green energy in Styria - Renewable Energy (i.e. biomass and solar thermal) - Energy Efficient Renovation Graz, Styria, Austria, 2008 The sole responsibility for the content of this publication lies with the authors. It does not necessarily reflect the opinion of the European Communities. The European Commission is not responsible for any use that may be made of the information contained therein.
Table of Contents 1. Introduction... 3 1.1. History of... 3 1.2. The Green Energy Cluster... 3 1.3. Strength fields... 4 1.4. The scope of this analysis...5 1.4.1. Energy Value Chains... 5 1.4.2. Accompanying Sectors... 6 1.4.3. General Constraints... 6 1.5. Acknowledgements...6 2. Output Assessment... 7 2.1. Employment... 7 2.1.1. Renewable Energy Biomass and Solar Thermal Energy... 7 2.1.2. Energy Efficient Renovation... 11 2.1.3. Employment in Research... 14 2.1.4. Employment in Administration and Cluster Management... 14 2.2. Added Value... 14 2.3. Investment... 14 2.4. Installed Capacities... 16 2.5. Innovation... 16 3. Input Assessment... 17 3.1. Regional Subsidy Programmes... 17 3.2. National Subsidy Instruments... 19 3.3. Amounts of Public Funding... 23 3.3.1. Green energy except research and administration... 23 3.3.2. Public Funding for Research... 24 3.3.3. Public Funding for Administration and Cluster Management... 25 4. Summary and Conclusions... 26 5. The organisations... 27 Authors and Contact Christian Sakulin, Alexandra Pack LEV - LandesEnergieVerein Steiermark Burggasse 9/II, A.8010 Graz T +43 316 877 3389, F +43 316 877 3391, E c.sakulin@lev.at, I www.lev.at Anton Schuller ECO WORLD STYRIA - Umwelttechnik-Netzwerkbetriebs GmbH Reininghausstrasse 13, A-8020 Graz T +43 316 407744-18, F +43 316 407744-4, E schuller@eco.at, I www.eco.at 2/27
1. Introduction Styria is a province in the south east of Austria counting about 1,200,000 inhabitants. 1.1. History of Renewable energy and energy efficiency (together called green energy in this report) in Styria have a long history. The large academic community (7 universities, several research organisations) is one reason for the strong movement against nuclear power in the seventies and eighties. This movement put forward a variety of actors which were not just against nuclear power, but offered new and alternative solutions. Another fact is the high degree of urban sprawl. All this has highly encouraged energy-autarky movements starting after the oil crisis in the late seventies. Do-it-yourself construction groups for solar-thermal collectors or small biomass district heating plants were founded and soon reached a high degree of national and cross-border renownedness. The key players often were loners, which soon formed groups and initiatives, often in forms of associations. Many of these groups were acting in parallel and of course there was competition and rivalry among these groups about finding the optimum solution to green energy. Up until now these tendencies for parallel actions are still prevailing. This interlude of cooperation and competition is a driving force for the innovation in Styria. 1.2. The Green Energy Cluster Today, the business community in renewable energy and energy efficiency technologies has developed strongly and is growing fast. Already more than 5 % of the gross domestic product is produced by the eco-industry (green energy and environmental technologies) one of the highest concentrations in Europe. The cluster of green energy is managed by horizontal organisations (intermediaries), that bundle the many actors. LEV, NOEST, and ECO WORLD STYRIA are serving as significant part of the cluster: - LEV is the regional energy agency and aims at increasing the use of regional renewable energy sources and energy efficiency (renewable energy conversion) - ECO WORLD SYTRIA is the business cluster and aims at strengthening the competitiveness of Styrian eco-businesses and establishing a leading business location (renewable energy technologies) - NOEST is the network for research in renewable energies and aims at a successful technology transfer and fostering innovation (research and technology transfer) Fostering cooperation, enhancing knowledge exchange and intermediating across the various spheres of the community are among the tasks and challenges of the cluster management. A portrait of the organisations is given in chapter 5. 3/27
1.3. Strength fields Almost all fields of green energy are dealt with in Styria, the main focus is set on: - green energy from biomass: solid biomass (more than half of Styria is covered by forests), biogas and plant oil/biodiesel. results: More than 327 MW heat of local district heating systems from biomass and a world market leader in biomass boilers; 13 MW el of biogas plants and a world market leader in technologies for producing biodiesel from multi-feedstock - solar thermal energy: The above mentioned do-it-yourself construction groups for solar thermal panels have evolved over the years into an internationally renowned research institute (AEE INTEC, Gleisdorf) and world market leading manufacturers for large solar panels (equipping e.g. the Olympic Games in Beijing 2008). Currently 420,000 m 2 of solar thermal panels are installed in Styria aiming at 1,200,000 m 2 by 2020 (1 m 2 per inhabitant) - energy efficiency in buildings: about 40% of energy demand is generated by buildings (heating and cooling). Thus, there is a large potential of energy savings in this sector. The Styrian programme for subsidised housing focuses on decreasing the energy demand of new buildings and renovating existing buildings energy efficiently. Both actions are linked to the use of renewable energy for heating and cooling. Today over 7,000 low energy houses exist in Styria. The figure below shows the current growth of the Styrian green economy. The regional gross expenditure on research in Styria of 3.6% in 2007 (national Austrian rate: 2.55%; EU average: 1.84%) too is remarkably high. Figure 1 Styrian Green Economy Source ECO WORLD SYTRIA 1 1 http://www.eco.at/cms/416/5095/ 4/27
