HOT|COOL NO. 1/2017 - "System Integration"


By Paul Voss, Managing Director, Euroheat and Power

its application in practice would be to simply increase prices and decrease system reliability, neither of which is particularly compatible with the EU’s ambitions in this field. The inclination of policy-makers to apply a model which they feel has worked in the case of the gas and electricity markets is understandable in principle, but this kind of impulse needs to be tempered by an understanding of the practical realities and highly specific nature of DHC networks. Cutting and pasting models from other sectors simply won’t work. Other areas of potential concern include the proposal to revise downward the factor used to determine the relative efficiency of electricity generation, continued uncertainty regarding the distinction between the notions of ‘customer’ and ‘final user’ with respect to metering and billing obligations for DHC providers, and insufficient clarity as to the placing of waste heat and cold on an equal footing with their renewable counterparts. And we’re only just getting started! What happens next? The publication of these proposals marks the beginning of a new phase for EHP and for the European district energy sector. Taken together, the numerous provisions on heating and cooling networks can be understood as an offer from the European Commission to our industry. They are effectively proposing to encourage our growth and development in exchange for assurances about our ability to deliver the best version of DHC; one that is green, affordable and consumer-friendly. To use a term from the Brexit debate, to refuse this offer would be an astonishing act of self-harm. Equally though, it is our right and obligation to negotiate the terms. It is important to distinguish between Commission proposals (what we have now) and final legislation (what we’ll have in a couple of years when the EU decision-making process has run its course). Working with legislators during this process to establish proportionate regulatory safeguards without compromising the commercial or technical viability of DHC networks around Europe will be the defining challenge of 2017 (and 2018 in all likelihood!) for EHP. With this inmind, EHP, together with ourmembers, will work closely alongside the European Council and Parliament throughout the process of transforming these draft proposals into finished pieces of legislation. It is our job to make sure that the Clean Energy for All Package is remembered not as an avalanche, a tsunami or a Death Star but as a catalyst for the further development of DHC as a solution to Europe’s environmental, strategic and economic challenges. It will be a busy, challenging and exciting time but we will approach this work with confidence and from a position of increasing strength. We’re looking forward to the journey and are quietly optimistic about the final destination!

Though it’s only been two months, it feels as though a lifetime has passed since the European Commission published its ‘Clean Energy for all Packages’. In the weeks leading up to the release of the package, it was compared to many different things, none of them particularly flattering. Whether it was a ‘tsunami’ an ‘avalanche’ or, my personal favourite, ‘the Death Star’, the one thing nearly everyone in Brussels seemed to agree on was that it would be big and potentially dangerous. Now that the dust has settled, we can confirm that the package is indeed BIG! Comprising more or less 4500 pages of legislative proposals, impact assessments and technical annexes, this isn’t something you’re going to want to bring to the beach! Whether or not it’s ‘dangerous’ is a rather more complex question. As we at Euroheat and Power (EHP) go through the process of working our way through the package’s many constituent documents, the picture we see emerging is predictably mixed, with opportunities and challenges for DHC blended together in equal measure. The good news is we will have many opportunities to improve the balance and sweeten the final results over the next two years. Personally, I see plenty of reasons for optimism. What we like! While there are literally thousands of details to consider, some key points of interest are already quite apparent. First and foremost, the package provides definitive proof that the heating sector in general and DHC in particular are no longer stuck in the margins of the EU policy debate. Heating and cooling networks are very much in the spotlight. There is more and more recognition of DHC’s potential to contribute to key European goals such as cutting GHG emissions, enhancing supply security and facilitating the increased update of renewables into the energy system. Similarly, the proposal to establish a home for DHC in the future Renewable Energy Directive is a clear and highly visible political signal that our technology is now understood as a driver of the energy transition rather than an alternative. We recognise in the proposals significant efforts on the part of the Commission to address EHP’s most pressing policy concerns, notably the explicit promotion of waste heat and cold and the fair treatment of ‘nearby’ energy supply (i.e. via DHC networks) relative to its on-site (building level) equivalent. Collectively, all of these positive signs tell us that the advocacy work we’ve taken as an industry in recent years has been worth the effort. They tell us that our voice can be heard and that the views of our industry count for something. What we like a little less… While the increased awareness of DHC is of course welcome, some of the proposals on the table will likely need to be refined if they are to deliver their stated objectives. An important example is the provision calling for opening of thermal networks to 3rd parties wishing to sell heat directly to customers. Although this is an interesting concept in principle, the likely effect of

For further information please contact:

Euroheat and Power Att.: Paul Voss


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