRIFT 1 FÖR TEXTEN SOM SKA VISAS HÄR. 4 RECOMMENDATIONS 63 5 SUMMARY 65 6 LITERATURE 69 7 LIST OF FIGURES 71 8 LIST OF TABLES 73 9 INDEX OF ABBREVIATIONS APPENDIX Questionnaire 1 EU 77 3

6 THE IMPLEMENTATION OF EUROPEAN DIRECTIVES AND REGULATIONS: OPPORTUNITIES OR THREATS FOR FUEL CELL SYSTEMS? 1 Introduction Alongside direct and indirect financial mechanisms, innovation needs to be pushed by a favourable regulatory framework. Experience in the renewable sector was demonstrated that long-term political and regulatory perspectives create the right stimulus for market-uptake including private investments. Clear political direction and commitment, for example in the form of binding targets and broad integration in EU energy and climate policies, proved to be instrumental in retaining investors trust. The specific goal of Subtask 3 is to identify and analyse upcoming opportunities or possible threats for the market uptake of fuel cell systems through the implementation of various EU directives and regulations in different countries. In addition to this different subsidy schemes / political frame conditions in various countries and world regions should be recorded and analysed in order to compare different measures to strengthen the market uptake of fuel cell systems. 1.1 Methodology and report structure At the beginning of the following report the EU energy and climate policy is summarised. Based on the current EU energy and climate policy the role of fuel cells in the EU and possible critical challenges for fuel cell systems are discussed (see chapters 1.2, 1.3 and 1.4). The main part of the report is the analysis of the current policy framework. The report focuses on energy-related EU directives and regulations. The following five directives have been considered relevant for the market introduction of fuel cell systems: Directive on the indication by labelling and standard product information of the consumption of energy and other resources by energy related products (LD) Directive for establishing a framework for the setting of ecodesign requirements for energy-related products (EDD) Directive on the energy performance of buildings (EPBD) Directive on energy efficiency (EED) Directive on the promotion of the use of energy from renewable sources (RESD) Directive 2009/73/Ec on the common rules for the internal market in natural gas Directive 2009/72/EC on the common rules for the internal market in electricity In chapter 2.2, the specific implementation of EU directives in different member states and their anticipated impacts on the market uptake of fuel cell systems are described and analysed. The analyses of the impacts are based on a conducted questionnaire exercise and on relevant literature studies. The questionnaire exercise has been carried out among the participants of the IEA Advanced Fuel Cell Implementing Agreement Annex 33 stationary fuel cells. 4

7 FEL! ANVÄND FLIKEN START OM DU VILL TILLÄMPA ÜBERSCHRIFT 1 FÖR TEXTEN SOM SKA VISAS HÄR. 1.2 EU Climate and energy policy The European Commission is looking at cost-efficient ways to make the European economy more climate-friendly and less energy-consuming. By 2050, the European Union could cut most of its greenhouse gas emissions. Clean technologies are the future for Europe's economy. [1] The European Union provides its member states with a long-term framework for dealing with the issue of sustainability and the cross-border effects that cannot be dealt with at national level alone. Climate change has long been recognised as one such long-term shaping factor where coherent European Union action is needed, both internationally and inside the EU. [2] The Commission proposed the Europe 2020 flagship initiative for a resource-efficient Europe and within this framework it is now putting forward a series of long term policy plans in areas such as transport, energy and climate change. This communication sets out key elements that should help the EU become a competitive low carbon economy by The general approach is based on the view that innovative solutions are required to mobilise investments in energy, transport, industry and information and communication technologies, and that more focus is needed on energy efficiency policies. [2] The following Figure 1.1 illustrates the pathway to the competitive low carbon economy by 2050: Figure 1.1: EU greenhouse gas emissions towards an 80% domestic reduction [2] The upper reference projection shows how domestic greenhouse gas emissions would develop under current policies. A scenario consistent with an 80% domestic reduction shows how overall and sectoral emissions could evolve, if additional policies were put in place, taking into account technological options available over time. [2] Based on the ambitious European Union targets it can be said that the future energy landscape in Europe will change fundamentally. Committed to assume a global leadership role in combating climate change, European countries have in recent years intensified their efforts to reduce the emissions of greenhouse gases through 5

8 THE IMPLEMENTATION OF EUROPEAN DIRECTIVES AND REGULATIONS: OPPORTUNITIES OR THREATS FOR FUEL CELL SYSTEMS? higher energy efficiency and more carbon-free generation. More and more countries are fully embarking on the transition towards an energy system largely based on renewable energy sources like solar, wind or biomass in order to meet their ambitious environmental objectives. On this pathway, political commitment appears strong stronger maybe than in other industrialised nations. By the year 2020, the European Union is committed to raising the share of renewable energy sources in final energy consumption to 20%, lowering greenhouse gas emissions by 20% compared to 1990 levels, and achieving a 20% increase in energy efficiency. The roadmap for moving to a low carbon economy in 2050 describes the long term goal of cutting emissions to 80% below 1990 levels through domestic reductions alone, with milestones of the order of 40% by 2030 and 60% by 2040 along the way. According to the European Commission, the EU could be using around 30% less energy in 2050 than in 2005 by moving to a low carbon society. [3] Directive 2009/73/EC on the common rules for the internal market in natural gas and directive 2009/72/EC on the common rules for the internal market in electricity electricity provide a framework for the internal market in natural gas and electricity including rules for the tariffs for the usage of the gas- respectively electricity infrastructure, like transmission and distribution grids. These directives do set a framework for the grid based supply of customers with the commodities electricity and natural gas in a competitive environment, thus is consistent with the goals of the EU Climate and energy police in particular in terms of cost-efficiency 1.3 Fuel cell systems in the EU It can be said that the future energy landscape in Europe will change fundamentally. The question is what role do fuel cell systems play in the future European Union energy system? According to the European Strategic Energy Technology Plan [11], hydrogen and fuel cells are expected to play an important role in achieving the EU vision of reducing greenhouse gas emissions by 80 95% compared to 1990 levels by Moreover it is stated that fuel cells and hydrogen are enabling technologies that offer a broad range of benefits for the environment, energy security and competitiveness. Fuel cells and hydrogen have the potential to contribute to overcoming the energy challenges that accompany the transition to a low carbon society [12]: Mobility: The mobility applications have made up the largest share of fuel cell production in recent years. Hydrogen fuel cells in passenger cars and public transport reduce local emissions without compromising the driving range. The cost trend of fuel cell vehicles shows that they will get closer to the cost-competitive range of incumbent and new technologies within the next decade. Niche applications (e.g. forklifts) are already available on a commercial scale. Demonstration and pre-commercialization projects are increasing in size and commitment. Power and heat: Stationary fuel cells offer highly efficient and reliable combined heat and power. The market can be roughly segmented into: - Residential CHP (1 kw systems) - Backup and off-grid solutions (3 20 kw) - Commercial scale (50 kw and up) Fuel cells are gaining market share especially in the middle segment, where they get more and more competitive with the incumbent technologies despite high technology costs. 6

9 FEL! ANVÄND FLIKEN START OM DU VILL TILLÄMPA ÜBERSCHRIFT 1 FÖR TEXTEN SOM SKA VISAS HÄR. Energy storage: Hydrogen energy storage solutions have grown in importance, given the intermittency issues that arise with increasing penetration of renewable energies. This fact is further underlined by the many opportunities that have been created over the past years for hydrogen storage demonstrations. Vattenfall and Total, for example, have built a hydrogen storage project of EUR 21 million in Prenzlau, and the Eco Island of Wight (with IBM, ITM Power and others) has attracted over EUR 300 million of investment, part of which is used for hydrogen storage. Over the last years, the capacity of hydrogen to enhance fuel security in transport, to balance the electricity grid and to enable enhanced penetration of renewable energy sources in transport and heat applications has resulted in a positive market outlook for fuel cell and hydrogen technologies. A projection of the future hydrogen market in Europe is shown in Figure 1.2: Figure 1.2: Projection of the future hydrogen market in Europe [11] Figure 1.3 gives an overview of the recent RD&D expenditures within the EU. It shows that private funding has been steadily rising in Europe, while public has remained constant (EU level) or even been declining (national budgets). Private funding has been, and still is, the biggest contributor to FCH R&D within the EU. 7

10 THE IMPLEMENTATION OF EUROPEAN DIRECTIVES AND REGULATIONS: OPPORTUNITIES OR THREATS FOR FUEL CELL SYSTEMS? Figure 1.3: RD&D expenditure for fuel cells and hydrogen in the EU in million EUR [12] Based on an expert survey, the expected commercialization of various FC&H technologies is displayed in the following Figure 1.4: Figure 1.4: Fuel cell & hydrogen applications expected to become commercial by 2020 [12] Based on the conducted expert survey in [12] the results of Figure 1.4 can be summarised: 8

11 FEL! ANVÄND FLIKEN START OM DU VILL TILLÄMPA ÜBERSCHRIFT 1 FÖR TEXTEN SOM SKA VISAS HÄR. In terms of fuel cell based CHP systems, a commercialization is expected in Car manufacturers forecasted commercialization by These expectations are further underlined by promising statements from Asian and European car manufacturers. In other application areas, many interviewed experts mentioned the increased focus on energy storage through electrolysis. Recent developments in renewables roll-out have imposed new dynamics on transmission & distribution grids, but also on peak versus base power pricing: storage solutions like hydrogen are regarded by many as a potential mitigation and business opportunity Stationary fuel cells in Europe s future energy landscape Stationary fuel cell systems are used in a wide range of applications, from small CHP systems to Multi MW power plants that supply entire districts with electricity and heat. The majority of fuel cells in the European industry portfolio are integrated CHP solutions some of which primarily supply heat to buildings with power as an addon product, whilst others position themselves as base load power generation units with excess heat as an addon product. Stationary fuel cells are a distributed generation technology; they produce power and heat at the site of the consumers in question and for the purpose of their immediate supply with energy [3]. Stationary fuel cells are a highly efficient technology to transform today s fossil fuels and tomorrow s clean fuels into power and heat with the potential to be one of the enablers of Europe s transition into a new energy age. Figure 1.5 displays the main rationale behind the roles and benefits of stationary fuel cells in Europe s future energy landscape [3]. Figure 1.5: European energy trends, policy framework and general market conditions [3] The distributed generation can follow the specific heat and power demand of the consumer on site, whether it is coming from stationary fuel cells, gas engines or even small turbines. Operating hours can be forecasted more reliably. Fuel cell mchp systems driven by the heat demand of households have already demonstrated between 6,000 and 8,000 operating hours per year in ongoing field tests across the EU. Specific supply meets specific demand. Distributed generation produces heat and power when the consumer in question needs it whereas centralised and decentralised production from renewables occurs irrespective of actual demand. In distributed CHP generation that is heat driven, decentralised systems moreover generate constant electricity output during the heating period, when other consumers heating with electric systems especially need it (e.g. residential homes 9

12 THE IMPLEMENTATION OF EUROPEAN DIRECTIVES AND REGULATIONS: OPPORTUNITIES OR THREATS FOR FUEL CELL SYSTEMS? equipped with heat pumps). Whilst electric heating devices can put a strain on power grids in cold periods of the year, heat-driven distributed CHP systems like stationary fuel cells consume less grid power during this period and, moreover, feed surplus electricity into the system for everyone else to take up [3]. These benefits could lead to a postponement or lowering of investments in the increase of the capacity demand of electricity grids. The global policy debate on fuel cells takes place in the greater context of the transition to new energy systems that are more sustainable and more efficient. Alternative energies have become increasingly important in the latest years, attracting more focus from policy makers. As renewable energy sources such as wind and solar are intermittent in nature, policy makers are focusing more and more on developing alternative and continuously available methods for power and heat generation. In this context, fuel cells have captured a rising share of interest because of their potential of being a highly efficient, reliable and low-emission source of energy. Policy makers and technology providers have begun exploring the benefits of stationary fuel cells and are increasingly pushing towards commercialization [3]. Policy support for fuel cell technology in Europe has been quite conservative compared to other countries. However, the EU's interest in and political commitment to fuel cells has gained momentum recently. EUinstigated support of the technology currently comprises grants for research and development as well as different demonstration projects to gauge the feasibility of commercialization. For example, the EU has renewed its commitment to funding further research and development of fuel cells and hydrogen technologies under the new multiannual financial framework The FCH JU 2 1 has nearly 650 million EUR in grant money at its disposal over this period 48% of which is dedicated to energy topics, including stationary fuel cells. All in all, the European diffusion projects remain smaller in size compared to their international peers, which reflects some hesitance regarding the future of fuel cells compared to other alternative energy technologies. Furthermore, the technological know-how and number of fuel cell providers in Europe is still lower than overseas, due to the inexistence of comparable supporting schemes in the EU. As a result, European players in the fuel cell industry are at an earlier development stage and therefore likely to be less competitive. By funding the ene.field project, European policy makers have taken a concrete step towards commercialization of stationary fuel cells at least in the residential segment for fuel cell mchp systems [3]. In addition there is a follow-up project related to the ene.field project which is called PACE. The projects deals with the large scale demonstration of mchp fuel cells. The starting date was on and the ending will be on The total project budget is EUR and EUR 33,932, are contributed from the FCH JU. Figure 1.6 includes some targets and key points of the EU-project:

13 FEL! ANVÄND FLIKEN START OM DU VILL TILLÄMPA ÜBERSCHRIFT 1 FÖR TEXTEN SOM SKA VISAS HÄR. Figure 1.6: targets and key points of the EU-project PACE [46] PACE aims to install more than 2,500 FC mchp, thus enabling several thousand consumers to actively contribute to Europe s energy transition. The project will unlock the market for FC mchp large scale uptake preparing the supply chain and working with policymakers in selected member states to promote a successful transition to volumes in the order of 10,000 units/year post The FC products in the PACE project should be smart grid ready and will be able to run on renewable fuels. Ene.field and now PACE are the largest European deployment of FC mchp energy solutions to date, contributing to advances in quality of the products and opening new markets for further commercialisation activities. [46] 1.4 Critical challenges to overcome Although experts are expecting commercialization within the next view years, there are still a few barriers and critical challenges to overcome to enable a large deployment. The commercialization outlook set in the previous section is not guaranteed. According to [12], key stakeholders indicated five critical challenges that need to be overcome in order to be successful: Commercialization rate: The expected date of commercialization has systematically fallen behind promises in the last years. Although the influence of the financial crisis and usual setbacks should not be neglected, many stakeholders do worry that the time for commercialization is now or never. Missing a credible and accurate time path is also a risk in attracting and retaining investors trust. Some stakeholders indicate that large companies with a widespread portfolio of R&D activities might deprioritize or abandon FC&H, if the industry does not mature in line with expectations. 11

14 THE IMPLEMENTATION OF EUROPEAN DIRECTIVES AND REGULATIONS: OPPORTUNITIES OR THREATS FOR FUEL CELL SYSTEMS? 12 Infrastructure: In the mobility segment, fuel cell vehicles fully depend on a widespread fuelling infrastructure to attract possible customers. This poses the well-known chicken and egg problem: energy and fuel companies will invest only if there is a sizeable market of fuel cell electric vehicles (FCEVs) owners, and car manufacturers will produce FCEVs at scale only if there is the necessary infrastructure. These problems can be solved by cohesive, coalition-led activities, but this is by no means an easy route. Research: Beneficiaries and respondents mentioned that R&D is vital for commercialization, and especially for domestic and commercial CHP. The majority of the research along various parts of the supply chain is done by small companies. These companies hinge on national and European funds and grants to finance their activities. The financial crisis might put this support for sustainable fuel cell and hydrogen technology at risk. The respondents also mentioned that the research focus and the quality of these companies do not always correspond with the priorities of companies further down the value chain, which limits the impact of the R&D done. Competitions from other regions and technologies: Respondents say that the US and Asia have been more successful in bringing fuel cell and hydrogen products to market. Forklifts applications are introduced in the US, while Japan has a very successful ENE Farm project. Although the majority of mobility-related hydrogen activities occur in Europe, many key stakeholders stated that the European industry sector should be careful that the nucleus of knowledge development does not permanently shift out of Europe. Public acceptance: The press coverage on fuel cell and hydrogen technologies is limited to the perspective provided by industry players and, to this date, has not received widespread public attention. Although the arguments put forward progressively indicate a preference for fuel cells, the opinion makers are not yet pronounced in their stance towards hydrogen. Once commercialization is near, public awareness and acceptance will need to be managed very carefully. The 2013 Technology Map of the European Strategic Energy Plan [11], too, indicates critical barriers to be overcome in order to ensure a large scale deployment of fuel cell and hydrogen technologies. Generally it can be said that fuel cell and hydrogen technologies must compete with well-established incumbent technologies and related infrastructures. Consequently, the financial risk for early movers is high and a lack of cash flow during the first phase of deployment is to be expected. The fuel cell and hydrogen sector is dispersed across different activity areas (energy, transport, industry, residential), actors and countries, which hampers the build-up of critical mass needed for self-sustained commercial activity. Fuel cell and hydrogen technologies are insufficiently covered in education curricula, which may also result in incorrect safety perception and low awareness of societal benefits. The current regulations, codes and standards do not adequately reflect real-world use of FCH technologies and are not harmonised between the different countries. Apart from the critical challenges and barriers, also some key solutions are suggested in relevant literature [12][11][13]. One of the proposed key solutions to overcome the mentioned barriers and critical challenges is an appropriate, harmonised framework in terms of policy, standards and regulations. Alongside direct and indirect financial mechanisms, innovation needs to be pushed by a favourable regulatory framework. Experience especially in the renewable sector has demonstrated that long-term political and regulatory perspectives create

