Support Measures For DHC

Support Measures for DHC

Country

Romania

#

Name and reference of measure

Type of measure

Responsible organ

Existing or planned?

1

Government Decision No. 219/2007

Decision

Government of Romania

Existing

Quotations from the measure

The Purpose of the measure

Why was it introduced?

The purpose of this Decision is to establish the necessary legal framework for promotion and development of high efficiency cogeneration of heat and power, based on useful heat demand and savings in primary energy on the energy market, the goal being energy efficiency increase and improved security of energy supply, taking into account the specific economical and climate conditions of Romania.

The purpose of the Government Decision No. 219/2007 is to contribute to the objective of increasing the share of electricity produced in combined heat and power plants in Romania, modernizing and constructing new combined heat and power plants (CHP plants as well as promoting the construction of new and expanding existing heat networks which supply heat from combined heat and power plants, in the interests of saving energy, environmental protection and achieving the government's climate protection targets.

As a basic instrument the Government Decision No. 219/2007 obliges grid operators to connect CHP plants to their grid and give priority to buying electricity from cogeneration.

For which target groups? National or regional?

The target groups are national CHP plant operators and heating network operators.

Which activities does it aim to stimulate?

In general the Decision tries to stimulate the production of electricity from cogeneration.

What results does it expect?

The result is an increased share of electricity from cogeneration by 2020. That translates to an increase in the current share of electricity from cogeneration of 10 %.

Is it related to Romania’s implementation of any EC Directive?

The Decision also serves as the implementation of Directive 2004/8/EC on the promotion of cogeneration based on a useful heat demand in the internal energy market (Cogeneration Directive).

Eligibility Criteria

In order to qualify for the bonus paid for the power supplied from cogeneration the producers have to fulfill certain eligibility criteria as laid out in the Decision.

Determining the effectiveness of CHP under the criteria set out in the Decision’s Annex. No. 3, shall be based on benchmarks of efficiency for separate production of electricity, heat, respectively

Impact of Measure

Effectiveness of the measure

Planning:

The decision a positive effect on planning because grid operators are obliged to connect CHP plants to the grid and buy electricity from cogeneration with priority over conventional electricity. In this context the legal equality between electricity from cogeneration and electricity from renewable energy sources also has a positive effect because electricity from renewable energy sources and electricity from cogeneration are accepted easily tin the grid. This gives plant operators more certainty in regards their investments and future developments.

Generation:

The Act also has a positive effect on generation because of the bonus being paid for electricity from cogeneration. This premium was introduced to offset higher investment costs for CHP plants. Because of the ecological and climate change benefits CHP has over the separated generation of heat and electricity, CHP and District Heating are natural allies. In this sense District Heating serves as a heat sink for CHP and on top of that provides valuable infrastructure for renewable energy sources and/or heat that would otherwise be wasted.

Distribution:

The Decision has a positive effect on distribution since it helps to offset high investment costs involved with the laying of pipelines.

Demand:

Since the Act provides incentives to produce heat and power in cogeneration in units that supply the District Heating networks it also helps the demand side.

Organization:

The Act has no direct effect on the organization side.

Could the measure be considered effective?

The Decision can be considered effective provided that all the involved clarifications and additional regulations are issued as mentioned in the Decision.

Due to which reasons? (quantifications if possible)

The Decision been in force for about a 2 years and 9 months but the necessary supplementary legislation was just issued in 2009, namely Decision 1215/2009 dated October 7^th, 2009, making quantifications complicated at this time.

How well does the measure suit the market conditions of your country?

The measure suits the market conditions in the sense that it aims to offset the relatively high investment costs in both production and distribution of District Heating from CHP. The problem related to this Decision is the eligibility of old power plants in terms of high efficiency cogeneration. Major changes are needed and very few of them can access the necessary investments funds. New cogeneration units are more qualified to benefit from this legislative measure.

Are there any recommended changes to this measure?

