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4. Policies and measures Renewable energy technologies available for meeting heating and cooling demands in many locations currently lack cost competitiveness with conventional systems that are based on relatively cheap electricity, gas or coal (Section 3). Public support is therefore necessary to ensure a growing deployment of REHC. Historically in most countries, renewable heating has not received comparable policy support as has renewable electricity or biofuels for transport. This disparity is, at least in part, due to a lack of legislative tools and policies to support the market development of specific heating and cooling technologies. Policies in support of REHC may be inherently different than those which address renewable electricity generation thereby reflecting the somewhat different characteristics of the electricity and heating markets. Electricity markets are clearly assigned to one or more centralized grid operator whereas, with the exception of district heating systems, heat is often the responsibility of individual producers. Moreover, the heat generated from renewable energy sources (RES) must be utilized locally as it is not possible to feed heat back into an extensive distribution grid, as is common practice with renewable electricity. Therefore, policy instruments need to be specifically addressed to meet the unique, local characteristics of REHC resources, the small-scale technologies involved, and the widely distributed demand. Experience has shown that the status of the market greatly influences the levels of required support and degree of successful product deployment. For technologies that have reached a critical mass, comparative intensities of support lead to higher levels of deployment (Piria, 2007). Therefore in a supportive policy environment, a cycle of technology and market development becomes self-enforcing in terms of economies of scale, falling costs and public awareness (IEA, 2003; Figure 29). Markets that have not yet reached a critical mass (or are in decline) are not subject to such benefits so will require stronger policy support to gain more rapid diffusion. Cycles function differently depending on the stage of maturity of a technology and how far its market has progressed. Careful policy design is necessary to incorporate these factors. This section provides an overview of the policies which have been utilized to promote an increased use of renewable resource for heating. The types of policy deployment instruments which have been used are introduced and grouped into categories (Figure 30): 1) Carrots - financial incentive schemes 2) Sticks - regulatory schemes, and 3) Guidance, or educationally based schemes6. Policy instruments for renewable heating have also taken the form of voluntary agreements between the private sector and the public sector. These have been employed in all three categories, but typically involve the voluntary development and purchase of renewable energy technology (RET) installations or the purchase of “green energy”. All three categories are designed to support the same goals, but they address the barriers in different ways. Policies for renewable heating are emphasised in this section as very few policies have been offered in support of renewable cooling to date. 6. This grouping structure is based upon ”Carrots, Sticks, and Sermons: Policy Instruments”, Vedung et al., 1998. 61PDF Image | RENEWABLES FOR HEATING AND COOLING
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