The implementation of European Directives and Regulations ... Subtask 3 Annex 33 report_final... ·...

The implementation of European Directivesand Regulations: Opportunities or threatsfor fuel cell systems?IEA AFC Annex 33, Subtask 3 – Report 2016

SUBTASK REPORT

Authors: Ing. Mag. Alfred Schuch

David Presch, BSc

DI Dr. Günter R. Simader

Client: FFG

BMVIT

Date: Vienna, März 2017

This report was compiled within Annex 33 – Subtask 3: The Implementation of the new Buildingsand energy directives: Opportunities or threats for fuel cell systems

Currently the following countries participate in this Annex: USA, Japan, Germany, France, Italy,Sweden, Swiss, Denmark, Australia, Israel and Austria.

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Abstract

The specific goal of this report is to identify and to analyse upcoming opportunities or possible threats for themarket uptake of fuel cell systems through the implementation of various EU directives and regulations indifferent countries. The specific impact has been carried out among the participants of the IEA Advanced FuelCell Implementing Agreement Annex 33 – Stationary fuel cells.

The anticipated impact of the implementation of EU directives in different member states on the market uptakeof fuel cell systems has been elaborated on the basis of the implementation in Austria and Germany. These twocountries have been chosen as representative example cases for the implementation of different EU directivesand regulations.

The implementation of the Ecodesign and Labelling Directive encourages high efficient products. The EcodesignDirective provides minimum requirements that appliances have to fulfil in order to be placed on the market.Generally it can be stated that those minimum requirements are fulfilled from state of the art fuel cell CHPsystems. Through the Labelling Directive the efficiency of a product is now visible for the costumers. It isanticipated that especially highly efficient systems like fuel cell mCHP`s can take advantages from theimplementation of these two directives.

Through the implementation of the Buildings Directive in Austria, the efficiency of the heating systems becamemore and more part of the requirements. This leads to an encouragement of highly efficient heating systems likeCHP systems (incl. fuel cells).

The Energy Efficiency Directive requires member states to adopt policies which encourage the due taking intoaccount of the potential of using efficient heating and cooling systems – in particular those systems using high-efficiency cogeneration (incl. fuel cell). It is anticipated that this requirement led to a favourable framework interms of investment grants and subsidies in both countries.

Directive 2009/73/Ec on the common rules for the internal market in natural gas and directive 2009/72/EC onthe common rules for the internal market in electricity provide a framework for the internal market in naturalgas and electricity – including rules for the tariffs for the usage of the gas- respectively eletricity infrastructure,like transmission and distribution grids. In case of a proper infrastructure tariffs-structure for gas as well as forelectricity grids, strong incentives could be generated for the market introduction and further on significantmarket penetration (part of the business model) of fuel cells.

Within the European Union, Germany has put in place the most extensive policy support for stationary fuel celltechnologies – both at federal and at state level. In addition to the present favourable framework for fuel cellsin Germany the implementation of different EU Directives brought further benefits for fuel cell systems. Oneexample is the requirement regarding renewables in buildings: For all new buildings, a certain share of renewableenergy sources to cover the heating and domestic hot water demand is mandatory. The exact ratio depends onthe chosen energy source and varies between 15% and 50%. Alternatively, the renewable energy heat act allowseither an energy performance of 15% better than required by the Energy Saving Ordinance, or the use of districtheating and combined heat and power (CHP incl. fuel cell) instead of renewable energy sources. The fact thatthe use of CHP heating systems neutralizes the requirements regarding renewable energy sources encouragesthe use of CHP systems.

THE IMPLEMENTATION OF EUROPEAN DIRECTIVES AND REGULATIONS: OPPORTUNITIES OR THREATS FOR FUELCELL SYSTEMS?

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Contents

1 INTRODUCTION 41.1 Methodology and report structure 41.2 EU Climate and energy policy 51.3 Fuel cell systems in the EU 61.3.1 Stationary fuel cells in Europe’s future energy landscape 91.4 Critical challenges to overcome 11

2 POLICY FRAMEWORK IN THE EU 142.1 Relevant EU Directives and Regulations 152.1.1 Directive on the indication by labelling and standard product information of the consumption of

energy and other resources by energy related products 152.1.2 Directive for establishing a framework for the setting of ecodesign requirements for energy-related

products 182.1.3 Directive on the energy performance of buildings 202.1.4 Directive on energy efficiency 212.1.5 Directive on the promotion of the use of energy from renewable sources 222.1.6 Directive 2009/73/EC on the common rules for the internal market in natural gas 222.1.7 Directive 2009/72/EC on the common rules for the internal market in electricity 232.2 Implementation of EU Directives in different Member States 232.2.1 Austria 232.2.2 Germany 29

3 POLICY FRAMEWORK IN OTHER WORLD REGIONS 383.1 Japan 383.1.1 Government Activities & Policy Framework 383.1.2 Programs and Projects 403.1.3 Stationary Fuel Cells 443.1 United States of America 533.1.1 Government Activities & Policy Framework 533.1.2 Programs and Projects 543.1.3 Stationary Fuel Cells 553.2 Switzerland 593.2.1 Government Activities & Policy Framework 593.2.2 Programs and Projects 603.2.3 Stationary Fuel Cells 61


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4 RECOMMENDATIONS 635 SUMMARY 656 LITERATURE 697 LIST OF FIGURES 718 LIST OF TABLES 739 INDEX OF ABBREVIATIONS 7510 APPENDIX 7710.1 Questionnaire 1 EU 77


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1 Introduction

Alongside direct and indirect financial mechanisms, innovation needs to be pushed by a favourable regulatoryframework. Experience in the renewable sector was demonstrated that long-term political and regulatoryperspectives create the right stimulus for market-uptake including private investments. Clear political directionand commitment, for example in the form of binding targets and broad integration in EU energy and climatepolicies, proved to be instrumental in retaining investors’ trust.

The specific goal of Subtask 3 is to identify and analyse upcoming opportunities or possible threats for the marketuptake of fuel cell systems through the implementation of various EU directives and regulations in differentcountries. In addition to this different subsidy schemes / political frame conditions in various countries and worldregions should be recorded and analysed in order to compare different measures to strengthen the marketuptake of fuel cell systems.

1.1 Methodology and report structure

At the beginning of the following report the EU energy and climate policy is summarised. Based on the currentEU energy and climate policy the role of fuel cells in the EU and possible critical challenges for fuel cell systemsare discussed (see chapters 1.2, 1.3 and 1.4).

The main part of the report is the analysis of the current policy framework. The report focuses on energy-relatedEU directives and regulations. The following five directives have been considered relevant for the marketintroduction of fuel cell systems:

· Directive on the indication by labelling and standard product information of the consumption ofenergy and other resources by energy related products (LD)

· Directive for establishing a framework for the setting of ecodesign requirements for energy-relatedproducts (EDD)

· Directive on the energy performance of buildings (EPBD)· Directive on energy efficiency (EED)· Directive on the promotion of the use of energy from renewable sources (RESD)· Directive 2009/73/Ec on the common rules for the internal market in natural gas· Directive 2009/72/EC on the common rules for the internal market in electricity

In chapter 2.2, the specific implementation of EU directives in different member states and their anticipatedimpacts on the market uptake of fuel cell systems are described and analysed. The analyses of the impacts arebased on a conducted questionnaire exercise and on relevant literature studies. The questionnaire exercise hasbeen carried out among the participants of the IEA Advanced Fuel Cell Implementing Agreement Annex 33 –stationary fuel cells.


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1.2 EU Climate and energy policy

“The European Commission is looking at cost-efficient ways to make the European economy more climate-friendlyand less energy-consuming. By 2050, the European Union could cut most of its greenhouse gas emissions. Cleantechnologies are the future for Europe's economy.“ [1]

The European Union provides its member states with a long-term framework for dealing with the issue ofsustainability and the cross-border effects that cannot be dealt with at national level alone. Climate change haslong been recognised as one such long-term shaping factor where coherent European Union action is needed,both internationally and inside the EU. [2]

The Commission proposed the Europe 2020 flagship initiative for a resource-efficient Europe and within thisframework it is now putting forward a series of long term policy plans in areas such as transport, energy andclimate change. This communication sets out key elements that should help the EU become a competitive lowcarbon economy by 2050. The general approach is based on the view that innovative solutions are required tomobilise investments in energy, transport, industry and information and communication technologies, and thatmore focus is needed on energy efficiency policies. [2]

The following Figure 1.1 illustrates the pathway to the competitive low carbon economy by 2050:

Figure 1.1: EU greenhouse gas emissions towards an 80% domestic reduction [2]

The upper reference projection shows how domestic greenhouse gas emissions would develop under currentpolicies. A scenario consistent with an 80% domestic reduction shows how overall and sectoral emissions couldevolve, if additional policies were put in place, taking into account technological options available over time. [2]

Based on the ambitious European Union targets it can be said that the future energy landscape in Europe willchange fundamentally. Committed to assume a global leadership role in combating climate change, Europeancountries have in recent years intensified their efforts to reduce the emissions of greenhouse gases through


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higher energy efficiency and more carbon-free generation. More and more countries are fully embarking on thetransition towards an energy system largely based on renewable energy sources like solar, wind or biomass inorder to meet their ambitious environmental objectives. On this pathway, political commitment appears strong– stronger maybe than in other industrialised nations. By the year 2020, the European Union is committed toraising the share of renewable energy sources in final energy consumption to 20%, lowering greenhouse gasemissions by 20% compared to 1990 levels, and achieving a 20% increase in energy efficiency. The roadmap formoving to a low carbon economy in 2050 describes the long term goal of cutting emissions to 80% below 1990levels through domestic reductions alone, with milestones of the order of 40% by 2030 and 60% by 2040 alongthe way. According to the European Commission, the EU could be using around 30% less energy in 2050 than in2005 by moving to a low carbon society. [3]

Directive 2009/73/EC on the common rules for the internal market in natural gas and directive 2009/72/EC onthe common rules for the internal market in electricity electricity provide a framework for the internal market innatural gas and electricity – including rules for the tariffs for the usage of the gas- respectively electricityinfrastructure, like transmission and distribution grids. These directives do set a framework for the grid basedsupply of customers with the commodities electricity and natural gas in a competitive environment, thus isconsistent with the goals of the EU Climate and energy police in particular in terms of cost-efficiency

1.3 Fuel cell systems in the EU

It can be said that the future energy landscape in Europe will change fundamentally. The question is what roledo fuel cell systems play in the future European Union energy system?

According to the European Strategic Energy Technology Plan [11], hydrogen and fuel cells are expected to playan important role in achieving the EU vision of reducing greenhouse gas emissions by 80 – 95% compared to1990 levels by 2050. Moreover it is stated that fuel cells and hydrogen are enabling technologies that offer abroad range of benefits for the environment, energy security and competitiveness.

Fuel cells and hydrogen have the potential to contribute to overcoming the energy challenges that accompanythe transition to a low carbon society [12]:

· Mobility: The mobility applications have made up the largest share of fuel cell production in recentyears. Hydrogen fuel cells in passenger cars and public transport reduce local emissions without com-promising the driving range. The cost trend of fuel cell vehicles shows that they will get closer to thecost-competitive range of incumbent and new technologies within the next decade. Niche applications(e.g. forklifts) are already available on a commercial scale. Demonstration and pre-commercializationprojects are increasing in size and commitment.

· Power and heat: Stationary fuel cells offer highly efficient and reliable combined heat and power. Themarket can be roughly segmented into:

- Residential CHP (1 kW systems)- Backup and off-grid solutions (3–20 kW)- Commercial scale (50 kW and up)

Fuel cells are gaining market share especially in the middle segment, where they get more and morecompetitive with the incumbent technologies despite high technology costs.


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· Energy storage: Hydrogen energy storage solutions have grown in importance, given the intermittencyissues that arise with increasing penetration of renewable energies. This fact is further underlined bythe many opportunities that have been created over the past years for hydrogen storagedemonstrations. Vattenfall and Total, for example, have built a hydrogen storage project of EUR 21million in Prenzlau, and the Eco Island of Wight (with IBM, ITM Power and others) has attracted overEUR 300 million of investment, part of which is used for hydrogen storage.

Over the last years, the capacity of hydrogen to enhance fuel security in transport, to balance the electricity gridand to enable enhanced penetration of renewable energy sources in transport and heat applications has resultedin a positive market outlook for fuel cell and hydrogen technologies. A projection of the future hydrogen marketin Europe is shown in Figure 1.2:

Figure 1.2: Projection of the future hydrogen market in Europe [11]

Figure 1.3 gives an overview of the recent RD&D expenditures within the EU. It shows that private funding hasbeen steadily rising in Europe, while public has remained constant (EU level) or even been declining (nationalbudgets). Private funding has been, and still is, the biggest contributor to FCH R&D within the EU.


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Figure 1.3: RD&D expenditure for fuel cells and hydrogen in the EU in million EUR [12]

Based on an expert survey, the expected commercialization of various FC&H technologies is displayed in thefollowing Figure 1.4:

Figure 1.4: Fuel cell & hydrogen applications expected to become commercial by 2020 [12]

Based on the conducted expert survey in [12] the results of Figure 1.4 can be summarised:


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In terms of fuel cell based CHP systems, a commercialization is expected in 2017. Car manufacturers forecastedcommercialization by 2015. These expectations are further underlined by promising statements from Asian andEuropean car manufacturers. In other application areas, many interviewed experts mentioned the increasedfocus on energy storage through electrolysis. Recent developments in renewables roll-out have imposed newdynamics on transmission & distribution grids, but also on peak versus base power pricing: storage solutions likehydrogen are regarded by many as a potential mitigation and business opportunity.

1.3.1 Stationary fuel cells in Europe’s future energy landscape

Stationary fuel cell systems are used in a wide range of applications, from small CHP systems to Multi MW powerplants that supply entire districts with electricity and heat. The majority of fuel cells in the European industryportfolio are integrated CHP solutions – some of which primarily supply heat to buildings with power as an add-on product, whilst others position themselves as base load power generation units with excess heat as an add-on product. Stationary fuel cells are a distributed generation technology; they produce power and heat at thesite of the consumers in question and for the purpose of their immediate supply with energy [3].

Stationary fuel cells are a highly efficient technology to transform today´s fossil fuels and tomorrow’s clean fuelsinto power and heat – with the potential to be one of the enablers of Europe’s transition into a new energy age.Figure 1.5 displays the main rationale behind the roles and benefits of stationary fuel cells in Europe’s futureenergy landscape [3].

Figure 1.5: European energy trends, policy framework and general market conditions [3]

The distributed generation can follow the specific heat and power demand of the consumer on site, whether itis coming from stationary fuel cells, gas engines or even small turbines. Operating hours can be forecasted morereliably. Fuel cell mCHP systems driven by the heat demand of households have already demonstrated between6,000 and 8,000 operating hours per year in ongoing field tests across the EU. Specific supply meets specificdemand. Distributed generation produces heat and power when the consumer in question needs it – whereascentralised and decentralised production from renewables occurs irrespective of actual demand. In distributedCHP generation that is heat driven, decentralised systems moreover generate constant electricity output duringthe heating period, when other consumers heating with electric systems especially need it (e.g. residential homes


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equipped with heat pumps). Whilst electric heating devices can put a strain on power grids in cold periods of theyear, heat-driven distributed CHP systems like stationary fuel cells consume less grid power during this periodand, moreover, feed surplus electricity into the system for everyone else to take up [3]. These benefits could leadto a postponement or lowering of investments in the increase of the capacity demand of electricity grids.

The global policy debate on fuel cells takes place in the greater context of the transition to new energy systemsthat are more sustainable and more efficient. Alternative energies have become increasingly important in thelatest years, attracting more focus from policy makers. As renewable energy sources such as wind and solar areintermittent in nature, policy makers are focusing more and more on developing alternative and continuouslyavailable methods for power and heat generation. In this context, fuel cells have captured a rising share ofinterest because of their potential of being a highly efficient, reliable and low-emission source of energy. Policymakers and technology providers have begun exploring the benefits of stationary fuel cells and are increasinglypushing towards commercialization [3].

Policy support for fuel cell technology in Europe has been quite conservative compared to other countries.However, the EU's interest in and political commitment to fuel cells has gained momentum recently. EU-instigated support of the technology currently comprises grants for research and development as well asdifferent demonstration projects to gauge the feasibility of commercialization. For example, the EU has renewedits commitment to funding further research and development of fuel cells and hydrogen technologies under thenew multiannual financial framework 2014–20. The FCH JU 21 has nearly 650 million EUR in grant money at itsdisposal over this period – 48% of which is dedicated to energy topics, including stationary fuel cells. All in all,the European diffusion projects remain smaller in size compared to their international peers, which reflects somehesitance regarding the future of fuel cells compared to other alternative energy technologies. Furthermore, thetechnological know-how and number of fuel cell providers in Europe is still lower than overseas, due to theinexistence of comparable supporting schemes in the EU. As a result, European players in the fuel cell industryare at an earlier development stage and therefore likely to be less competitive. By funding the ene.field project,European policy makers have taken a concrete step towards commercialization of stationary fuel cells – at leastin the residential segment for fuel cell mCHP systems [3].