1.4. The scope of this analysis This study analyses and compares the input in terms of public funding and the output in terms of employment, investment, added value and innovation along the energy value chains of the mentioned strength fields. The chosen fields are the ones with the highest significance for Styria: - renewable energy o o biomass solar thermal - energy efficient renovation remark: in terms of employment effects in the construction of new buildings, no distinction between a high or low energy demand of the new building can be made. Thus only energy efficient renovation is looked at in this study. Furthermore, energy efficient renovation has a very high CO 2 saving potential. 1.4.1. Energy Value Chains Renewable Energies The renewable energy value chain consists of 4 levels, each of which is formed of several classical value chains itself. This study focuses on the first three levels only. Furthermore, research in these fields is treated separately (see 1.4.2). Energy Efficient Renovation 5/27
Energy efficiency in buildings mainly appears on the consumption level, where less energy is consumed through the energy efficiency measures (e.g. insulation). Furthermore, the insulation materials are manufactured and new methods are developed (energy efficient technologies). 1.4.2. Accompanying Sectors Research In contrary to a classical value chain definition, which comprises all steps starting with research, in this study research in green energies was treated separately as a whole and was not related to the single strength fields. This is due top a lack of sufficient statistical data, especially on the funding-side. Stated is the high gross expenditure on research in Styria of 3.6% in 2007. (national Austrian rate: 2.55%; EU average: 1.84%). The research network NOEST gives an excellent service as a one-stopshop for research subsides. Cluster Management and Administration Similar to research, all jobs in the cluster management and administration of the Styrian green energy cluster was treated as a whole and was not related to the single strength fields. The following organisational units were considered in this section: ECO WORLD STYRIA, NOEST (Styrian Eco-Energies Network, research), LEV LandesEnergieVerein Steiermark Energy Agency of the Province of Styria, Energy Advice Unit, Office of the Energy Commissioner (Regional Government and Administration), Economic Chamber, Chamber of Agriculture, SFG, (Styrian Business Support Agency) 1.4.3. General Constraints This study bears several constraints: - This study is based on existing statistical data, scientific literature and headcount-data. No new surveys were performed. Where necessary, assumptions were made and are stated. - For reasons of data protection, some figures can only be given as totals and not in detail. - Crowding out effects caused by decreasing energy demand and substituting fossil energy for green energy are not considered. - The overall aim of this study was a compilation of existing information in order to give an overview. A detailed analysis could not be performed within the given resources. - The authors made all statements to their best knowledge. Further calculations based on the here given database are not recommended. - The authors point out that no direct comparison of the summed volumes of input subsides and output investment shall be made. 1.5. Acknowledgements The authors especially thank the following partner-organisations for their assistance and provision of necessary data: Chamber of Agriculture Styria, Land Steiermark Unit 15 Housing Affairs (Government and Administration of the Province of Styria), Kommunalkredit Public Consulting (KPC), Statistik Austria, SFG Styrian Business Support Agency, FFG Austrian Research Support Agency 6/27
2. Output Assessment The output assessment focuses on - employment - investment - added value generated by green energy policies resp. public funding. Only the core sector (tier 0) and tier 1 industry is considered 2. 2.1. Employment The data on employment underlies the following constraints: - due to a lack of statistical data, no differentiation can be made between newly created permanent jobs and those with a time limit (temporary). - the number of jobs reflect full time equivalent persons Employment Effects, Multipliers The employment is determined in terms of direct, indirect and induced effect. Direct employment refers to employment directly related to the production of products (biomass production in agriculture and forestry, production of goods) or services (operation and maintenance of boilers). As a result of this direct employment, employment is also generated in sectors that serve as component suppliers like in the manufacturing industry (e.g. production of spare parts for boilers or harvesters) or chemical industry (production of fertilizers) (indirect effect). Subsequently, a rise in income stimulates e.g. the consumption in general (induced effect).in this Study, the term primary employment refers to the sum of direct and indirect effect. Macroeconomic multipliers relate the different employment effects. If not given by the scientific literature, the multipliers are assumed 3. The assumption for the regional Leontief Multiplier (direct to indirect effect) is 0.5 (varies in scientific literature between 0.46 and 0.51), for the regional Keynesian Multiplier (primary to induced effect) is 0.35 (varies in scientific literature between 0.2 and 0.47). 2.1.1. Renewable Energy Biomass and Solar Thermal Energy Since years Styria is one of the leading and most innovative regions in the development and production of renewable energy and renewable energy technology worldwide. The substitution of fossil fuels with renewable energy sources leads not only to a significant reduction of CO 2 emissions and a diversification of supply sources, but has also a significant positive macroeconomic effect. The overall Austrian value added in this sector amounts to more than 1 billion Euro per year, and about 17,000 employees in Austria are involved in the production and construction of facilities in the renewable energy sector 4. 2 Renewable Energy Industry Gap Analysis (for Scotland) www.berr.gov.uk/files/file15401.pdf 3 Joanneum Research Institute of Technology and Regional Policy., www.joanneum.at/en/fb5/rtg.html 4 The economic spirit of renewables, Austrian Energy Agency, May 2005 7/27