There are certain clarifications that may be necessary in the context of administrative.

Is there any review process for this measure and if so what is it?

Nothing for the moment.

#

Name and reference of measure

Type of measure

Responsible organ

Existing or planned?

2

Government Decision No. 1215/2009

Quotations from the measure

CHAPTER I

General

Article 1. - This decision establishes the legal framework necessary to implement the bonus scheme type support for the promotion of high efficiency cogeneration based on useful heat demand, established by art. 9 para. (2) of Government Decision no. 219/2007 on the promotion of cogeneration based on useful heat demand, 'the support scheme.

Article 2. - This decision shall apply to:

a) producers of electricity and heat in high efficiency cogeneration;

b) electricity consumers;

c) Electric energy;

d) network operators;

e) support scheme administrator.

(…)

Article 4. - ANRE elaborates, within 5 months from the effective date of this decision, the subsequent regulatory support required to implement the scheme.

.

Article 7. - (1) support scheme applies only to producers of electricity and heat cogeneration that apply to ANRE for providing this support for electricity produced in high efficiency cogeneration.

(2) scheme support the producers referred to in paragraph applies. (1) that own and / or commercially exploit the CHP, the amount of electricity in high efficiency cogeneration, actually delivered the power networks of National Energetic System.

(3) producers of electricity and heat cogeneration from renewable energy sources are entitled to opt either for the support scheme provided for in this decision, either to support scheme to encourage electricity production from renewable energy.

Article 8. - (1) support scheme applies to the period 2010-2023.

(…)

CHAPTER III

Bonus for power produced in high efficiency cogeneration

Article 10. - (1) Bonus is the amount of money that a producer of electricity and heat cogeneration receives for each unit of electricity expressed in MWh, produced in high efficiency cogeneration power grid and delivered in the NPS.

(2) The bonus shall be paid monthly for electricity in high efficiency cogeneration, delivered in National Energetic System and sold on the competitive market for electricity and / or regulated contracts.

(3) Within 30 days after the effective date of this decision, ANRE approved by order of the President amount of bonuses that are granted each year of the period referred to in Art. 8 para. (2) and the procedure for their adjustment.

(4) Bonuses under par. (3) are determined for 3 types of fuels used to produce electricity and heat in cogeneration: solid fuel, fuel oil provided the fuel gas transport and distribution network provided.

(5) ANRE establishes annual electricity generators and heat cogeneration receiving the support and upgrades and quantities of highly efficient power receiving the support in the coming year, under each manufacturer.

(6) The producers who use the fuel mixes, bonus amount under par. (5) is determined fuel mostly considered in determining the annual amount of electricity referred to in paragraph high efficiency. (5).

(7) If electricity trade in the competitive market in electricity, bonus of electricity in high efficiency cogeneration is conditional upon the existence of groups of measurement that provides hourly measurements of quantities sold for heat and electricity.

CHAPTER IV

Contribution for CHP

Article 11. - Funds needed to support implementation of the scheme shall be the collection of monthly contribution for cogeneration of electricity consumers and from suppliers exporting electricity.

Article 12. - (1) ANRE determine annual contribution amount for cogeneration, based on income requirements for payment of bonuses and management support scheme and the amount of electricity needed to cover the curve of domestic electricity consumption and export sales.

(2) contribution for CHP is set annually by Order of the President of ANRE and may be changed every six months in accordance with Art. 17 para. (2).

Article 13. - (1) The electricity produced in other EU Member States in highly efficient cogeneration and certified by the guarantee of origin, consumers of electricity sold in Romania, receiving contributions for CHP return under the provisions of art. 25 and 90 of the Treaty establishing the European Community.

(2) In cases under para. (1), suppliers introduced in Romania through electricity interconnection lines in high efficiency cogeneration, certified by the guarantee of origin, may request the return of contribution for CHP, the maximum period of 60 days of the month in which the that traded energy.

