Current state of heating and cooling markets in Greece

Transcription

1 Current state of heating and cooling markets in Greece D3 of WP2 from the RES-H Policy project A report prepared as part of the IEE project "Policy development for improving RES-H/C penetration in European Member States (RES-H Policy)" March 2009 Written by Argyro Giakoumi (agiak@cres.gr), CRES, Greece With contributions from Minas Iatridis (miatri@cres.gr), CRES, Greece Supported by

2 The project "Policy development for improving RES-H/C penetration in European Member States (RES-H Policy)" is supported by the European Commission through the IEE programme (contract no. IEE/07/692/SI ). The sole responsibility for the content of this report lies with the authors. It does not represent the opinion of the European Communities. The European Commission is not responsible for any use that may be made of the information contained therein. Centre for Renewable Energy Sources - CRES, March 2009

3 RES-H Policy Current state of heating and cooling markets in Greece Content 1 Introduction Architecture of the market for heat in Greece Overall statistics Institutional set up of the market Dominant market players Architecture of the cooling sector in Greece Current status of Renewable Energy Sources of Heat in Greece RES-H penetration Solar thermal Biomass Geothermal RES-H potential Historical and ongoing policies to support RES Heating General RES policy context of Greece Policies related to RES-H Current status of Renewable Energy Sources of Cooling in Greece Historical and ongoing policies to support RES Cooling Ongoing Legislative, Regulatory and Market Changes Conclusion References

4 Current state of heating and cooling markets in Greece RES-H Policy List of figures Figure 1 Distribution of primary energy... 6 Figure 2 Breakdown of CO 2 emissions per type of activity relative to fossil fuels use in Figure 3 Final energy consumption in households by fuel in 1990 and Figure 4 Final energy consumption in households by end use in 1990 and Figure 5 Figure 6 Final energy consumption in households for space heating by fuel (1990&2004) Final energy consumption in households for water heating by fuel (1990&2004) List of tables Table 1 Breakdown of occupied dwellings and building of dwellings per construction period Table 2 Number of buildings in Greece Table 3 Number of buildings ordered by number of floors Table 4 Number of buildings per type of use Table 5 Buildings of dwellings ordered by number of dwellings Table 6 Production of thermal energy from RES (PJ) Table 7 Market size of solar thermal in Greece in term of collector s area and capacity Table 8 Breakdown of solar systems costs Table 9 Penetration of gaseous biomass in year Table 10 Penetration of solid biomass in year Table 11 Penetration of geothermal energy in Table 12 Summary of RES penetration per sector in year Table 13 Biomass Production Potential (PJ/yr) Table 14 Technical potential of biogas

5 RES-H Policy Current state of heating and cooling markets in Greece The RES-H Policy project The project "Policy development for improving RES-H/C penetration in European Member States (RES-H Policy)" aims at assisting Member State governments in preparing for the implementation of the forthcoming Directive on Renewables as far as aspects related to renewable heating and cooling (RES-H/C) are concerned. Member States are supported in setting up national sector specific 2020/2030 RES-H/C targets. Moreover the project initiates participatory National Policy Processes in which selected policy options to support RES-H/C are qualitatively and quantitatively assessed. Based on this assessment the project develops tailor made policy options and recommendations as to how to best design a support framework for increased RES-H/C penetration in national heating and cooling markets. The target countries/regions of the project comprise Austria, Greece, Lithuania, The Netherlands, Poland and UK countries that represent a variety in regard of the framework conditions for RES-H/C. On the European level the projects assesses options for coordinating and harmonising national policy approaches. This results in common design criteria for a general EU framework for RES-H/C policies and an overview of costs and benefits of different harmonised strategies. This report The purpose of this report is to present an overall picture of the situation in the heating and cooling sectors of Greece. The report summarizes the policy and regulatory framework of the Greek heating and cooling markets and gives the available statistics on the penetration rate of the different RES-H/C technologies, as well as the RES potentials for heating and cooling purposes. This report is mainly based on data gathered from existing government reports, national statistics, existing studies and previous as well as ongoing IEE projects, related to the context of this report. 5

