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Supplier obligation. A key policy tool to fund renewable energies in the heat sector

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Following the European Commission’s proposal for a heating and cooling strategy, the Fraunhofer Institute for Systems and Innovation Research (Fraunhofer ISI) coordinated a consortium - consisting of  the Fraunhofer Institute for Solar Energy Systems ISE (Fraunhofer ISE), TEP Energy GmbH,  the TU Vienna Energy Economics Group, Observ’ER energies and the Institute for Resource Efficiency and Energy strategies (IREES)- to support the Commission with scientific studies and further develop its proposal for a heating and cooling strategy.


Along this line, in the first part of the project “Mapping EU heat supply” a comprehensive energy balance for the heat and cold sector in all European countries was compiled, which served as basis for the EU Commission’s blueprint of the heating and cooling strategy. The second part, contains scenarios on the development of energy supply for heating and cooling in the EU until the year 2030, with a particular emphasis on possible funding instruments to increase the share of renewable energies. Moreover, the consortium investigated the impacts which may occur when gas and oil suppliers are obliged to bring a certain amount of renewable energies for the provision of heat on to the market each year.


According to the project’s coordinators, Tobias Fleiter and Jan Steinbach,: “a supplier obligation as a key policy tool to fund renewable energies in the heat sector potentially reaches the European targets for renewable energies at low costs. A share of 30% renewable energies in the EU in 2030 is realistic, it does, however, require additional measures. The supplier obligation could close this gap. If it were implemented optimally an additional charge of just 0.1 cent per kilowatt hour of sold oil and natural gas would be necessary”.


Existing subsidies of fossil heating technology (e.g. fossil fuel-powered boilers in Germany) have to be abolished, so that new instruments to fund renewable energies can work efficiently. This can have significant impacts on the expansion of renewable energies in the heat sector until 2030.


For further information, please visit the relevant Fraunhofer ISI webpage at the link below.