CHAPTER V

Management Support Scheme

Article 14. - (1) National Company "Transelectrica" - SA / OPCOM Trading Company - SA is responsible for managing support scheme, the main tasks is to collect the monthly contribution for the CHP and the monthly payment of bonuses.

(…)

Article 20. - To receive the bonus, the producers of electricity and heat in cogeneration of electricity marketing required in high efficiency cogeneration of electricity competitive market, according to regulations issued by ANRE.

Article 21. - (1) The electricity produced in high efficiency cogeneration has not been sold on the competitive market of electricity can be sold under contracts covered by the scheme during the relevant limit demand for electricity contracts covered under the regulations issued ANRE.

(2) sales price of electricity in high efficiency cogeneration through regulated contracts, is set annually by Order of the ANRE President at the 90% of the average electricity trading market in the previous year for the next day .

(3) For the period 2010-2012, the selling price of electricity in high efficiency cogeneration, governed by contracts, not more than 40 euros / MWh, excluding VAT.

(4) The limit referred to in paragraph lei. (3) is determined in accordance with Law no. 571/2003 regarding the Fiscal Code, with amendments and additions, the exchange rate used to calculate excise duty on electricity.

(5) If the supply of electricity in high efficiency CHP to be sold through regulated contracts exceeds electricity demand for these contracts, the amount of electricity acquired under contracts covered for each manufacturer is adjusted the ratio between the amount of electricity needed and the quantity of contracts to the total power required by producers to be sold by such contracts.

Article 22. - (1) ANRE establishes the price for heat produced and delivered from CHP receiving support scheme in the price for heat delivered from a plant that produces heat separately with the same type of fuel and harmonized efficiency reference separate production of heat, established by Commission Decision 2007/74/EC of 21 December 2006 laying down harmonized reference values for separate production of electricity and heat, issued pursuant to Directive 2004/8/EC of the European Parliament and Council.

(2) Within 30 days after the effective date of this decision, ANRE approved by order of President heat value prices for the 3 types of fuels referred to in Art. 10 para. (4) the adjustment procedure.

Article 23. - (1) Annually, during the quarter IV, ANRE analyze costs and revenues related to electricity production activity in high efficiency cogeneration, that the heat produced in cogeneration, estimated the following year for each producer receiving the support .

(…)

The Purpose of the measure

The purpose of the measure is to complement and clarify un-regulated aspects of Government Decision No. 219/2007 regarding promotion of high efficiency cogeneration.

Impact of Measure

As mentioned for Government Decision No. 219/2007

Effectiveness of the measure

As mentioned for Government Decision No. 219/2007

#

Name and reference of measure

Type of measure

Responsible organ

Existing or planned?

3

Government Decision No. 462/2006 - “District Heating 2006-2015 warmth and comfort” Programme

Decision

Ministry of Finance

Ministry of Internal Affairs, Ministry of Development, Public Works and Dwelling

Existing

Quotations from the measure

(…)

(2) The "District Heating 2006-2015 heat and comfort" comprises two components:

a) rehabilitation of the centralized heat supply;

b) the thermal rehabilitation of buildings.

(…)
Article 7. - (1) Eligible costs of the projects submitted under the "District Heating 2006-2015 heat and comfort" to the component under Art. 1 para. (2). a), are co-financed at up to 70% of funds from the state budget, the budget of the Ministry of Interior and Administrative Reform, the criteria are established for financing a project the percentages set out in Regulation on the application of "District Heating 2006-2015 warmth and comfort.

(2) Recipients of "District Heating 2006-2015 warmth and comfort" to the component under Art. 1 para. (2). a), are local government authorities which own centralized heat supply.

(3) beneficiaries referred to in para. (2) must include in its budget the difference between the amount received from the state budget and total project value.

(4) eligible expenditure projects submitted under the "District Heating 2006-2015 heat and comfort" to the component under Art. 1 para. (2). b), are financed by funds from the state budget, the budget of the Ministry of Development, Public Works and Housing.