In addition there is a follow-up project related to the ene.field project which is called PACE. The projects dealswith the large scale demonstration of mCHP fuel cells. The starting date was on 01.06.2016 and the ending willbe on 28.02.2021. The total project budget is EUR 90.307.094.50 and EUR 33,932,752.75 are contributed fromthe FCH JU. Figure 1.6 includes some targets and key points of the EU-project:

1 http://www.fch.europa.eu/


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Figure 1.6: targets and key points of the EU-project PACE [46]

PACE aims to install more than 2,500 FC mCHP, thus enabling several thousand consumers to activelycontribute to Europe’s energy transition. The project will unlock the market for FC mCHP large scaleuptake preparing the supply chain and working with policymakers in selected member states topromote a successful transition to volumes in the order of 10,000 units/year post 2020. The FCproducts in the PACE project should be smart grid ready and will be able to run on renewable fuels.Ene.field and now PACE are the largest European deployment of FC mCHP energy solutions to date,contributing to advances in quality of the products and opening new markets for furthercommercialisation activities. [46]

1.4 Critical challenges to overcome

Although experts are expecting commercialization within the next view years, there are still a few barriers andcritical challenges to overcome to enable a large deployment. The commercialization outlook set in the previoussection is not guaranteed. According to [12], key stakeholders indicated five critical challenges that need to beovercome in order to be successful:

· Commercialization rate: The expected date of commercialization has systematically fallen behindpromises in the last years. Although the influence of the financial crisis and “usual setbacks” shouldnot be neglected, many stakeholders do worry that the time for commercialization is “now or never”.Missing a credible and accurate time path is also a risk in attracting and retaining investors’ trust.Some stakeholders indicate that large companies with a widespread portfolio of R&D activities mightdeprioritize or abandon FC&H, if the industry does not mature in line with expectations.


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· Infrastructure: In the mobility segment, fuel cell vehicles fully depend on a widespread fuellinginfrastructure to attract possible customers. This poses the well-known “chicken and egg” problem:energy and fuel companies will invest only if there is a sizeable market of fuel cell electric vehicles(FCEVs) owners, and car manufacturers will produce FCEVs at scale only if there is the necessaryinfrastructure. These problems can be solved by cohesive, coalition-led activities, but this is by nomeans an easy route.

· Research: Beneficiaries and respondents mentioned that R&D is vital for commercialization, andespecially for domestic and commercial CHP. The majority of the research along various parts of thesupply chain is done by small companies. These companies hinge on national and European funds andgrants to finance their activities. The financial crisis might put this support for sustainable fuel cell andhydrogen technology at risk. The respondents also mentioned that the research focus and the qualityof these companies do not always correspond with the priorities of companies further down the valuechain, which limits the impact of the R&D done.

· Competitions from other regions and technologies: Respondents say that the US and Asia have beenmore successful in bringing fuel cell and hydrogen products to market. Forklifts applications areintroduced in the US, while Japan has a very successful ENE Farm project. Although the majority ofmobility-related hydrogen activities occur in Europe, many key stakeholders stated that the Europeanindustry sector should be careful that the nucleus of knowledge development does not permanentlyshift out of Europe.

· Public acceptance: The press coverage on fuel cell and hydrogen technologies is limited to theperspective provided by industry players and, to this date, has not received widespread publicattention. Although the arguments put forward progressively indicate a preference for fuel cells, theopinion makers are not yet pronounced in their stance towards hydrogen. Once commercialization isnear, public awareness and acceptance will need to be managed very carefully.

The 2013 Technology Map of the European Strategic Energy Plan [11], too, indicates critical barriers to beovercome in order to ensure a large scale deployment of fuel cell and hydrogen technologies.

Generally it can be said that fuel cell and hydrogen technologies must compete with well-established incumbenttechnologies and related infrastructures. Consequently, the financial risk for early movers is high and a lack ofcash flow during the first phase of deployment is to be expected.

The fuel cell and hydrogen sector is dispersed across different activity areas (energy, transport, industry, resi-dential), actors and countries, which hampers the build-up of critical mass needed for self-sustained commercialactivity.

Fuel cell and hydrogen technologies are insufficiently covered in education curricula, which may also result inincorrect safety perception and low awareness of societal benefits.

The current regulations, codes and standards do not adequately reflect real-world use of FCH technologies andare not harmonised between the different countries.

Apart from the critical challenges and barriers, also some key solutions are suggested in relevant literature[12][11][13]. One of the proposed key solutions to overcome the mentioned barriers and critical challenges is anappropriate, harmonised framework in terms of policy, standards and regulations. Alongside direct and indirectfinancial mechanisms, innovation needs to be pushed by a favourable regulatory framework. Experienceespecially in the renewable sector has demonstrated that long-term political and regulatory perspectives create


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the right stimulus for market-uptake including private investments. Clear political direction and commitment, forexample in the form of binding targets and broad integration in EU energy and climate policies, proved to beinstrumental in retaining investors’ trust. In view of the long-term horizon and the high pay-off in terms ofcontribution to EU policy goals, public support is and will remain necessary to help in reducing industrydevelopment times and offsetting first mover disadvantages. Therefore, a purpose-oriented coherent frameworkconsisting of tailored and time-phased actions, policies and incentives targeting public and private market actorsis needed.


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2 Policy framework in the EU

In 2011, the European Commission proposed the Europe 2020 flagship initiative for a resource-efficient Europeand within this framework is now putting forward a series of long-term policy plans in areas such as transport,energy and climate change. The present report focuses on energy-related EU directives and regulations. Thefollowing five directives have been considered relevant for the market introduction of fuel cell systems:

· Directive on the indication by labelling and standard product information of the consumption ofenergy and other resources by energy related products (LD)

· Directive for establishing a framework for the setting of ecodesign requirements for energy-relatedproducts (EDD)


As some of the above mentioned directives have to be applied throughout the EU on the basis of “Regulations”,it seems useful to recall the difference between EU regulations and EU directives in general:

EU Regulation

A "Regulation" is a binding legislative act. It must be applied in its entirety across the EU. For example, when theEU wanted to protect the names of agricultural products coming from certain regions, the Council adopted aRegulation.2 An energy related example for a EU regulation would be the energy labelling for products (seechapter 2.1.1).

EU Directive

A "Directive" is a legislative act that sets out a goal that all EU countries must achieve. However, it is up to theindividual countries to decide how.

In the following chapter, the selected Directives will be descripted briefly and relevant articles within thedirectives will be identified. The possible impact of the arising regulations on the market uptake will be derived.

As there is a certain implementation leeway of directives between the different member states, a questionnairehas been developed (see chapter 10.1) in order to assess the implementation of the directives in specific EUmember states. The questionnaire has been sent out to country representatives within the IEA AFC Annex 333.Based on the input received from the country representatives as well as on relevant literature, the upcomingopportunities or threats of EU directives for the market introduction of fuel cell systems have been derived.

2 http://europa.eu/eu-law/decision-making/legal-acts/index_en.htm (Dec 14th, 2015)3 http://www.ieafuelcell.com/annexdescriptions.php


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2.1 Relevant EU Directives and Regulations

In the following sections, selected EU directives and regulations will be described and analysed which areexpected to have an impact on the market introduction of fuel cell systems.

2.1.1 Directive on the indication by labelling and standard product information of theconsumption of energy and other resources by energy related products

The Labelling Directive4 establishes a framework for the harmonization of national measures regardinginformation provided for end-user , particularly by means of labelling and standard product information, on theconsumption of energy and, where relevant, other resources during use, as well as supplementary informationconcerning energy-related products, thereby allowing end-users to choose more efficient products.

The Labelling Directive shall apply to energy-related products which have a significant direct or indirect impacton the energy consumption and resources.

In order to specify the labelling requirements of [4] for various product groups, different regulations apply. E.g.for micro CHP systems the EU Regulation No. 811/2013 – “Space heaters” [5] is relevant.

The regulation establishes requirements for the energy labelling of and the provision of supplementary productinformation on space heaters and combination heaters with a rated heat output ≤70 kW, packages of spaceheater ≤70 kW, temperature control and solar device and packages of combination heater ≤70 kW, temperaturecontrol and solar device.

As regards relevant energy and cost savings for each type of heater, this regulation should introduce a newlabelling scale from A++ to G for the space heating function of boiler space heaters, cogeneration space heaters,heat pump space heaters, boiler combination heaters and heat pump combination heaters. While the labels Ato G cover the various types of conventional boilers not combined with cogeneration or renewable energytechnologies, classes A+ and A++ should promote the use of cogeneration and renewable energy sources.

2.1.1.1 Anticipated impact of the “Labelling Directive“

In context with the Labelling Directive, the regulation for “Space heaters” [5] is relevant for the market uptakeof CHP systems. As mentioned above, when a regulation is implemented directly into national law, it complieswith the implementation within the EU’s Member States (MS).

Since 26th September 2015, suppliers placing space heaters on the market and/or putting them into service shallensure that a printed label is provided for each space heater conforming to the seasonal space heating energyefficiency classes. For example, the label for cogeneration space heaters is illustrated in the following Figure 2.1.

4 Directive 2010/30/EU on the indication by labelling and standard product information of the consumption of energy and other resourcesby energy related products, 2010


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Figure 2.1: Label for cogeneration space heaters [5]

The following information shall be included in the label:

I supplier´s name or trade mark

II supplier`s model identifier

III the space heating function

IV the seasonal space heating energy efficiency class; the head of the arrow containing the seasonal spaceheating energy efficiency class of the cogeneration space heater shall be placed at the same height asthe head of the relevant energy efficiency class

V the rated heat output, including the rated heat output of any supplementary heater, in kW, rounded tothe nearest integer

VI the sound power level (indoors) in dB, rounded to the nearest integer

VII the additional electricity generation function


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The seasonal space heating energy efficiency class of a heater5 shall be determined on the basis of its seasonalspace heating energy efficiency as set out in the following Table 2.1.

Table 2.1: Seasonal space heating energy efficiency classes of heaters, with the exception of low-temperature heat pumpsand heat pump space heaters for low temperature application [5]

SEASONAL SPACE HEATINGENERGY EFFICIENCY CLASS

SEASONAL SPACE HEATINGENERGY EFFICIENCY ηs in %

A+++ ηs ≥ 150

A++ 125 ≤ηs < 150

A+ 98 ≤ηs < 125

A 90 ≤ηs < 98

B 82 ≤ηs < 90

C 75 ≤ηs < 82

D 36 ≤ηs < 75

E 34 ≤ηs < 36

F 30 ≤ηs < 34

G ηs < 30

In the following Table 2.2, the labelling of a fuel-cell-based mCHP heating unit is compared with the labelling ofa state-of-the-art gas condensing boiler:

Table 2.2: Example: Labelling of heating systems [28]

VIESSMANN VITOVOLAR 300-P VIESSMANN VITODENS 222-W

Technology PEM Fuel Cell heating unit Gas condensing boiler

Thermal output [kW] 1 (20)6 3.2 – 35

Electrical output [kW] 0.75 -

Electrical efficiency [%] 37 -

Total efficiency [%] 90 98

Label A++ A

5 With the exception of low-temperature heat pumps and heat pump space heaters for low-temperature application.6 The fuel cell heating unit is equipped with a gas condensing peak load boiler. Together with the peak load boiler the heating unit canprovide a thermal output of 20 kW.


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The above mentioned example is based on two Viessmann products but it can be assessed that also for othermanufacturers a similar result will appear, if a fuel-cell-based mCHP heating unit is compared with a state-of-the-art gas condensing boiler (with almost no further possibility to improve).

Generally, it can be said that the labelling makes the energy efficiency of various products more visible forcostumers. Promoting the use of cogeneration with the label classes A+ and A++ (even A+++ will be possible afterthe introduction of this class in 2019) is expected to have a positive impact on the market uptake of fuel cellsystems and encourage costumers’ investing in these systems. But is has to be added that not only fuel cells arelabelled in classes A+, A++ respectively A+++ (from 2019), but also heat pumps, systems with solar contribution,etc. will be labelled equally. An impact to the fuel cell market is therefore depending mainly on the economicfeasibility which means on subsidies on various renewable technologies and their relations. The advantage forfuel cell systems contrary to heat pumps and solar devices is the ease of installation as long as there is aconnection to the gas grid.

2.1.2 Directive for establishing a framework for the setting of ecodesign requirements forenergy-related products

The Ecodesign Directive7 establishes a framework for the setting of community ecodesign requirements forenergy-related products with the aim of ensuring the free movement of such products within the internal market.The directive provides a framework for the setting of minimum requirements which the energy-related productsmust fulfil in order to be placed on the market (and/or put into service). It contributes to a sustainabledevelopment by increasing energy efficiency and the level of protection of the environment, while at the sametime increasing the security of energy supply.

In order to specify the ecodesign requirements of [6] for various product groups, there are different regulations.For micro CHP systems, the EU Regulation No. 813/2013 – “Space heaters and combination heaters” [7] isrelevant and will be described in the following.

The regulation establishes ecodesign requirements for the placing on the market (and/or putting into service) ofspace heaters and combination heaters with a rated heat output ≤ 400 kW, including those integrated inpackages of space heater, temperature control and solar device or packages of combination heater, temperaturecontrol and solar device.

The ecodesign requirements arising from the regulation should harmonise energy consumption, sound powerlevel and nitrogen oxides emission requirements for space heaters and combination heaters throughout theUnion, thus helping to make the internal market operate better and to improve the environmental performanceof these products.

2.1.2.1 Anticipated impact of the “Ecodesign Directive”

In context with the ecodesign Directive, the regulation for “Space heaters and combination heaters” [7] isrelevant for the market uptake of CHP systems. As mentioned above, a regulation is implemented directly intonational law, meaning that the Regulation is implemented the same way within the EU’s member states.

7 Directive 2009/125/EC establishing a framework for the setting of Ecodesign requirements for energy related products, 2009


19

Since 26 September 2015, cogeneration space heaters shall meet the ecodesign requirements regarding energyconsumption represented through the seasonal space heating energy efficiency (see Table 2.3). From 26September 2018 emissions of nitrogen oxides, expressed in nitrogen dioxide, of cogeneration space heaters shallnot exceed the values in the following Table 2.3.

Table 2.3: Minimum ecodesign requirements for cogeneration space heaters [7]

SEASONAL SPACE HEATINGENERGY EFFICIENCY ηs in %

NITROGEN OXIDES EMISSIONS in mg/kWh

*) **) ***) ****)

≥ 86 ≤ 70 ≤ 120 ≤ 240 ≤ 420

*) cogeneration space heaters equipped with external combustion using gaseous fuels

**) cogeneration space heaters equipped with external combustion using liquid fuels

***) cogeneration space heaters equipped with an internal combustion engine using gaseous fuels

****) cogeneration space heaters equipped with an internal combustion engine using liquid fuels

If the above mentioned minimum requirements cannot be fulfilled from a specific product it is not possible toplace the specific product on the market. The ecodesign requirements are the bases for the labelling of theproducts (see chapter 2.1.1.). The better the ecodesign parameters of a product, the better the labelling of aproduct.

Generally it can be anticipated that the requirements will encourage efficient products, whereas inefficientproducts will sooner or later disappear from the market. It can be assumed that the high efficiency of fuel cellbased CHP systems lead to a fulfillment of the present (and future) ecodesign requirements.

However, the present minimum requirements leave a variety of technologies on the market, even such asconventional oil and gas condensing boilers. The effect of this directive is just the switch from non-condensingto condensing technology.

In the upcoming chapters (2.1.3 to 2.1.7) the below listed directives and relevant articles will be described:


The anticipated impact of EU directives depend on the specific national implementation in the different memberstates. Therefore the specific impact for different countries will be analysed in a second step (see chapter 2.2).


20

2.1.3 Directive on the energy performance of buildings

The Energy Performance of Buildings Directive8 promotes the improvement of the energy performance ofbuildings within the Union, taking into account outdoor climatic and local conditions, as well as indoor climaterequirements and cost-effectiveness. The EPBD lays down requirements as regards:

· The framework for a methodology for calculating the integrated energy performance of buildings andbuilding units;

· The application of minimum requirements to the energy performance of new and existing buildingsand building units;

· National plans for increasing the number of nearly zero-energy buildings;· The energy certification of buildings;· Regular inspection of heating and AC systems in buildings; and· Independent control systems for energy performance certificates and inspection reports.

In the following, articles of the EPBD possibly relevant for the market uptake of cogeneration systems will bedescribed:

Article 4 – Setting of minimum energy performance requirements

According to Article 4 of the EPBD, the member states shall take the necessary measures to ensure that minimumenergy performance requirements for buildings or building units are set with a view to achieving cost-optimallevels. The energy performance shall be calculated in accordance with the methodology referred to in article 3.Cost-optimal levels shall be calculated in accordance with the comparative methodology framework referred toin article 5, once the framework is in place.

Article 6 – New buildings

Member states shall take the necessary measures to ensure that new buildings meet the minimum energyperformance requirements set in article 4. Member States shall ensure that the technical, environmental andeconomic feasibility of high-efficiency alternative systems such as cogeneration are taken into account.