6 Current state of heating and cooling markets in Greece RES-H Policy 1 Introduction In recent decades, the distribution of primary energy in Greece has been steadily growing as indicated in Figure 1. In particular, the total distribution of primary energy in 2006 reached 31,5 Mtoe, a number that represents a 40% increase compared to levels in 1990, when the inland gross consumption was 22,3 Mtoe. Solid fuels and especially lignite is the main domestic energy source used for electricity production. Solid fuels and oil products cover around 85,7% of the total distribution of energy in Greece. Natural gas was firstly introduced in 1995, while RES began to play an important role in the electricity production at the end of the 90s. Figure 1 Distribution of primary energy. Source: Ministry of Development, RES contribution to the national energy balance in year 2006 was 5,3% of the total distribution of primary energy in the country, and 16% of the inland production of primary energy. The primary energy production of RES reached 1,8 Mtoe in 2006, while in the beginning of 1990 it was 1,2 Mtoe. The breakdown of the 1,8 Mtoe of the RES energy production is the following: 702 ktoe accounts to biomass use in the domestic sector, 230 ktoe accounts to biomass use in the industry sector (total percentage of biomass 52%), 536 ktoe (30%) to hydropower, 146 ktoe (8,1%) to wind power, 109 ktoe (6%) to solar thermal systems, 11ktoe to geothermal energy and 33 ktoe to biogas used mostly for electricity production [Ministry of Development, 2008]. 6

7 RES-H Policy Current state of heating and cooling markets in Greece Figure 2 presents the contribution to CO 2 emissions, of activities related to fossil fuels use. Τhe major contributor of CO 2 emissions is heat and electricity production with 58,91%, transportation follows with 21% and then come Agriculture, Domestic and Tertiary sectors with 12,8% and Industry with 7%. Figure 2 Breakdown of CO 2 emissions per type of activity relative to fossil fuels use in Agriculture, Domestic and Tertiary sectors 12,8% Transportation 21,0% Industry 7,0% Solid fuels production 0,3% Heat and electricity production 58,9% Source: Ministry of Development,

8 Current state of heating and cooling markets in Greece RES-H Policy 2 Architecture of the market for heat in Greece 2.1 Overall statistics Unfortunately there is a lack of overall statistics concerning heat demand in Greece. For the residential sector though, there is some available data presenting among other things, statistics for heat demand. The data presented below are from the Odyssee- Mure IEE project [8] and refer to years 1990 and According to the project s findings, the energy consumption by fuel type in the residential sector in years 1990 and 2004 is presented in Figure 3. As it can be seen oil products are in 2004 the main energy source for households representing 55% (or 3,03Mtoe) of the overall consumed energy, against 47,6% (or 1,51Mtoe) in Electricity comes second with a percentage of 26,3% (or 1,45Mtoe) in 2004, while this percentage in 1990 accounted to 24,6% (or 0,78Mtoe) of the overall consumed energy. From the aforementioned energy consumptions it can be concluded that oil products and electricity have both increased dramatically in the period between 1990 and In particular, energy consumption from oil products has almost doubled and electricity has increased by 85%. Figure 3 Final energy consumption in households by fuel in 1990 and Source: Odyssee Mure IEE Project, Energy efficiency Policies and measures in Greece 2006 The energy share of wood products has decreased by 9,8% in the period however wood products energy consumption has increased by 3,8% with 0,78 Mtoe in 1990 and 0,81 Mtoe in Natural gas and renewables (mainly solar energy for wa- 8

9 RES-H Policy Current state of heating and cooling markets in Greece ter heating) have a small energy share in the residential sector however for the case of gas there are promising perspectives for wider use in the future due to the construction of new gas infrastructure network. Lastly according to Figure 3, district heating accounts only to a small percentage (0,8% in 2004) of the overall energy consumption. District heating was introduced in the residential sector in 1997 in some Greek towns neighbouring with thermoelectric power plants. In Figure 4 the final energy consumption by end use in years 1990 and 2004, is presented. According to that space heating comes first in energy consumption in the residential sector, with a percentage of 74,4% (or 2,18Mtoe) in 1990 and 71,5% (or 3,83Mtoe) in For water heating the percentage of the absorbed energy accounts to 4,5% in 2004 or in terms of energy 0,24Mtoe. Figure 4 Final energy consumption in households by end use in 1990 and Source: Odyssee Mure IEE Project, Energy efficiency Policies and measures in Greece 2006 In Figure 5 the breakdown of space heating per type of fuel is presented. Also according to the findings of the Odyssee-Mure project [8], space heating energy originated from oil products has expanded its relative energy share by 10% during the period (Figure 5). In the same period the share of wood products for space heating has shrunk by 12,3%, however the final energy consumed from wood products has been almost fixed around 0,63 Mtoe. The share of electricity for space heating has increased by 0,6% and the share of gas (along with district heat introduced in 1997) re- 9