The first 3 levels of the energy value chain are considered (see 1.4.1) in this study being 1. the development and cultivation of renewable energy sources 2. the development and manufacturing of technologies for renewable energy conversion (plants and appliances) 3. the operation and maintenance of plants for the conversion of renewable energy sources to heat, cooling and electricity The forth level of consumption is omitted. The estimation of the employment effects in the renewable energy sources and renewable energy conversion in Styria is based on a national Study conducted by Haas et al. (2004) 6.The study offers a comprehensive overview over renewable energy technologies (biomass, solar, geothermal, wind, water power etc.) and their installed capacity in Austria (year 2004). The employment effects in renewable energy technologies are based on headcount and a multiplier analysis. Renewable Energy Sources In the production of renewable energy sources, only biomass is to be considered. (The sun shines by it self.) Biomass plants and trees is cultivated by farmers. The chamber of agriculture states that in total, Styria exports more wood than it imports, where the focus is set on high quality wood for e.g. furniture or the construction sector. We assume that all lower quality wood, which is fired in biomass systems, is cultivated in Styria. Very heterogeneous data exists about the workload of the cultivation of biomass as renewable energy source. Combing Information from the Chamber of Agriculture and statistical data on wood-fuel demand, an factor of 1,2 jobs / MW installed is estimated (see Table 2). Other factors were deducted by taking the national employment figures (Haas et. al. 2004) of the fuel supply for renewable energy conversion by technology and dividing through the installed capacities (nr. of plants for biogas and tons of biodiesel production), employment effects in the cultivation of biomass are calculated. Table 2 gives an overview of employments effects per installed unit. The results are shown in table 3. Renewable Energy Technologies At the time the study was made, 65 organisations that are active in green energy made available statistic data. 7 of these 65 organisations are research facilities, intermediaries and universities. This means that 58 of the organisations considered are companies managed on a commercial basis. It is known that these 58 companies make 70% of Styrian green energy economy. According to a data ascertainment from 2006, 1,723 employees (~70% of total employees in green energy in Styria) are working in ECO WORLD STYRIA s member companies. The jobs directly created by the companies in the core sector (tier 0) and supply industries (tier 1) are taken from an annual survey. In order to gross up from direct employment in Styrian companies the estimated regional multipliers (Leontief 0.5; Keynesian 0.35) as described above were used. The following spread sheet provides an outline survey of the number of employees in the above described organisations. The area with the biggest employee requirement in the high demand field is clearly the biomass/biogas/biodiesel sector. 8/27
Table 1 Employees of ECO WORLD STYRIA member enterprises (inclusive universities, R&D facilities and intermediaries ): headcount 2006, direct employment (ECO WORLD STYRIA) planning, production, jobs (full time equivalent engineering, consulting, R&D, qualification renovation, construction, trade and sales total per year) financing etc. biomass (solid, liquid, gaseous) 390 103 552 304 1,349 solar-thermal 35 38 14 15 102 photovoltaic 7 1 2 2 12 hydro 12 17 3 5 37 wind 5 17 0 0 22 energy efficient buildings 113 21 198 15 347 total 562 197 769 341 1,869 Renewable Energy Conversion LEV is the programme manager of the Austria quality management programme qm:heizwerke that aims at improving both ecological and economic efficiency in the operation and installation of wood biomass heat and power plants. With the support of LEV, AEE Intec in Gleisdorf trains special solar installers. Until today 400 installers have been trained and certified. The estimation of the employment effects in the conversion (production) of renewable energy in Styria is again based on the national Study by Haas et al. (2004) 6. By taking the national employment figures of renewable energy conversion by technology and dividing through the installed capacities (MW for solid biomass, nr. of plants for biogas and tons of biodiesel production), employment effects in the operation of plants for renewable energy conversion is deducted. Table 2 gives an overview, the results are shown in table 3. Table 2 Employment factors: Employment effects (full time jobs per year) of the production of renewable energy sources and renewable energy conversion per installed unit and technology (own calculation based on Haas et al. 2004 5, Fanninger 2007 6 and data of the Chamber of Agriculture and the Local Energy Agency Eastern Styria) see next page 5 Haas, R., Biermayr, P. und Kranzl, L. (2004), Technologien zur Nutzung Erneuerbarer Energieträgerwirtschaftliche Bedeutung für Österreich. Endbericht zum Forschungsprojekt, Energy Economics Group (EEG), Technische Universität Wien. 9/27
energy from (per unit) employment effects primary effects 7 induced effects total biomass solid (per MW) 1.9 0.6 2.5 production 8 1.2 0.5 2.3 conversion 0.7 0.2 1.0 biomass liquid (per 1.000t) 3.6 0.7 4.4 production 2.9 0.6 3.5 conversion 0.7 0.1 0.9 gaseous biomass (per plant) 0.9 0.2 1.1 production 0.3 0.1 0.3 conversion 0.6 0.1 0.7 solar thermal energy conversion (per 100 m² installed) 0.6 0.2 0,8 2.1.1.1. Biomass (solid, liquid, gaseous) Table 3 Estimated primary and induced employment effects (full time jobs per year) of biomass energy production (solid, liquid, gaseous) per installed capacity (in MW) of biomass technologies (own calculation based on employment factors of Table 2 and current figures of installed capacity of biomass technologies in Table 8) jobs (full time equivalent per year) 2005 2006 primary induced primary induced biomass as energy source 1,361 374 1,588 436 solid biomass 1,332 368 1,553 429 liquid biomass 18 4 26 5 gaseous biomass 11 2 10 2 biomass technologies 2,328 815 2,804 981 biomass energy conversion 868 279 1,008 325 solid biomass 839 273 978 318 biodiesel 4 1 6 1 gaseous biomass 25 6 24 5 total 4,556 1,468 5,399 1,742 * All figures are based on calculation and have to be interpreted accordingly. 6 Fanninger, G. (2007), Der Solarmarkt in Österreich. Erhebung für die internationale Energieagentur (IEA) im Auftrag des BMVIT, Technische Universität Wien. 7 The study of Haas 4 gives primary and induced employment effects. The primary effects can be furthermore divided into direct and indirect effects by applying a Leontief-Multiplier of 0.5 8 based on data of the chamber of agriculture in Sytria and own assumptions 10/27