15 FEL! ANVÄND FLIKEN START OM DU VILL TILLÄMPA ÜBERSCHRIFT 1 FÖR TEXTEN SOM SKA VISAS HÄR. the right stimulus for market-uptake including private investments. Clear political direction and commitment, for example in the form of binding targets and broad integration in EU energy and climate policies, proved to be instrumental in retaining investors trust. In view of the long-term horizon and the high pay-off in terms of contribution to EU policy goals, public support is and will remain necessary to help in reducing industry development times and offsetting first mover disadvantages. Therefore, a purpose-oriented coherent framework consisting of tailored and time-phased actions, policies and incentives targeting public and private market actors is needed. 13

16 THE IMPLEMENTATION OF EUROPEAN DIRECTIVES AND REGULATIONS: OPPORTUNITIES OR THREATS FOR FUEL CELL SYSTEMS? 2 Policy framework in the EU In 2011, the European Commission proposed the Europe 2020 flagship initiative for a resource-efficient Europe and within this framework is now putting forward a series of long-term policy plans in areas such as transport, energy and climate change. The present report focuses on energy-related EU directives and regulations. The following five directives have been considered relevant for the market introduction of fuel cell systems: Directive on the indication by labelling and standard product information of the consumption of energy and other resources by energy related products (LD) Directive for establishing a framework for the setting of ecodesign requirements for energy-related products (EDD) Directive on the energy performance of buildings (EPBD) Directive on energy efficiency (EED) Directive on the promotion of the use of energy from renewable sources (RESD) Directive 2009/73/Ec on the common rules for the internal market in natural gas Directive 2009/72/EC on the common rules for the internal market in electricity As some of the above mentioned directives have to be applied throughout the EU on the basis of Regulations, it seems useful to recall the difference between EU regulations and EU directives in general: EU Regulation A "Regulation" is a binding legislative act. It must be applied in its entirety across the EU. For example, when the EU wanted to protect the names of agricultural products coming from certain regions, the Council adopted a Regulation. 2 An energy related example for a EU regulation would be the energy labelling for products (see chapter 2.1.1). EU Directive A "Directive" is a legislative act that sets out a goal that all EU countries must achieve. However, it is up to the individual countries to decide how. In the following chapter, the selected Directives will be descripted briefly and relevant articles within the directives will be identified. The possible impact of the arising regulations on the market uptake will be derived. As there is a certain implementation leeway of directives between the different member states, a questionnaire has been developed (see chapter 10.1) in order to assess the implementation of the directives in specific EU member states. The questionnaire has been sent out to country representatives within the IEA AFC Annex Based on the input received from the country representatives as well as on relevant literature, the upcoming opportunities or threats of EU directives for the market introduction of fuel cell systems have been derived. 2 (Dec 14 th, 2015)

17 FEL! ANVÄND FLIKEN START OM DU VILL TILLÄMPA ÜBERSCHRIFT 1 FÖR TEXTEN SOM SKA VISAS HÄR. 2.1 Relevant EU Directives and Regulations In the following sections, selected EU directives and regulations will be described and analysed which are expected to have an impact on the market introduction of fuel cell systems Directive on the indication by labelling and standard product information of the consumption of energy and other resources by energy related products The Labelling Directive 4 establishes a framework for the harmonization of national measures regarding information provided for end-user, particularly by means of labelling and standard product information, on the consumption of energy and, where relevant, other resources during use, as well as supplementary information concerning energy-related products, thereby allowing end-users to choose more efficient products. The Labelling Directive shall apply to energy-related products which have a significant direct or indirect impact on the energy consumption and resources. In order to specify the labelling requirements of [4] for various product groups, different regulations apply. E.g. for micro CHP systems the EU Regulation No. 811/2013 Space heaters [5] is relevant. The regulation establishes requirements for the energy labelling of and the provision of supplementary product information on space heaters and combination heaters with a rated heat output 70 kw, packages of space heater 70 kw, temperature control and solar device and packages of combination heater 70 kw, temperature control and solar device. As regards relevant energy and cost savings for each type of heater, this regulation should introduce a new labelling scale from A++ to G for the space heating function of boiler space heaters, cogeneration space heaters, heat pump space heaters, boiler combination heaters and heat pump combination heaters. While the labels A to G cover the various types of conventional boilers not combined with cogeneration or renewable energy technologies, classes A+ and A++ should promote the use of cogeneration and renewable energy sources Anticipated impact of the Labelling Directive In context with the Labelling Directive, the regulation for Space heaters [5] is relevant for the market uptake of CHP systems. As mentioned above, when a regulation is implemented directly into national law, it complies with the implementation within the EU s Member States (MS). Since 26 th September 2015, suppliers placing space heaters on the market and/or putting them into service shall ensure that a printed label is provided for each space heater conforming to the seasonal space heating energy efficiency classes. For example, the label for cogeneration space heaters is illustrated in the following Figure Directive 2010/30/EU on the indication by labelling and standard product information of the consumption of energy and other resources by energy related products,

18 THE IMPLEMENTATION OF EUROPEAN DIRECTIVES AND REGULATIONS: OPPORTUNITIES OR THREATS FOR FUEL CELL SYSTEMS? Figure 2.1: Label for cogeneration space heaters [5] The following information shall be included in the label: I II III IV V VI VII supplier s name or trade mark supplier`s model identifier the space heating function the seasonal space heating energy efficiency class; the head of the arrow containing the seasonal space heating energy efficiency class of the cogeneration space heater shall be placed at the same height as the head of the relevant energy efficiency class the rated heat output, including the rated heat output of any supplementary heater, in kw, rounded to the nearest integer the sound power level (indoors) in db, rounded to the nearest integer the additional electricity generation function 16

19 FEL! ANVÄND FLIKEN START OM DU VILL TILLÄMPA ÜBERSCHRIFT 1 FÖR TEXTEN SOM SKA VISAS HÄR. The seasonal space heating energy efficiency class of a heater 5 shall be determined on the basis of its seasonal space heating energy efficiency as set out in the following Table 2.1. Table 2.1: Seasonal space heating energy efficiency classes of heaters, with the exception of low-temperature heat pumps and heat pump space heaters for low temperature application [5] SEASONAL SPACE HEATING ENERGY EFFICIENCY CLASS SEASONAL SPACE HEATING ENERGY EFFICIENCY ηs in % A +++ ηs 150 A ηs < 150 A + 98 ηs < 125 A 90 ηs < 98 B 82 ηs < 90 C 75 ηs < 82 D 36 ηs < 75 E 34 ηs < 36 F 30 ηs < 34 G ηs < 30 In the following Table 2.2, the labelling of a fuel-cell-based mchp heating unit is compared with the labelling of a state-of-the-art gas condensing boiler: Table 2.2: Example: Labelling of heating systems [28] VIESSMANN VITOVOLAR 300-P VIESSMANN VITODENS 222-W Technology PEM Fuel Cell heating unit Gas condensing boiler Thermal output [kw] 1 (20) Electrical output [kw] Electrical efficiency [%] 37 - Total efficiency [%] Label A ++ A 5 With the exception of low-temperature heat pumps and heat pump space heaters for low-temperature application. 6 The fuel cell heating unit is equipped with a gas condensing peak load boiler. Together with the peak load boiler the heating unit can provide a thermal output of 20 kw. 17

20 THE IMPLEMENTATION OF EUROPEAN DIRECTIVES AND REGULATIONS: OPPORTUNITIES OR THREATS FOR FUEL CELL SYSTEMS? The above mentioned example is based on two Viessmann products but it can be assessed that also for other manufacturers a similar result will appear, if a fuel-cell-based mchp heating unit is compared with a state-ofthe-art gas condensing boiler (with almost no further possibility to improve). Generally, it can be said that the labelling makes the energy efficiency of various products more visible for costumers. Promoting the use of cogeneration with the label classes A + and A ++ (even A+++ will be possible after the introduction of this class in 2019) is expected to have a positive impact on the market uptake of fuel cell systems and encourage costumers investing in these systems. But is has to be added that not only fuel cells are labelled in classes A+, A++ respectively A+++ (from 2019), but also heat pumps, systems with solar contribution, etc. will be labelled equally. An impact to the fuel cell market is therefore depending mainly on the economic feasibility which means on subsidies on various renewable technologies and their relations. The advantage for fuel cell systems contrary to heat pumps and solar devices is the ease of installation as long as there is a connection to the gas grid Directive for establishing a framework for the setting of ecodesign requirements for energy-related products The Ecodesign Directive 7 establishes a framework for the setting of community ecodesign requirements for energy-related products with the aim of ensuring the free movement of such products within the internal market. The directive provides a framework for the setting of minimum requirements which the energy-related products must fulfil in order to be placed on the market (and/or put into service). It contributes to a sustainable development by increasing energy efficiency and the level of protection of the environment, while at the same time increasing the security of energy supply. In order to specify the ecodesign requirements of [6] for various product groups, there are different regulations. For micro CHP systems, the EU Regulation No. 813/2013 Space heaters and combination heaters [7] is relevant and will be described in the following. The regulation establishes ecodesign requirements for the placing on the market (and/or putting into service) of space heaters and combination heaters with a rated heat output 400 kw, including those integrated in packages of space heater, temperature control and solar device or packages of combination heater, temperature control and solar device. The ecodesign requirements arising from the regulation should harmonise energy consumption, sound power level and nitrogen oxides emission requirements for space heaters and combination heaters throughout the Union, thus helping to make the internal market operate better and to improve the environmental performance of these products Anticipated impact of the Ecodesign Directive In context with the ecodesign Directive, the regulation for Space heaters and combination heaters [7] is relevant for the market uptake of CHP systems. As mentioned above, a regulation is implemented directly into national law, meaning that the Regulation is implemented the same way within the EU s member states. 7 Directive 2009/125/EC establishing a framework for the setting of Ecodesign requirements for energy related products,

21 FEL! ANVÄND FLIKEN START OM DU VILL TILLÄMPA ÜBERSCHRIFT 1 FÖR TEXTEN SOM SKA VISAS HÄR. Since 26 September 2015, cogeneration space heaters shall meet the ecodesign requirements regarding energy consumption represented through the seasonal space heating energy efficiency (see Table 2.3). From 26 September 2018 emissions of nitrogen oxides, expressed in nitrogen dioxide, of cogeneration space heaters shall not exceed the values in the following Table 2.3. Table 2.3: Minimum ecodesign requirements for cogeneration space heaters [7] SEASONAL SPACE HEATING ENERGY EFFICIENCY ηs in % NITROGEN OXIDES EMISSIONS in mg/kwh *) **) ***) ****) *) cogeneration space heaters equipped with external combustion using gaseous fuels **) cogeneration space heaters equipped with external combustion using liquid fuels ***) cogeneration space heaters equipped with an internal combustion engine using gaseous fuels ****) cogeneration space heaters equipped with an internal combustion engine using liquid fuels If the above mentioned minimum requirements cannot be fulfilled from a specific product it is not possible to place the specific product on the market. The ecodesign requirements are the bases for the labelling of the products (see chapter ). The better the ecodesign parameters of a product, the better the labelling of a product. Generally it can be anticipated that the requirements will encourage efficient products, whereas inefficient products will sooner or later disappear from the market. It can be assumed that the high efficiency of fuel cell based CHP systems lead to a fulfillment of the present (and future) ecodesign requirements. However, the present minimum requirements leave a variety of technologies on the market, even such as conventional oil and gas condensing boilers. The effect of this directive is just the switch from non-condensing to condensing technology. In the upcoming chapters (2.1.3 to 2.1.7) the below listed directives and relevant articles will be described: Directive on the energy performance of buildings (EPBD) Directive on energy efficiency (EED) Directive on the promotion of the use of energy from renewable sources (RESD) Directive 2009/73/Ec on the common rules for the internal market in natural gas Directive 2009/72/EC on the common rules for the internal market in electricity The anticipated impact of EU directives depend on the specific national implementation in the different member states. Therefore the specific impact for different countries will be analysed in a second step (see chapter 2.2). 19

22 THE IMPLEMENTATION OF EUROPEAN DIRECTIVES AND REGULATIONS: OPPORTUNITIES OR THREATS FOR FUEL CELL SYSTEMS? Directive on the energy performance of buildings The Energy Performance of Buildings Directive 8 promotes the improvement of the energy performance of buildings within the Union, taking into account outdoor climatic and local conditions, as well as indoor climate requirements and cost-effectiveness. The EPBD lays down requirements as regards: The framework for a methodology for calculating the integrated energy performance of buildings and building units; The application of minimum requirements to the energy performance of new and existing buildings and building units; National plans for increasing the number of nearly zero-energy buildings; The energy certification of buildings; Regular inspection of heating and AC systems in buildings; and Independent control systems for energy performance certificates and inspection reports. In the following, articles of the EPBD possibly relevant for the market uptake of cogeneration systems will be described: Article 4 Setting of minimum energy performance requirements According to Article 4 of the EPBD, the member states shall take the necessary measures to ensure that minimum energy performance requirements for buildings or building units are set with a view to achieving cost-optimal levels. The energy performance shall be calculated in accordance with the methodology referred to in article 3. Cost-optimal levels shall be calculated in accordance with the comparative methodology framework referred to in article 5, once the framework is in place. Article 6 New buildings Member states shall take the necessary measures to ensure that new buildings meet the minimum energy performance requirements set in article 4. Member States shall ensure that the technical, environmental and economic feasibility of high-efficiency alternative systems such as cogeneration are taken into account. Article 7 Existing buildings Member states shall take the necessary measures to ensure that, when buildings undergo major renovations, the energy performance is upgraded in order to meet the minimum energy performance requirements set in article 4. Article 8 Technical building systems Member states shall, for the purpose of optimising the energy use of technical building systems, set system requirements in respect of the overall energy performance, the proper installation, and the appropriate dimensioning, adjustment and control of the technical building systems which are installed in existing and new buildings. System requirements shall be set for new, replacement and upgrading of technical building systems. These requirements shall be applied in so far as they are technically, economically and functionally feasible. 8 Directive 2010/31/EU on the energy performance of buildings,

23 FEL! ANVÄND FLIKEN START OM DU VILL TILLÄMPA ÜBERSCHRIFT 1 FÖR TEXTEN SOM SKA VISAS HÄR. Article 9 Nearly zero-energy buildings Member states shall ensure that by 31 st December 2020, all new buildings are nearly zero-energy buildings. Therefore member states shall draw up national plans for increasing the number of nearly zero-energy buildings Directive on energy efficiency The Energy Efficiency Directive 9 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 headline target on energy efficiency and to pave the way for further energy efficiency improvements beyond that date. Furthermore, the directive provides a framework for the establishment of indicative national energy efficiency targets for In the following, articles of the EED possibly relevant for the market uptake of cogeneration systems will be described: Article 7 Energy efficiency obligation schemes Each member state shall set up an energy efficiency obligation scheme in order to ensure that energy distributers and/or retail energy sales companies designed as obligated parties achieve a certain cumulative end-use energy savings target by 31 December Article 14 Promotion of efficiency in heating and cooling By 31 December 2015, member states shall carry out and notify to the Commission a comprehensive assessment of the potential for the application of high-efficiency cogeneration and efficient district heating and cooling. Moreover, the member states shall adopt policies which encourage the due taking into account at local and regional levels of the potential of using efficient heating and cooling systems, in particular those using highefficiency cogeneration. Article 15 Energy transformation, transmission and distribution The member states shall ensure that The transmission and distribution of electricity from high-efficiency cogeneration is guaranteed; Access to the grid of electricity from high-efficiency cogeneration is guaranteed; Priority dispatch of electricity from high-efficiency cogeneration is being provided. Article 24 Review and monitoring of implementation By 30 April 2014, and every three years thereafter, member states shall provide and submit National Energy Efficiency Action Plans. The National Energy Efficiency Action Plans shall cover significant energy efficiency improvement measures and expected and/or achieved energy savings in view of achieving the national energy efficiency targets. Member states shall submit to the Commission each year statistics on national electricity and heat production from high- and low-efficiency cogeneration in relation to total heat and electricity production. Moreover annual statistics on cogeneration heat and electricity capacities and fuels for cogeneration, and on district heating and 9 Directive 2012/27/EU on energy efficiency,