(5) Recipients of "District Heating 2006-2015 warmth and comfort" to the component under Art. 1 para. (2). b) are associations of owners of blocks of housing - condominiums connected to centralized heating system.

(…)

The purpose of the investment program "District Heating 2006-2015 heat and comfort" is to improve the efficiency of DH systems, with the ultimate goal of reducing the consumption of primary energy to produce heat at least 1 million Gcal / year to consumption of primary energy consumed in 2004.

II. The program finances investments in:

a) rehabilitation of the centralized heat supply:

1. unit / heat production units;

2. transport network of primary heat (hot water);

3. heat and thermal modules points at the building, where economically justified;

4. distribution network and heat hot water heaters;

b) the thermal rehabilitation of buildings:

1. supply network inside the building with heat and hot water heaters;

2. metering with individual thermostatic valves;

3. rehabilitation of buildings thermal envelope, that the facades, terraces and exterior joinery.

For part b) Thermal Rehabilitation of Buildings ", section 1, 2 and 3, financing, measures and stages of the program will be conducted in accordance with Government Emergency Ordinance no. 174/2002 on the establishment of special measures for the thermal rehabilitation of housing units - condominiums, with amendments and completions.

(…)

Key measure for the thermal rehabilitation of residential buildings include the following:

- Thermal insulation of external walls, the terrace, the floor over basement, roof structures and roof achieve their replacement or repair or replacement or double windows and exterior doors, repair, strengthening and painting of exterior walls and other structural and non-structural elements constituting the tire building;

- Interference from pipes and fittings with loss of basement / heating association owned by individual owners.

III. Centralized generation, transmission, distribution and supply of heat must meet the following mandatory conditions:

a) the need for heat will ensure the following:

1. peak consumption curve - the equipment producing heat peak;

2. district heating consumption period to ensure - through co-generation plant with a capacity that can take heat consumption variations of + / - 10% of rated capacity;

3. insurance for domestic water consumption - by the cogeneration plant with a capacity that can take heat consumption variations of + / - 10% of rated capacity;

b) production capacity of heat production unit will be designed for current and projected consumption;

c) annual energy efficiency of the unit production of heat (heat + electricity evacuated for recovery) / primary energy consumed for obtaining heat and power must be at least 80% exception can only production units which using biomass as primary energy resource, where the total efficiency must be at least 70%;

d) technical loss reduction in transmission of primary heat and distribution to values below 15%;

e) increasing the energy efficiency of heat points;

f) use module-level thermal property, where economically justified;

g) metering devices in the building and the level of heating plants;

h) reducing loss of heat and water networks inside of buildings;

i) Individual metering and thermostatic valves fitted to the end consumers;

j) the introduction of automation and dispatching systems, so that it can be provided continuously monitor and control the operation of facilities in the optimal parameters, from production to the user.

(…)

V. Eligibility program "District Heating 2006-2015 warmth and comfort, component Rehabilitation of centralized heat supply":

1. beneficiaries are local public administration authorities, which own centralized heat supply;

2. to finance rehabilitation works and modernization of centralized heat supply, provided in section II lit. a) section 1-4;

3. recipients must prove their contribution to total project costs;

4. the project showing that the investments heat supply system meet the technical conditions specified in section III;

5. projects should be based on heat supply strategies developed under section IV;

6. projects are implemented in the period 2008-2015.

(…)

IX. For component Rehabilitation of centralized heat supply, the financing of "District Heating 2006-2015 heat and comfort" is performed over a period of 8 years., and the funds allocated from the state budget in the amount of 2120 million lei. (…)

The Purpose of the measure

The purpose of the measure is:

a) rehabilitation of the centralized heat supply;

b) the thermal rehabilitation of buildings

Impact of Measure

Planning:

The decision has no effect on planning because is aimed to thermal rehabilitate the existing DH networks and to perform thermal rehabilitation of existing buildings.