Article 7 – Existing buildings

Member states shall take the necessary measures to ensure that, when buildings undergo major renovations,the energy performance is upgraded in order to meet the minimum energy performance requirements set inarticle 4.

Article 8 – Technical building systems

Member states shall, for the purpose of optimising the energy use of technical building systems, set systemrequirements in respect of the overall energy performance, the proper installation, and the appropriatedimensioning, adjustment and control of the technical building systems which are installed in existing and newbuildings. System requirements shall be set for new, replacement and upgrading of technical building systems.These requirements shall be applied in so far as they are technically, economically and functionally feasible.

8 Directive 2010/31/EU on the energy performance of buildings, 2010


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Article 9 – Nearly zero-energy buildings

Member states shall ensure that by 31st December 2020, all new buildings are nearly zero-energy buildings.Therefore member states shall draw up national plans for increasing the number of nearly zero-energy buildings.

2.1.4 Directive on energy efficiency

The Energy Efficiency Directive9 establishes a common framework of measures for the promotion of energyefficiency within the Union in order to ensure the achievement of the Union’s 2020 headline target on energyefficiency and to pave the way for further energy efficiency improvements beyond that date. Furthermore, thedirective provides a framework for the establishment of indicative national energy efficiency targets for 2020.

In the following, articles of the EED possibly relevant for the market uptake of cogeneration systems will bedescribed:

Article 7 – Energy efficiency obligation schemes

Each member state shall set up an energy efficiency obligation scheme in order to ensure that energy distributersand/or retail energy sales companies designed as obligated parties achieve a certain cumulative end-use energysavings target by 31 December 2020.

Article 14 – Promotion of efficiency in heating and cooling

By 31 December 2015, member states shall carry out and notify to the Commission a comprehensive assessmentof the potential for the application of high-efficiency cogeneration and efficient district heating and cooling.Moreover, the member states shall adopt policies which encourage the due taking into account at local andregional levels of the potential of using efficient heating and cooling systems, in particular those using high-efficiency cogeneration.

Article 15 – Energy transformation, transmission and distribution

The member states shall ensure that

· The transmission and distribution of electricity from high-efficiency cogeneration is guaranteed;· Access to the grid of electricity from high-efficiency cogeneration is guaranteed;· Priority dispatch of electricity from high-efficiency cogeneration is being provided.

Article 24 – Review and monitoring of implementation

By 30 April 2014, and every three years thereafter, member states shall provide and submit National EnergyEfficiency Action Plans. The National Energy Efficiency Action Plans shall cover significant energy efficiencyimprovement measures and expected and/or achieved energy savings in view of achieving the national energyefficiency targets.

Member states shall submit to the Commission each year statistics on national electricity and heat productionfrom high- and low-efficiency cogeneration in relation to total heat and electricity production. Moreover annualstatistics on cogeneration heat and electricity capacities and fuels for cogeneration, and on district heating and

9 Directive 2012/27/EU on energy efficiency, 2012


22

cooling production and capacities, in relation to total heat and electricity production and capacities should alsobe submitted. In addition to this member states shall also submit statistics on primary energy savings achievedby application of cogeneration.

2.1.5 Directive on the promotion of the use of energy from renewable sources

The directive on the promotion of the use of energy from renewable sources10 establishes a framework for theproduction of energy from renewable sources and the promotion of its use. The main goal is to achieve a 20%share of renewable energy sources in the EU´s gross final energy consumption by 2020. Each member state hasa target calculated according to the share of energy from renewable sources in its gross final consumption for2020. The share of renewable energy sources used in the transport sector must be at least 10% of the final energyconsumption in the sector by 2020.

Article 4 – National renewable energy action plans

Each member state is obliged to establish a national renewable energy action plan. The national renewableenergy action plan shall set out the national targets for the share of energy from renewable sources consumedin transport, electricity and heating and cooling in 2020, taking into account the effects of other policy measuresrelating to energy efficiency on final consumption of energy.

In other words: the impact of the Renewable Energy Source Directive on the market uptake of fuel cell systemsdepends on the specific role of fuel cells in the renewable action plan of a country (see chapter 2.2.).

2.1.6 Directive 2009/73/EC on the common rules for the internal market in natural gas

The “gas directive” 2009/73/EC provides a framework for the internal market in natural gas – including rules forthe tariffs for the usage of the gas infrastructure, like transmission and distribution grids. As long as there is nocomprehensive hydrogen economy in place, fuel cells are fuelled by natural gas, thus the provisions stated in the“gas directive” do have an impact on the market uptake of fuel cells. Currently in a lot of EU-MS a mature gasmarket is in place and the potential to increase the gas consumption is very limited. On the contrary, demand isdecreasing, hence the capacity of the grids is not used to the full extend, subsequently the number of cost bearingunits is lowered as well whereas the costs remain stable or are even increasing. Consequently the transportationcosts per gas volume unit are increasing which leads – according to the supply and demand approach, taking theprice elasticity into consideration - to a lower gas demand in addition to the effects of increasing energy efficiencyand the strong competition with district heating systems. Natural gas – as the cleanest of the fossil fuels – will beconsumed – as transition energy carrier - for a long period of time at significant volumes in the space heating -and industry sector and potentially in the transport sector. In order to employ the cleanest of the fossil fuelenergy carriers and at the same time increase the energy efficiency - in comparison to combined natural gasheaters- fuel cells should be installed. To facilitate such an approach a fuel cell supportive environment isnecessary which would:

· Increase the gas consumption by replacing other fossil fuels

· Lower the GHG-emissions in comparison to the application of other fossil fuels

10 Directive 2009/28/EC on the promotion of the use of energy from renewable sources, 2009


23

· Back a decentralised electricity generation – besides the electricity production with RES – as well as inareas where RES cannot be employed because of the prevailing framework conditions.

It can be expected that predominantly gas fuelled combination heaters and gas boilers would be replaced orcomplemented by fuel cell systems. Also oil - and coal fired heating systems could be replaced by fuel cell systemswhereas in new appartments fuel cell systems could become some kind of “standard equipement” – besidesdistrict heating and heat pumps.

In case of a proper infrastructure tariffs-structure, strong incentives could be generated for the marketintroduction and further significant market penetration (part of the business modell) of fuel cells.

2.1.7 Directive 2009/72/EC on the common rules for the internal market in electricity

Because of the advancing decentralisation of the generation of electricity, accelerated – among others – by fuelcells, the share of the commodity electricity, generated by the final consumers, will increase. Subsequently, theamount of the electricity transported to the final customers via the public grid will decrease – if the electricityconsumption doesn’t increase stronger than the amount of electricity generated by the final customers. A lowerquantity transported to the final customer – in comparison to the status quo – entails a lower amount of costbearing units, thus the specific transportation cost would increase in order to cover the costs – including areasonable profit - of a efficiently operating transmission and or distribution system operator. In addition, cross-subsidisation of those final customers, who consume their by own facilities generated electricity, would occur –at least temporary. In the mid and lon term there might be positive impacts on the size (lower capacity) of theelectricity grid. These benefits could lead to a postponement or lowering of investments in the increase of thecapacity demand of electricity grids.

Therefore the impacts on the tariff structure, caused by decentralised generation of electricity, have to be takeninto consideration.

2.2 Implementation of EU Directives in different Member States

In the following, the specific implementation of EU directives in different member states and their anticipatedimpacts on the market uptake of fuel cell systems will be described. The description is based on the input receivedfrom the questionnaire session (see chapter 10.1) as well as on relevant laws, literature and reports.

2.2.1 Austria

2.2.1.1 Directive on the energy performance of buildings

In Austria, Energy Performance Certificates (EPCs) have been issued since 1998 in some of the Austrian Provinces(“Länder”), using the space heating demand (referring only to the building envelope) as a central element for thedefinition of performance of the building. As the regulations vary widely among the nine “Länder”, theimplementation of the EPBD offered the opportunity to start a harmonisation process within Austria. This meantdeveloping a common calculation methodology and implementing further elements like heating, ventilation andair-conditioning systems.

The building regulations in Austria fall under the jurisdiction of the nine “Länder”. The Austrian Institute ofConstruction Engineering (OIB: www.oib.or.at) was assigned to manage the harmonising process of the


24

implementation of the EPBD in 2006 in the provinces. A working group of representatives of the nine provinceswas authorised to work and agree on the common methodology. In this way the OIB Directives11 serve as thebasis for the harmonisation of building regulations and are used by the “Länder” for this purpose.

The “Länder” agreed on using the four following indicators to describe the overall energy performance of abuilding which are defined in the OIB Directive 6 (regarding energy saving and heat retention of both residentialand non-residential buildings):

· Space heating demand (HWB)· Energy performance factor (fGEE)· Primary energy demand (PEB)· CO2 emissions

Based on these four indicators, a national plan for increasing the number of nearly zero-energy buildings wasdesigned. In short, the Austrian way to define nearly zero-energy buildings (NZEBs) is to set a combination offour different main indicators, which, all in all, result in very energy efficient buildings, taking into account a well-insulated building envelope (reflected in HWB), the energy efficiency (reflected in fGEE), environmental friendlytechnical systems (reflected in PEB) and climate protection (reflected in CO2 emissions).

Based on the implementation of the EPBD in Austria, the following possible impacts on the market uptake of fuelcell systems can be derived:

· The space heating demand (referring only to the building envelope) was the central element for thedefinition of requirements before the implementation of the EPBD. Through the implementation ofthe EPBD, the efficiency of the heating systems became more and more part of the requirements. Thisleads to an encouragement of installing high efficient heating systems like CHP systems (incl. fuelcells).

· According to article 4 (EPBD), the member states shall take the necessary measures to ensure that theminimum energy performance requirements for buildings or building units are set with concerningachieving cost-optimal levels. On this point it has to be stated that presently, fuel-cell-based mCHPsystems are not used in Austrian residential and non-residential buildings. So currently they do notcontribute to reaching the cost-optimal level of the energy performance of buildings. In this respect,high investment costs and the lack of available subsidies are considered as the main barrier for themarket uptake.

In addition to the lack of financial attractiveness, presently it is not possible in Austria to receive an energyperformance certificate (EPC) for buildings having a mCHP system. The implementation of the EPBD requiresissuing an energy performance certificate (EPC) for the building permits and for the buildings being sold orrented. This means a regulative barrier for investors willing to invest in a fuel-cell-based mCHP system.

2.2.1.2 Directive on energy efficiency

According to the Austrian annual progress report on energy efficiency [18], the implementation of the EnergyEfficiency Directive can be summarized as follows.

11 http://www.oib.or.at/en


25

The directive on energy efficiency is implemented by the Austrian Energy Efficiency Act(“Energieeffizienzgesetz”). The substantive aim of the Federal Energy Efficiency Act is to implement the directiveon energy efficiency and the closely related promotion of energy efficiency measures. The Federal EnergyEfficiency Act was adopted on 9 July 2014 by the National Council (Nationalrat, i.e. the Lower House of theAustrian Parliament) with the required constitutional majority. After having passed the Federal Council(Bundesrat, i.e. the Upper House of the Austrian Parliament), it was published in the Federal Law Gazette on 11August 2014. Indirectly, this law also aims to improve security of supply by lowering energy imports, increase theproportion of renewable energy in the energy mix and bring about a reduction in emissions. The Energy EfficiencyAct seeks to bring about an improvement in the relationship between energy input and output through moreefficient use of energy, and raise awareness of the need for the efficient use of energy. The Energy Efficiency Actsets a target of final energy consumption not exceeding 1,050 PJ by 2020. This roughly means stabilising finalenergy consumption on the 2005 level. The act also sets a cumulative energy efficiency target of 310 PJ. Thesetargets are to be reached by means of the supplier obligation (cumulatively 159 PJ) and what are referred to asstrategic energy efficiency measures (cumulatively 151 PJ). These measures include domestic environmentalsubsidies, renovating buildings to improve their energy efficiency, etc.

Energy saving obligation scheme for energy suppliers

Energy suppliers who supply more than 25 GWh to Austrian end consumers must demonstrate that they havecarried out energy efficiency measures equivalent to 0.6% of the total energy they supplied the forgoing year attheir own or others' end customers. Measures count as energy efficiency measures if they improve the energyinput/output ratio and can, on the basis of an attestation, be attributed to the energy supplier. For example, ifan energy supplier supplied 50 GWh to Austrian end consumers in 2014, it must, in 2015, demonstrate energyefficiency measures amounting to 0.3 GWh. 40% of the measures must be implemented in the household sector.The national energy efficiency monitoring body verifies the fulfilment of this obligation.

Energy audit obligation

The Energy Efficiency Act requires large (energy consuming) businesses to implement an energy managementsystem or to carry out an energy audit every four years.

Federal energy saving obligation

The Federal Government has committed to carry out energy efficiency measures amounting to 48.2 GWh in allheated or cooled buildings in Austria that are owned and occupied by the Austrian government between 1st

January 2014 and 31st December 2020. This equates to an annual renovation rate of 3%. However, the FederalGovernment is not obliged to limit itself to thermal renovation measures: improvements in facility management,changes to behaviour of building users, savings through energy saving contracting etc. are also accepted. Thisshould ensure that the target is met in the most efficient and cost-effective way possible.

With regard to buildings owned by the Federal Real Estate Company and used by the Federal Government, theFederal Government together with the Federal Real Estate Company is to carry out energy efficiency measuresamounting to 125 GWh in the period from 1st January 2014 to 31st December 2020. The Federal Government, incooperation with the Federal Real Estate Company, is thus making an exemplary contribution to improvingAustria's final energy consumption in the area of public buildings.

One main pillar of the Energy Efficiency Directive is the promotion of efficiency in heating and cooling (Article14). Therefore the member states shall carry out and notify to the Commission a comprehensive assessment of


26

the potential for the application of high-efficiency cogeneration and efficient district heating and cooling.Corresponding to the Austrian National Energy Efficiency Action Plan 2014 [20], the comprehensive assessmentof the potential of high-efficiency cogeneration is currently under procession.

According to article 14, the member states shall adopt policies which encourage the due taking into account ofthe potential of using efficient heating and cooling systems – in particular those systems using high-efficiencycogeneration. Therefore the Austrian CHP Act provides investment grants for new CHP plants and subsidies forthe operation of existing CHP plants for the supply of public district heating. The mentioned investment grantsshall apply to CHP systems with an electrical power output of over 100 kW. Until 2020, an annual budget of 12million EUR will be provided.

Table 2.4: Investment grants for CHP systems [16]

ELECTRICAL POWER [KW] GRANTS [€/KW]

100 – 1,000 250

1,000 – 5,000 200

5,000 – 20,000 175

20,000 – 100,000 150

>100,000 125

In addition to the investment grants of the Austrian CHP Act there is the environmental subsidies programme forenterprises. Highly efficient CHP plants based on natural gas or LPG are subsidized within this programme. Thisprogramme aims at CHP systems with an electrical power output of maximum 100 kW. Some of the keyrequirements in order to receive the investment grants are listed below:

· The generated power must be utilized within the company by at least 80%.· The investment grants are only eligible in existing buildings. Systems in new constructions cannot be

subsidized.· Only CHP systems in areas without access to a district heating grid can receive investment grants.· The investment grants are limited to max. 675 €/kWel.

Article 15 refers to Energy transformation, transmission and distribution. In this context, the member states shallensure that the transmission and distribution of electricity from high-efficiency cogeneration is guaranteed aswell as the access to the grid of electricity from high-efficiency cogeneration. Furthermore a priority dispatch ofelectricity from high-efficiency cogeneration should be provided. The transformation, transmission anddistribution of energy in Austria is regulated by the Electricity Industry and Organization Act (ElWOG)12.Corresponding to the ElWOG, the transmission and distribution of CHP electricity and the grid access isguaranteed. In the case of insufficient capacity for interconnections, the electricity from highly efficient CHP mustbe treated as a priority.

12 Electricity Industry and Organization Act, 2010


27

In article 24 of the Energy Efficiency Directive the member states are asked to submit to the Commission eachyear statistics on national electricity and heat production from cogeneration (see Table 2.5).

Table 2.5: Statistical indicators heat and electricity generation in Austria [18][21][22]

2011 2012 2013

Electricity generation: thermalpower generation [ktoe]

1,062 988 1,620

Electricity generation: combinedheat and power plants [ktoe]

441 915 868

Heat generation: thermal powergeneration [ktoe]

712 740 2,097

Heat generation: combined heatand power plants [ktoe]

1,185 1,240 1,225

In Austria the average (2011 – 2013) share of CHP electricity generation of the total thermal electricity generationis 37.4%. The share of CHP heat generation of the total thermal power generation is 54.0%.

Along with the implementation of the Energy Efficiency Directive support mechanisms to encourage CHP systemsincluding fuel cell based CHP systems have been launched in Austria (e.g. investment grants see Table 2.4). Themarket uptake of fuel cell systems can benefit from these mechanisms.

