The focus of renewable industry analysts is typically on wind and solar electricity generation with occasional consideration of biogas and biomass generation. Few have considered the significant potential of renewable heat and how the principle behind feed-in tariffs can be applied to renewable or “green” heat.
Currently, several countries, including Germany, France, Spain, and Switzerland, pay a cogeneration or Combined Heat & Power (CHP) bonus. For every kWh of electricity generated, they are paid an extra amount to compensate for the heat they also produce.
However, modern electronics allow accurate metering of heat and are used widely in continental Europe to measure heat consumption in district heating systems. Heat, like electricity, can also be measured in kWh. It was only a matter of time before the policy of using feed-in tariffs to pay for new electricity generation was applied to the production of renewable heat.
Regulators in Britain are proposing a system that pays directly for the heat. Britain’s renewable heat payment is in addition to any payments for electricity generation. Thus a biogas plant less than 500 kW in size where waste heat from electricity generation is also used, for example in district heating, would be paid £0.055/kWh (€0.066/kWh) for the heat plus £0.115/kWh (€0.138/kWh)for the electricity for a total of £0.17/kWh (~€0.20/kWh).
The British heat tariffs perform the same function as the district heating bonus in the German Renewable Energy Sources Act of ~€0.03/kWh on top of the biogas tariff €0.115/kWh for electricity generation from plants less than 150 kW. If the biogas in the German plant is created with farm wastes, there is a further bonus of €0.04/kWh. Such a plant in Germany can receive a total of €0.185/kWh.
Likewise, French biogas tariffs for plants less than 150 kW of €0.09/kWh can be coupled with a maximum premium or bonus for heat content of €0.03/kWh. France also offers a further bonus of €0.02/kWh if the methane is produced on-farm. Thus, an on-farm biogas plant where the waste heat is used can receive up to €0.14/kWh.
In 2007, the Ontario Sustainable Energy Association (OSEA) recommended in its report “Renewables without Limits” that the Ontario Power Authority institute solar thermal tariffs of $0.20 CAD/kWh (€0.16/kWh) for residential solar thermal and $0.10 CAD/kWh (€0.08/kWh) for commercial solar thermal installations. OSEA’s recommendation was not included in Ontario’s feed-in tariff program launched in the fall of 2009. OSEA also recommended that OPA set a tariff for biogas injected into natural gas pipelines. This feature was also not included in the new Ontario program. Neither Ontario’s government nor the OPA have ruled out implementing a renewable heat tariff in the future and it is expected that the topic will be raised at the first review of the province’s feed-in tariff program likely to begin in late 2010 or early 2011.
While often overlooked, renewable heat tariffs may be as significant in the future development of renewable energy as feed-in tariffs for electricity generation have already become.