Fostering renewable industry integration in the industry
As one of the largest energy consumers and contributors to greenhouse gas emissions, industry will have to play a significant role to reach the targets of the Paris Agreement. Renewable energy (RE) is bound to provide renewable electricity, heat and fuels to this economic sector, as is demonstrated by several inspirational applications around the globe.
This IEA-RETD study explores 21 case studies of state-of-the-art renewable energy (RE) applications in the industry and provides lessons learned for industrial actors and recommendations for policy makers. It finds that RE integration in the industry is already widespread worldwide, mainly driven by its direct benefits for industrial players in a changing energy environment.
RE integration in industrial assets brings direct benefits: Reduced energy costs and price hedging, improved energy supply reliability, increased productivity, additional revenue-generating opportunities and greater coherence with corporate environmental and local commitments. But various barriers still hinder full RE development in the industry. Eight issues have been identified that can tilt an industrial actor towards or away from deploying RE production assets in its facilities, from regulatory regimes and investment costs over technology maturity to awareness. However, industrial players and policy makers have a wide array of options to overcome those barriers. Beyond direct financial incentives, innovative public support schemes should be implemented to facilitate RE integration projects, like guarantees to address risks, third party power production to improve pay-back time and operational implementation, and localized policy demonstration projects and clusters to test optimal regulatory solutions globally and to generate many new and successful projects in the coming years.
On this page, you can find the policy report, the final presentation the compilation of the 21 case studies, and the long list of cases.
RE-INDUSTRY was presented at the IEA-RETD workshop, co-organized by NEDO, on 15 May in Tokyo. For more information on the event, visit http://iea-retd.org/archives/events/iea-retd-workshop-in-tokyo-japan
Revitalisation of local economy by development of renewable energy: good practices and case studies
Renewable energy can contribute to the creation or revitalisation of local economies, by creating new jobs and services. But what is the exact nature of these benefits, how can they be realised, and what policies could support this? On behalf of the IEA RETD TCP, the Institute for European Environmental Policy (IEEP) explored good practices, by addressing the following topics:
- How to increase and/or maintain employment in the local economy induced by the development of renewable energy projects?
- What type of employment and new business can it create? What are the conditions to make it happen?
- How to divide policy roles between national and local governments to achieve successful revitalisation of the local economy?
Six in-depth case studies were carried out, namely:
- Nord-Norge (Norway) –a cluster of renewable energy sources
- Saint Dizier and Le Mené (France) –a biomass heater with district heating network and a renewable energy cluster, respectively
- Santa-Cruz (USA) –solar PV installations
- Bay of Fundy (Canada) –in-stream tidal turbines including research and pre-commercial activities
- Furness Peninsula (the UK) –off-shore wind farms
- Hamburg (Germany) –renewable energy cluster
REvLOCAL was launched at a workshop on the revitalisation of local economy by development of renewable energy, which was held on 1 September 2016 in Fukushima in Japan. This region is in dire need of a revitalisation of the local economies, after the Great East Japan Earthquake in 2011, and the damage caused by the resulting tsunami and nuclear disaster at the Fukushima Daiichi Nuclear Power Plant. For more information visit the event page on the website.
The detailed case studies as well as the summary findings and the Japanese translation of the Executive Summary can be downloaded on this page.
Policymakers should seek to stimulate the following local and regional RES deployment strategies:
- Clear commitment of local political decision-makers towards ensuring the success of renewables projects is critical, helping to ensure a positive spirit of cooperation and facilitation
- A clear local strategy for renewables depends on identifying potential economic advantages, and an urgent need for action. Where local areas face disadvantages such as old, declining industries, or isolation, renewable energy investment can therefore gain traction and support more quickly. Long-term national strategies for energy decarbonisation should identify not just geographical opportunities for renewables installation, but also the potential synergies with the economic needs of such disadvantaged areas
- Cooperation among a wide range of key local stakeholders is important in helping to overcome bureaucratic delays and find creative solutions (and can be easier to generate where there is a sense of urgency about local economic conditions)
- Approaches based on local ownership and control of RES projects may facilitate local acceptance and maximise local benefits
- Regions and local areas need to identify and capitalise on their strengths, in terms both of the renewable resources available and the local economic context
- Care needs to be taken to secure local support both for the overall strategy and for individual projects, on the basis of transparent and realistic assessments of impacts and benefits
- A one-window approach to applications is a useful way of facilitating early deployment of projects. But in practice the degree of commitment shown by local political leaders seems to be the most important factor in ensuring that relevant local bureaucracies work together to make things happen
- The strengths of the local skills pool need to be identified, together with the investments necessary to develop new skills relevant to renewables deployment
- A supportive national or state-level policy framework, based on continuity and predictability, is important; while local commitment might be effective in the absence of supportive national policies, the two operating together create an enhanced, synergetic impact.
Further issues to be considered include the following:
- Self-sufficiency and lower fuels bills can be an important driver of local attitudes and enthusiasm; but political commitments on these issues need to be managed carefully if they are not to hamper further development of renewables for export
- The local economic benefits of renewable investment are not a ´zero-sum game´. Creating centres of expertise, and gaining early deployment experience, make the economics of renewables investment more attractive generally
- People learn by seeing and doing, and demonstration by example can have a big impact. More attention should be paid to ensuring that the wider benefits of first-mover experience are shared promptly.