24 THE IMPLEMENTATION OF EUROPEAN DIRECTIVES AND REGULATIONS: OPPORTUNITIES OR THREATS FOR FUEL CELL SYSTEMS? cooling production and capacities, in relation to total heat and electricity production and capacities should also be submitted. In addition to this member states shall also submit statistics on primary energy savings achieved by application of cogeneration Directive on the promotion of the use of energy from renewable sources The directive on the promotion of the use of energy from renewable sources 10 establishes a framework for the production of energy from renewable sources and the promotion of its use. The main goal is to achieve a 20% share of renewable energy sources in the EU s gross final energy consumption by Each member state has a target calculated according to the share of energy from renewable sources in its gross final consumption for The share of renewable energy sources used in the transport sector must be at least 10% of the final energy consumption in the sector by Article 4 National renewable energy action plans Each member state is obliged to establish a national renewable energy action plan. The national renewable energy action plan shall set out the national targets for the share of energy from renewable sources consumed in transport, electricity and heating and cooling in 2020, taking into account the effects of other policy measures relating to energy efficiency on final consumption of energy. In other words: the impact of the Renewable Energy Source Directive on the market uptake of fuel cell systems depends on the specific role of fuel cells in the renewable action plan of a country (see chapter 2.2.) Directive 2009/73/EC on the common rules for the internal market in natural gas The gas directive 2009/73/EC provides a framework for the internal market in natural gas including rules for the tariffs for the usage of the gas infrastructure, like transmission and distribution grids. As long as there is no comprehensive hydrogen economy in place, fuel cells are fuelled by natural gas, thus the provisions stated in the gas directive do have an impact on the market uptake of fuel cells. Currently in a lot of EU-MS a mature gas market is in place and the potential to increase the gas consumption is very limited. On the contrary, demand is decreasing, hence the capacity of the grids is not used to the full extend, subsequently the number of cost bearing units is lowered as well whereas the costs remain stable or are even increasing. Consequently the transportation costs per gas volume unit are increasing which leads according to the supply and demand approach, taking the price elasticity into consideration - to a lower gas demand in addition to the effects of increasing energy efficiency and the strong competition with district heating systems. Natural gas as the cleanest of the fossil fuels will be consumed as transition energy carrier - for a long period of time at significant volumes in the space heating - and industry sector and potentially in the transport sector. In order to employ the cleanest of the fossil fuel energy carriers and at the same time increase the energy efficiency - in comparison to combined natural gas heaters- fuel cells should be installed. To facilitate such an approach a fuel cell supportive environment is necessary which would: Increase the gas consumption by replacing other fossil fuels Lower the GHG-emissions in comparison to the application of other fossil fuels 10 Directive 2009/28/EC on the promotion of the use of energy from renewable sources,

25 FEL! ANVÄND FLIKEN START OM DU VILL TILLÄMPA ÜBERSCHRIFT 1 FÖR TEXTEN SOM SKA VISAS HÄR. Back a decentralised electricity generation besides the electricity production with RES as well as in areas where RES cannot be employed because of the prevailing framework conditions. It can be expected that predominantly gas fuelled combination heaters and gas boilers would be replaced or complemented by fuel cell systems. Also oil - and coal fired heating systems could be replaced by fuel cell systems whereas in new appartments fuel cell systems could become some kind of standard equipement besides district heating and heat pumps. In case of a proper infrastructure tariffs-structure, strong incentives could be generated for the market introduction and further significant market penetration (part of the business modell) of fuel cells Directive 2009/72/EC on the common rules for the internal market in electricity Because of the advancing decentralisation of the generation of electricity, accelerated among others by fuel cells, the share of the commodity electricity, generated by the final consumers, will increase. Subsequently, the amount of the electricity transported to the final customers via the public grid will decrease if the electricity consumption doesn t increase stronger than the amount of electricity generated by the final customers. A lower quantity transported to the final customer in comparison to the status quo entails a lower amount of cost bearing units, thus the specific transportation cost would increase in order to cover the costs including a reasonable profit - of a efficiently operating transmission and or distribution system operator. In addition, crosssubsidisation of those final customers, who consume their by own facilities generated electricity, would occur at least temporary. In the mid and lon term there might be positive impacts on the size (lower capacity) of the electricity grid. These benefits could lead to a postponement or lowering of investments in the increase of the capacity demand of electricity grids. Therefore the impacts on the tariff structure, caused by decentralised generation of electricity, have to be taken into consideration. 2.2 Implementation of EU Directives in different Member States In the following, the specific implementation of EU directives in different member states and their anticipated impacts on the market uptake of fuel cell systems will be described. The description is based on the input received from the questionnaire session (see chapter 10.1) as well as on relevant laws, literature and reports Austria Directive on the energy performance of buildings In Austria, Energy Performance Certificates (EPCs) have been issued since 1998 in some of the Austrian Provinces ( Länder ), using the space heating demand (referring only to the building envelope) as a central element for the definition of performance of the building. As the regulations vary widely among the nine Länder, the implementation of the EPBD offered the opportunity to start a harmonisation process within Austria. This meant developing a common calculation methodology and implementing further elements like heating, ventilation and air-conditioning systems. The building regulations in Austria fall under the jurisdiction of the nine Länder. The Austrian Institute of Construction Engineering (OIB: was assigned to manage the harmonising process of the 23

26 THE IMPLEMENTATION OF EUROPEAN DIRECTIVES AND REGULATIONS: OPPORTUNITIES OR THREATS FOR FUEL CELL SYSTEMS? implementation of the EPBD in 2006 in the provinces. A working group of representatives of the nine provinces was authorised to work and agree on the common methodology. In this way the OIB Directives 11 serve as the basis for the harmonisation of building regulations and are used by the Länder for this purpose. The Länder agreed on using the four following indicators to describe the overall energy performance of a building which are defined in the OIB Directive 6 (regarding energy saving and heat retention of both residential and non-residential buildings): Space heating demand (HWB) Energy performance factor (f GEE) Primary energy demand (PEB) CO 2 emissions Based on these four indicators, a national plan for increasing the number of nearly zero-energy buildings was designed. In short, the Austrian way to define nearly zero-energy buildings (NZEBs) is to set a combination of four different main indicators, which, all in all, result in very energy efficient buildings, taking into account a wellinsulated building envelope (reflected in HWB), the energy efficiency (reflected in f GEE), environmental friendly technical systems (reflected in PEB) and climate protection (reflected in CO 2 emissions). Based on the implementation of the EPBD in Austria, the following possible impacts on the market uptake of fuel cell systems can be derived: The space heating demand (referring only to the building envelope) was the central element for the definition of requirements before the implementation of the EPBD. Through the implementation of the EPBD, the efficiency of the heating systems became more and more part of the requirements. This leads to an encouragement of installing high efficient heating systems like CHP systems (incl. fuel cells). According to article 4 (EPBD), the member states shall take the necessary measures to ensure that the minimum energy performance requirements for buildings or building units are set with concerning achieving cost-optimal levels. On this point it has to be stated that presently, fuel-cell-based mchp systems are not used in Austrian residential and non-residential buildings. So currently they do not contribute to reaching the cost-optimal level of the energy performance of buildings. In this respect, high investment costs and the lack of available subsidies are considered as the main barrier for the market uptake. In addition to the lack of financial attractiveness, presently it is not possible in Austria to receive an energy performance certificate (EPC) for buildings having a mchp system. The implementation of the EPBD requires issuing an energy performance certificate (EPC) for the building permits and for the buildings being sold or rented. This means a regulative barrier for investors willing to invest in a fuel-cell-based mchp system Directive on energy efficiency According to the Austrian annual progress report on energy efficiency [18], the implementation of the Energy Efficiency Directive can be summarized as follows

27 FEL! ANVÄND FLIKEN START OM DU VILL TILLÄMPA ÜBERSCHRIFT 1 FÖR TEXTEN SOM SKA VISAS HÄR. The directive on energy efficiency is implemented by the Austrian Energy Efficiency Act ( Energieeffizienzgesetz ). The substantive aim of the Federal Energy Efficiency Act is to implement the directive on energy efficiency and the closely related promotion of energy efficiency measures. The Federal Energy Efficiency Act was adopted on 9 July 2014 by the National Council (Nationalrat, i.e. the Lower House of the Austrian Parliament) with the required constitutional majority. After having passed the Federal Council (Bundesrat, i.e. the Upper House of the Austrian Parliament), it was published in the Federal Law Gazette on 11 August Indirectly, this law also aims to improve security of supply by lowering energy imports, increase the proportion of renewable energy in the energy mix and bring about a reduction in emissions. The Energy Efficiency Act seeks to bring about an improvement in the relationship between energy input and output through more efficient use of energy, and raise awareness of the need for the efficient use of energy. The Energy Efficiency Act sets a target of final energy consumption not exceeding 1,050 PJ by This roughly means stabilising final energy consumption on the 2005 level. The act also sets a cumulative energy efficiency target of 310 PJ. These targets are to be reached by means of the supplier obligation (cumulatively 159 PJ) and what are referred to as strategic energy efficiency measures (cumulatively 151 PJ). These measures include domestic environmental subsidies, renovating buildings to improve their energy efficiency, etc. Energy saving obligation scheme for energy suppliers Energy suppliers who supply more than 25 GWh to Austrian end consumers must demonstrate that they have carried out energy efficiency measures equivalent to 0.6% of the total energy they supplied the forgoing year at their own or others' end customers. Measures count as energy efficiency measures if they improve the energy input/output ratio and can, on the basis of an attestation, be attributed to the energy supplier. For example, if an energy supplier supplied 50 GWh to Austrian end consumers in 2014, it must, in 2015, demonstrate energy efficiency measures amounting to 0.3 GWh. 40% of the measures must be implemented in the household sector. The national energy efficiency monitoring body verifies the fulfilment of this obligation. Energy audit obligation The Energy Efficiency Act requires large (energy consuming) businesses to implement an energy management system or to carry out an energy audit every four years. Federal energy saving obligation The Federal Government has committed to carry out energy efficiency measures amounting to 48.2 GWh in all heated or cooled buildings in Austria that are owned and occupied by the Austrian government between 1 st January 2014 and 31 st December This equates to an annual renovation rate of 3%. However, the Federal Government is not obliged to limit itself to thermal renovation measures: improvements in facility management, changes to behaviour of building users, savings through energy saving contracting etc. are also accepted. This should ensure that the target is met in the most efficient and cost-effective way possible. With regard to buildings owned by the Federal Real Estate Company and used by the Federal Government, the Federal Government together with the Federal Real Estate Company is to carry out energy efficiency measures amounting to 125 GWh in the period from 1 st January 2014 to 31 st December The Federal Government, in cooperation with the Federal Real Estate Company, is thus making an exemplary contribution to improving Austria's final energy consumption in the area of public buildings. One main pillar of the Energy Efficiency Directive is the promotion of efficiency in heating and cooling (Article 14). Therefore the member states shall carry out and notify to the Commission a comprehensive assessment of 25

28 THE IMPLEMENTATION OF EUROPEAN DIRECTIVES AND REGULATIONS: OPPORTUNITIES OR THREATS FOR FUEL CELL SYSTEMS? the potential for the application of high-efficiency cogeneration and efficient district heating and cooling. Corresponding to the Austrian National Energy Efficiency Action Plan 2014 [20], the comprehensive assessment of the potential of high-efficiency cogeneration is currently under procession. According to article 14, the member states shall adopt policies which encourage the due taking into account of the potential of using efficient heating and cooling systems in particular those systems using high-efficiency cogeneration. Therefore the Austrian CHP Act provides investment grants for new CHP plants and subsidies for the operation of existing CHP plants for the supply of public district heating. The mentioned investment grants shall apply to CHP systems with an electrical power output of over 100 kw. Until 2020, an annual budget of 12 million EUR will be provided. Table 2.4: Investment grants for CHP systems [16] ELECTRICAL POWER [KW] GRANTS [ /KW] 100 1, ,000 5, ,000 20, , , >100, In addition to the investment grants of the Austrian CHP Act there is the environmental subsidies programme for enterprises. Highly efficient CHP plants based on natural gas or LPG are subsidized within this programme. This programme aims at CHP systems with an electrical power output of maximum 100 kw. Some of the key requirements in order to receive the investment grants are listed below: The generated power must be utilized within the company by at least 80%. The investment grants are only eligible in existing buildings. Systems in new constructions cannot be subsidized. Only CHP systems in areas without access to a district heating grid can receive investment grants. The investment grants are limited to max. 675 /kw el. Article 15 refers to Energy transformation, transmission and distribution. In this context, the member states shall ensure that the transmission and distribution of electricity from high-efficiency cogeneration is guaranteed as well as the access to the grid of electricity from high-efficiency cogeneration. Furthermore a priority dispatch of electricity from high-efficiency cogeneration should be provided. The transformation, transmission and distribution of energy in Austria is regulated by the Electricity Industry and Organization Act (ElWOG) 12. Corresponding to the ElWOG, the transmission and distribution of CHP electricity and the grid access is guaranteed. In the case of insufficient capacity for interconnections, the electricity from highly efficient CHP must be treated as a priority. 12 Electricity Industry and Organization Act,

29 FEL! ANVÄND FLIKEN START OM DU VILL TILLÄMPA ÜBERSCHRIFT 1 FÖR TEXTEN SOM SKA VISAS HÄR. In article 24 of the Energy Efficiency Directive the member states are asked to submit to the Commission each year statistics on national electricity and heat production from cogeneration (see Table 2.5). Table 2.5: Statistical indicators heat and electricity generation in Austria [18][21][22] Electricity generation: thermal power generation [ktoe] Electricity generation: combined heat and power plants [ktoe] Heat generation: thermal power generation [ktoe] Heat generation: combined heat and power plants [ktoe] 1, , ,097 1,185 1,240 1,225 In Austria the average ( ) share of CHP electricity generation of the total thermal electricity generation is 37.4%. The share of CHP heat generation of the total thermal power generation is 54.0%. Along with the implementation of the Energy Efficiency Directive support mechanisms to encourage CHP systems including fuel cell based CHP systems have been launched in Austria (e.g. investment grants see Table 2.4). The market uptake of fuel cell systems can benefit from these mechanisms Directive on the promotion of the use of energy from renewable sources The impact of the Renewable Energy Sources Directive depends on the respective national renewable energy action plans. The 2010 National Renewable Energy Action Plan for Austria [17] presents measures to achieve an increase to 34%, by 2020, of renewables as a share of gross energy consumption. Based on the National Renewable Energy Action Plan for Austria, the following measures in context with the market uptake of fuel cell systems can be highlighted: The extension schemes for hydropower and wind, which represent the largest extension schemes for renewable energies in the next ten years, have led to corresponding preparations by system operators. In the case of insufficient capacity for interconnections for supplies exceeding control areas, a preference of transport to supply customers with electricity from RES and CHP plants on the part of implementation laws is established in order to comply with all applications to use systems. Generally, an exclusive use of support measures is provided for feed-in tariffs and investment grants. Exceptions to this include, for example, complementary incentives in the field of heat production by means of CHP plants. The Austrian Green Electricity Act provides feed-in tariffs for electricity generated from renewable sources. For electricity generated from CHP power plants a surcharge is provided. In the following Table 2.6 the feed-in tariffs for biogas-operated CHP plants are illustrated. 27

30 THE IMPLEMENTATION OF EUROPEAN DIRECTIVES AND REGULATIONS: OPPORTUNITIES OR THREATS FOR FUEL CELL SYSTEMS? Table 2.6: Feed-in tariffs for biogas-operated CHP plants [26] CAPACITY [kwel] FEED-IN TARIFF [ct./kwh] CHP SURCHARGE [ct./kwh] < > It can be assumed, that the above mentioned support mechanisms for CHP systems encourage the market uptake of fuel cell based CHP systems Anticipated impact of the implementation of EU Directives in Austria In the following section the anticipated impact of the implementation of various EU Directives on the market uptake of fuel cell systems in Austria is summarized. Through the implementation of the EPBD in Austria, the following anticipated impacts on the market uptake of fuel cell systems can be derived: The space heating demand (referring only to the building envelope) was the central element for the definition of requirements before the implementation of the EPBD. Through the implementation of the EPBD, the efficiency of the heating systems became more and more part of the requirements. This leads to an encouragement of highly efficient heating systems like CHP systems (incl. fuel cells). According to article 4 (EPBD), the Member States shall take the necessary measures to ensure that the minimum energy performance requirements for buildings or building units are set with a view to achieving cost-optimal levels. On this point it has to be stated that presently, fuel-cell-based mchp systems are no business case in Austrian residential and non-residential buildings. So they do currently not contribute to reach the cost-optimal level of the energy performance of buildings. So, within this context, high investment costs and the lack of available subsidies constitute the main barrier for the market uptake. In addition to the lack of financial attractiveness, it is presently not possible in Austria to receive an energy performance certificate (EPC) for buildings supplied by a mchp system. The implementation of the EPBD requires to issue an energy performance certificate (EPC) for - new buildings - buildings going to be sold - buildings going to be rent out This means a regulative barrier for investors willing to invest in a fuel-cell-based mchp system. The Energy Efficiency Directive requires member states to adopt policies which encourage the due taking into account of the potential of using efficient heating and cooling systems in particular those systems using high- 28

31 FEL! ANVÄND FLIKEN START OM DU VILL TILLÄMPA ÜBERSCHRIFT 1 FÖR TEXTEN SOM SKA VISAS HÄR. efficiency cogeneration. Therefore the Austrian CHP Act provides investment grants for new CHP plants and subsidies for the operation of existing CHP plants for the supply of public district heating. In context with the renewable energy Directive Austria has drawn up a National Renewable Energy Action plan. Based on this Action Plan, the following measures in context with the market uptake of fuel cell systems can be highlighted: The extension schemes for hydropower and wind, which represent the largest extension schemes for renewable energies in the next ten years, have led to corresponding preparations by system operators. In the case of insufficient capacity for interconnections for supplies exceeding control areas, a preference of transport to supply customers with electricity from RES and CHP plants on the part of implementation laws is established in order to comply with all applications to use systems. Generally, an exclusive use of support measures is provided for feed-in tariffs and investment grants. Exceptions to this include, for example, complementary incentives in the field of heat production by means of CHP plants. The Austrian Green Electricity Act provides feed-in tariffs for electricity generated from renewable sources. For electricity generated from CHP power plants a surcharge is provided. It can be assumed, that the above mentioned support mechanisms for CHP systems encourage the market uptake of fuel cell based CHP systems Directive on the common rules for the internal market in natural gas The effects, elaborated in article 2.1.6, would occur in Austria. So far Austria has not taken any incentives regarding the tariff structure in order to support the market entry, and further on strong market penetration, of fuel cells. Such a proposal (change of the tariff structure) needs intensive discussions with the regulatory authority responsible for energy, and with the transmission and even more important distribution system operators respectively their professional representation(s) Directive on the common rules for the internal market in electricity The impacts, described in article 2.1.7, would influence the specific transportation costs at transmission- and probably more significant at the distribution level. So far Austria. Has not taken serious steps in order to cope with the tariff-impacts of the increasing decentralisation regarding electricity generation. Such a step needs in analogy respectively in parallel to the discussions dealing with the tariff-structure of the gas grids intensive discussions with the regulatory authority, and with the transmission- and distribution system operators respectively their professional representation(s) Germany General policy framework and national subsidies that effect the introduction of fuel cells Within the European Union, Germany has put in place the most extensive policy support for stationary fuel cell technologies both at federal and at state level. Due to the country s decommissioning of its nuclear power programme, the demand for alternative power generation preferably from clean sources is greater than ever. Furthermore, a relatively large number of fuel cell technology providers are based in Germany and funding 29