2.1.1.2. Solar Thermal Energy Table 4 Primary employment effects (full time jobs per year) generated by the production of solar thermal technologies and energy production by solar technologies (own calculation based on employment factors in Table 2 and current figures of installed capacity of solar technologies in Table 8) jobs (full time equivalent per year) 2005 2006 primary induced primary induced solar thermal technologies 99 35 140 49 solar thermal energy conversion 128 45 250 88 total 227 80 390 137 * All figures are based on calculation and have to be interpreted accordingly. 2.1.2. Energy Efficient Renovation According to the Energy Action Plan of Styria (2005-2015) more than half of the final energy is used in households predominantly for space and water heating. From an energy efficiency perspective, especially buildings built within the period 1945-1980 are in need of renovation (Innovation and Climate, 2007 9 ). The actual rate of renovation in Styria is around one percent of the living space per year. In this section we calculate the employment effect generated by improving the thermal efficiency of the building stock (residential and non-residential buildings) in Styria. In this context the term thermal efficiency covers thermal efficiency improvements of the building stock like, exchanging windows/doors, insulation of the building facades, insulation between the unheated attic and the highest floor, insulation between the cellar and the ground floor etc. For reasons of simplification we use the term renovation as synonym for thermal efficiency measures. The estimation of employment effects generated by improving the thermal efficiency of the building stock (e.g. thermal insulation, exchanging windows etc.) is based on an Austrian study conducted by the Austrian Institute of Economic Research (WIFO, Czerny et al. 2002 11 ). The objective of the study is to calculate total investment and employment effects generated by encouraging renovation measures at the building stock in Austria. They study comes to the result that each increase in the rate of renovation by 0.1% (per year) results in 35 million additional investment and 760 additional jobs (in full time equivalents) per year. Based on the results of Czerny et al. (2002) 9 we calculated the employment effects generated by a one million Euro investment in improving the thermal efficiency of buildings by dividing the additional generated jobs (760) by the additional investment ( 35 million). As a result we get 21.7 jobs per million Euro invested. Besides Czerny et al. (2002), also the Vienna Holding GmbH, an organisation that works on the behalf of the city of Vienna, published employment figures generated by renovation: According to a press release form 2006 the renovation programme Thewosan of the city of Vienna initiated yearly investments of 90 million (in the period 2000-2006), which generated 2000 jobs in the building 9 Innovation und Klima Innovative Klimastrategie für die österreichische Wirtschaft. Das Guide Book: Leitlinien für Entscheidungen in den Sektoren Mobilität, Gebäude, Industrie und Energie. WIFO, Wegener Zentrum für Klima und Gobalen Wandel an der Universität Graz, Technische Universität Graz, KWI management Consultants, http://www.innovation-klima.at, downloaded 24.6.2008 11/27
industry and side-businesses. Considering the figures of the Vienna Holding Gmbh, we result in 22,2 jobs per million Euro invested. For our calculation we take the mean value of both studies: 22 jobs per million Euro invested in improving the thermal efficiency of the building stock. In order to carry out our calculation we need one further indicator, namely the average investment costs of renovation. In this context we refer to Czerny et al. (2002) 9, who take an average renovation cost of 270 10. Based on the indicators in Table 5 we calculated investments and generated employment effects caused by subsidised renovation measures in Styria. Table 5 Calculation basis for employment effects of improving the thermal efficiency of buildings: employment effects per unit of investment and average costs of refurbishment calculation basis reference value employment effects per million invested in thermal efficiency of buildings (number of employees; full time equivalents) mean value based on WIFO (Czerny et al. 2002 11 ) and Wien Holding 22 GmbH 12 average costs of improving the thermal efficiency of buildings per m² living space (in ) Mean value based on WIFO (Czerny et al. 2002 11 ) 270 Concerning employment effects we distinguish between employment effects generated by renovation of residential buildings (Housing Programme of the Government of Styria) and non-residential buildings. Starting with residential buildings the department of housing affairs of the federal district of Styria indicates that the subsidised renovated living space amounts to 124,438 m² in 2006 and 256,790 m² in 2007 13 (see Table 6). Considering the renovated living space and taking the indicators in Table 5, we results in total investments of 33.6 million in 2006 and 70.3 million in 2007, which generated total employment effects of 778 in 2006 and 1,544 jobs in 2007, respectively. Nonresidential buildings are subsidised by the National Environmental Support Scheme (see chapter 3.2). According to Kommunalkredit Public Consulting the environmental related investments amount to 1.8 million in 2006 and 0.9 million in 2007. The associated employment effects make up 40 jobs in 2006 and 21 jobs in 2007. Table 6 summarises the investment costs and total employment effects of residential and non residential buildings. 10 The authors point out that the mentioned renovation costs represent only a mean value resulted from an extensive literature research. 11 Czerny, M., Kratena, K., Köppl, A. and Weingärtler, M. (2002), Makroökonomische Wirkungen energiesparender Sanierungsinvestitionen im Wohnbau. Studie im Auftrag der Gemeinschaft Dämmstoff Industrie (GDI), Institut für Wirtschaftsforschung (WIFO), Wien. 12 Wien Holding GmbH, http://wienholding.at/event/mediaroom-news/id/1814, downloaded 18.6.2008 13 The department of housing affairs of the government of Styria pointed out, that between 2006 and 2007 there was a huge increase in renovation. 12/27