2.2.1.3 Directive on the promotion of the use of energy from renewable sources

The impact of the Renewable Energy Sources Directive depends on the respective national renewable energyaction plans. The 2010 National Renewable Energy Action Plan for Austria [17] presents measures to achieve anincrease to 34%, by 2020, of renewables as a share of gross energy consumption. Based on the NationalRenewable Energy Action Plan for Austria, the following measures in context with the market uptake of fuel cellsystems can be highlighted:

· The extension schemes for hydropower and wind, which represent the largest extension schemes forrenewable energies in the next ten years, have led to corresponding preparations by systemoperators. In the case of insufficient capacity for interconnections for supplies exceeding controlareas, a preference of transport to supply customers with electricity from RES and CHP plants on thepart of implementation laws is established in order to comply with all applications to use systems.

· Generally, an exclusive use of support measures is provided for feed-in tariffs and investment grants.Exceptions to this include, for example, complementary incentives in the field of heat production bymeans of CHP plants.

· The Austrian Green Electricity Act provides feed-in tariffs for electricity generated from renewablesources. For electricity generated from CHP power plants a surcharge is provided. In the followingTable 2.6 the feed-in tariffs for biogas-operated CHP plants are illustrated.


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Table 2.6: Feed-in tariffs for biogas-operated CHP plants [26]

CAPACITY

[kWel]

FEED-IN TARIFF

[ct./kWh]

CHP SURCHARGE

[ct./kWh]

<250 18.67 2.0

250 - 500 16.15 2.0

500 - 750 12.97 2.0

>750 12.51 2.0

It can be assumed, that the above mentioned support mechanisms for CHP systems encourage the market uptakeof fuel cell based CHP systems.

2.2.1.4 Anticipated impact of the implementation of EU Directives in Austria

In the following section the anticipated impact of the implementation of various EU Directives on the marketuptake of fuel cell systems in Austria is summarized.

Through the implementation of the EPBD in Austria, the following anticipated impacts on the market uptake offuel cell systems can be derived:

· The space heating demand (referring only to the building envelope) was the central element for thedefinition of requirements before the implementation of the EPBD. Through the implementation ofthe EPBD, the efficiency of the heating systems became more and more part of the requirements. Thisleads to an encouragement of highly efficient heating systems like CHP systems (incl. fuel cells).

· According to article 4 (EPBD), the Member States shall take the necessary measures to ensure that theminimum energy performance requirements for buildings or building units are set with a view toachieving cost-optimal levels. On this point it has to be stated that presently, fuel-cell-based mCHPsystems are no business case in Austrian residential and non-residential buildings. So they do currentlynot contribute to reach the cost-optimal level of the energy performance of buildings. So, within thiscontext, high investment costs and the lack of available subsidies constitute the main barrier for themarket uptake.

· In addition to the lack of financial attractiveness, it is presently not possible in Austria to receive anenergy performance certificate (EPC) for buildings supplied by a mCHP system. The implementation ofthe EPBD requires to issue an energy performance certificate (EPC) for

- new buildings- buildings going to be sold- buildings going to be rent out

This means a regulative barrier for investors willing to invest in a fuel-cell-based mCHP system.

The Energy Efficiency Directive requires member states to adopt policies which encourage the due taking intoaccount of the potential of using efficient heating and cooling systems – in particular those systems using high-


29

efficiency cogeneration. Therefore the Austrian CHP Act provides investment grants for new CHP plants andsubsidies for the operation of existing CHP plants for the supply of public district heating.

In context with the renewable energy Directive Austria has drawn up a National Renewable Energy Action plan.Based on this Action Plan, the following measures in context with the market uptake of fuel cell systems can behighlighted:

· The extension schemes for hydropower and wind, which represent the largest extension schemes forrenewable energies in the next ten years, have led to corresponding preparations by systemoperators. In the case of insufficient capacity for interconnections for supplies exceeding controlareas, a preference of transport to supply customers with electricity from RES and CHP plants on thepart of implementation laws is established in order to comply with all applications to use systems.


· The Austrian Green Electricity Act provides feed-in tariffs for electricity generated from renewablesources. For electricity generated from CHP power plants a surcharge is provided.

It can be assumed, that the above mentioned support mechanisms for CHP systems encourage the market uptakeof fuel cell based CHP systems.

2.2.1.5 Directive on the common rules for the internal market in natural gas

The effects, elaborated in article 2.1.6, would occur in Austria. So far Austria has not taken any incentivesregarding the tariff structure in order to support the market entry, and further on strong market penetration, offuel cells. Such a proposal (change of the tariff structure) needs intensive discussions with the regulatoryauthority responsible for energy, and with the transmission and – even more important – distribution systemoperators respectively their professional representation(s).

2.2.1.6 Directive on the common rules for the internal market in electricity

The impacts, described in article 2.1.7, would influence the specific transportation costs at transmission- andprobably more significant – at the distribution level. So far Austria. Has not taken serious steps in order to copewith the tariff-impacts of the increasing decentralisation regarding electricity generation. Such a step needs – inanalogy respectively in parallel to the discussions dealing with the tariff-structure of the gas grids – intensivediscussions with the regulatory authority, and with the transmission- and distribution system operatorsrespectively their professional representation(s).

2.2.2 Germany

2.2.2.1 General policy framework and national subsidies that effect the introduction of fuelcells

Within the European Union, Germany has put in place the most extensive policy support for stationary fuel celltechnologies – both at federal and at state level. Due to the country’s decommissioning of its nuclear powerprogramme, the demand for alternative power generation – preferably from clean sources – is greater than ever.Furthermore, a relatively large number of fuel cell technology providers are based in Germany and funding


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programmes help boost these companies' research and development efforts and accelerate thecommercialization of stationary fuel cells [3].

To illustrate Germany’s extensive policy support for stationary fuel cell technologies, the CALLUX13 project isdescribed below.

Callux is Germany’s biggest practical test for fuel cell heating systems for domestic use; the project has beenlaunched together with partners from industry and supported by the German Federal Ministry of Transport andDigital Infrastructure. As part of the national innovation program for hydrogen and fuel cell technology, which iscoordinated by NOW GmbH, the industry, together with the Ministry, is investing 75 million Euros in promotingthe use of this innovative technology. In the project there are three system manufacturers involved: BAXIINNOTECH, Hexis and Vaillant, as well as five utility companies: EnBW, E.ON, EWE, MVV Energie, and VNGVerbundnetz Gas. See the key facts of the CALLUX project in Table 2.7.

Table 2.7: Key facts about the CALLUX project [3]

CALLUX

Start: 2008

Duration: 7 years

Amount: 75 Million EUR

Target Segment: Residential

Funded by: Private, Public

Objectives:

· Gain insights about market entryand long-term commercialization

· Collect test data for 3 millionoperating hours

Measures:

· Deployment of 800residential fuel cell units

· Testing of mCHP unitsunder real conditions

Results/Status:

· Production cost savings of 60% and service cost savings of 90% since2008

· 3 million kWh electricity produced from 474 installed units in more than5 million operating hours

Key Learnings:

· Grant programme that analyses commercial feasibility of residential FC-mCHP systems through larger fieldtests and has achieved reputable results confirming commerciality of the technology

· Roll-out delivers the first larger sample in Europe of specific technical performance data for mCHPs

The “CALLUX” project ended in November 2015. The outcome of the CALLUX project is depictured in Table 2.8.

Table 2.8: The outcome of CALLUX: Eight FC-appliances are at the market [44]

Company Name Fuel Cell Condensingboiler

Price (taxinclusive)

funding

CapacityWel/Wth

CapacitykWth

€ €

13 http://www.callux.net/home.English.html


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BoschThermo-technik

Buderus(Aisin Seiki– Kyocera)

LOGAPOWERBZH192IT

SOFC 700/620 25 n.a. 8,850

Junkers(Aisin Seiki– Kyocera)

Cerapower –C10

SOFC 700/620 25 n.a. 8,850

Viessmann

Hexis(Viessmann)

Galileo 1000N

SOFC 1000/1800from 7 to

2122,600 10,200

Viessmann(Panasonic)

Vitovalor 300P

PEM-FC

750/1000from 5.5 to

1919,860 9,300

SOLIDpowerSOLIDpower Bluegen SOFC 1500/600 n.a. n.a. 12,450SOLIDpower Engen 2500 SOFC 2500/2000 n.a. n.a. n.a.

BDRThermea

Senertec(Baxi –

Toshiba)

DachsInnogen

PEM-FC

250-700/950

From 4.8 to20

n.a. 8,850

Elcore ElcoreElcore 2400

MaxHT-PEM

305/700 2118,000 to

22,0007,500

VaillantVaillant

(IKTSSunfire)

FC 6.generation

SOFC 700/1300 n.a. n.a. n.a.

Despite a couple of financial incentives, by federal and/or regional governmental instituations (e.g. projectCALLUX) as well as by utilities, the breakthrough of the fuel cell systems could not yet be initiated. To give thistechnology a jumpstart, the Federal Government of Germany has set up a new funding programme which iscalled “Energy Efficient Construction and Rehabilitation”. It started 01.08.2016.

In the following paragraph the key facts of the program will be described.· What is funded: The installation of a stationary FC-appliance with a capacity of min. Pel=0.25 kWel to

max. Pel=5.0 kWel in new or existing buildings.· Who can get a funding: Private persons, for single and two family houses, but it is necessary to involve

an authorised energy-expert. The application must be submitted before project start.· The amount of funding: The subsidy is composed by two parts, the basic amount of 5,700 € and the

capacity based amount of 450 € per every started 100 kWel. It is paid out after the installation is finished.Now two subsidy examples will follow:

o for fuel cell Vitovalor: basic 5,700 € plus capacity 8 x 450 € = 3,600 €, in total 9,300 €.o for fuel cell Galileo: basic 5,700 € plus capacity 10 x 450 € = 4,500 €, in total 10,200 €.

· Requirements to get the funding:The FC must be integrated into the heat and power supply of the house. In addition with the installationof the FC a hydraulic balancing must be done and documented. The installation must be done by acertified enterprise. After the installation, the electrical efficiency must be min. 32 % and the overallefficiency min. 82 %. Another criteria to get the funding is to sign a 10 years full maintenance contract,which guarantees an electrical efficiency of not less than 26 %. [44]

Another example for Germany´s support of fuel cell- and combined heat and power systems is the CombinedHeat and Power Act (KWK Gesetz). The key facts about this act are illustrated in Table 2.9.


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Table 2.9: Key facts about the Combined Heat and Power Act [3]

COMBINED HEAT AND POWER ACT (KWK Gesetz)

Start: 2009

Duration: 11 years

Amount: 8 billion EUR

Target Segment: All

Funded by: Public

Objectives:

· Increase CHP electricityproduction to 25% ofGermany’s total amount

Measures:

· 5.11 EUR ct./kWh with funding for 10years per CHP system <50kWel

· 2.1 and 1.5 EUR ct./kWh with fundingfor 30,000 hours per 50 kWel – 2MWel

and >2MWel CHP systems

Results/Status:

· During temporary interruption of funding for CHP systems in 2010, newinstallations decreased by around 30%

· Total of 95 TWh electricity produced from CHP systems (2014)

Key Learnings:

· Tariff law that effectively incentivises the use of CHP technology by improving the business case on therevenue side for the use of such systems through monetary compensation for every unit of electricityproduced

In addition to the Combined Heat and Power Act, the mini-CHP programme should give impulses to a widespreaduse of small CHP plants. In the framework of the National Climate Protection Initiative the German EnvironmentMinistry promotes highly efficient mini-CHP plants in the electrical power range up to 20 kilowatt since 2012.According to the mini-CHP programme, new cogeneration plants can receive a one-time investment grant. Thegrants are graded according to the electric power of the plants (see Table 2.10).

Table 2.10: Investment grants according to the German mini-CHP programme [27]

MIN. CAPACITY

[kWel]

MAX. CAPACITY

[kWel]

INVESTMENT GRANT

[€/kWel]

>0 ≤1 1,900

>1 ≤4 300

>4 ≤10 100

>10 ≤20 10

In addition to the basic grants in Table 2.10 there are bonus grants for highly efficient mini-CHP systems:


33

Heat efficiency bonus

The heat efficiency bonus is granted for mini-CHP plants, which are equipped with a (second) exhaust gas heatexchanger for utilization of condensing technology and connected to a hydraulically equalized heating system.The heat efficiency bonus amounts to 25 % of the basic subsidy.

Power efficiency bonus

The power efficiency bonus is granted for CHP systems with a particularly high electrical efficiency. The powerefficiency bonus amounts to 60% of the basic subsidy. The requirements in order to receive the additional grants(power efficiency bonus) are listed in Table 2.11.

Table 2.11: Additional investment grants – power efficiency bonus [27]

MIN. CAPACITY

[kWel]

MAX. CAPACITY

[kWel]

ELECTRICAL EFFICIENCY AT RATED OUTPUT

[%]

>0 ≤1 >31

>1 ≤4 >31

>4 ≤10 >33

>10 ≤20 >35

2.2.2.2 Directive on the energy performance of buildings

In Germany the transposition of the EPBD recast is mainly through an amendment of the Energy Saving Ordinance(EnEv). Requirements concerning the energy performance of buildings in Germany have been in place since thefirst Thermal Insulation Ordinance in 1976. In order to meet the political needs, this law has been amendedseveral times.[30] Since 2009 and in addition to the requirements of the Energy Saving Ordinance, the use ofrenewable energy for heating in new buildings has been compulsory nationwide according to the RenewableEnergy Heat Act. This obligation for use of renewable energy for heating has even been expanded to certainrefurbishments of existing buildings in some federal states [14].

Based on the implementation of the EPBD in Germany the following possible impacts on the market uptake offuel cell systems can be derived:

· For all new buildings, a certain share of renewable energy sources to cover the energy used for theheating and domestic hot water is mandatory. The exact ratio depends on the chosen energy sourceand varies between 15% and 50%. Alternatively, the Renewable Energy Heat Act allows either an energyperformance of 15% better than required by the Energy Saving Ordinance, or the use of district heatingand combined heat and power (CHP) instead of renewable energy sources [14]. The fact that the use ofCHP heating systems neutralizes the requirements regarding renewable energy sources, encourages theuse of CHP systems.


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2.2.2.3 Directive on energy efficiency

Even before the directive on energy efficiency was adopted, Germany had a wide range of instruments forincreasing energy efficiency and already managed a visible decoupling of energy consumption and economicgrowth. The aim is to build on this positive development in the future. The increase in energy efficiency, with theassociated energy savings, is a key pillar of the ‘energy transition’ in Germany. The German government sent theEuropean Commission an indicative national energy efficiency target and noted that [19]:

Germany is assuming an average annual increase of 2.1 % in macroeconomic energy productivity from 2008 to2020. Assuming an annual increase of 1.1 % in gross domestic product, this produces a reduction in the energy-related share of primary energy consumption from 314.3 million tonnes crude oil equivalent (Mtoe) in 2008 to276.6 Mtoe in 2020. The attainability of this reduction depends inter alia on the actual development of grossdomestic product and other factors beyond our control, such as storms and changes in stock, along with theresulting composition of the German generation system in the market. This corresponds to a reduction in finalenergy consumption from 220.7 Mtoe in 2008 to 194.3 Mtoe in 2020 [19].

According to the German Energy Efficiency Action Plan [19], the promotion of cogeneration is another packageof measures to increase energy efficiency. A differentiated system of measures should address CHP at variouslevels. Among other things, this covers the following areas:

· From a regulatory standpoint, combined heat and power generation is usually required for a permit forsome industrial facilities and plants of a certain size (from 50 MW heat output). The necessary conditionsfor using local and district heating are also created on the demand side (EnEV, etc.).

· The cost side is affected by exemption from energy tax for high-efficiency CHP plants. There are alsofunding programmes for various types of investment. In the public sector, the market incentiveprogramme to promote measures for using renewable energies in the heating market, the mini-CHPprogramme for small/micro plants and heat networks and the investment support under the CHP Actfor heat networks and heat stores.

· On the revenue side, the attractiveness of CHP is improved, for example, by paying a surcharge forelectricity generated from CHP and exempting locally generated electricity from the EEG14 allocation.

The main instrument to promote the use of highly efficient cogeneration systems is the combined heat andpower act (KWK Gesetz, keyfacts see in the above Table 2.9). To promote efficient CHP plants, the Germangovernment has introduced a CHP levy: the Act on the conservation, modernization and development ofcombined heat and power compensates operators for the higher cost of running cogeneration plants by meansof this levy. The purpose of this Act is to make a contribution to the increase of electricity production fromcombined heat and power in the Federal Republic of Germany to 25% through temporary protection, thepromotion of the modernization and rebuilding of combined heat and power plants, the support of the marketintroduction of heat networks into which heat is injected from the combined heat and power installations, in theinterest of energy saving, environmental protection and of reaching the climate protection objectives of theFederal Government. The Act regulates the procurement of and compensation for power and heat combinedcurrent from power stations with combined heat and power installations on the basis of coal, lignite, waste,waste heat, biomass, gaseous and liquid fuels as well as additional fees for the building and expansion of heat

14 Renewable Energy Act


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networks, provided that the combined heat and power installations and the heat networks fall within the scopeof application of this act15. The priority transformation, transmission and distribution of electricity generated byCHP plants (Article 15) is also regulated and ensured by the KWK Gesetz.