10 Current state of heating and cooling markets in Greece RES-H Policy mained insignificant. Coal has been almost abandoned as an energy source for space heating in Greece and it is used rarely only as an auxiliary energy source. Over this period of the 14 years ( ) Greek society has undergone many changes both economical and demographical. Urban and suburban population living in flats or single houses with central oil space heating has increased significantly, contrary to population living in single cottage houses using traditional energy sources such as wood or coal for residential space heating. On the other hand, most single family and cottage houses have modernized their space heating equipment with central heating boilers or electrical heating equipment. It is estimated that in % of all dwellings and 84% of all permanently occupied dwellings were using oil products (including LPG and kerosene) for space heating, most of the time using central heating equipment. Additionally many dwellings (22% of dwellings - Eurostat survey ) with oil central heating systems are using auxiliary sources such as electricity and wood in individual space heaters, stoves, fireplaces etc. Figure 5 Final energy consumption in households for space heating by fuel (1990&2004). Source: Odyssee Mure IEE Project, Energy efficiency Policies and measures in Greece 2006 As established in the Odyssee-Mure project [8], in the field of fuels for water heating in households, a remarkable turn has occurred since 1990 as the shares of renewables (solar) and oil products have overcame electricity as the main source for water heating. In particular, in 2004 solar water heating systems represented 31,7% and oil products 28,8% of the total energy demand for water heating in households (Figure 6). The elec- 10

11 RES-H Policy Current state of heating and cooling markets in Greece tricity energy share has decreased by 15,2% over the last 14 years. The share of wood for water heating has also decreased by 5,4%. This reversal in water heating in Greece has taken place mainly because of the further penetration of solar water heaters and water boilers/heat exchangers in central heating systems instead of conventional electric heaters alone. The number of electric water heaters has tended not to decline as in most cases they comprise standard equipment in old or new dwellings. In fact many households continue to use electric water heaters as the main equipment for water heating. However in many cases solar heaters and water boilers are now covering a substantial amount of the demand for domestic hot water rendering electric heaters as backup additional source for domestic hot water and vice-versa. Figure 6 Final energy consumption in households for water heating by fuel (1990&2004). Source: Odyssee Mure IEE Project, Energy efficiency Policies and measures in Greece 2006 Building stock In Greece building s thermal insulation was firstly introduced in year 1979 when the first building insulation code was established. According to the building insulation code the country is divided in three climatic zones and the insulation requirements do not make any distinctions based on the use of each building. The average U value for the outside walls must be equal or less than 0,7W/m 2 K, while for the roof (or pilotis) it must be equal or less than 0,5W/m 2 K. 11

12 Current state of heating and cooling markets in Greece RES-H Policy All buildings that were constructed before 1980 are considered to be buildings with no thermal insulation, while buildings that were constructed after 1980 are considered to be insulated based on the standards set by the thermal insulation code. It is estimated though that the great majority of buildings constructed until 1990, have deficient or even no thermal insulation at all (the building insulation code was in force but was not always applied). Thus the number of buildings that have no thermal insulation is quite big. Indicative is the situation in the domestic sector. In table 1 the number of occupied dwellings per construction period is presented, according to the National census of population conducted in March 2001 by the National Statistical Service of Greece. If we take into consideration the aforementioned allegations then in the domestic sector the number of dwellings with no thermal insulation is around 3million. Table 1 Breakdown of occupied dwellings and building of dwellings per construction period. Construction period Number of occupied dwellings Number of buildings of dwellings Before to to to to to to to till Under construction unregistered total Source: National Statistical Service of Greece, National census of buildings in 2000, National census of population in 2001 In the tables 2, 3, 4 and 5 general statistical data on the Greek building stock are given, based on surveys conducted by the National Statistical Service of Greece. 12

13 RES-H Policy Current state of heating and cooling markets in Greece Table 2 Number of buildings in Greece Total number of buildings with exclusive use Total number of buildings with mixed use Source: Total number of buildings in Greece National Statistical Service of Greece, National census for buildings in December 2000 Table 3 Number of buildings ordered by number of floors Total number of buildings in Greece Only groundfloor (with or without basement) Ground floor or pilotis (with or without basement) with number of floors to 5 6 and more pilotis Source: National Statistical Service of Greece, National census for buildings in December 2000 Table 4 Number of buildings per type of use. Total number of buildings with exclusive use Churches/ Hotels Type of building Schools Shops/ Offices Buildings of Dwellings Monasteries Factories Parking place s Hospitals, clinics, etc. other uses Source: National Statistical Service of Greece, National census for buildings in December 2000 Table 5 Number of buildings Source: Buildings of dwellings ordered by number of dwellings Number of dwellings in the building 1 dwelling 2 dwellings 3 to 5 6 to to and more Total number of buildings of dwellings National Statistical Service of Greece, National census for buildings in December