Non-individual transport – Paving the way for renewable Power-to-Gas (RE-P2G)
Should power-to-gas technology be pursued as an option for decarbonising the non-individual transport sector and if so, how can policy makers economically promote its development?
The answer is yes – but in order to be environmentally sound, power-to-gas must be based on fully, or close to fully, renewable electricity. This is particularly true for power-to-SNG, which is at a disadvantage when compared to the hydrogen path from a CO2 footprint point of view.
Detailed modelling of various options reveals that compared to other non-individual transport options, captive fleets of long range light duty vehicles are the most promising market segment for early adoption of power-to-gas technology, due to lower total cost of ownership (TCO) difference to diesel, potential for high volumes being reached faster and synergies with fuel cell electric vehicles (FCEVs) for individual uses.
Whatever the market segment, renewable power-to-gas mobility will hardly compete with fossil options or with the cheapest renewable options (i.e. battery electric vehicles (BEVs) and biomethane) without significant policy support. Therefore, setting an ambitious and binding regulation in favour of renewable mobility is a prerequisite to the development of renewable power-to-gas in the transport sector. The regulation on renewable fuels in transport should at least include higher requirements in terms of share of renewable fuels at the distribution infrastructure level.
In parallel, an exemption of taxes on electricity consumed and on fuel produced should be granted to power-to-gas plants running on renewable electricity. Subsidies for hydrogen distribution infrastructure, Green Public Procurement and direct financial support to private fleet operators are other recommended policy measures for P2G deployment at larger scale.
The preliminary project results were presented at the P2G conference in Berlin in June 2016. The final report will be presented at the European Transport Conference in Barcelona on 5-7 October 2016.
Policies for Storing Renewable Energy – a scoping study of policy considerations for energy storage (RE-STORAGE)
Energy storage is currently en vogue in the energy world, and sometimes presented as a silver bullet in meeting the challenges on the path to a low carbon energy system. Storage technologies could indeed help address the structural changes our energy system is facing and smooth the transition. They can contribute to balancing mismatches between supply and demand, and can support the deployment of renew-ables. However, deployment of storage aimed at facilitating renewables integration has, thus far, been limited.
This study identifies and discusses in detail four policy-relevant issues relating to renewables and storage that could affect the transition to a largely renewable energy system:
1. An effective energy system transition requires system approaches
2. The legacy system drives current market frameworks
3. Uncertainty around the performance of storage technologies affects adoption
4. System operators have a privileged position in storage deployment
As things stand, many storage technologies are immature and cannot compete on cost in current markets, but can provide valuable services that are currently poorly rewarded. Mechanisms to allow these technol-ogies to compete fairly, by valuing the services they do provide, would enable them to come down the cost curve and ultimately be fully cost-competitive.
While deployment and use of storage can inevitably support deployment of renewables, supporting it in a way that is fair, transparent, cost-effective and coherent with much larger energy system considerations is a complex and lengthy undertaking, with implications that ripple throughout that system.
This study provides recommendations for how stakeholders can engage around energy storage to ensure that decisions and policies regarding the energy system transition are informed by a clear and consistent systems perspective, and that barriers to the deployment of storage are reduced or eliminated.
Next generation policy instruments for renewable heating and cooling in the commercial sector
The overall objective of the RES-H-NEXT project was to analyse current patterns of use of renewable energy sources for heating and cooling (RES-H/C) in the commercial sector and provide evidence-based policy recommendations for IEA-RETD countries. The focus is on existing buildings.
Questions to be answered in this project are among others:
- What barriers to effective and efficient deployment of renewable heating and cooling exist at trans-national levels, national levels?
- Which policies have been seen to work and what features contribute to this success?
- What costs are typically associated with the implementation of a particular policy and which policies are most cost-effective?
- How can industry be encouraged to improve product efficiency and reliability and reduce costs?
- What is the relationship between uptake of energy efficiency measures and RES-H/C technologies?
- Which policies targeting the domestic or new building sector are useful to be applied in the commercial sector and which ones are less effective?
The project was carried out by Meister Consultants Group (US) in collaboration with Öko Institute (Institute for Applied Ecology, Germany), International Association of Plumbing and Mechanical Officals (IAPMO) and OÖ Energiesparverband (Energy Agency for Upper Austria).
In order to drive RES-H/C market development, the study investigates the following, crucial next generation policy areas:
- Long-term plans and policy commitments.
- RES-H/C mandates for existing buildings or utilities.
- Performance-based incentives for RES-H/C
- Soft cost reductions for RES-H/C
- Innovative financing and business models
More deployment of renewable energy technologies (RET) could potentially result in negative side effects like visual or noise impacts, or increased local transport for biomass. The integration of renewables in societies asks for institutional solutions that take the concerns of citizens and other stakeholders seriously. Fortunately, many good practices exist that have demonstrated that renewables can be integrated in the ‘backyards’ of modern societies. The IEA-RETD has prepared a guidebook with many of these institutional solutions. Examples are: stakeholder involvement, -participation and even -compensation, or clear spatial planning and legal procedures that are trusted by all stakeholders. Project developers and both national and local policy makers can learn examples in other countries.