32 THE IMPLEMENTATION OF EUROPEAN DIRECTIVES AND REGULATIONS: OPPORTUNITIES OR THREATS FOR FUEL CELL SYSTEMS? programmes help boost these companies' research and development efforts and accelerate the commercialization of stationary fuel cells [3]. To illustrate Germany s extensive policy support for stationary fuel cell technologies, the CALLUX 13 project is described below. Callux is Germany s biggest practical test for fuel cell heating systems for domestic use; the project has been launched together with partners from industry and supported by the German Federal Ministry of Transport and Digital Infrastructure. As part of the national innovation program for hydrogen and fuel cell technology, which is coordinated by NOW GmbH, the industry, together with the Ministry, is investing 75 million Euros in promoting the use of this innovative technology. In the project there are three system manufacturers involved: BAXI INNOTECH, Hexis and Vaillant, as well as five utility companies: EnBW, E.ON, EWE, MVV Energie, and VNG Verbundnetz Gas. See the key facts of the CALLUX project in Table 2.7. Table 2.7: Key facts about the CALLUX project [3] CALLUX Start: 2008 Duration: 7 years Amount: 75 Million EUR Objectives: Gain insights about market entry and long-term commercialization Collect test data for 3 million operating hours Results/Status: Measures: Deployment of 800 residential fuel cell units Testing of mchp units under real conditions Target Segment: Residential Funded by: Private, Public Production cost savings of 60% and service cost savings of 90% since million kwh electricity produced from 474 installed units in more than 5 million operating hours Key Learnings: Grant programme that analyses commercial feasibility of residential FC-mCHP systems through larger field tests and has achieved reputable results confirming commerciality of the technology Roll-out delivers the first larger sample in Europe of specific technical performance data for mchps The CALLUX project ended in November The outcome of the CALLUX project is depictured in Table 2.8. Table 2.8: The outcome of CALLUX: Eight FC-appliances are at the market [44] Company Name Fuel Cell Condensing Capacity W el/w th boiler Price (tax inclusive) funding Capacity kw th

33 FEL! ANVÄND FLIKEN START OM DU VILL TILLÄMPA ÜBERSCHRIFT 1 FÖR TEXTEN SOM SKA VISAS HÄR. Buderus (Aisin Seiki Kyocera) Junkers (Aisin Seiki Kyocera) Hexis (Viessmann) Viessmann (Panasonic) Bosch Thermotechnik Viessmann SOLIDpower BDR Thermea Elcore Vaillant LOGAPOWER BZH192IT SOFC 700/ n.a. 8,850 Cerapower C10 SOFC 700/ n.a. 8,850 Galileo 1000 from 7 to SOFC 1000/1800 N 21 22,600 10,200 Vitovalor 300 PEM- from 5.5 to 750/1000 P FC 19 19,860 9,300 SOLIDpower Bluegen SOFC 1500/600 n.a. n.a. 12,450 SOLIDpower Engen 2500 SOFC 2500/2000 n.a. n.a. n.a. Senertec Dachs PEM From 4.8 to (Baxi Innogen FC 700/ Toshiba) n.a. 8,850 Elcore Elcore 2400 HT- 18,000 to 305/ Max PEM 22,000 7,500 Vaillant FC 6. (IKTS generation Sunfire) SOFC 700/1300 n.a. n.a. n.a. Despite a couple of financial incentives, by federal and/or regional governmental instituations (e.g. project CALLUX) as well as by utilities, the breakthrough of the fuel cell systems could not yet be initiated. To give this technology a jumpstart, the Federal Government of Germany has set up a new funding programme which is called Energy Efficient Construction and Rehabilitation. It started In the following paragraph the key facts of the program will be described. What is funded: The installation of a stationary FC-appliance with a capacity of min. P el=0.25 kwel to max. P el=5.0 kwel in new or existing buildings. Who can get a funding: Private persons, for single and two family houses, but it is necessary to involve an authorised energy-expert. The application must be submitted before project start. The amount of funding: The subsidy is composed by two parts, the basic amount of 5,700 and the capacity based amount of 450 per every started 100 kw el. It is paid out after the installation is finished. Now two subsidy examples will follow: o for fuel cell Vitovalor: basic 5,700 plus capacity 8 x 450 = 3,600, in total 9,300. o for fuel cell Galileo: basic 5,700 plus capacity 10 x 450 = 4,500, in total 10,200. Requirements to get the funding: The FC must be integrated into the heat and power supply of the house. In addition with the installation of the FC a hydraulic balancing must be done and documented. The installation must be done by a certified enterprise. After the installation, the electrical efficiency must be min. 32 % and the overall efficiency min. 82 %. Another criteria to get the funding is to sign a 10 years full maintenance contract, which guarantees an electrical efficiency of not less than 26 %. [44] Another example for Germany s support of fuel cell- and combined heat and power systems is the Combined Heat and Power Act (KWK Gesetz). The key facts about this act are illustrated in Table

34 THE IMPLEMENTATION OF EUROPEAN DIRECTIVES AND REGULATIONS: OPPORTUNITIES OR THREATS FOR FUEL CELL SYSTEMS? Table 2.9: Key facts about the Combined Heat and Power Act [3] COMBINED HEAT AND POWER ACT (KWK Gesetz) Start: 2009 Duration: 11 years Amount: 8 billion EUR Objectives: Increase CHP electricity production to 25% of Germany s total amount Measures: 5.11 EUR ct./kwh with funding for 10 years per CHP system <50kW el 2.1 and 1.5 EUR ct./kwh with funding for 30,000 hours per 50 kw el 2MW el and >2MW el CHP systems Target Segment: All Funded by: Public Results/Status: During temporary interruption of funding for CHP systems in 2010, new installations decreased by around 30% Total of 95 TWh electricity produced from CHP systems (2014) Key Learnings: Tariff law that effectively incentivises the use of CHP technology by improving the business case on the revenue side for the use of such systems through monetary compensation for every unit of electricity produced In addition to the Combined Heat and Power Act, the mini-chp programme should give impulses to a widespread use of small CHP plants. In the framework of the National Climate Protection Initiative the German Environment Ministry promotes highly efficient mini-chp plants in the electrical power range up to 20 kilowatt since According to the mini-chp programme, new cogeneration plants can receive a one-time investment grant. The grants are graded according to the electric power of the plants (see Table 2.10). Table 2.10: Investment grants according to the German mini-chp programme [27] MIN. CAPACITY [kwel] MAX. CAPACITY [kwel] INVESTMENT GRANT [ /kwel] >0 1 1,900 > > > In addition to the basic grants in Table 2.10 there are bonus grants for highly efficient mini-chp systems: 32

35 FEL! ANVÄND FLIKEN START OM DU VILL TILLÄMPA ÜBERSCHRIFT 1 FÖR TEXTEN SOM SKA VISAS HÄR. Heat efficiency bonus The heat efficiency bonus is granted for mini-chp plants, which are equipped with a (second) exhaust gas heat exchanger for utilization of condensing technology and connected to a hydraulically equalized heating system. The heat efficiency bonus amounts to 25 % of the basic subsidy. Power efficiency bonus The power efficiency bonus is granted for CHP systems with a particularly high electrical efficiency. The power efficiency bonus amounts to 60% of the basic subsidy. The requirements in order to receive the additional grants (power efficiency bonus) are listed in Table Table 2.11: Additional investment grants power efficiency bonus [27] MIN. CAPACITY [kwel] MAX. CAPACITY [kwel] ELECTRICAL EFFICIENCY AT RATED OUTPUT [%] >0 1 >31 >1 4 >31 >4 10 >33 >10 20 > Directive on the energy performance of buildings In Germany the transposition of the EPBD recast is mainly through an amendment of the Energy Saving Ordinance (EnEv). Requirements concerning the energy performance of buildings in Germany have been in place since the first Thermal Insulation Ordinance in In order to meet the political needs, this law has been amended several times.[30] Since 2009 and in addition to the requirements of the Energy Saving Ordinance, the use of renewable energy for heating in new buildings has been compulsory nationwide according to the Renewable Energy Heat Act. This obligation for use of renewable energy for heating has even been expanded to certain refurbishments of existing buildings in some federal states [14]. Based on the implementation of the EPBD in Germany the following possible impacts on the market uptake of fuel cell systems can be derived: For all new buildings, a certain share of renewable energy sources to cover the energy used for the heating and domestic hot water is mandatory. The exact ratio depends on the chosen energy source and varies between 15% and 50%. Alternatively, the Renewable Energy Heat Act allows either an energy performance of 15% better than required by the Energy Saving Ordinance, or the use of district heating and combined heat and power (CHP) instead of renewable energy sources [14]. The fact that the use of CHP heating systems neutralizes the requirements regarding renewable energy sources, encourages the use of CHP systems. 33

36 THE IMPLEMENTATION OF EUROPEAN DIRECTIVES AND REGULATIONS: OPPORTUNITIES OR THREATS FOR FUEL CELL SYSTEMS? Directive on energy efficiency Even before the directive on energy efficiency was adopted, Germany had a wide range of instruments for increasing energy efficiency and already managed a visible decoupling of energy consumption and economic growth. The aim is to build on this positive development in the future. The increase in energy efficiency, with the associated energy savings, is a key pillar of the energy transition in Germany. The German government sent the European Commission an indicative national energy efficiency target and noted that [19]: Germany is assuming an average annual increase of 2.1 % in macroeconomic energy productivity from 2008 to Assuming an annual increase of 1.1 % in gross domestic product, this produces a reduction in the energyrelated share of primary energy consumption from million tonnes crude oil equivalent (Mtoe) in 2008 to Mtoe in The attainability of this reduction depends inter alia on the actual development of gross domestic product and other factors beyond our control, such as storms and changes in stock, along with the resulting composition of the German generation system in the market. This corresponds to a reduction in final energy consumption from Mtoe in 2008 to Mtoe in 2020 [19]. According to the German Energy Efficiency Action Plan [19], the promotion of cogeneration is another package of measures to increase energy efficiency. A differentiated system of measures should address CHP at various levels. Among other things, this covers the following areas: From a regulatory standpoint, combined heat and power generation is usually required for a permit for some industrial facilities and plants of a certain size (from 50 MW heat output). The necessary conditions for using local and district heating are also created on the demand side (EnEV, etc.). The cost side is affected by exemption from energy tax for high-efficiency CHP plants. There are also funding programmes for various types of investment. In the public sector, the market incentive programme to promote measures for using renewable energies in the heating market, the mini-chp programme for small/micro plants and heat networks and the investment support under the CHP Act for heat networks and heat stores. On the revenue side, the attractiveness of CHP is improved, for example, by paying a surcharge for electricity generated from CHP and exempting locally generated electricity from the EEG 14 allocation. The main instrument to promote the use of highly efficient cogeneration systems is the combined heat and power act (KWK Gesetz, keyfacts see in the above Table 2.9). To promote efficient CHP plants, the German government has introduced a CHP levy: the Act on the conservation, modernization and development of combined heat and power compensates operators for the higher cost of running cogeneration plants by means of this levy. The purpose of this Act is to make a contribution to the increase of electricity production from combined heat and power in the Federal Republic of Germany to 25% through temporary protection, the promotion of the modernization and rebuilding of combined heat and power plants, the support of the market introduction of heat networks into which heat is injected from the combined heat and power installations, in the interest of energy saving, environmental protection and of reaching the climate protection objectives of the Federal Government. The Act regulates the procurement of and compensation for power and heat combined current from power stations with combined heat and power installations on the basis of coal, lignite, waste, waste heat, biomass, gaseous and liquid fuels as well as additional fees for the building and expansion of heat 14 Renewable Energy Act 34

37 FEL! ANVÄND FLIKEN START OM DU VILL TILLÄMPA ÜBERSCHRIFT 1 FÖR TEXTEN SOM SKA VISAS HÄR. networks, provided that the combined heat and power installations and the heat networks fall within the scope of application of this act 15. The priority transformation, transmission and distribution of electricity generated by CHP plants (Article 15) is also regulated and ensured by the KWK Gesetz. Furthermore it is regulated that the grid operator has to connect the CHP plant and to pay a surcharge payment as far as the plant is certificated. Table 2.12 shows the specific surcharge tariffs and the maximal duration of the payment [25]. Table 2.12: Surcharge payment for CHP appliances, operated since [25] Additionally the plant operator gets a payment for the power feed-in. This feed-in tariff is variable and can be negotiated between the plant operator and the grid operator. In case an agreement cannot be found, the paid compensation consists of the average EEX baseload price plus the avoided network using costs [25]. These funding mechanisms lead (see Table 2.12) to an encouragement of CHP and fuel cell systems. In Article 24 of the Energy Efficiency Directive the member states are asked to submit to the Commission each year statistics on national electricity and heat production from cogeneration (see Table 2.13). Table 2.13: Statistical indicators heat and electricity generation in Germany [23] Electricity generation: thermal power generation [TWh] Electricity generation: combined heat and power plants [TWh]

38 THE IMPLEMENTATION OF EUROPEAN DIRECTIVES AND REGULATIONS: OPPORTUNITIES OR THREATS FOR FUEL CELL SYSTEMS? Heat generation: thermal power generation [TWh] Heat generation: combined heat and power plants [TWh] n.a. n.a. n.a. In Germany, the average ( ) share of CHP electricity generation of the total thermal electricity generation is 16.8%. For the heat generation with combined heat and power plants there are no data available Directive on the promotion of the use of energy from renewable sources The share of energy from renewable sources in gross final consumption of energy was 5.8% in Based on this initial value, Germany is obliged to increase its share of energy from renewable sources by 2020 to at least 18.0%. The Federal Republic of Germany assumes that the 2020 target of 18% energy from renewable sources can be achieved with national measures only [24]. The National Renewable Energy Action Plan for Germany [24] presents measures to achieve an increase to 18%, by 2020, of renewables as a share of gross energy consumption. Based on the National Renewable Energy Action Plan for Germany the following measures in context with the market uptake of fuel cell systems can be highlighted: In the electricity sector, the current Renewable Energy Act (EEG) is the basis for further development in the production of renewable energies. This also applies to the production of combined power and heating/cooling based on renewable energies. The EEG is here supplemented by the Combined Heat and Power Act (KWK Gesetz) and by emissions trading. The EEG regulates the power payment provisions with employment of renewable fuels like landfill gas, sewage gas, mine gas and biomass and therefore can contribute to a further implementation of fuel cells. The legal obligation of the network operator to connect appliances willing to feed-in is the central aspect beside the feed-in tariffs which are guaranteed for 20 years plus the year with the first feed-in. For illustration, Table 2.14 shows the basic remuneration values for electricity feed-in from biomass plants. The determining factor for the height of the remuneration is the capacity, whereby for fuel cells only biogas or liquefied biomass products come into consideration [25]. Table 2.14: Payments for installations generating electricity from biomass (Degression: 1.5%, duration: 20 years) [25] YEAR OF COMMISSIONING <150 kwel [ct./kwh] kwel [ct./kwh] 500 5,000 kwel [ct./kwh] 5 20 MWel [ct./kwh]