Generation:

It has a positive effect on generation because is including the heat producing units in the list of programme beneficiaries but the effect is limited due to the dimension of the budget. Existing heat producer units are requesting significant funds for rehabilitation or modernization.

Distribution:

The Decision has a positive effect on distribution since it helps in rehabilitating the existing networks..

Demand:

Since the decision is promoting a programme which provides funds for the DH, the DH customers are affected in a positive way.

Organization:

The Act has no direct effect on the organization side.

Could the measure be considered effective?

The Decision can be considered effective provided that budgeted funds are provided as planned.

Due to which reasons? (quantifications if possible)

The Decision been in force for several years and is already helping the DH systems in the rehabilitation works. Unfortunately the necessary funds are not available as stated in the Decision .

How well does the measure suit the market conditions of your country?

The measure suits the market conditions in the sense that it aims to support the efforts towards DH rehabilitation.

Effectiveness of the measure

The effectiveness of the measure up to now is quantifiable but is less than the one expected due to the difficulties in insuring the necessary funds and the lack of co financing requested from the beneficiaries.

One of the benefits is that of having now several local heat supply strategies, which are mandatory in order to access the funds of the programme.

#

Name and reference of measure

Type of measure

Responsible organ

Existing or planned?

4

Decision No. 1661/2008

Government Decision

Ministry of Economy and Finance

Existing

Quotations from the measure

Article 1. - The National Program for energy efficiency and renewable energy use in the public sector for the years 2009-2010 is approved; the Annex is an integral part of this decision.

Article 2. - The measures provided for in this decision, which are likely to be considered state aid, will be carried out in compliance with provisions of Government Emergency Ordinance no. 117/2006 on national procedures in the field of state aid, approved with amendments by Law no. 137/2007 and state aid will be granted only after their approval by law.

Article 3. - Rules for the selection of applicants for co-financing provided in the National Program for energy efficiency and renewable energy use in the public sector for the years 2009-2010, approved by order of the Minister of Economy and Finance within 15 days from the date publication of this decision in the Official Gazette of Romania, Part I.

National Program for energy efficiency and renewable energy use in public sector for the years 2009-2010

(…)

2. Skills and main tasks

National Program for energy efficiency and renewable energy use in the public sector is the follow up implementation of energy efficiency measures carried out in 2005-2006, through the Romanian Agency for Energy Conservation (ARCE), to diversify the type of works to increase energy efficiency and renewable energy use that will get financial support from the state budget.

(…)

Financial support for co-financing is provided by the state budget, the budget of the Ministry of Economy and Finance, transfers between units of government. During period2009-2010 the National Program is intended to fund an amount of 32.9 million lei for 2009 and thereafter, 40 million lei for 2010.

(…)

2009-2010 National Program provides financing investment projects on energy efficiency and renewable energy use, with the direct beneficiaries being local government authorities.

Population in urban areas whose homes are connected to DH systems is the indirect beneficiary of this program by implementing new technologies that lead to significant heat bills, increased comfort and security of supply heat and domestic hot water.

It will record sales market benefits of energy efficiency equipment to reduce pollution and benefit the environment, primarily by decreasing emissions of greenhouse gases.

2. Types of eligible investment objectives for the new National Program 2009-2010

2009-2010 National Program provides financial support through grant financing from the state budget for the following types of investment objectives:

2.1. Rehabilitation and modernization of DH, including changing the type of fuel burning power plants (eg, switching to biomass)

DH development is a strategic option, since their replacement with other individual natural gas leads to irrational use of primary energy resources and require investment in new infrastructure for their distribution. Rehabilitation and upgrading these systems are consistent with national energy efficiency strategy, approved by Government Decision no. 163/2004.