Table 6 Renovated living space, total investment costs and total employment effects (in full time equivalents) to improve the thermal efficiency of residential and non-residential buildings (own calculation based on data from the Federal Ministry of Styria 13, Kommunalkredit Public Consulting and employment indicators in Table 5) Improvement of the thermal efficiency of the building stock 2006 2007 residential buildings 14 subsidised renovated living space (m²) 124,438 256,790 total investment costs (in million Euro) 33.6 70.3 total employment effects (full time equivalents) 738 1,523 non residential buildings total subsidised investment costs (in million ) 15 1.8 0.9 total employment effects (full time equivalents) 40 21 TOTAL total direct employment effects (full time equivalents) 16 384 762 total indirect employment effects (full time equivalents) 16 192 382 total induced employment effects (full time equivalents) 17 202 400 total employment effects (full time equivalents) 778 1544 * All figures are based on calculation and have to be interpreted accordingly unless otherwise noted. 14 Data according to the Federal Ministry of Styria, department of housing affairs (A 15) and own calculations 15 Source: Kommunalkredit Public Consulting 16 backwards calculated; (Leontief-Multiplier of 0,5) 17 backwards calculated; (Keynesian-Multiplier of 0,35) 13/27
2.1.3. Employment in Research In Styria around 8,000 researchers worked in public (3,100 or 39%) or private (4,900 or 61%) research facilities in 2004. The share of energy research is significantly higher than in Austria. A headcount 18 resulted in 120 full time equivalent direct jobs in 2005 and 130 in 2006. All in all the number of employees due to green energy research in Styria (including indirect and induced effects) is estimated to be 243 in 2005 (120 direct, 60 indirect and 63 induced jobs) and 263 in 2006 (130 direct, 65 indirect, 65 induced jobs). (Leontief 0.5; Keynesian 0.35) 2.1.4. Employment in Administration and Cluster Management Please see chapter 3.3.3. 2.2. Added Value The gross value added of the federal state of Styria was about 28,817 million in 2006. In the same year the region had about 568 thousand employed persons. Hence a gross added value of 50,742 per employed person can be calculated. Taking regional employment figures in renewable energy and energy efficiency we can calculate the gross added value of the mentioned sectors. In 2006 the energy efficiency and renewable energy sectors generated a gross added value of 447 million (2 % of total added value in the federal state of Styria). 2.3. Investment This Section focuses on the total investments generated by promoting green energy in Styria. Because of inconsistency in data, reliable figures are available only for 2006. In this year total investments associated with green energy amounts to 133,735,599. The amounts of investment are based on real figures (e.g. national environmental support) and calculations following the ratio of funding of the instruments. E.g. concerning the agricultural funds, it is assumed 25% of the investment is funded publicly (subsidised). In 2005 4.68 million funding supported a total (private) investment of 18.72 million. In 2006 5.53 million funding supported a total investment of 22.12 million. The allocation of total private investments in green energy to biomass, solar and energy efficiency is shown in the following table. 18 precise data for Joanneum Research and AEE Intec (ECO WORLD STYRIA), estimates for other research organisations 14/27
Table 7 Total generated investments in green energy in Styria. Total generated investments by programme 2005 2006 2007 Agricultural Funds biomass 18,720,000 22,120,000 - Housing Renovation Programme 19 biomass 1,200,000 5,450,000 20,700,000 solar thermal 2,000 1,150,000 4,200,000 energy efficient renovation 69,700,000 57,100,000 64,150,000 National Environmental Support biomass 10,690,586 28,162,546 32,837,642 solar thermal 851,205 3,020,892 2,278,484 energy efficient renovation 2,357,782 1,832,341 935,892 Styrian Environment Fund 20 biomass 6,053,396 7,543,948 - solar thermal 2,100,784 7,355,872 - Styrian Fund for Green Electricity 20 biomass 190.000 - - total 111,865,753 133,735,599 - biomass 36,853,982 63,276,494 - solar thermal 2,953,989 11,526,764 - energy efficient renovation 72,057,782 58,932,341 - * All figures are based on calculation and have to be interpreted accordingly unless otherwise noted. ** The symbol - refers to an unknown investment volume. 19 the data for 2005 is based on many assumptions. 2006 and 2007 is more accurate 20 exact figures according the Federal Government of Styria, department of the Energy Commissioner 15/27
2.4. Installed Capacities Table 8 Installed capacity of renewable energy technologies (biomass, solar) in Styria 2004 and 2005 in comparison to total installed capacity in Austria 2005 2006 Styria % Austria Styria % Austria biomass heating technologies 21 [MW] 1,119 20% 1,304 19% small scale until 100 KW 535 21% 624 22% large scale >100KW 584 19% 680 17% biodiesel 22,23,24 [t] 6,160 9% 8,800 7% biogas 25 [MWel] 12.8 16% 12.5 15% solar thermal energy 26 [m²] 27,220 11% 30,722 10% 2.5. Innovation Styrian energy and environmental engineering is the innovation powerhouse. Innovation is firmly in the hands of ECO member companies with a R&D rate of 3.9 % plus numerous awards to their credit such as those received from Innostar or the Top of Styria rankings. The general challenge that is currently being faced is for innovation of a kind that is specifically customer oriented and with above average success on the market. A total of eight ECO member companies are currently working on innovation projects within the scope of the competence development for innovation management project. A further eleven companies are to profit within the ECO Leadership offensive from a 50 % support grant for strategy and innovation consulting 27. The Styrian Eco-Energy Network NOEST promotes and facilitates green energy innovation from the science community towards the Styrian companies. 