Comparative Analysis of Identified Drivers and Barriers for Flexibility Common for all countries is the priority for CHP, and additionally that the power market alone is not sufficient for providing a feasible investment-case for CHP. At the same time, subsidies should only be necessary to the extent that the energy system cannot ensure the type of production facilities that society prefers. A solution can be re-regulation on a national level to remove the current barriers, concretely by replacing flexibility-reducing subsidy schemes with flexibility inducing taxation. It remains to context-specific feasibility studies, to show whether additional support is needed to maintain and invest in flexibly operated CHP. Also, since the process of reforming taxation can be lengthy, it might be relevant to consider subsidies on the short term. 10 8 6 4 2 DK ES FI LA LI NO SE TOTAL Figure 10 Distribution of barriers for flexibility in CHP operation. Total indicates the sum of all barriers for CHP, not counting the less relevant category Grid connection discounts. 6.1.2. Framework Conditions for Power-to-Heat Technologies P2H has very limited deployment in all surveyed countries. Denmark, Finland, Norway and Sweden use heat pumps and electric boilers to varying, but generally to small extent, while the Baltic countries use almost no electricity for heat generation. In the latter case, it is likely to be explained by the electricity production, which is less characterised by low-cost renewable electricity than the Nordic countries. All countries apply some sort of levy on the use of electricity for heating purposes. Tariffs on P2H for using electricity, decrease the comparative advantage against other heat producers. In the Nordic countries levies and taxes are reduced to a varying degree, while in the Baltic countries the electricity used for heat production is taxed and levied in the same way as any other electricity consumption. As with tariffs, presence of reduced energy taxation improves the competitive power of P2H. This effect is particularly present in Denmark and Norway, and for Finland specifically for P2H combined with CHP. For Lithuania, the exception regarding heat pumps is valid if the heat pump has not received investment subsidy. In Sweden and Finland, P2H is exempt from taxes in CHP-plants, but not in HO-plants. This appears to be a regulatory artefact from the time when CHPs were positively discriminated to increase deployment, but can be a barrier for P2H on the longer term. Regulatory priority is applied for waste-based heat in Denmark, where waste heat plants are present in the larger cities. This could limit the operational time of other production facilities, including heat pumps, resulting in a competitive advantage of waste. For Norway and Lithuania, the priority is linked to investment subsidy and reduced electricity tax for electricity produced by waste. 42 ‐ Sum of barriers and absent drivers for CHP
WP2 DH report
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