(…)

The categories of works eligible investment in the field of centralized heat supply, which may require co-financing funds under the National Program 2009-2010, are:

a) works for the rehabilitation and efficiency of DH, at generation, transmission and distribution (central heating zone, thermal power blocks, heating plants, providing them with thermal modules and / or equipment performance: steam and / or water hot, heat exchangers, pumps and other equipment with high energy efficiency);

b) work for energy production in cogeneration system (central heating with cogeneration, cogeneration installation groups heat engines, other types of cogeneration systems with high energy efficiency);

c) works for the modernization and extension of transmission and distribution of thermal heat in the primary circuit and secondary circuit (main heating, external heating and hot water heating);

d) works to automate the operation of facilities and metering systems and thermal energy consumption for end users coupled to DH;

e) works for the use of renewable energy (solar, geothermal, energy from biomass-sawdust and other wood waste, heat pumps);

f) work to change the fuel used to produce heat.

Sizing new heating system components, installed capacity of production units, namely the transmission and distribution should take into account the current application of heat, but also its development over time.

2.2. Thermal Rehabilitation of public buildings and use of local potential of renewable energy for power supply and / or heat (projects with a strong socio-economic impact)

(…)

2009-2010 National Program objectives are:

a) providing financial support for co-financing grant from the state budget, leading to stimulation of a large amount of local investment, either by attracting other sources of financing, either through public-private partnership;

b) reduction of heat invoice population, increased comfort and security of supply heat and domestic hot water;

c) increasing comfort in public buildings by improving heat supply services, public lighting inside and out, and the restoration of heat and heat insulation;

d) development of energy services market in Romania and market energy efficient equipment, in particular the development of domestic production;

e) unlocking the potential of renewable energy locally to cover the heat demand for the population and replace or reduce the amount of expensive fuel or poor;

f) reduction of pollutant emissions in urban living space and overall pollution by reducing emissions of greenhouse gases.

(…)

The Purpose of the measure

To increase the country's energy independence and to reduce pollution. The most important method is to implement new technologies, leading to greater energy savings and increase energy efficiency, the implementation of investment projects in the sectors where there is energy intensive and high energy losses.

In the context of meeting the targets of Romania's national strategy for 2007-2020, approved by Government Decision no. 1.069/2007, and the transposition into national law Directive 2006/32/EC of the European Parliament and Council on energy end-use efficiency and energy services and repealing Council Directive 93/76/EEC, which stipulates the role of the public sector in promoting energy efficiency, implementing a national program for energy efficiency and renewable energy use in the public sector for the years 2009-2010, 'the 2009-2010 national program, allows the effective implementation of key legislative provisions impacting multiple: to reduce energy consumption, reduce bills, positive social effects, positive impact on the market and environment.

Impact of Measure

Planning:

The decision has no effect on planning because is aimed to thermal rehabilitate the existing DH networks and to perform thermal rehabilitation of existing buildings.

Generation:

It has a positive effect on generation because is including the heat producing units in the list of programme beneficiaries but the effect is limited due to the dimension of the budget. Existing heat producer units are requesting significant funds for rehabilitation or modernization.

Distribution:

The Decision has a positive effect on distribution since it helps in rehabilitating the existing networks..

Demand:

Since the decision is promoting a programme which provides funds for the DH, the DH customers are affected in a positive way.

Organization:

The Act has no direct effect on the organization side.

Could the measure be considered effective?

The Decision can be considered effective provided that budgeted funds are provided as planned..

Due to which reasons? (quantifications if possible)

The Decision been in force for two years and is already helping the DH systems in the modernization works. Unfortunately the necessary funds are not available as stated in the Decision .

How well does the measure suit the market conditions of your country?

The measure suits the market conditions in the sense that it aims to support the efforts towards DH rehabilitation.

Effectiveness of the measure

The effectiveness of the measure up to now is quantifiable but is less than the one expected due to the difficulties in insuring the necessary funds and the lack of co financing requested from the beneficiaries.