Furthermore it is regulated that the grid operator has to connect the CHP plant and to pay a surcharge paymentas far as the plant is certificated. Table 2.12 shows the specific surcharge tariffs and the maximal duration of thepayment [25].

Table 2.12: Surcharge payment for CHP appliances, operated since 01.01.2009 [25]

Additionally the plant operator gets a payment for the power feed-in. This feed-in tariff is variable and can benegotiated between the plant operator and the grid operator. In case an agreement cannot be found, the paidcompensation consists of the average EEX baseload price plus the avoided network using costs [25]. Thesefunding mechanisms lead (see Table 2.12) to an encouragement of CHP and fuel cell systems.

In Article 24 of the Energy Efficiency Directive the member states are asked to submit to the Commission eachyear statistics on national electricity and heat production from cogeneration (see Table 2.13).

Table 2.13: Statistical indicators heat and electricity generation in Germany [23]

2011 2012 2013

Electricity generation: thermalpower generation [TWh]

521.1 521.1 521.7

Electricity generation: combinedheat and power plants [TWh]

101.4 106.5 107.7

15 https://www.transnetbw.com/en/res-kwk-g/kwk-g/act-on-combined-heat-and-power-generation


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Heat generation: thermal powergeneration [TWh]

204.5 213.3 215.8

Heat generation: combined heatand power plants [TWh]

n.a. n.a. n.a.

In Germany, the average (2011–2013) share of CHP electricity generation of the total thermal electricitygeneration is 16.8%. For the heat generation with combined heat and power plants there are no data available.

2.2.2.4 Directive on the promotion of the use of energy from renewable sources

The share of energy from renewable sources in gross final consumption of energy was 5.8% in 2005. Based onthis initial value, Germany is obliged to increase its share of energy from renewable sources by 2020 to at least18.0%. The Federal Republic of Germany assumes that the 2020 target of 18% energy from renewable sourcescan be achieved with national measures only [24].

The National Renewable Energy Action Plan for Germany [24] presents measures to achieve an increase to 18%,by 2020, of renewables as a share of gross energy consumption. Based on the National Renewable Energy ActionPlan for Germany the following measures in context with the market uptake of fuel cell systems can behighlighted:

· In the electricity sector, the current Renewable Energy Act (EEG) is the basis for further development inthe production of renewable energies. This also applies to the production of combined power andheating/cooling based on renewable energies. The EEG is here supplemented by the Combined Heatand Power Act (KWK Gesetz) and by emissions trading.

The EEG regulates the power payment provisions with employment of renewable fuels like landfill gas,sewage gas, mine gas and biomass and therefore can contribute to a further implementation of fuelcells. The legal obligation of the network operator to connect appliances willing to feed-in is the centralaspect beside the feed-in tariffs which are guaranteed for 20 years plus the year with the first feed-in.For illustration, Table 2.14 shows the basic remuneration values for electricity feed-in from biomassplants. The determining factor for the height of the remuneration is the capacity, whereby for fuel cellsonly biogas or liquefied biomass products come into consideration [25].

Table 2.14: Payments for installations generating electricity from biomass (Degression: 1.5%, duration: 20 years) [25]

YEAR OFCOMMISSIONING

<150 kWel

[ct./kWh]

150 – 500 kWel

[ct./kWh]

500 – 5,000 kWel

[ct./kWh]

5 – 20 MWel

[ct./kWh]

2009 11.67 9.18 8.25 7.79

2010 11.55 9.09 8.17 7.71

2011 11.44 9.00 8.09 7.63


37

· Another part is the CHP bonus in the EEG. This is particularly granted for CHP plants based on renewableenergies, provided the heat is fed into a district heating network.

· As already mentioned under 2.2.2.2, the Renewable Energy Heat Act allows either an energyperformance of 15% better than required by the Energy Saving Ordinance, or the use of district heatingand combined heat and power (CHP) instead of renewable energy sources [14]. This fact could possiblyencourage the use of CHP systems.

2.2.2.5 Anticipated impact of the implementation of EU Directives in Germany

In the following section the anticipated impact of the implementation of various EU Directives on the marketuptake of fuel cell systems in Germany is summarized.

Within the European Union, Germany has put in place the most extensive policy support for stationary fuel celltechnologies – both at federal and at state level. Due to the country’s decommissioning of its nuclear powerprogramme, the demand for alternative power generation – preferably from clean sources – is greater than ever.Furthermore, a relatively large number of fuel cell technology providers are based in Germany and fundingprogrammes help boost these companies' research and development efforts and accelerate thecommercialization of stationary fuel cells.

In addition to the present favourable framework for fuel cells in Germany the implementation of different EUdirectives brought further benefits for fuel cell systems:

For all new buildings, a certain share of renewable energy sources to cover the heating and domestic hot waterdemand is mandatory. The exact ration depends on the chosen energy source and varies between 15% and 50%.Alternatively, the renewable energy heat act allows either an energy performance of 15% better than requiredby the Energy Saving Ordinance, or the use of district heating and combined heat and power (CHP) instead ofrenewable energy sources [14]. The fact that the use of CHP heating systems neutralizes the requirementsregarding renewable energy sources encourages the use of CHP systems and has a positive impact on the marketuptake of fuel cell based CHP systems.

In the German Energy Efficiency Action Plan [19], the promotion of cogeneration is another package of measuresto increase energy efficiency. A differentiated system of measures should address CHP systems (including fuelcell based systems) at various levels.

In the renewable energy context the following benefits - based on the German National Renewable Energy ActionPlan - for the market uptake of fuel cell systems can be highlighted:

In the electricity sector, the current Renewable Energy Act (EEG) is the basis for further development in theproduction of renewable energies. This also applies to the production of combined power and heating/coolingbased on renewable energies. The EEG is here supplemented by the Combined Heat and Power Act (KWK Gesetz)and by emissions trading. The EEG regulates the power payment provisions with employment of renewable fuelslike landfill gas, sewage gas, mine gas and biomass and therefore can contribute to a further implementation offuel cells. The legal obligation of the network operator to connect appliances willing to feed-in is the centralaspect beside the feed-in tariffs which are guaranteed for 20 years plus the year with the first feed-in. Anotherpart is the CHP bonus in the EEG. This is particularly granted for CHP plants based on renewable energies.


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3 Policy framework in other worldregions

East Asia and North America are – by far – leading the way regarding support schemes for stationary fuel cell andCHP systems in terms of large scale diffusion. According to [3] the reasons for the advanced support of thesetechnologies are many - especially the following:

· The larger share of technology developers are located in these regions and they intensely collaboratewith one another whilst benefiting from policy support across borders

· The regulatory frameworks in these countries mandate emissions reduction as well as renewable energyprocurement targets

· High-tech innovation is one of the hallmarks of these regions

The most conducive policy frameworks for stationary fuel cells exist in Japan, Switzerland and the USA. In thefollowing chapter therefor these countries should be analysed in terms of the policy framework for stationaryfuel cells. In these markets, support schemes have led to substantial progress in commercialization, significantincreases in production volumes and consequently considerable cost reductions of stationary fuel cell systems.Specifically, support schemes in Asia target the large-scale diffusion of residential fuel cell CHP system, whereasthe USA's support schemes focus mainly on the deployment of industrial systems.

3.1 Japan

3.1.1 Government Activities & Policy Framework

The main actors for FC R&D (research & development) in Japan are the following institutions:§ Government

o Ministry of Economy, Trade and Industry (METI. Formerly known as MITI)o The Agency of Natural Resources and Energy (ANRE), part of METIo Ministry of Land, Infrastructure and Transport (MLIT)

§ Semi-governmental organizationo New Energy and Industrial Technology Development Organization (NEDO) an affiliate of METI

§ Public Research Institutionso National Institute of Advanced Industrial Science and Technology (AIST, part of METI. Formerly:

The agency of Industrial Science and Technology.)§ Private Firms

o Firms in a consortium called the Fuel Cell Commercialization Conference of Japan (FCCJ)


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3.1.1.1 NEDO (New Energy and Industrial Technology Development Organization)

One of the biggest supporters in the fuel cell industry is the NEDO in Japan. The NEDO is active in a wide varietyof areas as one of the largest public research and development management organizations in Japan. It has twobasic missions:

· Addressing energy and global environmental problems· Enhancing industrial technology

Figure 3.1: Positioning of NEDO [31]

The NEDO’s R&D (Research & Development) activity for hydrogen and fuel cell technology is composed of thefollowing content:

Hydrogen SocietyThe NEDO is going to support Japans Policy on Hydrogen Energy – the want to help by the realisation of the“Hydrogen Society”.The concept of a “Hydrogen Society”: In a hydrogen society, citizens use hydrogen as the primary energy sourcegenerated by renewable energy and fuel cells. Fuel cells will power homes as well as vehicles. The communitywill also be equipped with central control centres with advanced computer systems, accumulators, and batteriesto manage power generation, supply and demand, in an area-wide manner, throughout the day (Figure 3.2).

Figure 3.2: Concept of a hydrogen Society [32]

The following actions have to be set to realize such a “Hydrogen Society”:


40

§ Promote of stationary FC§ Create of preferable market conditions for FCVs commercialization§ Develop new application toward wider H2 utilization (H2gas-based power generation, etc§ Develop large-scale hydrogen supply chain (production/storage/delivery)§ Develop H2/FC Roadmap toward “Hydrogen Society”

There are three phases toward “Hydrogen Society” (Figure 3.3):Phase 1 (Present -): Expand utilization of fuel cell§ Acceleration of dissemination micro – CHP (ENE.FARM)§ Market introduction of fuel cell for commercial/industry use§ FCV: Price equivalent to the hybrid vehicles

Phase 2 (second half of 2020’s -): Establish hydrogen supply chain with unused energy form overseas§ Develop efficient transport/storage technology with chemical hydride, liquid hydrogen§ Market introduction on hydrogen power plant (2030)

Phase 3 (2040 -): Establish CO2 free hydrogen supply chain§ Develop hydrogen production technology with renewable energy, CCS

Figure 3.3: Step by Step approach to realize Hydrogen Society [33]

3.1.2 Programs and Projects

3.1.2.1 ENE.FARM

Installed units and subsidies of ENE.FARM:Referring to the program “Hydro Society” (see Phase 1), the stationary FC sector is going to be pushedenormously. There are subsidies for supporting the introduction of micro-CHP - they accounts for 15 billion yen.One of the most successful programs to support stationary fuel cell development is ENE.FARM. Japan’sENE.FARM program is program is probably the world’s most successful commercialization program for fuel cells(Figure 3.4).

Figure 3.4: ENE.FARM logo [33]


41

ENE.FARM has contributed to spread of more than 120,000 fuel cell heating systems in Japan, proving that long-term public-private partnerships can certainly bring new technologies into the market. Figure 3.5 shows the totalnumber (104,486) of fuel cells which have been installed until 09.2014 and the following trend for this residentialFCs. At the beginning of 2015 the total installed unit’s accounts for more than 120,992.

Figure 3.5: Trend for residential FCs („ENE.FARM“) [33]

Market extensionAn even more recent estimation of Panasonic shows the actual situation in Japan referring to the Ene.Farm –project. The fuel cell market is growing rapidly since 2009. For example in 2009 5,000 fuel cell CHPs were installedin Japan, but if we take a look at the end 2015 there were more than 150,000 units installed. Nevertheless afurther cost reduction of the fuel cells will be needed because the amount of subsidy decreases every year – thistrend is also shown in Figure 3.6.

Figure 3.6: Panasonic’s estimation from the summary of co-generation foundation regarding the shipping data between2009-2015 [34]

The new targets for market expansion in the domestic fuel cell sector are shown in Figure 3.7. By 2020 thereJapan should reach a number of 1.4 million installed fuel cells and in 2030 the target is 5.3 million ones.


42

Figure 3.7: Total demand is Panasonic’s estimation from FCA data and ACEJ data [34]

Table 3.1 shows a short summary of the planned targets and the current progress based on accumulatedinstallation number and the payback period of the FCs.

Table 3.1: Targets and Current Progress based on installation number and payback period [35]

Different SubsidiesTo reach the set targets in 2020 and 2030, one of the main problems will be the decreasing amount of subsidyevery year. Subsidy had been planned to be zero in 2016, but the government judged that continuous support isnecessary to achieve the planned targets.

Targets of Japanese Government Current ProgressAccumulated installation number1,400 k units by 20205,300 k units by 2030

154 k units installed (June 2016)

Payback period7-8 years by 20205 years by 2030

18 years without subsidies13 years without


43

Figure 3.8: Amount of subsidies for SOFC and PEFC – source: Agency for Natural Resources and Energy [35]

Problematic: Subsidy had been planned to be zero in 2016, but government judged that continuous support isnecessary to achieve planned spread. The criteria for subsidy in 2016 are shown in Figure 3.9 and Table 3.2. Thediagram shows the whole costs (product costs + installation) per fuel cell unit (PEFC or SOFC) and the table thedifferent subsidies per fuel cell. There is also a subsidy bonus is available.

Figure 3.9: Costs per unit (installation + product costs) without tax [35]


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Table 3.2: Subsidy per unit in k Yen [35]

Subsidy per unit in k YenPEFC SOFC Bonus

product costs 150 190 for existing house 30install. costs 70 90 for LPG 30

for Cold region 30

The following Table 3.3 is showing a short summary of the ENE.FARM program:

Table 3.3: Key facts about ene.farm field test [3]

ENE.FARM

Start:

2009

Duration:

6 years

Amount:

80 million EUR

Target Segment:Residential

Funded by:

Public, Private

Objectives:

· Operation of 5.3 millionene.farm units by 2030

· Decreasing price for fuelcells through massproduction

Measures:

· World`s first home-use fuel cellsystem

· Government subsidy for producing 5.3million units

Results/Status:

· Steady increase in units sold (20,000 by end of 2012) despite decreasingsubsidy

· Update 2015: 120,992 installed unit’s

· Operating lifetime for FC increased from 50 – 60,000 hours due toimprovements in PEM fuel cell installation leading also to lower unit costs

Key Learnings:

· Subsidy scheme that effectively incentivises large-scale diffusion of residential CHP systems, thus drivingproduction volumes which, in turn, lead to significant cost reductions and accelerate commercializationof the technology

While a number of companies have participated in development and early deployment, the main participantstoday are Panasonic and Toshiba, which offer PEM units, and Aisin Seiki, offering SOFC units for the ENE.FARMproject. The power rated power output of ENE.FARM products is based on the power and hot water levels usedby an average family household (family of four in a detached house) – ca. 700W.

3.1.3 Stationary Fuel Cells

Chapter 3.1.3 describes the most commonly used stationary fuel cells in Japan. When it comes to the usage ofstationary fuel cell applications in Japan, the country tends to use small scale stationary power, e.g. micro CHPs


45

in the domestic or residential sector. A good example for this trend is the ENE.FARM project which is describedin chapter 3.1.2.1. The following chapters provide a compact overview of the stationary fuel cell landscape ofJapan. It is already known that Panasonic, Toshiba and Aisin Seiki are the most common manufacturers in Japanand in the ENE.FARM project. Before the stationary fuel cell applications of these companies are described indetail, Table 3.4 should give an overview about the price of these units.

Table 3.4: Pricelist of the ENE-FARM Units in the market [45]

Toshiba Panasonic Aisin Seiki

Model

Retail Price(list price)(excl. tax (8%))

¥ 1,630,000(excl. installation)



3.1.3.1 The Panasonic Residential fuel cells

Site of operation:· detached houses· condominium

Fuel cells for electricity generation + heat supply

There are two different types of Panasonic residential fuel cells, one for detached houses and one forcondominium. They are described in the following text parts.

Residential fuel cells for detached houses:Features:

· More affordable price for the same basic functionality:The recommended retail price of the 2016 model of Residential fuel cell is about 300,000 yen* lowerthan that of the 2013 model for the same basic functionality and an approximately 17% longer operatingtime.

· Uninterrupted power generation function of the fuel cell unit:It enables ENE-FARM to continue the operation even during blackout of grid power. When the blackoutoccurs, it delivers power to the blackout outlet and continues to deliver domestic hot water and spaceheating medium.


46

Figure 3.10: Explanation of fuel cell operation mode if there is a power distribution [37]

Figure 3.11: Explanation of fuel cell operation mode if there is a power distribution [37]

· There are two types of Panasonic Residential fuel cells available:A separate type that offers greater installation flexibility and is combined with one of the backup heatsource devices offered and an integrated type (more compact) of the same depth dimension (400mm)that has a backup heat source device within its hot water storage unit.


47

Figure 3.12: Two types of residential fuel cells for detached houses [37]

Typical backup boilers are:

Figure 3.13: Typical boilers for reheating and hot water [37]

· The fuel cells can achieve a durability of 4,000 start/stop operations and 70,000 hours of operation,while maintaining a rated overall efficiency comparable to that of the 2013 model (95.0% LHV＊1(85.8%HHV)). With a longer life, the new model also meets the needs of customers who want to use a lot ofenergy.