39 FEL! ANVÄND FLIKEN START OM DU VILL TILLÄMPA ÜBERSCHRIFT 1 FÖR TEXTEN SOM SKA VISAS HÄR. Another part is the CHP bonus in the EEG. This is particularly granted for CHP plants based on renewable energies, provided the heat is fed into a district heating network. As already mentioned under , the Renewable Energy Heat Act allows either an energy performance of 15% better than required by the Energy Saving Ordinance, or the use of district heating and combined heat and power (CHP) instead of renewable energy sources [14]. This fact could possibly encourage the use of CHP systems Anticipated impact of the implementation of EU Directives in Germany In the following section the anticipated impact of the implementation of various EU Directives on the market uptake of fuel cell systems in Germany is summarized. Within the European Union, Germany has put in place the most extensive policy support for stationary fuel cell technologies both at federal and at state level. Due to the country s decommissioning of its nuclear power programme, the demand for alternative power generation preferably from clean sources is greater than ever. Furthermore, a relatively large number of fuel cell technology providers are based in Germany and funding programmes help boost these companies' research and development efforts and accelerate the commercialization of stationary fuel cells. In addition to the present favourable framework for fuel cells in Germany the implementation of different EU directives brought further benefits for fuel cell systems: For all new buildings, a certain share of renewable energy sources to cover the heating and domestic hot water demand is mandatory. The exact ration depends on the chosen energy source and varies between 15% and 50%. Alternatively, the renewable energy heat act allows either an energy performance of 15% better than required by the Energy Saving Ordinance, or the use of district heating and combined heat and power (CHP) instead of renewable energy sources [14]. The fact that the use of CHP heating systems neutralizes the requirements regarding renewable energy sources encourages the use of CHP systems and has a positive impact on the market uptake of fuel cell based CHP systems. In the German Energy Efficiency Action Plan [19], the promotion of cogeneration is another package of measures to increase energy efficiency. A differentiated system of measures should address CHP systems (including fuel cell based systems) at various levels. In the renewable energy context the following benefits - based on the German National Renewable Energy Action Plan - for the market uptake of fuel cell systems can be highlighted: In the electricity sector, the current Renewable Energy Act (EEG) is the basis for further development in the production of renewable energies. This also applies to the production of combined power and heating/cooling based on renewable energies. The EEG is here supplemented by the Combined Heat and Power Act (KWK Gesetz) and by emissions trading. The EEG regulates the power payment provisions with employment of renewable fuels like landfill gas, sewage gas, mine gas and biomass and therefore can contribute to a further implementation of fuel cells. The legal obligation of the network operator to connect appliances willing to feed-in is the central aspect beside the feed-in tariffs which are guaranteed for 20 years plus the year with the first feed-in. Another part is the CHP bonus in the EEG. This is particularly granted for CHP plants based on renewable energies. 37

40 THE IMPLEMENTATION OF EUROPEAN DIRECTIVES AND REGULATIONS: OPPORTUNITIES OR THREATS FOR FUEL CELL SYSTEMS? 3 Policy framework in other world regions East Asia and North America are by far leading the way regarding support schemes for stationary fuel cell and CHP systems in terms of large scale diffusion. According to [3] the reasons for the advanced support of these technologies are many - especially the following: The larger share of technology developers are located in these regions and they intensely collaborate with one another whilst benefiting from policy support across borders The regulatory frameworks in these countries mandate emissions reduction as well as renewable energy procurement targets High-tech innovation is one of the hallmarks of these regions The most conducive policy frameworks for stationary fuel cells exist in Japan, Switzerland and the USA. In the following chapter therefor these countries should be analysed in terms of the policy framework for stationary fuel cells. In these markets, support schemes have led to substantial progress in commercialization, significant increases in production volumes and consequently considerable cost reductions of stationary fuel cell systems. Specifically, support schemes in Asia target the large-scale diffusion of residential fuel cell CHP system, whereas the USA's support schemes focus mainly on the deployment of industrial systems. 3.1 Japan Government Activities & Policy Framework The main actors for FC R&D (research & development) in Japan are the following institutions: Government o Ministry of Economy, Trade and Industry (METI. Formerly known as MITI) o The Agency of Natural Resources and Energy (ANRE), part of METI o Ministry of Land, Infrastructure and Transport (MLIT) Semi-governmental organization o New Energy and Industrial Technology Development Organization (NEDO) an affiliate of METI Public Research Institutions o National Institute of Advanced Industrial Science and Technology (AIST, part of METI. Formerly: The agency of Industrial Science and Technology.) Private Firms o Firms in a consortium called the Fuel Cell Commercialization Conference of Japan (FCCJ) 38

41 FEL! ANVÄND FLIKEN START OM DU VILL TILLÄMPA ÜBERSCHRIFT 1 FÖR TEXTEN SOM SKA VISAS HÄR NEDO (New Energy and Industrial Technology Development Organization) One of the biggest supporters in the fuel cell industry is the NEDO in Japan. The NEDO is active in a wide variety of areas as one of the largest public research and development management organizations in Japan. It has two basic missions: Addressing energy and global environmental problems Enhancing industrial technology Figure 3.1: Positioning of NEDO [31] The NEDO s R&D (Research & Development) activity for hydrogen and fuel cell technology is composed of the following content: Hydrogen Society The NEDO is going to support Japans Policy on Hydrogen Energy the want to help by the realisation of the Hydrogen Society. The concept of a Hydrogen Society : In a hydrogen society, citizens use hydrogen as the primary energy source generated by renewable energy and fuel cells. Fuel cells will power homes as well as vehicles. The community will also be equipped with central control centres with advanced computer systems, accumulators, and batteries to manage power generation, supply and demand, in an area-wide manner, throughout the day (Figure 3.2). Figure 3.2: Concept of a hydrogen Society [32] The following actions have to be set to realize such a Hydrogen Society : 39

42 THE IMPLEMENTATION OF EUROPEAN DIRECTIVES AND REGULATIONS: OPPORTUNITIES OR THREATS FOR FUEL CELL SYSTEMS? Promote of stationary FC Create of preferable market conditions for FCVs commercialization Develop new application toward wider H2 utilization (H2gas-based power generation, etc Develop large-scale hydrogen supply chain (production/storage/delivery) Develop H2/FC Roadmap toward Hydrogen Society There are three phases toward Hydrogen Society (Figure 3.3): Phase 1 (Present -): Expand utilization of fuel cell Acceleration of dissemination micro CHP (ENE.FARM) Market introduction of fuel cell for commercial/industry use FCV: Price equivalent to the hybrid vehicles Phase 2 (second half of 2020 s -): Establish hydrogen supply chain with unused energy form overseas Develop efficient transport/storage technology with chemical hydride, liquid hydrogen Market introduction on hydrogen power plant (2030) Phase 3 (2040 -): Establish CO2 free hydrogen supply chain Develop hydrogen production technology with renewable energy, CCS Figure 3.3: Step by Step approach to realize Hydrogen Society [33] Programs and Projects ENE.FARM Installed units and subsidies of ENE.FARM: Referring to the program Hydro Society (see Phase 1), the stationary FC sector is going to be pushed enormously. There are subsidies for supporting the introduction of micro-chp - they accounts for 15 billion yen. One of the most successful programs to support stationary fuel cell development is ENE.FARM. Japan s ENE.FARM program is program is probably the world s most successful commercialization program for fuel cells (Figure 3.4). Figure 3.4: ENE.FARM logo [33] 40

43 FEL! ANVÄND FLIKEN START OM DU VILL TILLÄMPA ÜBERSCHRIFT 1 FÖR TEXTEN SOM SKA VISAS HÄR. ENE.FARM has contributed to spread of more than 120,000 fuel cell heating systems in Japan, proving that longterm public-private partnerships can certainly bring new technologies into the market. Figure 3.5 shows the total number (104,486) of fuel cells which have been installed until and the following trend for this residential FCs. At the beginning of 2015 the total installed unit s accounts for more than 120,992. Figure 3.5: Trend for residential FCs ( ENE.FARM ) [33] Market extension An even more recent estimation of Panasonic shows the actual situation in Japan referring to the Ene.Farm project. The fuel cell market is growing rapidly since For example in ,000 fuel cell CHPs were installed in Japan, but if we take a look at the end 2015 there were more than 150,000 units installed. Nevertheless a further cost reduction of the fuel cells will be needed because the amount of subsidy decreases every year this trend is also shown in Figure 3.6. Figure 3.6: Panasonic s estimation from the summary of co-generation foundation regarding the shipping data between [34] The new targets for market expansion in the domestic fuel cell sector are shown in Figure 3.7. By 2020 there Japan should reach a number of 1.4 million installed fuel cells and in 2030 the target is 5.3 million ones. 41

44 THE IMPLEMENTATION OF EUROPEAN DIRECTIVES AND REGULATIONS: OPPORTUNITIES OR THREATS FOR FUEL CELL SYSTEMS? Figure 3.7: Total demand is Panasonic s estimation from FCA data and ACEJ data [34] Table 3.1 shows a short summary of the planned targets and the current progress based on accumulated installation number and the payback period of the FCs. Table 3.1: Targets and Current Progress based on installation number and payback period [35] Targets of Japanese Government Accumulated installation number 1,400 k units by ,300 k units by 2030 Payback period 7-8 years by years by 2030 Current Progress 154 k units installed (June 2016) 18 years without subsidies 13 years without Different Subsidies To reach the set targets in 2020 and 2030, one of the main problems will be the decreasing amount of subsidy every year. Subsidy had been planned to be zero in 2016, but the government judged that continuous support is necessary to achieve the planned targets. 42

45 FEL! ANVÄND FLIKEN START OM DU VILL TILLÄMPA ÜBERSCHRIFT 1 FÖR TEXTEN SOM SKA VISAS HÄR. Figure 3.8: Amount of subsidies for SOFC and PEFC source: Agency for Natural Resources and Energy [35] Problematic: Subsidy had been planned to be zero in 2016, but government judged that continuous support is necessary to achieve planned spread. The criteria for subsidy in 2016 are shown in Figure 3.9 and Table 3.2. The diagram shows the whole costs (product costs + installation) per fuel cell unit (PEFC or SOFC) and the table the different subsidies per fuel cell. There is also a subsidy bonus is available. Figure 3.9: Costs per unit (installation + product costs) without tax [35] 43

46 THE IMPLEMENTATION OF EUROPEAN DIRECTIVES AND REGULATIONS: OPPORTUNITIES OR THREATS FOR FUEL CELL SYSTEMS? Table 3.2: Subsidy per unit in k Yen [35] Subsidy per unit in k Yen PEFC SOFC Bonus product costs for existing house 30 install. costs for LPG 30 for Cold region 30 The following Table 3.3 is showing a short summary of the ENE.FARM program: Table 3.3: Key facts about ene.farm field test [3] ENE.FARM Start: 2009 Duration: 6 years Amount: Objectives: Operation of 5.3 million ene.farm units by 2030 Decreasing price for fuel cells through mass production Measures: World`s first home-use fuel cell system Government subsidy for producing 5.3 million units 80 million EUR Target Segment: Residential Funded by: Public, Private Results/Status: Steady increase in units sold (20,000 by end of 2012) despite decreasing subsidy Update 2015: 120,992 installed unit s Operating lifetime for FC increased from 50 60,000 hours due to improvements in PEM fuel cell installation leading also to lower unit costs Key Learnings: Subsidy scheme that effectively incentivises large-scale diffusion of residential CHP systems, thus driving production volumes which, in turn, lead to significant cost reductions and accelerate commercialization of the technology While a number of companies have participated in development and early deployment, the main participants today are Panasonic and Toshiba, which offer PEM units, and Aisin Seiki, offering SOFC units for the ENE.FARM project. The power rated power output of ENE.FARM products is based on the power and hot water levels used by an average family household (family of four in a detached house) ca. 700W Stationary Fuel Cells Chapter describes the most commonly used stationary fuel cells in Japan. When it comes to the usage of stationary fuel cell applications in Japan, the country tends to use small scale stationary power, e.g. micro CHPs 44

47 FEL! ANVÄND FLIKEN START OM DU VILL TILLÄMPA ÜBERSCHRIFT 1 FÖR TEXTEN SOM SKA VISAS HÄR. in the domestic or residential sector. A good example for this trend is the ENE.FARM project which is described in chapter The following chapters provide a compact overview of the stationary fuel cell landscape of Japan. It is already known that Panasonic, Toshiba and Aisin Seiki are the most common manufacturers in Japan and in the ENE.FARM project. Before the stationary fuel cell applications of these companies are described in detail, Table 3.4 should give an overview about the price of these units. Table 3.4: Pricelist of the ENE-FARM Units in the market [45] Toshiba Panasonic Aisin Seiki Model Retail Price (list price) (excl. tax (8%)) 1,630,000 (excl. installation) 1,600,000 (excl. installation) 1,785,000 (excl. installation) The Panasonic Residential fuel cells Site of operation: detached houses condominium Fuel cells for electricity generation + heat supply There are two different types of Panasonic residential fuel cells, one for detached houses and one for condominium. They are described in the following text parts. Residential fuel cells for detached houses: Features: More affordable price for the same basic functionality: The recommended retail price of the 2016 model of Residential fuel cell is about 300,000 yen* lower than that of the 2013 model for the same basic functionality and an approximately 17% longer operating time. Uninterrupted power generation function of the fuel cell unit: It enables ENE-FARM to continue the operation even during blackout of grid power. When the blackout occurs, it delivers power to the blackout outlet and continues to deliver domestic hot water and space heating medium. 45

48 THE IMPLEMENTATION OF EUROPEAN DIRECTIVES AND REGULATIONS: OPPORTUNITIES OR THREATS FOR FUEL CELL SYSTEMS? Figure 3.10: Explanation of fuel cell operation mode if there is a power distribution [37] Figure 3.11: Explanation of fuel cell operation mode if there is a power distribution [37] There are two types of Panasonic Residential fuel cells available: A separate type that offers greater installation flexibility and is combined with one of the backup heat source devices offered and an integrated type (more compact) of the same depth dimension (400mm) that has a backup heat source device within its hot water storage unit. 46

49 FEL! ANVÄND FLIKEN START OM DU VILL TILLÄMPA ÜBERSCHRIFT 1 FÖR TEXTEN SOM SKA VISAS HÄR. Figure 3.12: Two types of residential fuel cells for detached houses [37] Typical backup boilers are: Figure 3.13: Typical boilers for reheating and hot water [37] The fuel cells can achieve a durability of 4,000 start/stop operations and 70,000 hours of operation, while maintaining a rated overall efficiency comparable to that of the 2013 model (95.0% LHV*1(85.8% HHV)). With a longer life, the new model also meets the needs of customers who want to use a lot of energy. 47

50 THE IMPLEMENTATION OF EUROPEAN DIRECTIVES AND REGULATIONS: OPPORTUNITIES OR THREATS FOR FUEL CELL SYSTEMS? Figure 3.14: endurance time of the Panasonic residential fuel cell [37] Table 3.5: Specifications of the residential fuel cell for a detached house [37] Integrated type Separate type Fuel type City gas (13A) Poweroutput Rating 700W Output range W Power generation efficiency (Rating) LHV*: 39.0% HHV: 35.2% Heat recovery efficiency (Rating) LHV: 56.0% HHV: 50.6% Total efficiency LHV: 95.0% HHV: 85.8% Hot water storage capacity 140 L Fuel cell unit Height: 1750; Width: 700; Depth: 400(mm) Dimensions Hot water storage unit Height: 1750; Width: 700; Depth: 400(mm) Height: 1750; Width: 560; Depth: 400(mm) Backup boiler (Built into the hot water storage Height: 750; Width: 480; Depth: unit) 250(mm) Fuel cell unit 77kg (82kg) Hot water Mass (during 88kg (233kg) 50kg (198kg) storage unit operation) (Built into the hot water storage Backup boiler 44kg unit) Output during blackouts (model with a function for continuing to generate Maximum 500W power during blackouts) A value obtained by deducting the condensation latent heat of steam from the heating value of fuel gas when completely burned. *Lowering heating value description: This can be compared with HHV (higher heating value), which includes the condensation latent heat of steam generated by burning in the heating value. For city gas, the ratio of LHV to HHV (LHV/HHV) is about

51 FEL! ANVÄND FLIKEN START OM DU VILL TILLÄMPA ÜBERSCHRIFT 1 FÖR TEXTEN SOM SKA VISAS HÄR. Residential fuel cells for a condominium: There is also an ENE-FARM model for housing complexes from the company Panasonic. Features: Improvement in design flexibility for new condominiums Increased resistance to earthquake Increase resistance to wind Figure 3.15: Residential fuel cells for a condominium source: Panasonic [37] Table 3.6: Specifications of the residential fuel cell for a condominium [37] Fuel cell unit Integrated type Separate type Balcony type Fuel type City gas (13A) Power output (Rating) 700W (Output range: W) Power generation efficiency (Rating) LHV: 39% (HHV: 32.2%) Heat recovery efficiency (Rating) LHV: 56% (HHV: 50.6%) Total efficiency LHV: 95% (HHV: 85.8%) Dimensions Height: 1750; Height: 1750; Width: Height: 1750; Width: Width: 399; Depth: 399; Depth: 395(mm) 399; Depth 395(mm) 395(mm) Mass (during operation) 82kg (87kg) 80kg (85kg) 82kg (87kg) Hot water storage unit Hot water storage capacity Dimensions Mass (during operation) 140 L Height: 1750; Width: 400; Depth: 560(mm) 49kg (197kg) 49

52 THE IMPLEMENTATION OF EUROPEAN DIRECTIVES AND REGULATIONS: OPPORTUNITIES OR THREATS FOR FUEL CELL SYSTEMS? Backup boiler (Slim model with room heating function) Heat source type Mass External dimensions Latent heat condensing type instantaneous gas heater 49kg Height: 900; Width: 250; Depth: 450(mm) List of different companies/gas suppliers supporting Panasonic s residential fuel cells: Figure 3.16: Supporting companies of the Panasonic residential fuel cell [37] TOSHIBA FUEL CELL POWER SYSTEM CORPORTATION Site of operation: detached houses (e.g. family of four in a detached house) Figure 3.17: Why is TOSHIBA supporting ENE.FARM [38] 50

