Future Aspects While remunerated under the FiT scheme the CHP installations are not used as flexibility option, however, the support scheme provides incentives for investment in CHP capacity. The contract period is limited to a certain amount of years, and after it expires the CHP installations can enter the power markets and contribute to the flexibility of the system. In other words, the incentive scheme may counteract the flexibility at the moment, but it helps to secure that flexibility through CHP capacity is available in the future. For improved flexibility the CHP installations would need to be supplemented with heat storages. 27 5.2.4. Framework Conditions for P2H in Estonia Current Aspects P2H technologies are currently not utilized in the Estonian DH system and no special regulation regarding electric heating has been adopted. Low heat prices and high electricity cost are considered reasons for the lack of investment incentives. Furthermore, due to high installation costs, heat pumps are considered baseload units, however, baseloads are presently covered by CHP. Future Aspects If P2H technologies are to be promoted, relevant legislation should be implemented. 5.2.5. Framework Conditions for General Resources Operational practice in DH-systems is primarily to match demand with supply through production units, and not through storage. Heat storages are uncommon. Seasonal storages are not deployed. HO boilers are not subsidised, but are widely deployed. Heat tariffs are subject to approval by the national competition authority, and must be flat, consumption-based and determined according to the cost of supply. Hence, they provide no incentive for flexibility. The heat suppliers are allowed a capital return of about 5-6% on top of their costs to supply heat power to the customers. DH systems are ageing, since many were established in the Soviet-era, and have large transmission losses.
WP2 DH report
To see the actual publication please follow the link above