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Figure 3.14: endurance time of the Panasonic residential fuel cell [37]

Table 3.5: Specifications of the residential fuel cell for a detached house [37]

Integrated type Separate typeFuel type City gas (13A)

Power-output

Rating 700WOutput range 200 - 700W

Power generation efficiency (Rating) LHV*: 39.0% HHV: 35.2%Heat recovery efficiency

(Rating)LHV: 56.0% HHV: 50.6%

Total efficiency LHV: 95.0% HHV: 85.8%Hot water storage capacity 140 L

Dimensions

Fuel cell unit Height: 1750; Width: 700; Depth: 400(mm)Hot water

storage unitHeight: 1750; Width: 700;

Depth: 400(mm)Height: 1750; Width: 560;

Depth: 400(mm)

Backup boiler(Built into the hot water storage

unit)Height: 750; Width: 480; Depth:

250(mm)

Mass (duringoperation)

Fuel cell unit 77kg (82kg)Hot water

storage unit88kg (233kg) 50kg (198kg)

Backup boiler(Built into the hot water storage

unit)44kg

Output during blackouts (model witha function for continuing to generate

power during blackouts)Maximum 500W

*Lowering heating valuedescription:

A value obtained by deducting the condensation latent heat ofsteam from the heating value of fuel gas when completely burned.This can be compared with HHV (higher heating value), whichincludes the condensation latent heat of steam generated byburning in the heating value. For city gas, the ratio of LHV to HHV(LHV/HHV) is about 0.903.


49

Residential fuel cells for a condominium:There is also an ENE-FARM model for housing complexes from the company Panasonic.Features:

· Improvement in design flexibility for new condominiums· Increased resistance to earthquake· Increase resistance to wind

Figure 3.15: Residential fuel cells for a condominium – source: Panasonic [37]

Table 3.6: Specifications of the residential fuel cell for a condominium [37]

Fuel cell unit Integrated type Separate type Balcony typeFuel type City gas (13A)

Power output (Rating) 700W (Output range: 200-700W)Power generation efficiency

(Rating)LHV: 39% (HHV: 32.2%)

Heat recovery efficiency(Rating)

LHV: 56% (HHV: 50.6%)

Total efficiency LHV: 95% (HHV: 85.8%)

DimensionsHeight: 1750; Width:399; Depth: 395(mm)

Height: 1750; Width:399; Depth 395(mm)

Height: 1750;Width: 399; Depth:

395(mm)Mass (during operation) 82kg (87kg) 80kg (85kg) 82kg (87kg)

Hot water storage unitHot water storage capacity 140 L

Dimensions Height: 1750; Width: 400; Depth: 560(mm)Mass (during operation) 49kg (197kg)


50

Backup boiler (Slim modelwith room heating function)

Heat source type Latent heat condensing type instantaneous gas heaterMass 49kg

External dimensions Height: 900; Width: 250; Depth: 450(mm)

List of different companies/gas suppliers supporting Panasonic’s residential fuel cells:

Figure 3.16: Supporting companies of the Panasonic residential fuel cell [37]

3.1.3.2 TOSHIBA FUEL CELL POWER SYSTEM CORPORTATION

Site of operation:· detached houses (e.g. family of four in a detached house)

Figure 3.17: Why is TOSHIBA supporting ENE.FARM [38]


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Figure 3.18: CO2-Reductions due ENE.FARM [38]

Table 3.7: Specifications of fuel cell of Toshiba [38]

Fuel cell unit SpecificationsPower generation output 500 – 700W

Electrical efficiency 39%Total efficiency 95%Cell design life 80,000 hoursOutput voltage AC100/200V

Ambient temperature -10°C – 43°CHot water temperature >60°C at exit

Fuel City gas/LPGNoise 37dB (A)

Operation mode Automatic (learning control type)Start-up time >60 min. (70 min.)Dimensions W780 x D300 x H1000mmWeight (dry) 94kg

Product

Table 3.8: Different hot water storage tanks [38]

Hot water storage tank unit By Chofu Seisakusho By NoritzStorage tank capacity 200L 200L

Dimensions W750 x D440 x H1760mm W750 x D440 x H1755mmWeight (dry) 92kg 92kg


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Product

3.1.3.3 ASINI - SOFCTable 3.9: Specifications of fuel cell of ASINI [35]

Fuel cell unit SpecificationsPower generation output 700 W

Electrical efficiency 52% @700 WWeight 100 kg

Hot water tank capacity 28 LMaintenance period 10 years

Used Space 1.4 m²Price* 1,927,800 Yen

Product

*Catalog Price published by Osaka Gas; Including boiler and tax, excluding

installation cost, subsidy


53

3.1.3.4 Feed in tariff by Gas Company:

Figure 3.19: Feed in Tariff by Gas Company [35]

3.1 United States of America


The United States of America provide funding for a range of fuel cell and hydrogen research, development anddemonstration (RD&D) activities at U.S. universities and conducted by private industry. At the state level,numerous policies supported the development and deployment of fuel cells and hydrogen fuelling stations.Incidentally the most active states are California, Connecticut and New York [40].

Three of the world’s leading fuel cell manufacturers are situated in the USA:· FuelCell Energy (FCE)· Doosan Fuel Cell America· Bloom Energy

These three companies are producing MCFC, PAFC and DOFC based stationary fuel cells of 100 kW to severalMW. Each company has benefited from government support for R&D and subsequently for fuel cell installationsat home, in California and Connecticut in particular, and overseas, notably Korea. Furthermore they alsoincreasingly use power purchasing agreements and project financing to make their fuel cell units attractive tocostumers [41].

Some facts about fuel cell policies in the U.S. [39]:· 30 states include fuel cells or hydrogen as eligible resources in Renewable Portfolio Standards.· 32 states permit net metering of fuel cells.


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· 25 states offer funding for fuel cells in the form of rebates, grants, loans, bonds, PACE financing, orpublic benefits funding.

· 16 states provide personal, corporate, property and/or sales tax incentives for fuel cells.


Programs and projects of the states of the U.S. with the most activities related to stationary fuel cells are listedin this chapter.

3.1.2.1 California

California has more fuel cell distributed power generation than any other state, with more than 480 fuel cellsystems, totalling more than 210 MW of power generation, that were placed in service with the support of stategrants.

Major Influencers – State Agencies and Organizations:The following state agencies and organizations are responsible, among other things, for the success of the fuelcell projects in California:

· Office of Business and Economic Development (GO-Biz)· California Air Resources Board (CARB)· California Energy Commission (CEC)· California’s Air Quality Management Districts (AQMDs)· California Fuel Cell Partnership (CaFCP)· Alameda-Contra Costa Transit District (AC Transit)· SunLine Transit

Key Programs and Policies:The Self Generation Incentive Program (SGIP), which provides grant funding to support the deployment ofdistributed power generation resources, including stationary fuel cells [39].

3.1.2.2 Connecticut

Connecticut’s support for stationary fuel cells is strong, deploying the technology to enhance power reliabilityand reduce emissions. Conservatively, at least 35 MW of fuel cells now operate in the state and another 20 MWare planned. A 63.3 MW fuel cell installation has been approved by Connecticut’s Siting Council. This would bethe world’s largest fuel cell power park.

Major Influencers – State Agencies and Organizations:The following state agencies and organizations are responsible, among other things, for the success of the fuelcell projects in Connecticut:

· Department of Energy and Environmental Protection (DEEP)· Department of Economic and Community Development (DECD)· California’s senators and representatives· Connecticut Hydrogen-Fuel Cell coalition (CHFCC)· CTTRANSIT


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· Connecticut Center for Advanced Technology (CCAT)

Key Programs and Policies:The Fuel Cell Program which was created by the Department of Energy and Environmental Protection providesincentive funding through the Connecticut Green Bank’s On-Site Distributed Generation Program, the Low andZero Emissions Renewable Energy Credit Program (LREC/ZREC) and the Microgrid Grant and Loan Program [39].

3.1.2.3 New York

New York is home to more than 180 companies that are part of the hydrogen and fuel cell industry. More than14 MW of fuel cells operate in New York.

Major Influencers – State Agencies and Organizations:The following state agencies and organizations are responsible, among other things, for the success of the fuelcell projects in New York:

· New York’s state government· New York’s senators and representatives· New York State Department of Public Service and Commission· New York State Energy Development Authority (NYSERDA)· New York Power Authority (NYPA)

Key Programs and Policies:New York includes all fuel cell systems in their Renewable Portfolio Standard and in the new Clean EnergyStandard (released in 2016) and provides a sale and use tax exemption for fuel cell systems and service, andhydrogen gas.The following programs are supporting the fuel cell sector in New York:

· New York’s reforming the Energy Vision (REV) strategy· New York’s Clean Energy Standard· NY Prize Microgrid program· NYSERDA’S fuel cell R&D program for New York companies [39]


The stationary sector in the USA includes both large-scale (200 kW and higher) and small-scale (up to 200 kW)and a wide range of markets including retail, data centres, residential, telecommunications and many more.

3.1.3.1 Large-Scale Stationary Power

There are more than 235 MW of large stationary (100 kW to multi – megawatt) fuel cells currently operating inthe USA. Bloom Energy, Doosan Fuel Cell America and FuelCell Energy sold or installed more than 70 MW of fuelcell systems in 2015 (publicly disclosed). The following tables show a short overview of the work of the threebiggest fuel cell manufacturers focused on the large-scale stationary sector.


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Table 3.10: Bloom Energy publicly disclosed 2015 orders and installations [40]

Customer Power DetailsCentruyLinkIrvine, California

500 kW Fuel cells are expected to produce nearly 4.4 million kWh ofannual electricity and will help power cloud, manged hosting andcolocation services housed within the data centre

ComcastBerlin, Connecticut

400 kW Will provide up to 80% of the facility’s total energy load.

EquinixSan Jose, California

1 MW Will provide an estimated 8.3 million kWh of electricity annually,powering a portion of the SV5 data centre.

Hyatt Regency GreenwichOld Greenwich,Connecticut

500 kW Will provide up to 75% of the hotel’s energy load, reducing carbonemissions by 40% compared to electricity purchased form the grid

IKEAEmeryville, California

300 kW Retrial store’s fuel cell is powered by biogas and is combined witha solar energy system to generate a majority of the store’s energyonsite.

Johnson & Johnson –Advanced SterilizationProducts (ASP)Irvine, California

500 kW 500-kW fuel cells were installed with uninterruptible powermodules which provide 25% of the daily energy consumption

Staples CenterLos Angeles, California

500 kW Provides about 25% of the power required by the sports andentertainment venue each year.

Stop & ShopMt. Vernon, New York

250 kW Will generate more than 2 million kWh each year.

Osaka Prefectural CentralWholesale MarketIbaraki City, Japan

1.2 MW Provides 50% of the buildings’ overall electricity needs

TOTAL 5.15 MW

Table 3.11: Doosan Fuel Cell America publicly disclosed 2015 orders and installations [40]

Customer Power DetailsAmgraph PackagingBaltic, Connecticut

880 kW 2 PureCell® Model 400 power plants were installed (CHP)

California State University,San MarcosSan Marcos, California

880 kW Two fuel cells were installed to help the university adhere tostrict sustainability standards and reduce greenhouse gasemissions.

CTTransitHamden, Connecticut

440 kW Electricity, heat and hot water are supplied by the fuel cell to itsmaintenance and storage facility.

Norco CollegeNorco, California

440 kW 60% of the campus’s average daily requirement for electricity isprovided.

Korean South East PowerCo. Ltd. (KOSEP)Ansan, South Korea

2.6 MW 6 PureCell® Model 400 fuel cell power plants are located at theKOSEP facility in Ansan – they are providing energy and heat tothe local electric grid and KOSEP customers.


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KOSEPBudang, South Korea

5.6 MW Will deliver 13 PureCell® Model 400 fuel cells worth for KOSEP’scombined cycle power plant in Budang.

Samsung C&T Corp. andKorea Hydro & NuclearPower BusanSouth Korea

30.8 MW 70 fuel cells totalling 30.8 MW for the Busan Green EnergyProject.

Korea Western Power andServeone, an LG affiliatedcompanyIncheon, South Korea

5 MW 11 PureCell® Model 400 power plants were installed at KoreaWestern Power’s facility to generate electricity for nearly 3,000homes.

TOTAL 46.64 MW

Table 3.12: FuelCell Energy publicly disclosed 2015 orders and installations [40]

Customer Power DetailsAlameda CountyDublin, California

1.4 MW Will install a 1.4-MW fuel cell CHP plant at Santa Rita jail toreplace a smaller FuelCell Energy power plant installed in 2006.The fuel cell plant will meet approximately 60% of the energyuse, while the excess heat will be used for hot water for a rangeof facility uses.

Riverside WastewaterQuality Control PlantRiverside, California

1.4 MW The fuel cell power plant will convert biogas form thewastewater treatment process to power the facility and twoelectric vehicle charging stations, as well as provide thermalenergy for the water treatment process.

Pepperidge FarmBloomfield, Connecticut

1.4 MW Will install a DFV® power plant at its bakery to supplement theexisting DFC® fuel cell that was installed at the bakery in 2008.

United IlluminatingWoodbridge, Connecticut

2.2 MW The United Illuminating Company finalized an agreement withthe town of Woodbridge to build a state-of-the-art microgridconnecting the Woodbridge Town hall, Library, Fire House, PoliceStation, Public Works Facility, Senior Center (which also serves asan emergency centre), and Amity Regional High School.

University of BridgeportBridgeport Connecticut

1.4 MW Closed a previously announced agreement to sell the fuel cellpower plant at the University of Bridgeport to NRG Energy, Inc.

E.ON 1.4 MW A FCES fuel cell system is located at FRAITEC’s headquarters andproduction facility.

PSOCO Energy 33.6 MW Under a long-term existing contract, FuelCell Energy shipped2.8 MW (two 1.4 MW kits) a month to POSCO in 2015, totalling24units and 33.6 MW.

5.6 MW 5.6 MW of fuel cell modules were delivered to POSCO Energy.8.4 MW Sale of 6 fuel cell modules totalling 8.4 MW to POSCO Energy.

TOTAL 56.8 MW


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3.1.3.2 Small-Scale Stationary Power

Small scale fuel cells in this section include residential units and micro-CHP (m-CHP) sales and installations,primarily in Asia and Europe. The following table lists the commercial available stationary fuel cells in the U.S.

Table 3.13: Examples of commercially available stationary fuel cells 2015 – Prime Power and m-CHP [40]

Manufacturer Product Type OutputBallard Power Systems(Canada)

ClearGen PEM Mulit-500 kW power banks

Bloom Energy (U.S.) ES-5700 SOFC 200 kWES-5710 SOFC 250 kW

UPM-570 SOFC 160 kWUPM-571 SOFC 200 kW

Doosan Fuel Cell America (U.S.) PureCell system Model 400 PAFC 400 kWFuelCell Energy (U.S.) DFC 300 MCFC 300 kW

DFC 1500 MCFC 1,400 kWDFC 3000 MCFC 2,800 kWDFC-ERG MCFC Multi-MW

Hydrogenics (Canada) MW power plant PEM 1 MW

Table 3.14: Key facts about the Feed-in Tariff [3]

FEED-IN TARIFF

Start:

2008

Duration:

12 years

Amount:

750 MW

Target Segment:

Industrial

Funded by:

Public

Objectives:

· Installation of min. 3,000MWel CHP systems intotal to reduce 6.7 millionmetric tons (MMT) of GHGemissions

· For CHP units <20 MWel

Measures:

· Feed-in tariffs for CHP systems <20MWel and >62% efficiency

· CHP viewed as third most significantsource for GHG emission reduction

· Tariffs will be available untilcumulative capacity equals 750 MW

Results/Status:

· Reduction of 1.61 MMT of GHG emissions; 3.19 MMT remaining

· More than 58% of MWel capacity already installed

Key Learnings:

· Tariff scheme that successfully supports California in meeting its renewable portfolio standards throughlong-term diffusion of industrial CHP systems, but total incentives are limited by a maximum energygeneration capacity


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Table 3.15: Key facts about the Business Energy Investment Tax Credit (ITC) [3]

BUSINESS ENERGY INVESTMENT TAX CREDIT

Start:

2008

Duration:

8 years

Target Segment:

Commercial

Industrial

Funded by:

Public

Objectives:

· Encourage investment andgrowth in certainrenewable energy andenergy efficiencytechnologies

Measures:

· Up to USD 1,500 per 0.5 kWel installedcapacity

· Fuel cells receive a 30% credit, CHPunits 10%

Results/Status:

· USD 18.5 billion in tax credits have been issued under the Energy InvestmentTax Credits as of May 2013, which equates to 9,016 approved credits

· Specifically, USD 160 million credits have been distributed for FC and CHPsystems

Key Learnings:

· Tax scheme that effectively incentivises commercial and industrial segments to invest in low carbon-carbon technologies shortly after the recession, thus simulating the economy and reducing nationalemissions simultaneously

3.2 Switzerland


Another significant player in development of fuel cell technology is Switzerland. The Swiss energy policy, basedon the energy strategy 2050, is an important factor which is responsible for a higher activity in R&D of fuel cellsin Switzerland. The target is to reach a reduction of end-energy use by 9% (21TWh) until 2020 and by 33% (-77TWh) until 2050. One of the main actors in pushing fuel cell development is the Swiss Federal Office of Energy(SFOE). The organisation’s main researching fields are renewable energy, nuclear Energy, energy efficiency andcross-sectional themes (e.g. energy policy fundamentals). These fields are subdivided into several different coreareas – research of hydrogen and fuel cells are two of these areas.When it comes to public funding for hydrogen and fuel cell projects more than 80 projects according to a sourceof the SFOE were supported in 2014. The estimated numbers of the height of the public funding in MCHF aregiven in the following table:

Table 3.16: Public funding for fuel cells and hydrogen in Switzerland [42]

2011 2012 2013

Fuel Cells in MCHF 16.2 12.8 15.3

Hydrogen in MCHF 15.8 12.3 12.2


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Switzerland is not only working hard on fuel cell research and development, but also carries out some seriousprojects in the field of fuel cell CHPs.