53 FEL! ANVÄND FLIKEN START OM DU VILL TILLÄMPA ÜBERSCHRIFT 1 FÖR TEXTEN SOM SKA VISAS HÄR. Figure 3.18: CO2-Reductions due ENE.FARM [38] Table 3.7: Specifications of fuel cell of Toshiba [38] Fuel cell unit Specifications Power generation output W Electrical efficiency 39% Total efficiency 95% Cell design life 80,000 hours Output voltage AC100/200V Ambient temperature -10 C 43 C Hot water temperature >60 C at exit Fuel City gas/lpg Noise 37dB (A) Operation mode Automatic (learning control type) Start-up time >60 min. (70 min.) Dimensions W780 x D300 x H1000mm Weight (dry) 94kg Product Table 3.8: Different hot water storage tanks [38] Hot water storage tank unit By Chofu Seisakusho By Noritz Storage tank capacity 200L 200L Dimensions W750 x D440 x H1760mm W750 x D440 x H1755mm Weight (dry) 92kg 92kg 51

54 THE IMPLEMENTATION OF EUROPEAN DIRECTIVES AND REGULATIONS: OPPORTUNITIES OR THREATS FOR FUEL CELL SYSTEMS? Product ASINI - SOFC Table 3.9: Specifications of fuel cell of ASINI [35] Fuel cell unit Specifications Power generation output 700 W Electrical efficiency W Weight 100 kg Hot water tank capacity 28 L Maintenance period 10 years Used Space 1.4 m² Price* 1,927,800 Yen Product * Catalog Price published by Osaka Gas; Including boiler and tax, excluding installation cost, subsidy 52

55 FEL! ANVÄND FLIKEN START OM DU VILL TILLÄMPA ÜBERSCHRIFT 1 FÖR TEXTEN SOM SKA VISAS HÄR Feed in tariff by Gas Company: 3.1 United States of America Figure 3.19: Feed in Tariff by Gas Company [35] Government Activities & Policy Framework The United States of America provide funding for a range of fuel cell and hydrogen research, development and demonstration (RD&D) activities at U.S. universities and conducted by private industry. At the state level, numerous policies supported the development and deployment of fuel cells and hydrogen fuelling stations. Incidentally the most active states are California, Connecticut and New York [40]. Three of the world s leading fuel cell manufacturers are situated in the USA: FuelCell Energy (FCE) Doosan Fuel Cell America Bloom Energy These three companies are producing MCFC, PAFC and DOFC based stationary fuel cells of 100 kw to several MW. Each company has benefited from government support for R&D and subsequently for fuel cell installations at home, in California and Connecticut in particular, and overseas, notably Korea. Furthermore they also increasingly use power purchasing agreements and project financing to make their fuel cell units attractive to costumers [41]. Some facts about fuel cell policies in the U.S. [39]: 30 states include fuel cells or hydrogen as eligible resources in Renewable Portfolio Standards. 32 states permit net metering of fuel cells. 53

56 THE IMPLEMENTATION OF EUROPEAN DIRECTIVES AND REGULATIONS: OPPORTUNITIES OR THREATS FOR FUEL CELL SYSTEMS? 25 states offer funding for fuel cells in the form of rebates, grants, loans, bonds, PACE financing, or public benefits funding. 16 states provide personal, corporate, property and/or sales tax incentives for fuel cells Programs and Projects Programs and projects of the states of the U.S. with the most activities related to stationary fuel cells are listed in this chapter California California has more fuel cell distributed power generation than any other state, with more than 480 fuel cell systems, totalling more than 210 MW of power generation, that were placed in service with the support of state grants. Major Influencers State Agencies and Organizations: The following state agencies and organizations are responsible, among other things, for the success of the fuel cell projects in California: Office of Business and Economic Development (GO-Biz) California Air Resources Board (CARB) California Energy Commission (CEC) California s Air Quality Management Districts (AQMDs) California Fuel Cell Partnership (CaFCP) Alameda-Contra Costa Transit District (AC Transit) SunLine Transit Key Programs and Policies: The Self Generation Incentive Program (SGIP), which provides grant funding to support the deployment of distributed power generation resources, including stationary fuel cells [39] Connecticut Connecticut s support for stationary fuel cells is strong, deploying the technology to enhance power reliability and reduce emissions. Conservatively, at least 35 MW of fuel cells now operate in the state and another 20 MW are planned. A 63.3 MW fuel cell installation has been approved by Connecticut s Siting Council. This would be the world s largest fuel cell power park. Major Influencers State Agencies and Organizations: The following state agencies and organizations are responsible, among other things, for the success of the fuel cell projects in Connecticut: 54 Department of Energy and Environmental Protection (DEEP) Department of Economic and Community Development (DECD) California s senators and representatives Connecticut Hydrogen-Fuel Cell coalition (CHFCC) CTTRANSIT

57 FEL! ANVÄND FLIKEN START OM DU VILL TILLÄMPA ÜBERSCHRIFT 1 FÖR TEXTEN SOM SKA VISAS HÄR. Connecticut Center for Advanced Technology (CCAT) Key Programs and Policies: The Fuel Cell Program which was created by the Department of Energy and Environmental Protection provides incentive funding through the Connecticut Green Bank s On-Site Distributed Generation Program, the Low and Zero Emissions Renewable Energy Credit Program (LREC/ZREC) and the Microgrid Grant and Loan Program [39] New York New York is home to more than 180 companies that are part of the hydrogen and fuel cell industry. More than 14 MW of fuel cells operate in New York. Major Influencers State Agencies and Organizations: The following state agencies and organizations are responsible, among other things, for the success of the fuel cell projects in New York: New York s state government New York s senators and representatives New York State Department of Public Service and Commission New York State Energy Development Authority (NYSERDA) New York Power Authority (NYPA) Key Programs and Policies: New York includes all fuel cell systems in their Renewable Portfolio Standard and in the new Clean Energy Standard (released in 2016) and provides a sale and use tax exemption for fuel cell systems and service, and hydrogen gas. The following programs are supporting the fuel cell sector in New York: New York s reforming the Energy Vision (REV) strategy New York s Clean Energy Standard NY Prize Microgrid program NYSERDA S fuel cell R&D program for New York companies [39] Stationary Fuel Cells The stationary sector in the USA includes both large-scale (200 kw and higher) and small-scale (up to 200 kw) and a wide range of markets including retail, data centres, residential, telecommunications and many more Large-Scale Stationary Power There are more than 235 MW of large stationary (100 kw to multi megawatt) fuel cells currently operating in the USA. Bloom Energy, Doosan Fuel Cell America and FuelCell Energy sold or installed more than 70 MW of fuel cell systems in 2015 (publicly disclosed). The following tables show a short overview of the work of the three biggest fuel cell manufacturers focused on the large-scale stationary sector. 55

58 THE IMPLEMENTATION OF EUROPEAN DIRECTIVES AND REGULATIONS: OPPORTUNITIES OR THREATS FOR FUEL CELL SYSTEMS? Table 3.10: Bloom Energy publicly disclosed 2015 orders and installations [40] Customer Power Details CentruyLink Irvine, California 500 kw Fuel cells are expected to produce nearly 4.4 million kwh of annual electricity and will help power cloud, manged hosting and colocation services housed within the data centre Comcast 400 kw Will provide up to 80% of the facility s total energy load. Berlin, Connecticut Equinix San Jose, California 1 MW Will provide an estimated 8.3 million kwh of electricity annually, powering a portion of the SV5 data centre. Hyatt Regency Greenwich Old Greenwich, 500 kw Will provide up to 75% of the hotel s energy load, reducing carbon emissions by 40% compared to electricity purchased form the grid Connecticut IKEA Emeryville, California 300 kw Retrial store s fuel cell is powered by biogas and is combined with a solar energy system to generate a majority of the store s energy onsite. Johnson & Johnson Advanced Sterilization 500 kw 500-kW fuel cells were installed with uninterruptible power modules which provide 25% of the daily energy consumption Products (ASP) Irvine, California Staples Center Los Angeles, California 500 kw Provides about 25% of the power required by the sports and entertainment venue each year. Stop & Shop 250 kw Will generate more than 2 million kwh each year. Mt. Vernon, New York Osaka Prefectural Central 1.2 MW Provides 50% of the buildings overall electricity needs Wholesale Market Ibaraki City, Japan TOTAL 5.15 MW Table 3.11: Doosan Fuel Cell America publicly disclosed 2015 orders and installations [40] Customer Power Details Amgraph Packaging 880 kw 2 PureCell Model 400 power plants were installed (CHP) Baltic, Connecticut California State University, San Marcos San Marcos, California 880 kw Two fuel cells were installed to help the university adhere to strict sustainability standards and reduce greenhouse gas emissions. CTTransit Hamden, Connecticut 440 kw Electricity, heat and hot water are supplied by the fuel cell to its maintenance and storage facility. Norco College Norco, California 440 kw 60% of the campus s average daily requirement for electricity is provided. Korean South East Power Co. Ltd. (KOSEP) Ansan, South Korea 2.6 MW 6 PureCell Model 400 fuel cell power plants are located at the KOSEP facility in Ansan they are providing energy and heat to the local electric grid and KOSEP customers. 56

59 FEL! ANVÄND FLIKEN START OM DU VILL TILLÄMPA ÜBERSCHRIFT 1 FÖR TEXTEN SOM SKA VISAS HÄR. KOSEP Budang, South Korea Samsung C&T Corp. and Korea Hydro & Nuclear Power Busan South Korea Korea Western Power and Serveone, an LG affiliated company Incheon, South Korea 5.6 MW Will deliver 13 PureCell Model 400 fuel cells worth for KOSEP s combined cycle power plant in Budang MW 70 fuel cells totalling 30.8 MW for the Busan Green Energy Project. 5 MW 11 PureCell Model 400 power plants were installed at Korea Western Power s facility to generate electricity for nearly 3,000 homes. TOTAL MW Table 3.12: FuelCell Energy publicly disclosed 2015 orders and installations [40] Customer Power Details Alameda County Dublin, California 1.4 MW Will install a 1.4-MW fuel cell CHP plant at Santa Rita jail to replace a smaller FuelCell Energy power plant installed in The fuel cell plant will meet approximately 60% of the energy use, while the excess heat will be used for hot water for a range of facility uses. Riverside Wastewater Quality Control Plant Riverside, California 1.4 MW The fuel cell power plant will convert biogas form the wastewater treatment process to power the facility and two electric vehicle charging stations, as well as provide thermal energy for the water treatment process. Pepperidge Farm Bloomfield, Connecticut 1.4 MW Will install a DFV power plant at its bakery to supplement the existing DFC fuel cell that was installed at the bakery in United Illuminating Woodbridge, Connecticut 2.2 MW The United Illuminating Company finalized an agreement with the town of Woodbridge to build a state-of-the-art microgrid connecting the Woodbridge Town hall, Library, Fire House, Police Station, Public Works Facility, Senior Center (which also serves as an emergency centre), and Amity Regional High School. University of Bridgeport Bridgeport Connecticut 1.4 MW Closed a previously announced agreement to sell the fuel cell power plant at the University of Bridgeport to NRG Energy, Inc. E.ON 1.4 MW A FCES fuel cell system is located at FRAITEC s headquarters and production facility. PSOCO Energy 33.6 MW Under a long-term existing contract, FuelCell Energy shipped 2.8 MW (two 1.4 MW kits) a month to POSCO in 2015, totalling 24 units and 33.6 MW. 5.6 MW 5.6 MW of fuel cell modules were delivered to POSCO Energy. 8.4 MW Sale of 6 fuel cell modules totalling 8.4 MW to POSCO Energy. TOTAL 56.8 MW 57

60 THE IMPLEMENTATION OF EUROPEAN DIRECTIVES AND REGULATIONS: OPPORTUNITIES OR THREATS FOR FUEL CELL SYSTEMS? Small-Scale Stationary Power Small scale fuel cells in this section include residential units and micro-chp (m-chp) sales and installations, primarily in Asia and Europe. The following table lists the commercial available stationary fuel cells in the U.S. Table 3.13: Examples of commercially available stationary fuel cells 2015 Prime Power and m-chp [40] Manufacturer Product Type Output Ballard Power Systems (Canada) ClearGen PEM Mulit-500 kw power banks Bloom Energy (U.S.) ES-5700 SOFC 200 kw ES-5710 SOFC 250 kw UPM-570 SOFC 160 kw UPM-571 SOFC 200 kw Doosan Fuel Cell America (U.S.) PureCell system Model 400 PAFC 400 kw FuelCell Energy (U.S.) DFC 300 MCFC 300 kw DFC 1500 MCFC 1,400 kw DFC 3000 MCFC 2,800 kw DFC-ERG MCFC Multi-MW Hydrogenics (Canada) MW power plant PEM 1 MW Table 3.14: Key facts about the Feed-in Tariff [3] FEED-IN TARIFF Start: Objectives: Measures: 2008 Duration: 12 years Amount: 750 MW Target Segment: Industrial Funded by: Public Installation of min. 3,000 Feed-in tariffs for CHP systems <20 MWel CHP systems in MWel and >62% efficiency total to reduce 6.7 million CHP viewed as third most significant metric tons (MMT) of GHG source for GHG emission reduction emissions Tariffs will be available until For CHP units <20 MW el cumulative capacity equals 750 MW Results/Status: Reduction of 1.61 MMT of GHG emissions; 3.19 MMT remaining More than 58% of MW el capacity already installed Key Learnings: Tariff scheme that successfully supports California in meeting its renewable portfolio standards through long-term diffusion of industrial CHP systems, but total incentives are limited by a maximum energy generation capacity 58

61 FEL! ANVÄND FLIKEN START OM DU VILL TILLÄMPA ÜBERSCHRIFT 1 FÖR TEXTEN SOM SKA VISAS HÄR. Table 3.15: Key facts about the Business Energy Investment Tax Credit (ITC) [3] BUSINESS ENERGY INVESTMENT TAX CREDIT Start: 2008 Duration: 8 years Target Segment: Objectives: Encourage investment and growth in certain renewable energy and energy efficiency technologies Measures: Up to USD 1,500 per 0.5 kw el installed capacity Fuel cells receive a 30% credit, CHP units 10% Commercial Industrial Funded by: Public Results/Status: USD 18.5 billion in tax credits have been issued under the Energy Investment Tax Credits as of May 2013, which equates to 9,016 approved credits Specifically, USD 160 million credits have been distributed for FC and CHP systems Key Learnings: Tax scheme that effectively incentivises commercial and industrial segments to invest in low carboncarbon technologies shortly after the recession, thus simulating the economy and reducing national emissions simultaneously 3.2 Switzerland Government Activities & Policy Framework Another significant player in development of fuel cell technology is Switzerland. The Swiss energy policy, based on the energy strategy 2050, is an important factor which is responsible for a higher activity in R&D of fuel cells in Switzerland. The target is to reach a reduction of end-energy use by 9% (21TWh) until 2020 and by 33% (- 77TWh) until One of the main actors in pushing fuel cell development is the Swiss Federal Office of Energy (SFOE). The organisation s main researching fields are renewable energy, nuclear Energy, energy efficiency and cross-sectional themes (e.g. energy policy fundamentals). These fields are subdivided into several different core areas research of hydrogen and fuel cells are two of these areas. When it comes to public funding for hydrogen and fuel cell projects more than 80 projects according to a source of the SFOE were supported in The estimated numbers of the height of the public funding in MCHF are given in the following table: Table 3.16: Public funding for fuel cells and hydrogen in Switzerland [42] Fuel Cells in MCHF Hydrogen in MCHF

62 THE IMPLEMENTATION OF EUROPEAN DIRECTIVES AND REGULATIONS: OPPORTUNITIES OR THREATS FOR FUEL CELL SYSTEMS? Programs and Projects Switzerland is not only working hard on fuel cell research and development, but also carries out some serious projects in the field of fuel cell CHPs. PHAROS: One of the biggest projects in this field is a national light house project which is called PHAROS. It deals with the field test of different high temperature fuel cell heating appliances in single family or small multifamily houses. More than 10 domestic fuel cell heating installations based on high temperature ceramic fuel cell types (SOFC) have been realized. The following types of fuel cells have been installed: HEXIS Galileo 1000 N and Bruns- CFCL Waxess BZG F01. The fuel cell appliance specifications and the differences between these two units are illustrated in the following table. Table 3.17: fuel cell appliance specifications which were used in the project PHAROS [43] Specifications HEXIS Galileo 1000 N Bruns-CFCL Waxess BZG F01 Fuel Cell part Electric power 1 kw el (AC, net) kw el Thermal power 1.8 kw th 0.61 kw th Electric efficiency % 60 % (1.5 kw export) Total efficiency 95 % (H i, T air = 30 C) module-efficiency: 85 % Operation modulating modulating Emissions NO x < 30 mg/kwh n.a. Peak Boiler Thermal power 5-20 kw th kw th Operation modulating modulating Total efficiency 109 % (H i, T air = 30 C) Module efficiency: 94 (H s) Product picture Ene.field Switzerland: Another big project based on residential fuel cell CHPs is the ene.field project in Switzerland. This project was launched in 2015 and runs until The aim of ene.field Switzerland is to test three fuel cell units (Buderus Logapower FC10) for heating operation. 60

63 FEL! ANVÄND FLIKEN START OM DU VILL TILLÄMPA ÜBERSCHRIFT 1 FÖR TEXTEN SOM SKA VISAS HÄR Stationary Fuel Cells The following charts which were created by the Office federal de l energie (OFEN) are comparing the total electricity production and consumption of Switzerland in 2010 and The significant point is that in 2035 there will be a big gap between electricity production and consumption during the winter months. This gap will appear because of the phase out of nuclear power and the usage of only renewable sources for electricity production (e.g. PV, wind, geothermal, hydropower and biomass). Above all, seasonal renewable energy sources such as hydropower and PV will not be able to produce as much electrical energy as it will be required during winter. So another important factor which pushes the development of energy efficient technologies in Switzerland (e.g. fuel cell CHPs for domestic usage) is the high amount of electricity which will be needed in the near future

