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WP2 DH report

Framework Conditions Operation: Tax exemptions generally move the marginal bidding price down, thereby making the CHP more competitive and more able to participate in the market. Investment: Tax exemptions for fuel used for electricity production improves the business case towards investment in CHP capacity. 16 4.1.8. Presence of Energy, CO2 or Other Tax Reductions Reduction on energy tax, CO2 tax and other tax for fuel or CHP electricity or heat production. Operation: Tax reduction generally move the marginal bidding price down, thereby making the CHP more competitive and more able to participate in the market. Investment: Tax reductions improves the business case towards investment in CHP capacity. 4.1.9. Presence of Grid Connection Discounts The grid connecting cost for new CHP can be reduced. Grid connection discounts have been defined as framework conditions ex post the survey, hence related information are only available for some countries. Operation: A one-time cost, which is assumed to affect bidding price, although only marginally. Investment: Increases the investment incentives for CHP. 4.1.10. Absence of Tariffs Levied on CHP for Feeding Into Grid Tariffs can be levied on the production of electricity from generators. Grid tariffs for feeding to grid have been defined as framework conditions ex post the survey, hence information regarding on these are only available for some countries. Operation: Tariffs generally move the marginal bidding price up, thus the absence of these makes the CHP more competitive. Investment: Improves the business case towards investment in CHP capacity. 4.2. Power to Heat 4.2.1. Absence of PSO on Electricity (When Used for Heat Generation) PSO (Public Service Obligation) is a tariff on electricity consumption, which is aimed at covering support costs for energy investment schemes, often for renewable energy. Similar tariffs, not necessarily called PSO, also fall into this category. Operation: If applied on electricity when used for P2H, PSO and similar tariffs increase marginal operation costs, making the P2H-solution less competitive. Investment: The operational barrier reduces incentive to invest.


WP2 DH report
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