The RETs addressed in the guidebook include: wind energy (onshore and offshore); solar thermal and solar electric energy; biomass and biogas; wave and tidal energy; and geothermal energy. The best practices are described according to the following three dimensions:
- spatial planning;
- integration of RETs into the local environment; and
- stakeholder involvement.
A key to successful RET deployment is proper spatial planning, which balances the many interests surrounding a RET project. National authorities can make a major difference by creating a legal framework that supports effective spatial planning. Local authorities also play a crucial role in being responsible for the planning process itself. Developers can do a lot to respond to local concerns by carefully integrating the technologies into the local context, respecting the local landscape and other natural assets and seeking ways to harmoniously integrate the RET into the surrounding environment.
The involvement of – and communication with – the stakeholders that are directly affected by the projects should be carefully considered throughout all phases of the project. Stakeholder involvement and communication is principally the responsibility of the project developers, but local authorities can also play an important role.
Business models for Renewable Energy in the Built Environment
The project RE-BIZZ aims to provide insight into policy makers and market actors in the way new and innovative business models (and/or policy measures) can stimulate the deployment of renewable energy technologies (RET) and energy efficiency (EE) measures in the built environment. It analyses ten business models in three categories (amongst others different types of Energy Service Companies (ESCOs), Developing properties certified with a ‘green’ building label, Building owners profiting from rent increases after EE measures, Property Assessed Clean Energy (PACE) financing, On-bill financing, and Leasing of RET equipment) including their organisational and financial structure, the existing market and policy context, and an analysis of Strengths, Weaknesses, Opportunities and Threats (SWOT). The study concludes with recommendations for policy makers and other market actors.
BOOK: Business Models for Renewable Energy in the Built Environment
The report is also available as book, which can be ordered via the publisher for GBP 49.99 (excl shipping costs, incl VAT) or directly via IEA_RETD@ecofys.com for EUR 45 (excl shipping costs, incl VAT).
It has become obvious that a number of countries have used different methods and approaches to promote the use of renewable energy technologies for heating and cooling. Some countries have chosen to focus on deployment of REHC in the institutional, commercial and industrial sectors whilst others have been increasingly successful in deploying REHC in the residential sector. Following on the recommendations of previous RETD work, this focuses on the critical success factors for developing policies in support of increased deployment of REHC in the residential sector. The findings will be discussed with policy makers, regional and local decision makers, utilities and energy retailers with the aim of furthering the deployment of REHC in the residential sector by means of international co-operation and ongoing dialogue.
The report is published by Routledge in a book format, see Routledge.
The book can also be ordered via IEA-RETD for the discount price of € 45. For further information, please contact IEA_RETD@ecofys.com.
Heating in the industrial, commercial and residential sectors accounts for an estimated 40-50% of global final energy demand. But renewable energy technologies do not contribute significantly to providing that heat. The need for policies supporting heat from renewables is often overshadowed by efforts in transportation and power generation. The publication Renewables for Heating and Cooling – Untapped Potential turns the spotlight on a sector often overlooked even though it offers one of the largest potential contributions to climate change mitigation and energy security. Taking a hands-on approach, it details the “carrot and stick” policies that, when combined with education programs, can vigorously support renewable technologies for heating and cooling. Renewables for Heating and Cooling – Untapped Potential comes up with some strong findings on both policies and markets for renewable heating technologies. It is the fruit of intensive collaboration between researchers and takes a crucial step in raising awareness of the vast potential of renewable heat.
“This publication marks a milestone for renewable heat and gives policy-makers the tools to stir the ‘sleeping giant’ of renewables potentials,” said Hans Jørgen Koch, Deputy State Secretary of the Danish Energy Agency and Chair of the RETD. Ole Langniss, a co-author and former Operating Agent for the RETD, declared “this publication proves that renewable heating technologies are mature and inexpensive; now, the time is ripe for governments to guide the markets.”
Stuttgart, Germany (January 25, 2008): The International Energy Agency’s Implementing Agreement on Renewable Energy Technology Deployment (RETD) has issued the hardcopy release of its “Renewables for Heating and Cooling – Untapped Potential.” The report was a joint effort with the IEA Renewable Energy Unit (REU).
The objective of the RETD Heating and Cooling project is to provide an improved basis for decisions to promote heating and cooling services based on renewable energy.
The purpose is to identify actions which governments and local authorities could undertake to promote renewable energy for heating and cooling purposes.
The main results include the aforementioned comprehensive review of renewable heating and cooling technologies, markets and policies, “Renewables for Heating and Cooling – Untapped Potential” and a standard methods toolbox created to assist policy-makers in designing support schemes for renewable heat. A good policy practice brochure will also be created, especially targeted toward public bodies. The Standard Methods tool and good policy practice brochure are available for download below.
Additional Project Downloads:
The project was launched in November 2006 and ran until February 2008.