Modelling the impact of policy instruments on district heating operations: experiences from Sweden
2006 (English)In: 10th International Symposium on District Heating and Cooling, Hanover, Germany, 2006Conference paper (Refereed)
Emission allowances aim at reducing carbon dioxide emissions in the European Union. Feed-in tariffs and green certificates increase renewable electricity generation in some countries. Undesired energy carriers, such as fossil fuels, can be taxed to decrease consumption. In Sweden, monetary policy instruments have been used for many years, which has influenced district-heating utilities’ operations and investments.
The energy system optimisation model MODEST may help elucidating the impact of policy instruments on choices of fuels and plants. The model can minimise operation and investment costs for satisfying district heating demand, considering revenues from electricity sales and waste reception. It has been used to analyse heat and electricity production for 50 local Swedish utilities. This paper shows how some plants, systems and policy instruments have been modelled and results from some case studies. It may help analysts who face policy instruments, which probably will have a growing influence on district heating operations.
Policy instruments should reflect external costs and induce behaviour that is beneficial from an overall viewpoint. Swedish fossil-fuel taxes hampered cogeneration during many years. Earlier, fuel input could be freely allocated to output energy forms and wood was often used for heat production and coal for electricity generation to minimise taxes. Now, lower taxes promote fossil cogeneration but green certificates make it more profitable to invest in renewable electricity generation.
Carbon dioxide emission allowances can reduce local emissions due to districtheating and electricity production significantly at current price levels but the impact depends on allowance price. With emission trading, investment in a natural-gas-fired cogeneration plant may be beneficial for some utilities due to high electricity prices in the European electricity market, partly caused by emission allowances.
District-heating demand can enable utilisation of resources that otherwise would be of no value. A landfill ban now increases waste incineration, which may reduce industrial waste heat utilisation and heat disposal from cogeneration plants and thereby decrease electricity production. A tax on incinerated waste may reduce the profitability of investing in waste incineration.
Place, publisher, year, edition, pages
Energy policy, taxes, green certificates, emission allowances, CHP
Engineering and Technology
IdentifiersURN: urn:nbn:se:liu:diva-14204OAI: oai:DiVA.org:liu-14204DiVA: diva2:22891