14 Current state of heating and cooling markets in Greece RES-H Policy 2.2 Institutional set up of the market In Greece the heat market has no separate institutional set up. The heat market is considered to be part of the overall energy sector, where the competent public authority is the Ministry of Development. The Ministry of Development is responsible for all matters concerning the energy sector and conclusively responsible for Renewable Energy Sources and their penetration in the Greek energy market. For this purpose there are two special Divisions in the Ministry, the Division of Energy Policy and the Division of RES and Energy Conservation. Both those Divisions are under the Directorate of Energy. Besides the Ministry of Development there is also the Regulatory Authority for Energy (RAE), which was established by virtue of article 4 of Law 2773/1999 as an independent administrative authority entrusted with the monitoring and control of the electricity market functioning and the delivery of opinions regarding the observance of the rules of genuine competition and the protection of the customers. Further, RAE formulates suggestions to the Ministry of Development with regard to the issue of power generation authorizations and thereafter monitors the implementation progress of the RES projects through quarterly reports and recommends the combing out the sector of investors which exhibit unjustifiable slowness. Also, RAE recommends legislative measures for further deregulation of the electricity market within which critical RES issues can be addressed. Finally, there is also the Ministry of Environment, Physical Planning & Public Works which is involved in the procedure of issuing licenses for the operation of RES-E power plants (e.g. the Ministry is responsible for all issues related to the physical planning of the plants). As it can be seen, the aforementioned regulatory bodies, as far as renewables are concerned, have provisions that focus mostly on RES electricity rather than RES heating or cooling. Maybe in view of the forthcoming RES Directive more attention will be given to the RES-H/C sector. Concerning the geothermal fields there is the Institute of Geology and Mineral Exploration of Greece (I.G.M.E.), which is the public institution involved in Earth Sciences. Its fundamental aim is the geological study of the country and the exploration - evaluation of the mineral and groundwater resources (except hydrocarbons). Additionally, it aims to locate and to assess the geothermal fields in Greece and some of its main activities related to geothermal energy are: Recording and assessment of the country's geothermal potential. Basic infrastructure research surveys (recent volcanicity, thermal flow, ground temperature maps, etc.). Exploration, by modern methods, for the location and evaluation of geothermal fields. 14

15 RES-H Policy Current state of heating and cooling markets in Greece Contribution to the exploitation and development of geothermal energy. Study of the chemistry of geothermal fluids. Contribution to the confrontation of problems of scaling and environmental pollution. Assessment of energy output of geothermal fields. Feasibility studies for the exploitation of energy of the located geothermal fluids. A significant body in the heating sector for solar thermal systems is the Greek Solar Industry Association (GSIA). It was formed in 1979 and currently has 18 members (plus 3 associate ones). All 18 GSIA members are manufacturers of solar thermal systems, while among the associate members there are research institutes working on renewable energy (such as the National Center for Scientific Research "Demokritos", and the Greek Center for Renewable Energy Sources - CRES). GSIA is aiming at promoting solar energy both on the national as well as the international level. It also guarantees that all its members follow the highest international standards in the manufacturing process of solar thermal systems, so that the customer enjoys the maximum benefits of solar energy. In order for a company to become a member of GSIA, it should: Produce its solar systems at its privately own manufacturing plant. This plant should comply with all legal state requirements and have all necessary permits. Its products should be monitored and controlled by accredited EU laboratories according to international (ISO) or European (CEN) standards. Both solar panels and the boilers should carry the CE label and the accompanying test report issued by an accredited test laboratory. The company should have a clear market record. GSIA is a founding member of the European Solar Thermal Industry Federation (ESTIF) and the biggest share of the solar thermal market belong to its members. 2.3 Dominant market players Space heating needs in the residential sector, as indicated in Figure 5, are covered mostly by oil products (75,4%). Conclusively oil suppliers are the dominant market players in the space heating sector in Greece. According to the 2001 census of population of the National Statistical Service of Greece almost 61% of the occupied dwellings in Greece have central heating systems. The great majority of the central heating systems in existing buildings have boilers which are fired with oil. Thus it is understandable that there is a very well developed market of oil suppliers as well as companies that install and maintain oil boilers. 15