PHAROS:One of the biggest projects in this field is a national light house project which is called “PHAROS”. It deals withthe field test of different high temperature fuel cell heating appliances in single family or small multifamilyhouses. More than 10 domestic fuel cell heating installations based on high temperature ceramic fuel cell types(SOFC) have been realized. The following types of fuel cells have been installed: HEXIS Galileo 1000 N and Bruns-CFCL Waxess BZG F01. The fuel cell appliance specifications and the differences between these two units areillustrated in the following table.

Table 3.17: fuel cell appliance specifications which were used in the project “PHAROS“ [43]

Specifications HEXIS Galileo 1000 N Bruns-CFCL Waxess BZG F01Fuel Cell partElectric power 1 kWel (AC, net) 0.5-1.5 kWel

Thermal power 1.8 kWth 0.61 kWth

Electric efficiency 30-35 % 60 % (1.5 kW export)Total efficiency 95 % (Hi, Tair = 30 °C) module-efficiency: 85 %

Operation modulating modulatingEmissions NOx < 30 mg/kWh n.a.

Peak BoilerThermal power 5-20 kWth 5.1-22.8 kWth

Operation modulating modulatingTotal efficiency 109 % (Hi, Tair = 30 °C) Module efficiency: 94 (Hs)

Product picture

Ene.field Switzerland:Another big project based on residential fuel cell CHPs is the ene.field project in Switzerland. This project waslaunched in 2015 and runs until 2017. The aim of ene.field Switzerland is to test three fuel cell units (BuderusLogapower FC10) for heating operation.


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The following charts which were created by the Office federal de l‘energie (OFEN) are comparing the totalelectricity production and consumption of Switzerland in 2010 and 2035. The significant point is that in 2035there will be a big gap between electricity production and consumption during the winter months. This gap willappear because of the phase out of nuclear power and the usage of only renewable sources for electricityproduction (e.g. PV, wind, geothermal, hydropower and biomass). Above all, seasonal renewable energy sourcessuch as hydropower and PV will not be able to produce as much electrical energy as it will be required duringwinter. So another important factor which pushes the development of energy efficient technologies inSwitzerland (e.g. fuel cell CHPs for domestic usage) is the high amount of electricity which will be needed in thenear future.

2015


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Figure 3.20: Electricity consumption and production in Switzerland – 2010 (left pic.) vs. 2035 (right pic.) [43]

Referring to residential fuel cell micro CHPs the legal framework for space heating and sanitary hot water shouldbe mentioned – it contains the following points:

· Swiss energy politics mandates the provinces (cantons) in Switzerland: provinces are responsible for allregulations regarding the energy use in residential buildings

· The provinces formulated the model prescriptions for energy use 2008, now approved since 2015· New dwellings: 80 % of the energy use is non-renewable – 20 % is renewable (insulation, solar,

environmental heat, biomass etc.) for space heating and domestic hot water. Similar requirements areapplied for refurbishing of new buildings where 10 % has to be renewable

An investigation of the SVGW shows the total estimated number of installed heating appliances and boilers(1,650,000 units) and the whole heat (80,000 GWh/a) and sanitary hot water (15,000 GWh/a) energy productionin Switzerland. To push energy saving and efficiency in this sector, base technologies for heating such as oilboilers, gas boilers, solar-gas thermal and electrically driven heat pumps should be replaced by emergingtechnologies such as electric heat pumps (two stage, CO2-fluid, high temperature), biomass (pellet for small heatpower, wood chips for > 200 kW), micro CHP (Stirling), fuel cells (high efficiency) and gas heat pumps (absorptionheat pumps). Fuel cell CHPs are becoming more and more important in Switzerland. This trend is shown in thefollowing graph, which describes the main future scenarios in Switzerland till year 2035 and 2050.

Figure 3.21: Electrification and district heating – future scenarios till year 2035 and 2050 [43]


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4 Recommendations

The project has been processed so far on the basis of the ruling:

· EU-Directives, transposed into national laws,

· EU Regulations

· Technical codes

taking the fast changing developments regarding legal provisions and technology – as much as possible – intoconsideration. Knowing that even these existing regulations are supportive for the market uptake of the fuel celltechnology, thus more ambitious goals should even more push the development of fuel cells. Having said this,the Annex 33 members should provide supportive input regarding information of energy efficient fuel celltechnologies to the relevant decision makers.

The mentioned more ambitioned goals can be found in the 40/27/27 “formula” - targeted to be achieved by2030. These goals, namely reduction of the GHGs by 40%, share of RES 27% and improvement of the energyefficiency target by 27% (in the meantime a proposal was tabled, suggesting to increase the energy efficiencygoal from 27% to 30% by 2030). The present discussion should be used by Annex 33 members to provideconstructive proposals to the relevant stakeholders regarding inherent advantages of fuel cell technology.

Besides an improved heating and cooling strategy was developed and proposed by the European Commission –which should – based on very rough initial analyses - also be in favour of fuel cells.

The so called “Winter package” comprises a series of proposals – like the improvement of the security of gassupply status in the European Union - which are in favour of the fuel cell technology as well.

On top, the so called hydrogen council, thirteen leading energy, transport and industry companies have recentlylaunched a global initiative to voice a united vision and long-term ambition for hydrogen to foster the energytransition. The creation of the ‘Hydrogen Council’ was initiated by FCH JU, Hydrogen Europe in order to positionhydrogen among the key solutions of the energy transition. To achieve the high ranked ambitions, the Councilwill work with, and provide recommendations to, a number of key stakeholders such as policy makers, businessand hydrogen players, international agencies and civil society. The CEOs of the participating multinational, wellknown and highly reputable companies, active in the automotive industry, logistics industry etc., used theoccasion of the World Economic Forum in Davos to kick off this important activity.

In Austria the steel producing company Voest Alpine16 entered a joint venture with Siemens17 and Verbund18 -Austria’s leading electricity generation company - in order to analyse the possibility and potential of theemployment of hydrogen in the steel sector in order to reduce GHG emissions and at the same time remaincompetitive. It is recommended to cooperate with this joint venture – of course taking business secretrestrictions into consideration.

16 http://www.voestalpine.com/group/en/17 http://www.siemens.com/at/de/home.html18 https://www.verbund.com/en-at


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Potentially the high speed progress of Tesla and other manufacturers of battery electric vehicles (BEVs) have putsome pressure on the fuel cell industry to put even more money into R&D activities to reap the benefits of thispromising technology.

Having said this it is necessary to:

· Analyse and – if possible – influence the draft laws in terms of suggesting improvements for the fueltechnology

· Contribute to the work of the “Hydrogen Council” as much as possible

· Contribute to the development of successful business models, e.g. the “Gas” and “Electricity” Directive(2009/73/EC and 2009/72/EC) should be further analysed regarding the chance to reasonably lower thetariffs for the infrastructure usage (gas and electricity). Lower tariffs- based on solid cost accountingrules- could partially improve the environment for a successful business model.

· Enable issuing of energy performance certificates – if not possible currently – for buildings installing amCHP-system.

· Analyse the effects of grants or subsidies for mCHP systems similar or in analogy to the provisions in theCHP act and recommendation to implement such provisions – if reasonable and cost efficient

· Include the analyses of the disposal systems for expended fuel cells since this is completely excluded inthe BEV-sector and which potentially generates high costs to be paid for by the final costumer, hencecould be decisive for his choice.

One can see that there are a lot of issues to be urgently tackled, in order to leverage the market penetration offuel cells – either as stationary or mobile fuel cells.


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5 Summary

The specific goal of this report is to identify and analyse upcoming opportunities or possible threats for themarket uptake of fuel cell systems through the implementation of various EU directives and regulations indifferent countries.

The report focuses either on energy-related EU directives and regulations and the general policy frame-work inother world regions (Japan, USA, Switzerland).

The specific implementation of EU directives in different member states and their anticipated impacts on themarket uptake of fuel cell systems are described and analysed. The analyses of the expected impacts are basedon a conducted questionnaire session and on relevant literature. The questionnaire session has been carried outamong the participants of the IEA Advanced Fuel Cell Implementing Agreement Annex 33 – Stationary fuel cells.

The specific impact of the implementation of EU directives in different member states and their anticipatedimpacts on the market uptake of fuel cell systems have been elaborated on the basis of the implementation inAustria and Germany. These two countries have been chosen as representative example cases for theimplementation of different EU directives and regulations.

The transposition of the Ecodesign and Labelling Directive in the EU is relevant for the market uptake process offuel cell systems since the labelling makes the energy efficiency of various products more visible, thus easy to beevaluated, for customers. The promotion of the use of cogeneration with the label classes A+ and A++ (even A+++will be possible after the introduction of this class in 2019) is expected to have a positive impact on the marketpenetration of fuel cell systems and encourage costumers’ investing in these system. In comparison to heatpumps and solar devices, which are labelled on equal terms, the ease of installation of fuel cells - as long as thereis a connection to the gas grid available – can be regarded as competitive advantage.

Directive 2009/73/EC on the common rules for the internal market in natural gas and directive 2009/72/EC onthe common rules for the internal market in electricity provide a framework for the internal market in naturalgas and electricity – including rules for the tariffs for the usage of the gas- respectively electricity infrastructure,like transmission and distribution grids. In case of a proper infrastructure tariffs-structure for gas as well as forelectricity grids, strong incentives could be generated for the market introduction and further on significantmarket penetration (part of the business model) of fuel cells.

Through the implementation of the EPBD in Austria, the following impacts on the market uptake of fuel cellsystems can be derived:

· The space heating demand (referring only to the building envelope) was the central element for thedefinition of requirements before the implementation of the EPBD. Through the implementation ofthe EPBD, the efficiency of the heating systems became more and more part of the requirements. Thisleads to an encouragement of highly efficient heating systems like CHP systems (incl. fuel cells).

· According to Article 4 (EPBD), the Member States shall take the necessary measures to ensure that theminimum energy performance requirements for buildings or building units are set with a view toachieving cost-optimal levels. On this point it has to be stated that presently, the economic feasibilityof fuel-cell-based mCHP systems is presently not favorable for Austrian residential and non-residential


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buildings. So they do currently not contribute to reach the cost-optimal level of the energyperformance of buildings. So, within this context, high investment costs and the lack of availablesubsidies constitute the main barrier for the market uptake.

· In addition to the lack of financial attractiveness, it is presently not possible in Austria to receive anenergy performance certificate (EPC) for buildings supplied by a mCHP system. The implementation ofthe EPBD requires to issue an energy performance certificate (EPC) for

- new buildings- buildings going to be sold- buildings going to be rent out

This means a regulative barrier for investors willing to invest in a fuel-cell-based mCHP system.

The Energy Efficiency Directive requires member states to adopt policies which encourage the due taking intoaccount of the potential of using efficient heating and cooling systems – in particular those systems using high-efficiency cogeneration. Therefore the Austrian CHP Act provides investment grants for new CHP plants andsubsidies for the operation of existing CHP plants feeding heat into public district heating systems.

In context with the Renewable Energy Directive Austria has drawn up a National Renewable Energy Action Plan.Based on this action plan, the following measures in context with the market uptake of fuel cell systems can behighlighted:

· The extension schemes for hydropower and wind, which represent the largest extension schemes forrenewable energies in the next ten years, have led to corresponding preparations by systemoperators. In the case of insufficient capacity for interconnections for supplies exceeding controlareas, a preference of transport to supply customers with electricity from RES and CHP plants (incl.fuel cells) on the part of implementation laws is established in order to comply with all applications touse systems.


· The Austrian Green Electricity Act provides feed-in tariffs for electricity generated from renewablesources. For electricity generated from CHP power plants a surcharge is provided.

It can be assessed, that the above mentioned support mechanisms for CHP systems will encourage the marketuptake of fuel cell based CHP systems.

The impact of the implementation of various EU Directives on the market uptake of fuel cell systems in Germanycan be summarized as follows:

Within the European Union, Germany has put in place the most extensive policy support for stationary fuel celltechnologies – both at federal and at state level. Due to the country’s decommissioning of its nuclear powerprogramme, the demand for alternative power generation – preferably from clean sources – is greater than ever.Furthermore, a relatively large number of fuel cell technology providers are based in Germany and fundingprogrammes help boost these companies' research and development efforts and accelerate thecommercialization of stationary fuel cells.

In addition to the present favourable framework for fuel cells in Germany the implementation of different EUDirectives brought further benefits for fuel cell systems:


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For all new buildings, a certain share of renewable energy sources to cover the heating and domestic hot waterdemand is mandatory. The exact ration depends on the chosen energy source and varies between 15% and 50%.Alternatively, the renewable energy heat act allows either an energy performance of 15% better than requiredby the Energy Saving Ordinance, or the use of district heating and combined heat and power (CHP) instead ofrenewable energy sources. The fact that the use of CHP heating systems neutralizes the requirements regardingrenewable energy sources encourages the use of CHP systems and has a positive impact on the market uptakeof fuel cell based CHP systems.

In the German Energy Efficiency Action Plan, the promotion of cogeneration is another package of measures toincrease energy efficiency. A differentiated system of measures should address CHP systems (including fuel cellbased systems) at various levels.

In the renewable energy context the following benefits - based on the German National Renewable Energy ActionPlan - for the market uptake of fuel cell systems can be highlighted:

In the electricity sector, the current Renewable Energy Act (EEG) is the basis for further development in theproduction of renewable energies. This also applies to the production of combined power and heating/coolingbased on renewable energies. The EEG is here supplemented by the Combined Heat and Power Act (KWK Gesetz)and by emission trading. The EEG regulates the power payment provisions with employment of renewable fuelslike landfill gas, sewage gas, mine gas and biomass and therefore can contribute to a further implementation offuel cells. The legal obligation of the network operator to connect appliances willing to feed-in is the centralaspect beside the feed-in tariffs which are guaranteed for 20 years. Another part is the CHP bonus in the EEG.This is particularly granted for CHP plants based on renewable energies.

The second part of the report also focuses on the stationary fuel cell sector and the policy framework in otherworld regions, especially the US, Japan and Switzerland. Based on the report it can be said that East Asia (e.g.Japan) and North America (e.g. the USA) are – by far – leading the way regarding support schemes for stationaryfuel cells and CHP systems in terms of large scale diffusion, but also small countries like Switzerland are verycommitted to developing supporting schemes for stationary fuel cell systems. In the following paragraph themost important facts about the policy framework and the R&D in the stationary fuel cell sector, in other worldregions, will be summarized.

JapanJapan has a very large supporting scheme in the stationary fuel cell sector. The “ENE.FARM” project is one of thebiggest funding projects for residential fuel cell appliances in the world. One of the biggest supporters of theENE.FARM project is the NEDO in Japan, which is also responsible for the push on of Japans “Hydrogen Society”.If we take a look at the end of 2015, there were more than 150,000 domestic fuel cell units installed due theENE.FARM project in Japan. Nevertheless a further cost reduction of the fuel cells will be needed because theamount of subsidy decreases every year. The structure and the approach of the ENE.FARM project clearlydemonstrated a progress in technology related to endurance time, lower costs, application of economies of scale,size and scope, thus the Japanese technology is heavily influencing the European RD&D market in form ofsuccessful cooperations.

USA


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The United States of America provide funding for a range of fuel cell and hydrogen research, development anddemonstration (RD&D) activities at U.S. universities and conducted by private industry. At the state level,numerous policies supported the development and deployment of fuel cells and hydrogen fuelling stations.The most important drivers of the strong fuel cell engagement are the strict legal restrictions regarding emissionthresholds.Incidentally the most active states are California, Connecticut and New York. There are more than 30 states inthe US, which have included fuel cell or hydrogen as eligible resources in Renewable Portfolio Standards. Inaddition 25 out of these 30 states offer funding for fuel cells in the form of rebates, grants, loans, bonds, PACEfinancing, or public benefits funding.

Three of the world’s leading fuel cell manufacturers are situated in the USA:· FuelCell Energy (FCE)· Doosan Fuel Cell America· Bloom Energy

These three companies are producing MCFC, PAFC and DOFC based stationary fuel cells of 100 kW to severalMW. Each company has benefited from government support for R&D and subsequently for fuel cell installationsat home, in California and Connecticut in particular, and overseas, notably Korea. Furthermore they alsoincreasingly use power purchasing agreements and project financing to make their fuel cell units attractive tocostumers

SwitzerlandAnother significant player in development of fuel cell technology is Switzerland. The Swiss energy policy, basedon the energy strategy 2050, is an important factor which is responsible for a higher activity in R&D of fuel cellsin Switzerland. The target is to reach a reduction of end-energy use by 9% (21TWh) until 2020 and by 33% (-77TWh) until 2050. When it comes to public funding for hydrogen and fuel cell projects more than 80 projectsaccording to a source of the SFOE were supported in 2014.