21 Estimated figures based on: Landwirtschaftskammer Niederösterreich (2005, 2006), Biomasse Heizungserhebung 2006. Abteilung Betriebswirtschaft und Technik, LK NÖ, St. Pölten. 22 SEEG Mureck, http://www.seeg.at/seeg.php, downloaded 18.06.2008; no other producer of biodiesel or plantoil in Styria was counted. 23 Salchenegger, S. (2006), Biokraftstoffe im Verkehrssektor in Österreich 2006. Zusammenfassung der Daten der Republik Österreich gemäß Art. 4, Abs. 1 der Richtlinie 2003/30/EG für das Berichtsjahr 2005. Rep- 0068, BLFUW, Wien. 24 Salchenegger, S. (2007), Biokraftstoffe im Verkehrssektor in Österreich 2006. Zusammenfassung der Daten der Republik Österreich gemäß Art. 4, Abs. 1 der Richtlinie 2003/30/EG für das Berichtsjahr 2005. Rep- 0068, BLFUW, Wien. 25 Lokale Energieagentur Oststeiermark, personal information of Ing. Puchas, 19.6.2008 26 Fanninger, G. (2007) Der Solarmarkt in Österreich 2006. Studie im Auftrag des Bundesministeriums für Verkehr, Innovation und Technologie (BMVIT). Institut für Elektrische Anlagen und Energiewirtschaft, Technische Universität Wien. 27 ECO WORLD STYRIA, www.eco.at 16/27
3. Input Assessment As input to the green energy cluster this study counts instruments, promotion sponsorship, programmes,.., which affect the public budget. (Styrian share or where appropriate company share only); regional, national and to some extent EU subsidies The thoroughly strong growth pattern for companies in Styria during 2005 and 2006 can be traced back to a significant extent to the promotion, support and financing landscape that was available at federal, state and EU levels. During this period the number of employees from companies in the area of renewable energy (biomass and solar) grew by 20.3% (see chapter 1) In Austria, numerous support programmes for green energy exist. The most important are listed below: 3.1. Regional Subsidy Programmes Agricultural Funds The regional government of Styria funded district heating project in Styria in 2005 and 2006 with the aims - to support farmers and farmer cooperatives in setting up new local district heating projects in order to increase the share of renewable energy - to keep added value in the region and - to support farmers in building up new fields of business. The funding was limited to about 25% of the investment costs. Aim of the funding are investment costs in technology such as boilers and installation, in constructing the buildings, constructing the storage space for the wood chips as well as funding the internal labour of the farmers. Styrian Business Promotion Agency SFG 28 The Styrian Business Promotion Agency the SFG provided financial support and promotion for companies in the renewable energy and environmental engineering sector to the tune of some 1,770,000 according to both the SFG annual report 2005 and own research. By comparison the support and financing based on the same data basis in the year 2006 was substantially less at 408,600. Focus area of these subsidies was mainly in the areas of market development, company internal research and development, innovative investment, qualification of specialist workers. Special programs did also support companies in their growth with the help of venture capital. An emphasis is set on small and medium size companies. Many of the offered programs are co-financed by the European Union. 28 www.sfg.at 17/27
Styrian Environment Fund Umweltlandesfonds 29 In the framework of the Styrian Environment Fund the government of Styria supports the installation of biomass heating systems and solar heating systems exclusive in residential buildings or in sport facilities and schools. Concerning biomass heating systems applicants obtain max. 25% of total investment costs, with an upper limit of 1,100 in the case of wood log boilers or pellet boilers and 1,400 in the case of pelletburning or wood-chips-burning central heating system, respectively. For the installation of a solar thermal system or a photovoltaic plant in residential buildings the basic funding varies between 300 and 500 per apartment or house unit. In addition to the basic funding applicants (e.g. house and apartment owners, co-owners and tenants, public utility and municipal institutions, associations, sport facility operators, schools) obtain a grant of 50 per m² installed collector area. The total maximum subsidy amounts to 2,000 per house unit (single family house, semidetached house) and 650 per apartment. Housing Renovation Programme of the Government of Styria The most important Support Programs concerning the use of renewable energy in and energy efficiency improvements of residential buildings is the housing renovation programme of the province of Styria. In this context we can distinguish between the small housing renovation programme ( kleine Wohnhaussanierung ) and the extensive housing renovation programme ( Umfassende Wohnhaussanierung ). Please note that the rules for the programme from 2005 to 2007 were changes significantly. This explains the large increase in funding by the programme, which can be seen in Table 9. The paragraphs below explain the current rules of the programme. In the framework of the small housing renovation programme realty and apartment owners, co-owners and tenants who carry out maintenances measure at the building stock can, among other things, apply for a subsidy for the installation of a biomass heating system, a solar heating system and for measures that improve the thermal efficiency of the building stock. Besides a base funding for general improvement and maintenance measures at the building stock, additional funds are provided for selected ecological and energy savings measures (one ecological bonus point for each ecological or energy saving measure). The subsidy is made up of a government grant to annuity in the amount of 15 % of total investment costs for repaying a loan with a term of at least 10 years. In the case of