64 THE IMPLEMENTATION OF EUROPEAN DIRECTIVES AND REGULATIONS: OPPORTUNITIES OR THREATS FOR FUEL CELL SYSTEMS? Figure 3.20: Electricity consumption and production in Switzerland 2010 (left pic.) vs (right pic.) [43] Referring to residential fuel cell micro CHPs the legal framework for space heating and sanitary hot water should be mentioned it contains the following points: Swiss energy politics mandates the provinces (cantons) in Switzerland: provinces are responsible for all regulations regarding the energy use in residential buildings The provinces formulated the model prescriptions for energy use 2008, now approved since 2015 New dwellings: 80 % of the energy use is non-renewable 20 % is renewable (insulation, solar, environmental heat, biomass etc.) for space heating and domestic hot water. Similar requirements are applied for refurbishing of new buildings where 10 % has to be renewable An investigation of the SVGW shows the total estimated number of installed heating appliances and boilers (1,650,000 units) and the whole heat (80,000 GWh/a) and sanitary hot water (15,000 GWh/a) energy production in Switzerland. To push energy saving and efficiency in this sector, base technologies for heating such as oil boilers, gas boilers, solar-gas thermal and electrically driven heat pumps should be replaced by emerging technologies such as electric heat pumps (two stage, CO2-fluid, high temperature), biomass (pellet for small heat power, wood chips for > 200 kw), micro CHP (Stirling), fuel cells (high efficiency) and gas heat pumps (absorption heat pumps). Fuel cell CHPs are becoming more and more important in Switzerland. This trend is shown in the following graph, which describes the main future scenarios in Switzerland till year 2035 and Figure 3.21: Electrification and district heating future scenarios till year 2035 and 2050 [43] 62

65 FEL! ANVÄND FLIKEN START OM DU VILL TILLÄMPA ÜBERSCHRIFT 1 FÖR TEXTEN SOM SKA VISAS HÄR. 4 Recommendations The project has been processed so far on the basis of the ruling: EU-Directives, transposed into national laws, EU Regulations Technical codes taking the fast changing developments regarding legal provisions and technology as much as possible into consideration. Knowing that even these existing regulations are supportive for the market uptake of the fuel cell technology, thus more ambitious goals should even more push the development of fuel cells. Having said this, the Annex 33 members should provide supportive input regarding information of energy efficient fuel cell technologies to the relevant decision makers. The mentioned more ambitioned goals can be found in the 40/27/27 formula - targeted to be achieved by These goals, namely reduction of the GHGs by 40%, share of RES 27% and improvement of the energy efficiency target by 27% (in the meantime a proposal was tabled, suggesting to increase the energy efficiency goal from 27% to 30% by 2030). The present discussion should be used by Annex 33 members to provide constructive proposals to the relevant stakeholders regarding inherent advantages of fuel cell technology. Besides an improved heating and cooling strategy was developed and proposed by the European Commission which should based on very rough initial analyses - also be in favour of fuel cells. The so called Winter package comprises a series of proposals like the improvement of the security of gas supply status in the European Union - which are in favour of the fuel cell technology as well. On top, the so called hydrogen council, thirteen leading energy, transport and industry companies have recently launched a global initiative to voice a united vision and long-term ambition for hydrogen to foster the energy transition. The creation of the Hydrogen Council was initiated by FCH JU, Hydrogen Europe in order to position hydrogen among the key solutions of the energy transition. To achieve the high ranked ambitions, the Council will work with, and provide recommendations to, a number of key stakeholders such as policy makers, business and hydrogen players, international agencies and civil society. The CEOs of the participating multinational, well known and highly reputable companies, active in the automotive industry, logistics industry etc., used the occasion of the World Economic Forum in Davos to kick off this important activity. In Austria the steel producing company Voest Alpine 16 entered a joint venture with Siemens 17 and Verbund 18 - Austria s leading electricity generation company - in order to analyse the possibility and potential of the employment of hydrogen in the steel sector in order to reduce GHG emissions and at the same time remain competitive. It is recommended to cooperate with this joint venture of course taking business secret restrictions into consideration

66 THE IMPLEMENTATION OF EUROPEAN DIRECTIVES AND REGULATIONS: OPPORTUNITIES OR THREATS FOR FUEL CELL SYSTEMS? Potentially the high speed progress of Tesla and other manufacturers of battery electric vehicles (BEVs) have put some pressure on the fuel cell industry to put even more money into R&D activities to reap the benefits of this promising technology. Having said this it is necessary to: Analyse and if possible influence the draft laws in terms of suggesting improvements for the fuel technology Contribute to the work of the Hydrogen Council as much as possible Contribute to the development of successful business models, e.g. the Gas and Electricity Directive (2009/73/EC and 2009/72/EC) should be further analysed regarding the chance to reasonably lower the tariffs for the infrastructure usage (gas and electricity). Lower tariffs- based on solid cost accounting rules- could partially improve the environment for a successful business model. Enable issuing of energy performance certificates if not possible currently for buildings installing a mchp-system. Analyse the effects of grants or subsidies for mchp systems similar or in analogy to the provisions in the CHP act and recommendation to implement such provisions if reasonable and cost efficient Include the analyses of the disposal systems for expended fuel cells since this is completely excluded in the BEV-sector and which potentially generates high costs to be paid for by the final costumer, hence could be decisive for his choice. One can see that there are a lot of issues to be urgently tackled, in order to leverage the market penetration of fuel cells either as stationary or mobile fuel cells. 64

67 FEL! ANVÄND FLIKEN START OM DU VILL TILLÄMPA ÜBERSCHRIFT 1 FÖR TEXTEN SOM SKA VISAS HÄR. 5 Summary The specific goal of this report is to identify and analyse upcoming opportunities or possible threats for the market uptake of fuel cell systems through the implementation of various EU directives and regulations in different countries. The report focuses either on energy-related EU directives and regulations and the general policy frame-work in other world regions (Japan, USA, Switzerland). The specific implementation of EU directives in different member states and their anticipated impacts on the market uptake of fuel cell systems are described and analysed. The analyses of the expected impacts are based on a conducted questionnaire session and on relevant literature. The questionnaire session has been carried out among the participants of the IEA Advanced Fuel Cell Implementing Agreement Annex 33 Stationary fuel cells. The specific impact of the implementation of EU directives in different member states and their anticipated impacts on the market uptake of fuel cell systems have been elaborated on the basis of the implementation in Austria and Germany. These two countries have been chosen as representative example cases for the implementation of different EU directives and regulations. The transposition of the Ecodesign and Labelling Directive in the EU is relevant for the market uptake process of fuel cell systems since the labelling makes the energy efficiency of various products more visible, thus easy to be evaluated, for customers. The promotion of the use of cogeneration with the label classes A+ and A++ (even A+++ will be possible after the introduction of this class in 2019) is expected to have a positive impact on the market penetration of fuel cell systems and encourage costumers investing in these system. In comparison to heat pumps and solar devices, which are labelled on equal terms, the ease of installation of fuel cells - as long as there is a connection to the gas grid available can be regarded as competitive advantage. Directive 2009/73/EC on the common rules for the internal market in natural gas and directive 2009/72/EC on the common rules for the internal market in electricity provide a framework for the internal market in natural gas and electricity including rules for the tariffs for the usage of the gas- respectively electricity infrastructure, like transmission and distribution grids. In case of a proper infrastructure tariffs-structure for gas as well as for electricity grids, strong incentives could be generated for the market introduction and further on significant market penetration (part of the business model) of fuel cells. Through the implementation of the EPBD in Austria, the following impacts on the market uptake of fuel cell systems can be derived: The space heating demand (referring only to the building envelope) was the central element for the definition of requirements before the implementation of the EPBD. Through the implementation of the EPBD, the efficiency of the heating systems became more and more part of the requirements. This leads to an encouragement of highly efficient heating systems like CHP systems (incl. fuel cells). According to Article 4 (EPBD), the Member States shall take the necessary measures to ensure that the minimum energy performance requirements for buildings or building units are set with a view to achieving cost-optimal levels. On this point it has to be stated that presently, the economic feasibility of fuel-cell-based mchp systems is presently not favorable for Austrian residential and non-residential 65

68 THE IMPLEMENTATION OF EUROPEAN DIRECTIVES AND REGULATIONS: OPPORTUNITIES OR THREATS FOR FUEL CELL SYSTEMS? buildings. So they do currently not contribute to reach the cost-optimal level of the energy performance of buildings. So, within this context, high investment costs and the lack of available subsidies constitute the main barrier for the market uptake. In addition to the lack of financial attractiveness, it is presently not possible in Austria to receive an energy performance certificate (EPC) for buildings supplied by a mchp system. The implementation of the EPBD requires to issue an energy performance certificate (EPC) for - new buildings - buildings going to be sold - buildings going to be rent out This means a regulative barrier for investors willing to invest in a fuel-cell-based mchp system. The Energy Efficiency Directive requires member states to adopt policies which encourage the due taking into account of the potential of using efficient heating and cooling systems in particular those systems using highefficiency cogeneration. Therefore the Austrian CHP Act provides investment grants for new CHP plants and subsidies for the operation of existing CHP plants feeding heat into public district heating systems. In context with the Renewable Energy Directive Austria has drawn up a National Renewable Energy Action Plan. Based on this action plan, the following measures in context with the market uptake of fuel cell systems can be highlighted: The extension schemes for hydropower and wind, which represent the largest extension schemes for renewable energies in the next ten years, have led to corresponding preparations by system operators. In the case of insufficient capacity for interconnections for supplies exceeding control areas, a preference of transport to supply customers with electricity from RES and CHP plants (incl. fuel cells) on the part of implementation laws is established in order to comply with all applications to use systems. Generally, an exclusive use of support measures is provided for feed-in tariffs and investment grants. Exceptions to this include, for example, complementary incentives in the field of heat production by means of CHP plants. The Austrian Green Electricity Act provides feed-in tariffs for electricity generated from renewable sources. For electricity generated from CHP power plants a surcharge is provided. It can be assessed, that the above mentioned support mechanisms for CHP systems will encourage the market uptake of fuel cell based CHP systems. The impact of the implementation of various EU Directives on the market uptake of fuel cell systems in Germany can be summarized as follows: Within the European Union, Germany has put in place the most extensive policy support for stationary fuel cell technologies both at federal and at state level. Due to the country s decommissioning of its nuclear power programme, the demand for alternative power generation preferably from clean sources is greater than ever. Furthermore, a relatively large number of fuel cell technology providers are based in Germany and funding programmes help boost these companies' research and development efforts and accelerate the commercialization of stationary fuel cells. In addition to the present favourable framework for fuel cells in Germany the implementation of different EU Directives brought further benefits for fuel cell systems: 66

69 FEL! ANVÄND FLIKEN START OM DU VILL TILLÄMPA ÜBERSCHRIFT 1 FÖR TEXTEN SOM SKA VISAS HÄR. For all new buildings, a certain share of renewable energy sources to cover the heating and domestic hot water demand is mandatory. The exact ration depends on the chosen energy source and varies between 15% and 50%. Alternatively, the renewable energy heat act allows either an energy performance of 15% better than required by the Energy Saving Ordinance, or the use of district heating and combined heat and power (CHP) instead of renewable energy sources. The fact that the use of CHP heating systems neutralizes the requirements regarding renewable energy sources encourages the use of CHP systems and has a positive impact on the market uptake of fuel cell based CHP systems. In the German Energy Efficiency Action Plan, the promotion of cogeneration is another package of measures to increase energy efficiency. A differentiated system of measures should address CHP systems (including fuel cell based systems) at various levels. In the renewable energy context the following benefits - based on the German National Renewable Energy Action Plan - for the market uptake of fuel cell systems can be highlighted: In the electricity sector, the current Renewable Energy Act (EEG) is the basis for further development in the production of renewable energies. This also applies to the production of combined power and heating/cooling based on renewable energies. The EEG is here supplemented by the Combined Heat and Power Act (KWK Gesetz) and by emission trading. The EEG regulates the power payment provisions with employment of renewable fuels like landfill gas, sewage gas, mine gas and biomass and therefore can contribute to a further implementation of fuel cells. The legal obligation of the network operator to connect appliances willing to feed-in is the central aspect beside the feed-in tariffs which are guaranteed for 20 years. Another part is the CHP bonus in the EEG. This is particularly granted for CHP plants based on renewable energies. The second part of the report also focuses on the stationary fuel cell sector and the policy framework in other world regions, especially the US, Japan and Switzerland. Based on the report it can be said that East Asia (e.g. Japan) and North America (e.g. the USA) are by far leading the way regarding support schemes for stationary fuel cells and CHP systems in terms of large scale diffusion, but also small countries like Switzerland are very committed to developing supporting schemes for stationary fuel cell systems. In the following paragraph the most important facts about the policy framework and the R&D in the stationary fuel cell sector, in other world regions, will be summarized. Japan Japan has a very large supporting scheme in the stationary fuel cell sector. The ENE.FARM project is one of the biggest funding projects for residential fuel cell appliances in the world. One of the biggest supporters of the ENE.FARM project is the NEDO in Japan, which is also responsible for the push on of Japans Hydrogen Society. If we take a look at the end of 2015, there were more than 150,000 domestic fuel cell units installed due the ENE.FARM project in Japan. Nevertheless a further cost reduction of the fuel cells will be needed because the amount of subsidy decreases every year. The structure and the approach of the ENE.FARM project clearly demonstrated a progress in technology related to endurance time, lower costs, application of economies of scale, size and scope, thus the Japanese technology is heavily influencing the European RD&D market in form of successful cooperations. USA 67

70 THE IMPLEMENTATION OF EUROPEAN DIRECTIVES AND REGULATIONS: OPPORTUNITIES OR THREATS FOR FUEL CELL SYSTEMS? The United States of America provide funding for a range of fuel cell and hydrogen research, development and demonstration (RD&D) activities at U.S. universities and conducted by private industry. At the state level, numerous policies supported the development and deployment of fuel cells and hydrogen fuelling stations. The most important drivers of the strong fuel cell engagement are the strict legal restrictions regarding emission thresholds. Incidentally the most active states are California, Connecticut and New York. There are more than 30 states in the US, which have included fuel cell or hydrogen as eligible resources in Renewable Portfolio Standards. In addition 25 out of these 30 states offer funding for fuel cells in the form of rebates, grants, loans, bonds, PACE financing, or public benefits funding. Three of the world s leading fuel cell manufacturers are situated in the USA: FuelCell Energy (FCE) Doosan Fuel Cell America Bloom Energy These three companies are producing MCFC, PAFC and DOFC based stationary fuel cells of 100 kw to several MW. Each company has benefited from government support for R&D and subsequently for fuel cell installations at home, in California and Connecticut in particular, and overseas, notably Korea. Furthermore they also increasingly use power purchasing agreements and project financing to make their fuel cell units attractive to costumers Switzerland Another significant player in development of fuel cell technology is Switzerland. The Swiss energy policy, based on the energy strategy 2050, is an important factor which is responsible for a higher activity in R&D of fuel cells in Switzerland. The target is to reach a reduction of end-energy use by 9% (21TWh) until 2020 and by 33% (- 77TWh) until When it comes to public funding for hydrogen and fuel cell projects more than 80 projects according to a source of the SFOE were supported in

71 6 Literature [1] European Commission: Roadmap for moving to a low carbon economy in 2050, accessed 06/2015 [2] European Commission: A Roadmap for moving to a competitive low carbon economy in 2050, 2011 [3] Ammermann H. et al.: Advancing Europe s energy systems: Stationary fuel cells in distributed generation, Roland Berger Strategy Consultants, 2015 [4] Directive 2010/30/EU on the indication by labelling and standard product information oft he consumption of energy and other resources by energy related products, 2010 [5] Comission delegated regulation (EU) No 811/2013 supplemting Directive 2010/30/EU of the EU with regard to the energy labelling of space heaters, combination heaters, packages of space heater, temperature control and solar device and packages of combination heater, temperature control and solar device, 2013 [6] Directive 2009/125/EC establishing a framework for the setting of Ecodesign requirements for energy related products, 2009 [7] Commission Regulation (EU) No 813/2013 implementing Directive 2009/125/EC of the European Parliament and of the Council with regard to Ecodesign requirements for space heaters and combination heaters, 2013 [8] Directive 2010/31/EU on the energy performance of buildings, 2010 [9] Directive 2012/27/EU on energy efficiency, 2012 [10] Directive 2009/28/EC on the promotion of the use of energy from renewable sources, 2009 [11] European Commission, Joint Research Centre Institute for Energ and Transport: 2013 Technology Map of the European Strategic Energy Technology Plan, 2013 [12] Fuel Cells and Hydrogen Joint Undertaking: Trends in investments, jobs and turnover in the Fuel cells and Hydrogen sector, 2013 [13] New Energy World Industry Grouping: Fuel Cell and Hydogen technologies in Europe Financial and technology outlook on the European sector ambition , 2011 [14] Concerted Action Energy Performance of Buildings: Implementing the Energy Perfromance of Buildings Directive (EPBD) Featuring country reports 2012, 2012 [15] Callux Project: access on [16] OEMAG: Investitionszuschüsse für Kraft-Wärme-Kopplungsanlage gemäß KWK Gesetz (Inkrafttreten per ), 2015 [17] National Renewable Energy Action Plan for Austria (NREAP-AT) under Directive 2009/28/EC of the European Parliament and of the Council, 2010 [18] Austrian progress report 2015 in accordance with Article 24 (1) of Directive 2012/27/EU, 2015 [19] 3 rd National Energy Efficiency Action Plan (NEEAP) 2014 for the Federal Republic of Germany pursuant to Directive 2012/27/EU of the European Parliament and of the Council of 25 October 2012 on energy efficiency, 2014 [20] First National Energy Efficiency Action Plan of the Republic of Austria 2014 in accordance with the Energ yefficiency Directive 2012/27/EU, 2014 [21] Austrian progress report 2013 in accordance with Article 24 (1) of Directive 2012/27/EU, 2013 [22] Austrian progress report 2014 in accordance with Article 24 (1) of Directive 2012/27/EU, 2014 [23] German annual report for 2015 in accordance with Article 24 (1) of the Directive of the European Parliament and of the Council of 25 October 2012 on energy efficiency (2012/27/EU),