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6 Literature

[1] European Commission: Roadmap for moving to a low carbon economy in 2050, http://eur-lex.europa.eu/legal-content/EN/ALL/?uri=CELEX:52011DC0112, accessed 06/2015

[2] European Commission: A Roadmap for moving to a competitive low carbon economy in 2050, 2011[3] Ammermann H. et al.: Advancing Europe’s energy systems: Stationary fuel cells in distributed

generation, Roland Berger Strategy Consultants, 2015[4] Directive 2010/30/EU on the indication by labelling and standard product information oft he

consumption of energy and other resources by energy related products, 2010[5] Comission delegated regulation (EU) No 811/2013 supplemting Directive 2010/30/EU of the EU with

regard to the energy labelling of space heaters, combination heaters, packages of space heater,temperature control and solar device and packages of combination heater, temperature control andsolar device, 2013

[6] Directive 2009/125/EC establishing a framework for the setting of Ecodesign requirements forenergy related products, 2009

[7] Commission Regulation (EU) No 813/2013 implementing Directive 2009/125/EC of the EuropeanParliament and of the Council with regard to Ecodesign requirements for space heaters andcombination heaters, 2013

[8] Directive 2010/31/EU on the energy performance of buildings, 2010[9] Directive 2012/27/EU on energy efficiency, 2012[10] Directive 2009/28/EC on the promotion of the use of energy from renewable sources, 2009[11] European Commission, Joint Research Centre – Institute for Energ and Transport: 2013 Technology

Map of the European Strategic Energy Technology Plan, 2013[12] Fuel Cells and Hydrogen Joint Undertaking: Trends in investments, jobs and turnover in the Fuel cells

and Hydrogen sector, 2013[13] New Energy World Industry Grouping: Fuel Cell and Hydogen technologies in Europe – Financial and

technology outlook on the European sector ambition 2014-2020, 2011[14] Concerted Action – Energy Performance of Buildings: Implementing the Energy Perfromance of

Buildings Directive (EPBD) – Featuring country reports 2012, 2012[15] Callux Project: http://www.callux.net/home.English.html, access on 2015 – 10 -01[16] OEMAG: Investitionszuschüsse für Kraft-Wärme-Kopplungsanlage gemäß KWK Gesetz (Inkrafttreten

per 01.02.2015) , 2015[17] National Renewable Energy Action Plan for Austria (NREAP-AT) under Directive 2009/28/EC of the

European Parliament and of the Council, 2010[18] Austrian progress report 2015 in accordance with Article 24 (1) of Directive 2012/27/EU, 2015[19] 3rd National Energy Efficiency Action Plan (NEEAP) 2014 for the Federal Republic of Germany

pursuant to Directive 2012/27/EU of the European Parliament and of the Council of 25 October 2012on energy efficiency, 2014

[20] First National Energy Efficiency Action Plan of the Republic of Austria 2014 in accordance with theEnerg yEfficiency Directive 2012/27/EU, 2014

[21] Austrian progress report 2013 in accordance with Article 24 (1) of Directive 2012/27/EU, 2013[22] Austrian progress report 2014 in accordance with Article 24 (1) of Directive 2012/27/EU, 2014[23] German annual report for 2015 in accordance with Article 24 (1) of the Directive of the European

Parliament and of the Council of 25 October 2012 on energy efficiency (2012/27/EU), 2014

70

[24] Federal Republic of Germany – National Renewable Energy action Plan in accordance with Directive2009/28/EC on the promotion of the use energy from renewable sources

[25] Ridell B., Sandgren A.: FC Eurogrid – WP 1 Review of European electricity supply infrastructure, 2014[26] Austrian Green Electricity Order, 2012[27] German Federal Office for Economic Affairs and Export Control, Subsidy for mini-CHP plants:

http://www.bafa.de/bafa/de/energie/kraft_waerme_kopplung/mini_kwk_anlagen/, 2015[28] Viessmann Gesellschaft m.b.H: http://www.viessmann.de/de/wohngebaeude/kraft-waerme-

kopplung/mikro-kwk-brennstoffzelle/vitovalor-300-p.html, 10.11.2015[29] Behling N., et. al.: Fuel cells and the hydrogen revolution: Analysis of a strategic plan in Japan,

Economic Society of Australia, Published by Elsevier B.V., Queensland, 2015[30] Concerted Action – Energy Performance of Buildings: Implementing the Energy Performance of

Buildings Directive (EPBD) – Featuring country reports 2016, 2015[31] NEDO - New Energy Industrial Technology Development Organization:

http://www.nedo.go.jp/english/introducing_index.html, 07.09.2016[32] ANRE – Agency for Natural Resources and Energy, NEDO – New Energy Industrial Technology

Development Organization, 2013[33] Shinka Y.: Hydrogen and Fuel cell utilization in Japan and NEDO’s R&D activity for Hydrogen and Fuel

cell technology, presentation - 5th IPHE H2igher Educational Rounds, 2014[34] Hashimoto N.: Standardization activity on Fuel Cells in Japan, Panasonic AG, presentation at

IEA/AFCIA/Annex 33 in Naples, 2016[35] Nishimura O.: AISIN SOFC – update information, AISIN SEIKI Co., Ltd, presentation at

IEA/AFCIA/Annex 33 in Naples, 2016[36] Osaka Gas Co., Ltd., Fuel processing system for ENE.FRAM:

http://www.osakagas.co.jp/en/homeusers/index.html, 10.10.2016[37] Panasonic AG, Specifications of a Residential fuel cell unit for a detached house:

http://panasonic.co.jp/ap/FC/en_about_01.html: 16.11.2016[38] Toshiba AG, Products: https://www.toshiba.co.jp/product/fc/english/products/index.htm,

Specifications: https://www.toshiba.co.jp/product/fc/english/products/specification.htm,17.11.2016

[39] Curtin S., Gangi J.: State of the States: Fuel Cells in America 2016, 7th Edition, Fuel Cell TechnologiesOffice, 2016

[40] Curtin S., Gangi J.: Fuel Cell Technologies Market Report 2015, 2015[41] Hart D., et. al.: The Fuel Cell Industry Review 2016, E4tech, 2016[42] Oberholzer S.: Fuel cell and hydrogen R&D and demo in Switzerland, SFOE (Swiss Federal Office of

Energy), presentation at IEA Advanced Fuel Cells Annex 33 Meeting No6 in Switzerland, 2016[43] Seifert M.: Fuel cells in Switzerland – Micro fuel cells demonstration project in Switzerland, SVGW

(Schweizerische Verein des Gas- und Wasserfaches), presentation at IEA Advanced Fuel Cells Annex33 Meeting No6 in Switzerland, 2016

[44] Brinbaum K.U.: Stationary Fuel Cell Systems for the Residential Market (Germany), presentation atthe AFC-Workshop in Vienna, 2016

[45] Maruta A.: Japan’s ENE-FARM programme, Technova Inc., presentation at the AFC-Workshop inVienna, 2016

[46] Small M.: European-wide field trials for residential fuel cell micro-CHP, Overview of ene.field andPACE projects, presentation at Brussels, 2016

71

7 List of figures

Figure 1.1: EU greenhouse gas emissions towards an 80% domestic reduction [2] ............................. 5Figure 1.2: Projection of the future hydrogen market in Europe [11] .................................................. 7Figure 1.3: RD&D expenditure for fuel cells and hydrogen in the EU in million EUR [12] ..................... 8Figure 1.4: Fuel cell & hydrogen applications expected to become commercial by 2020 [12].............. 8Figure 1.5: European energy trends, policy framework and general market conditions [3] ................. 9Figure 1.6: targets and key points of the EU-project PACE [46] ..........................................................11Figure 2.1: Label for cogeneration space heaters [5] .........................................................................16Figure 3.1: Positioning of NEDO [31] .................................................................................................39Figure 3.2: Concept of a hydrogen Society [32] .................................................................................39Figure 3.3: Step by Step approach to realize Hydrogen Society [33]...................................................40Figure 3.4: ENE.FARM logo [33] .........................................................................................................40Figure 3.5: Trend for residential FCs („ENE.FARM“) [33] ....................................................................41Figure 3.6: Panasonic’s estimation from the summary of co-generation foundation regarding theshipping data between 2009-2015 [34] .............................................................................................41Figure 3.7: Total demand is Panasonic’s estimation from FCA data and ACEJ data [34] ......................42Figure 3.8: Amount of subsidies for SOFC and PEFC – source: Agency for Natural Resources andEnergy [35] .......................................................................................................................................43Figure 3.9: Costs per unit (installation + product costs) without tax [35] ...........................................43Figure 3.10: Explanation of fuel cell operation mode if there is a power distribution [37] ..................46Figure 3.11: Explanation of fuel cell operation mode if there is a power distribution [37] ..................46Figure 3.12: Two types of residential fuel cells for detached houses [37] ...........................................47Figure 3.13: Typical boilers for reheating and hot water [37] .............................................................47Figure 3.14: endurance time of the Panasonic residential fuel cell [37] .............................................48Figure 3.15: Residential fuel cells for a condominium – source: Panasonic [37] .................................49Figure 3.16: Supporting companies of the Panasonic residential fuel cell [37] ...................................50Figure 3.17: Why is TOSHIBA supporting ENE.FARM [38] ...................................................................50Figure 3.18: CO2-Reductions due ENE.FARM [38] ..............................................................................51Figure 3.19: Feed in Tariff by Gas Company [35] ................................................................................53Figure 3.20: Electricity consumption and production in Switzerland – 2010 (left pic.) vs. 2035 (rightpic.) [43] ...........................................................................................................................................62Figure 3.21: Electrification and district heating – future scenarios till year 2035 and 2050 [43] .........62

CONTENTS

ABOUT THE AUSTRIAN ENERGY AGENCYThe Austrian Energy Agency is the national centre of excellence for energy. New technologies, renewable energy, and

energy efficiency are the focal points of our scientific activities. The objectives of our work for the public and the privatesector are the sustainable production and use of energy and energy supply security. We are an independent think tank

that manages knowledge, provides the basis for well-founded decision making, and develops suggestions for theimplementation of energy-related measures and projects. We advise decision-makers in politics, science, and the

industry on the basis of our mainly scientific work. We prepare political, energy and economic expert opinions,economic feasibility analyses, social analyses, feasibility studies, and evaluations.

8 List of tables

Table 2.1: Seasonal space heating energy efficiency classes of heaters, with the exception of low-temperature heat pumps and heat pump space heaters for low temperature application [5] ...........17Table 2.2: Example: Labelling of heating systems [28] .......................................................................17Table 2.3: Minimum ecodesign requirements for cogeneration space heaters [7] .............................19Table 2.4: Investment grants for CHP systems [16] ............................................................................26Table 2.5: Statistical indicators heat and electricity generation in Austria [18][21][22] ......................27Table 2.6: Feed-in tariffs for biogas-operated CHP plants [26] ...........................................................28Table 2.7: Key facts about the CALLUX project [3] .............................................................................30Table 2.8: The outcome of CALLUX: Eight FC-appliances are at the market [44] .................................30Table 2.9: Key facts about the Combined Heat and Power Act [3] .....................................................32Table 2.10: Investment grants according to the German mini-CHP programme [27] ..........................32Table 2.11: Additional investment grants – power efficiency bonus [27] ...........................................33Table 2.12: Surcharge payment for CHP appliances, operated since 01.01.2009 [25] .........................35Table 2.13: Statistical indicators heat and electricity generation in Germany [23] .............................35Table 2.14: Payments for installations generating electricity from biomass (Degression: 1.5%,duration: 20 years) [25].....................................................................................................................36Table 3.1: Targets and Current Progress based on installation number and payback period [35] .......42Table 3.2: Subsidy per unit in k Yen [35] ............................................................................................44Table 3.3: Key facts about ene.farm field test [3] ..............................................................................44Table 3.4: Pricelist of the ENE-FARM Units in the market [45] ...........................................................45Table 3.5: Specifications of the residential fuel cell for a detached house [37] ...................................48Table 3.6: Specifications of the residential fuel cell for a condominium [37] ......................................49Table 3.7: Specifications of fuel cell of Toshiba [38] ...........................................................................51Table 3.8: Different hot water storage tanks [38] ..............................................................................51Table 3.9: Specifications of fuel cell of ASINI [35] ..............................................................................52Table 3.10: Bloom Energy publicly disclosed 2015 orders and installations [40] .................................56Table 3.11: Doosan Fuel Cell America publicly disclosed 2015 orders and installations [40] ...............56Table 3.12: FuelCell Energy publicly disclosed 2015 orders and installations [40] ..............................57Table 3.13: Examples of commercially available stationary fuel cells 2015 – Prime Power and m-CHP[40] ...................................................................................................................................................58

74

Table 3.14: Key facts about the Feed-in Tariff [3] .............................................................................. 58Table 3.15: Key facts about the Business Energy Investment Tax Credit (ITC) [3] ............................... 59Table 3.16: Public funding for fuel cells and hydrogen in Switzerland [42] ......................................... 59Table 3.17: fuel cell appliance specifications which were used in the project “PHAROS“ [43] ............ 60

CONTENTS





9 index of abbreviationsAC Transit Alamed-Contra Costa Tranist DistrictAFC Advanced Fuel Cell Implementing AgreementAIST National Institute of Advanced Industrial Science and TechnologyANRE Agency of Natural Resources and EnergyAQMDs Califronia’s Air Quality Management DistrictsBEV Battery Electric VehiclesCaFCP California Fuel Cell PartnershipCARB California Air Resources BoardCCAT Connecticut Center for Advanced TechnologyCEC California Energy CommissionCHFCC Connecticut Hydrogen-Fuel Cell coalitionCHP/KWK Combined Heat and Power/ Kraft-Wärme-KopplungCTTRANSIT Connecticut Department of TrasportationDECD Department of Economic and Community DevelopmentDEEP Department of Energy and Environmental ProtectionEDD Directive for establishing a framework for the setting of ecodesign requirements for energy-

related productsEED Directive on energy efficiencyEEX European Energy ExchangeElWOG Elektrititätswirtschafts- und –organisationsgesetz (Electric Industry and Organisation Act)EnEv Energieeinsparverordnung (Energy Saving Ordinance)EPBD Directive on the energy performance of buildingsEPC Energy Performance CertificateFC Fuel CellFCCJ Fuel Cell Commercialization Conference of JapanFCE Fuel Cell EnergyFCEV Fuel Cell Electric VehicleFCH JU Fuel Cells and Hydrogen Joint UndertakingFCV Fuel Cell VehicleGHG Greenhouse GasesGO-Biz Office of Business Economic DevelopmentHHV Higher Heating ValueHWB Heizwärmebedarf (heating demand)

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IEA International Energy AgencyLD Directive on the indication by labelling and standard product information of the consumption

of energy and other resources by energy related productsLHV Lower Heating ValueLPG Liquefied Petroleum GasLREC/ZREC Low and Zero Emission Renewable Energy Credit ProgramMCFC Molten Carbonate Fuel CellmCHP micro Combined Heat and PowerMETI/MITI Ministry of Economy, Trade and IndustryMLIT Ministry of Land, Infrastructure and TransportNEDO New Energy and Industrial Technology Development OrganizationNYPA New York Power AuthorityNYSERDA New York State Energy Development AuthorityNZEB Nearly Zero-Energy BuildingsOFEN Office federal de l‘energieOIB Österreichisches Institut für Bautechnik (Austrian Institute of Construction Engineering)PAFC Phosphoric Acid Fuel CellPEB Primary Energy DemandPEM/PEFC Proton Exchange Membrane Fuel cellR&D Reearch and DevelopmentRD&D Research, Development and DemonstrationRES Renewable Energy SourcesRESD Directive on the promotion of the use of energy from renewable sourcesREV Reforming Energy VisionSFOE Swiss Federal Office of EnergySGIP Self Generation Incentive ProgramSOFC Solid Oxid Fuel CellSVGW Schweizerische Verein des Gas- und Wasserfaches

CONTENTS





10 Appendix

10.1 Questionnaire 1 EU

90

About the authors

DI DR. GÜNTER R. SIMADER

ING. MAG. ALFRED SCHUCH

DAVID PRESCH, BSC

MANUEL MITTERNDORFER, MSC

ABOUT THE AUSTRIAN ENERGY AGENCYThe Austrian Energy Agency is the national centre of excellence for energy. New technologies, renewable energy, and energy

efficiency are the focal points of our scientific activities. The objectives of our work for the public and the private sector are thesustainable production and use of energy and energy supply security. We are an independent think tank that manages

knowledge, provides the basis for well-founded decision making, and develops suggestions for the implementation of energy-related measures and projects. We advise decision-makers in politics, science, and the industry on the basis of our mainlyscientific work. We prepare political, energy and economic expert opinions, economic feasibility analyses, social analyses,

feasibility studies, and evaluations.www.energyagency.at

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