energy saving measures and installation of renewable heating systems, subsidies are non-repayable. The maximum granted subsidy volume depends on the degree of improvement measures and the number of eco-bonus points, and amounts between 30,000 and 50,000. If the investment costs of renovation per apartment exceed 21,802, reality owners (or person authorized for construction) can apply for subsidies in the course of the extensive housing renovation programme. The object of this programme is to support extensive renovation measures at residential buildings with at least three apartments, whose building licence dates back at least 30 years. Besides general renovation work, also measures to improve the thermal efficiency of the building stock are eligible. In addition extra bonus points are given for ecological measures like the installation of biomass heating systems and solar heating systems. Similar to the small housing renovation programme, the subsidy is made up of a non-repayable government grant to annuity in the amount of 29 data according to the Federal Government of Styria, department of the Energy Commissioner 18/27
45% of total investment costs for repaying a loan with a term of at least 15 years. The maximum granted subsidy volume depends again on the degree of improvement measures and the number of bonus points, and amounts between 908 and 1,126 per m² living space. Styrian Fund for Green Electricity Ökofonds 29 With the objective of increasing the share of renewable energy in electricity production the province of Styria subsidizes investments in power plants using renewable energy resources. In the strict sense, the Styrian Fund for Green Electricity supports investments in power plants based on the following renewable energy resources: solid biomass, liquid biomass, biogas, solar energy, geothermics, hydropower, sewage and landfill gas. The subsidy volume is limited to additional costs of the investment. In other words, costs that are not met by feed in tariffs according to the Green Electricity Act. The additional investment costs are 100% eligible. Besides, the installation of power plants also the implementation of feasibility studies, concepts and marketing actions that considerably contribute to the development and diffusion of green power plants are funded. In this context the subsidy volume makes up to a level of 100% of total costs. Zukunftsfonds / Energy Research The Future Fund of the Government of Styria supports innovative and forward-looking projects in the field of economics, science, research, technology, youth, art and culture. Since 2001 the Government of Styria yearly calls for projects for given key topics. In the year 2006 the following key topics are emphasized: health (public health, public health and wellness) renewable energy nanotechnology mobility (internationalization, globalisation, knowledge exchange, migration) simulations (process-simulation, virtual reality, industrial engineering and manufacture) humanities The type and volume of subsidy are announced in the course of the tendering procedure and vary from project to project. In 2006 the total Future Fund budget covers 3.9 million whereas 8.6% ( 337,965) of it is used to support renewable energy projects 30. Surprisingly, in 2008 the future fund was not endowed. 3.2. National Subsidy Instruments Green Electricity Act 31 The Austrian law on green electricity - the Ökostromgesetz regulates the acceptance and payments obligations for renewable energy and energy from combined heat and power generation plant (CHP plant) as well as the organisation and financial support for these facilities. The goal of the law on ecological electricity is the achievement of a target value for the proportion of renewable energy totalling 78.1% in the total of electricity generated plus the following: 30 Land Steiermark: Zukunftsfond Steiermark, Tätigkeitsbericht 2005/2006, http://www.zukunftsfonds.steiermark.at/cms/beitrag/10082130/2061055, downloaded 30.6.2008 31 Austrian Law Ökostromgesetz (BGBl. I Nr. 149/2002) Implementation of EC Directive 2001/77/EG 19/27
- The assurance of efficient financial support for renewable energy carriers, - Supporting the development of new technologies, - Supporting CHP plant in the area of district heating, - Increasing the proportion of electricity generated from hydro-electric power stations with a bottleneck capacity of up to 10 MW, - Ensuring investment security for existing and future plant, - The creation of a federal-wide equalisation of the burden from financial support for electricity production from renewable energy and CHP combined heat and power generation plant. The delivery prices are to apply for the coming 10 years, in the first two years the price is to be lowered to 75% and subsequently to 50%. Different price categories are applied for the different technologies in use for the generation of ecological electricity, and these have additional variables in accordance with the year of the support provided and the size of the facility. Austrian Research Promotion Agency FFG 32 The Austrian Research Promotion Agency (FFG) provided financial support to the tune of 3,169,223 in 2005 for 45 participations of the above discussed Styrian companies, research institutions, intermediaries and universities that are members of ECO and are discussed above. The support funds provided in the following year 2006 were higher and reached 9,587,384, with these funds being shared out in the course of this year by 57 sponsored participation projects. Participation is defined as each separate interest taken on by a company in a programme line. In accordance with this principle research facilities received 2,084,838 in 2005 and 5,557,710 in 2006. The universities received 477,500 in 2005 and 757,110 in 2006. Intermediaries were involved in this support process in 2006 only receiving 209,000. A sum of 606,885 from FFG funds was shared by 58 Styrian companies contained within these project definitions for involvement in 15 participations. In 2005 the sum was 3,063,564 in 20 participations. Since the financial support given was derived from both energy specific as also general programme lines a completely precise division in the share-out for the funding cannot be made. For the sake of simplicity the assumption is made in this study that 65% of the funds flowed to energy and energy efficiency specific measures. The consequence of this is: - 15 participations in 2005; 394,475 energy specific financial support to companies - 20 participations in 2006; 1,991,316 energy specific financial support to companies National Environmental Support (UFI UmweltFörderung im Inland) The use of renewable energy and the implementation of energy efficiency measures by companies are supported by the National Environmental Support (UFI). The UFI is a national support scheme programme, which grants subsidies to the provinces of Austria for projects aimed to protect the environment, like projects that - control sewage disposal and warranty of a sufficient water supply, 32 Data based on personal interview and compilation by FFG, June 2008 20/27