72 [24] Federal Republic of Germany National Renewable Energy action Plan in accordance with Directive 2009/28/EC on the promotion of the use energy from renewable sources [25] Ridell B., Sandgren A.: FC Eurogrid WP 1 Review of European electricity supply infrastructure, 2014 [26] Austrian Green Electricity Order, 2012 [27] German Federal Office for Economic Affairs and Export Control, Subsidy for mini-chp plants: [28] Viessmann Gesellschaft m.b.h: [29] Behling N., et. al.: Fuel cells and the hydrogen revolution: Analysis of a strategic plan in Japan, Economic Society of Australia, Published by Elsevier B.V., Queensland, 2015 [30] Concerted Action Energy Performance of Buildings: Implementing the Energy Performance of Buildings Directive (EPBD) Featuring country reports 2016, 2015 [31] NEDO - New Energy Industrial Technology Development Organization: [32] ANRE Agency for Natural Resources and Energy, NEDO New Energy Industrial Technology Development Organization, 2013 [33] Shinka Y.: Hydrogen and Fuel cell utilization in Japan and NEDO s R&D activity for Hydrogen and Fuel cell technology, presentation - 5th IPHE H2igher Educational Rounds, 2014 [34] Hashimoto N.: Standardization activity on Fuel Cells in Japan, Panasonic AG, presentation at IEA/AFCIA/Annex 33 in Naples, 2016 [35] Nishimura O.: AISIN SOFC update information, AISIN SEIKI Co., Ltd, presentation at IEA/AFCIA/Annex 33 in Naples, 2016 [36] Osaka Gas Co., Ltd., Fuel processing system for ENE.FRAM: [37] Panasonic AG, Specifications of a Residential fuel cell unit for a detached house: [38] Toshiba AG, Products: Specifications: [39] Curtin S., Gangi J.: State of the States: Fuel Cells in America 2016, 7th Edition, Fuel Cell Technologies Office, 2016 [40] Curtin S., Gangi J.: Fuel Cell Technologies Market Report 2015, 2015 [41] Hart D., et. al.: The Fuel Cell Industry Review 2016, E4tech, 2016 [42] Oberholzer S.: Fuel cell and hydrogen R&D and demo in Switzerland, SFOE (Swiss Federal Office of Energy), presentation at IEA Advanced Fuel Cells Annex 33 Meeting No6 in Switzerland, 2016 [43] Seifert M.: Fuel cells in Switzerland Micro fuel cells demonstration project in Switzerland, SVGW (Schweizerische Verein des Gas- und Wasserfaches), presentation at IEA Advanced Fuel Cells Annex 33 Meeting No6 in Switzerland, 2016 [44] Brinbaum K.U.: Stationary Fuel Cell Systems for the Residential Market (Germany), presentation at the AFC-Workshop in Vienna, 2016 [45] Maruta A.: Japan s ENE-FARM programme, Technova Inc., presentation at the AFC-Workshop in Vienna, 2016 [46] Small M.: European-wide field trials for residential fuel cell micro-chp, Overview of ene.field and PACE projects, presentation at Brussels,

73 7 List of figures Figure 1.1: EU greenhouse gas emissions towards an 80% domestic reduction [2]... 5 Figure 1.2: Projection of the future hydrogen market in Europe [11]... 7 Figure 1.3: RD&D expenditure for fuel cells and hydrogen in the EU in million EUR [12]... 8 Figure 1.4: Fuel cell & hydrogen applications expected to become commercial by 2020 [12]... 8 Figure 1.5: European energy trends, policy framework and general market conditions [3]... 9 Figure 1.6: targets and key points of the EU-project PACE [46]...11 Figure 2.1: Label for cogeneration space heaters [5]...16 Figure 3.1: Positioning of NEDO [31]...39 Figure 3.2: Concept of a hydrogen Society [32]...39 Figure 3.3: Step by Step approach to realize Hydrogen Society [33]...40 Figure 3.4: ENE.FARM logo [33]...40 Figure 3.5: Trend for residential FCs ( ENE.FARM ) [33]...41 Figure 3.6: Panasonic s estimation from the summary of co-generation foundation regarding the shipping data between [34]...41 Figure 3.7: Total demand is Panasonic s estimation from FCA data and ACEJ data [34]...42 Figure 3.8: Amount of subsidies for SOFC and PEFC source: Agency for Natural Resources and Energy [35]...43 Figure 3.9: Costs per unit (installation + product costs) without tax [35]...43 Figure 3.10: Explanation of fuel cell operation mode if there is a power distribution [37]...46 Figure 3.11: Explanation of fuel cell operation mode if there is a power distribution [37]...46 Figure 3.12: Two types of residential fuel cells for detached houses [37]...47 Figure 3.13: Typical boilers for reheating and hot water [37]...47 Figure 3.14: endurance time of the Panasonic residential fuel cell [37]...48 Figure 3.15: Residential fuel cells for a condominium source: Panasonic [37]...49 Figure 3.16: Supporting companies of the Panasonic residential fuel cell [37]...50 Figure 3.17: Why is TOSHIBA supporting ENE.FARM [38]...50 Figure 3.18: CO2-Reductions due ENE.FARM [38]...51 Figure 3.19: Feed in Tariff by Gas Company [35]...53 Figure 3.20: Electricity consumption and production in Switzerland 2010 (left pic.) vs (right pic.) [43]...62 Figure 3.21: Electrification and district heating future scenarios till year 2035 and 2050 [43]

74

75 CONTENTS 8 List of tables Table 2.1: Seasonal space heating energy efficiency classes of heaters, with the exception of lowtemperature heat pumps and heat pump space heaters for low temperature application [5]...17 Table 2.2: Example: Labelling of heating systems [28]...17 Table 2.3: Minimum ecodesign requirements for cogeneration space heaters [7]...19 Table 2.4: Investment grants for CHP systems [16]...26 Table 2.5: Statistical indicators heat and electricity generation in Austria [18][21][22]...27 Table 2.6: Feed-in tariffs for biogas-operated CHP plants [26]...28 Table 2.7: Key facts about the CALLUX project [3]...30 Table 2.8: The outcome of CALLUX: Eight FC-appliances are at the market [44]...30 Table 2.9: Key facts about the Combined Heat and Power Act [3]...32 Table 2.10: Investment grants according to the German mini-chp programme [27]...32 Table 2.11: Additional investment grants power efficiency bonus [27]...33 Table 2.12: Surcharge payment for CHP appliances, operated since [25]...35 Table 2.13: Statistical indicators heat and electricity generation in Germany [23]...35 Table 2.14: Payments for installations generating electricity from biomass (Degression: 1.5%, duration: 20 years) [25]...36 Table 3.1: Targets and Current Progress based on installation number and payback period [35]...42 Table 3.2: Subsidy per unit in k Yen [35]...44 Table 3.3: Key facts about ene.farm field test [3]...44 Table 3.4: Pricelist of the ENE-FARM Units in the market [45]...45 Table 3.5: Specifications of the residential fuel cell for a detached house [37]...48 Table 3.6: Specifications of the residential fuel cell for a condominium [37]...49 Table 3.7: Specifications of fuel cell of Toshiba [38]...51 Table 3.8: Different hot water storage tanks [38]...51 Table 3.9: Specifications of fuel cell of ASINI [35]...52 Table 3.10: Bloom Energy publicly disclosed 2015 orders and installations [40]...56 Table 3.11: Doosan Fuel Cell America publicly disclosed 2015 orders and installations [40]...56 Table 3.12: FuelCell Energy publicly disclosed 2015 orders and installations [40]...57 Table 3.13: Examples of commercially available stationary fuel cells 2015 Prime Power and m-chp [40]...58 ABOUT THE AUSTRIAN ENERGY AGENCY The Austrian Energy Agency is the national centre of excellence for energy. New technologies, renewable energy, and energy efficiency are the focal points of our scientific activities. The objectives of our work for the public and the private sector are the sustainable production and use of energy and energy supply security. We are an independent think tank that manages knowledge, provides the basis for well-founded decision making, and develops suggestions for the implementation of energy-related measures and projects. We advise decision-makers in politics, science, and the industry on the basis of our mainly scientific work. We prepare political, energy and economic expert opinions, economic feasibility analyses, social analyses, feasibility studies, and evaluations.

76 Table 3.14: Key facts about the Feed-in Tariff [3] Table 3.15: Key facts about the Business Energy Investment Tax Credit (ITC) [3] Table 3.16: Public funding for fuel cells and hydrogen in Switzerland [42] Table 3.17: fuel cell appliance specifications which were used in the project PHAROS [43]

77 CONTENTS 9 index of abbreviations AC Transit AFC AIST ANRE AQMDs BEV CaFCP CARB CCAT CEC CHFCC CHP/KWK CTTRANSIT DECD DEEP EDD EED EEX ElWOG EnEv EPBD EPC FC FCCJ FCE FCEV FCH JU FCV GHG GO-Biz HHV HWB Alamed-Contra Costa Tranist District Advanced Fuel Cell Implementing Agreement National Institute of Advanced Industrial Science and Technology Agency of Natural Resources and Energy Califronia s Air Quality Management Districts Battery Electric Vehicles California Fuel Cell Partnership California Air Resources Board Connecticut Center for Advanced Technology California Energy Commission Connecticut Hydrogen-Fuel Cell coalition Combined Heat and Power/ Kraft-Wärme-Kopplung Connecticut Department of Trasportation Department of Economic and Community Development Department of Energy and Environmental Protection Directive for establishing a framework for the setting of ecodesign requirements for energyrelated products Directive on energy efficiency European Energy Exchange Elektrititätswirtschafts- und organisationsgesetz (Electric Industry and Organisation Act) Energieeinsparverordnung (Energy Saving Ordinance) Directive on the energy performance of buildings Energy Performance Certificate Fuel Cell Fuel Cell Commercialization Conference of Japan Fuel Cell Energy Fuel Cell Electric Vehicle Fuel Cells and Hydrogen Joint Undertaking Fuel Cell Vehicle Greenhouse Gases Office of Business Economic Development Higher Heating Value Heizwärmebedarf (heating demand) ABOUT THE AUSTRIAN ENERGY AGENCY The Austrian Energy Agency is the national centre of excellence for energy. New technologies, renewable energy, and energy efficiency are the focal points of our scientific activities. The objectives of our work for the public and the private sector are the sustainable production and use of energy and energy supply security. We are an independent think tank that manages knowledge, provides the basis for well-founded decision making, and develops suggestions for the implementation of energy-related measures and projects. We advise decision-makers in politics, science, and the industry on the basis of our mainly scientific work. We prepare political, energy and economic expert opinions, economic feasibility analyses, social analyses, feasibility studies, and evaluations.

78 IEA LD LHV LPG LREC/ZREC MCFC mchp METI/MITI MLIT NEDO NYPA NYSERDA NZEB OFEN OIB PAFC PEB PEM/PEFC R&D RD&D RES RESD REV SFOE SGIP SOFC SVGW International Energy Agency Directive on the indication by labelling and standard product information of the consumption of energy and other resources by energy related products Lower Heating Value Liquefied Petroleum Gas Low and Zero Emission Renewable Energy Credit Program Molten Carbonate Fuel Cell micro Combined Heat and Power Ministry of Economy, Trade and Industry Ministry of Land, Infrastructure and Transport New Energy and Industrial Technology Development Organization New York Power Authority New York State Energy Development Authority Nearly Zero-Energy Buildings Office federal de l energie Österreichisches Institut für Bautechnik (Austrian Institute of Construction Engineering) Phosphoric Acid Fuel Cell Primary Energy Demand Proton Exchange Membrane Fuel cell Reearch and Development Research, Development and Demonstration Renewable Energy Sources Directive on the promotion of the use of energy from renewable sources Reforming Energy Vision Swiss Federal Office of Energy Self Generation Incentive Program Solid Oxid Fuel Cell Schweizerische Verein des Gas- und Wasserfaches 76

79 CONTENTS 10 Appendix 10.1 Questionnaire 1 EU ABOUT THE AUSTRIAN ENERGY AGENCY The Austrian Energy Agency is the national centre of excellence for energy. New technologies, renewable energy, and energy efficiency are the focal points of our scientific activities. The objectives of our work for the public and the private sector are the sustainable production and use of energy and energy supply security. We are an independent think tank that manages knowledge, provides the basis for well-founded decision making, and develops suggestions for the implementation of energy-related measures and projects. We advise decision-makers in politics, science, and the industry on the basis of our mainly scientific work. We prepare political, energy and economic expert opinions, economic feasibility analyses, social analyses, feasibility studies, and evaluations.

80 78

81 ABOUT THE AUSTRIAN ENERGY AGENCY The Austrian Energy Agency is the national centre of excellence for energy. New technologies, renewable energy, and energy efficiency are the focal points of our scientific activities. The objectives of our work for the public and the private sector are the sustainable production and use of energy and energy supply security. We are an independent think tank that manages knowledge, provides the basis for well-founded decision making, and develops suggestions for the implementation of energy-related measures and projects. We advise decision-makers in politics, science, and the industry on the basis of our mainly scientific work. We prepare political, energy and economic expert opinions, economic feasibility analyses, social analyses, feasibility studies, and evaluations.

82 80

83 ABOUT THE AUSTRIAN ENERGY AGENCY The Austrian Energy Agency is the national centre of excellence for energy. New technologies, renewable energy, and energy efficiency are the focal points of our scientific activities. The objectives of our work for the public and the private sector are the sustainable production and use of energy and energy supply security. We are an independent think tank that manages knowledge, provides the basis for well-founded decision making, and develops suggestions for the implementation of energy-related measures and projects. We advise decision-makers in politics, science, and the industry on the basis of our mainly scientific work. We prepare political, energy and economic expert opinions, economic feasibility analyses, social analyses, feasibility studies, and evaluations.

84 82

85 ABOUT THE AUSTRIAN ENERGY AGENCY The Austrian Energy Agency is the national centre of excellence for energy. New technologies, renewable energy, and energy efficiency are the focal points of our scientific activities. The objectives of our work for the public and the private sector are the sustainable production and use of energy and energy supply security. We are an independent think tank that manages knowledge, provides the basis for well-founded decision making, and develops suggestions for the implementation of energy-related measures and projects. We advise decision-makers in politics, science, and the industry on the basis of our mainly scientific work. We prepare political, energy and economic expert opinions, economic feasibility analyses, social analyses, feasibility studies, and evaluations.

86 84

87 ABOUT THE AUSTRIAN ENERGY AGENCY The Austrian Energy Agency is the national centre of excellence for energy. New technologies, renewable energy, and energy efficiency are the focal points of our scientific activities. The objectives of our work for the public and the private sector are the sustainable production and use of energy and energy supply security. We are an independent think tank that manages knowledge, provides the basis for well-founded decision making, and develops suggestions for the implementation of energy-related measures and projects. We advise decision-makers in politics, science, and the industry on the basis of our mainly scientific work. We prepare political, energy and economic expert opinions, economic feasibility analyses, social analyses, feasibility studies, and evaluations.

88 86

89 ABOUT THE AUSTRIAN ENERGY AGENCY The Austrian Energy Agency is the national centre of excellence for energy. New technologies, renewable energy, and energy efficiency are the focal points of our scientific activities. The objectives of our work for the public and the private sector are the sustainable production and use of energy and energy supply security. We are an independent think tank that manages knowledge, provides the basis for well-founded decision making, and develops suggestions for the implementation of energy-related measures and projects. We advise decision-makers in politics, science, and the industry on the basis of our mainly scientific work. We prepare political, energy and economic expert opinions, economic feasibility analyses, social analyses, feasibility studies, and evaluations.

90 88

91 ABOUT THE AUSTRIAN ENERGY AGENCY The Austrian Energy Agency is the national centre of excellence for energy. New technologies, renewable energy, and energy efficiency are the focal points of our scientific activities. The objectives of our work for the public and the private sector are the sustainable production and use of energy and energy supply security. We are an independent think tank that manages knowledge, provides the basis for well-founded decision making, and develops suggestions for the implementation of energy-related measures and projects. We advise decision-makers in politics, science, and the industry on the basis of our mainly scientific work. We prepare political, energy and economic expert opinions, economic feasibility analyses, social analyses, feasibility studies, and evaluations.

92 About the authors DI DR. GÜNTER R. SIMADER ING. MAG. ALFRED SCHUCH DAVID PRESCH, BSC MANUEL MITTERNDORFER, MSC 90