- prevent or reduce strains due to air pollution, noise and waste, - support plant-related measures abroad, which serve the implementation of national, Community law, or international environmental and climate protection objectives, as well as - aim to remediate contaminated sites - support measures to reduce CO 2 and other climate relevant emissions like promotion of renewable energy use and energy efficiency measures. For the purpose of this paper, the last point is a matter of particular interest. The programme for renewable energy use promotes, among others (geothermal energy, wind energy, small hydropower station, production of energy from waste), energy production from biomass and solar heat production. The following systems are eligible: Biomass: - Single biomass heating system including automatically charged biomass heating systems, wood log boilers, central heating systems and related costs (boiler house etc.) as well as micro-nets; - Biomass district heating systems: district heat stations (inclusive equipment), storage building, distributing network; - Plants for combined heat and power production (for personal use or grid connected systems) based on liquid or solid biomass; Solar: - Solar heating system aimed for hot water preparation and partial solar space heating and large-scale solar plants The energy efficiency programme promotes the use of heat pumps, the efficiency improvement of energy use (e.g. use of waste heat) and supports measures to improve the thermal efficiency of buildings (building envelope, windows). The latter includes the exchange windows/doors, the thermal insulation of the building facades, insulation between the unheated attic and the upper floor as well as the insulation between the cellar and the ground floor etc.. The latter enables asylums, hostels, private kindergartens, private schools and private nursery, office and administration buildings, business premises and accommodation facilities to apply for subsidies for the following measures: - exchanging windows/doors, - thermal insulation of the building facades, - thermal insulation between the unheated attic and the upper floor - thermal insulation between the cellar and the ground floor - measure that facilitate the passive use of solar energy The target group of the UFI programme are individual and legal person who are engaged in a business. With the exception of thermal efficiency measures (subsidy volume depends ongrade of efficiency and amounts to 20%-30% of environmental related costs), the subsidy volume amounts to 30% of environmental related investment costs. 21/27
Since 1993 Kommunalkredit Public Consulting (KPC) is in charge of the management of the Federal Environmental Support Schemes on behalf of the Federal Ministry of Agriculture and Forestry, Environment and Water Management. National Energy Research Austrian Science Fund (FWF) The Austrian Science Fund (FWF) was established in 1967 and is Austria's central body for the promotion of basic research. On the basis of proposals the Fund supports high quality research projects on international level, which are non acquisitive. The FWF is the most important source for financing third-party funds projects. In 2005 the budget amounts to 122 33 million and 151 million in 2005, respectively, whereas less than 1% 33 is used to support research in energy technologies. The major part of this budget projects is used to finance research projects with a maximum term of three years. Besides, the FWF fosters key research topics with a maximum term between five to ten years, supports the establishment of doctoral colleges and awards junior researchers scholarship and other awards. 33 FWF Financial Review 2005 und 2006, available at: http://www.fwf.ac.at/de/public_relations/publikationen/publikationen.html, downloaded 30.06.2008 22/27
3.3. Amounts of Public Funding 3.3.1. Green energy except research and administration Table 9 Public Funding in green energy for the periods 2005 and 2006 Public Funding 2005 2006 2007 Agricultural funds 34 4,680,000 5,530,000 - biomass production 4,680,000 5,530,000 - Styrian environment fund 29 2,038,695 3,724,955 - biomass production 150,000 0 - conversion of biomass to heat and el. 1,513,349 1,885,987 - solar thermal energy conversion 35 525,196 1,838,968 - Styrian fund Green Electricity 29 190,000 0 - conversion of biomass to heat and el. 190,000 0 - Housing Renovation Programme 14 4,551,000 6,800,000 13,050,000 conversion of biomass to heat and el. 550,000 1,300,000 3,400,000 solar thermal energy conversion 1,000 200,000 650,000 energy efficient renovation 4,000,000 5,300,000 9,000,000 National Environmental Support 15 3,334,236 8,239,132 8,256,722 conversion of biomass to heat and el. 2,499,915 6,982,997 7,384,591 solar thermal energy conversion 257,771 895,564 665,930 energy efficient renovation 576,550 360,571 206,201 SFG (Styria) 27 1,770,000 408,600 - green energy technologies 1,770,000 408,600 - FFG (Austria) 27 394,475 1,991,316 green energy technologies 394,475 1,991,316 total 16,958,406 26,694,003 - * All figures are exact figures based on cited references with the exception of the Housing Renovation Programme and SFG. ** The symbol - refers to an unknown investment volume - - 34 exact figures according to the Chamber of Agriculture in Styria 35 a delay in the payments of the year 2005 into 2006 explains the large differences between the years 23/27