16 Current state of heating and cooling markets in Greece RES-H Policy In the last few years though, space heating using natural gas has been steadily increasing, with the network grid being constantly expanded. Its penetration since 1995, when natural gas was first introduced in the Greek market, has shown significant growth. According to a press release in 24/9/2007 [12], it is estimated that only in the Attica region, in the areas where there is already an operative network, the penetration rate of gas is almost 25%. The number of the households which are connected with the natural gas network is over , while the number of industrial consumers is approximately 330 and the number of commercial consumers is One very important aspect that led to the increased penetration of natural gas is the fact that from 2004 with a Joint Ministerial Decision (JMD D3/A/11346 FEK 963/B/ ) it became mandatory in some big cities (e.g. Athens, Thessaloniki), for newly constructed buildings to have natural gas installations as their standard equipment. The Public Gas Corporation (DEPA) is the company that introduced natural gas to Greece, by implementing a large energy investment. DEPA s share capital belongs to the Hellenic Petroleum SA company (35%) and the Greek State (65%). The Public Gas Corporation (DEPA) lies within the jurisdiction of the Ministry of Development [11]. Besides DEPA there are the Gas Supply Companies (EPAs) whose mission is to expand, operate and maintain the city networks, as well as to distribute gas to domestic, commercial and industrial consumers (with annual consumption up to 100 GWh Gross Calorific Value). Three EPAs are in operation (one in Attica, with the participation of the consortium DukeEnergy - Shell and two in the regions of Thessaloniki and Thessaly, with the Italian company Eni as strategic partner). DEPA is in the process of establishing three new Gas Supply Companies, which will cover the areas of Central Greece, Central Macedonia (excluding Thessaloniki) as well as Eastern Macedonia and Thrace [11]. Thus, besides the oil suppliers, natural gas companies are becoming important market players in the heating sector and a new market of natural gas installers and specialized technicians has emerged, giving consumers a variety of choices. As far as biomass is concerned, although it accounts to 17% of the overall energy consumed for space heating in the residential sector (see Figure 5) the Greek biomass market is not considered to be widely developed. Consumers have only few choices when it comes to biomass suppliers and biomass boiler installers. A crucial reason for the immaturity of the biomass market is a barrier that exists in the Greek legislation. Specifically, according to a Ministerial Degree of 1993 (MD 103/1993/B-369), biomass boilers are not allowed to be installed in the two major cities of Greece, Athens and Thessaloniki. Due to this restriction a very large part of the Greek population cannot choose biomass as their energy source for space heating. Finally as mentioned in the previous chapter district heating covers only a minor percentage (0,8%) of the overall energy consumption for space heating in the residential sector. There is only one market player in the sector of district heating and that is the Public Power Corporation SA (PPC), which has materialized district heating projects in towns neighbouring with large power plants in northern Greece. The first project was materialized in 1996 to a small community neighbouring with a large power plant. Af- 16

17 RES-H Policy Current state of heating and cooling markets in Greece terwards, few more projects were materialized in larger towns neighbouring with thermoelectric power plants, and although studies for additional district heating projects have been discussed, none of them has been so far materialized. 17

18 Current state of heating and cooling markets in Greece RES-H Policy 3 Architecture of the cooling sector in Greece Unfortunately there is a lack of available data in statistics referring to the cooling sector. Although there is a need for cooling in Greece during summer months and this need has been increased in the last years especially in big cities, there are no official statistics describing the demand of energy for cooling purposes. The most common practice for cooling in Greece is to use air-conditioning units (e.g. split type). This fact together with the increased need for cooling during summer months increases the peak electric load causing major problems in the country s electric supply. As far as the institutional set up of the market is concerned it could be said that the cooling market is regulated by the Ministry of Development, which is as mentioned before the overall competent body of the energy sector. For installing air-conditioning units to a building there is no special procedure. The role of the Ministry is relative only to the maintenance of the units in the public sector. In particular a Joint Ministerial Decision was recently issued (D6/B/14826, June 2008) which among else obliges public buildings to maintain their air-condition units regularly. 18

19 RES-H Policy Current state of heating and cooling markets in Greece 4 Current status of Renewable Energy Sources of Heat in Greece 4.1 RES-H penetration As far as policy aims are concerned there are specific aims only for Electricity production from RES. Law 3468/06 sets a feed-in tariff system for electricity produced from RES. Unfortunately there is no similar provision for RES Heating and Cooling. Below follows a table where the registered thermal energy production from RES for the period 1990 to 2000, is presented. As it can be seen in table 6 the total RES heat production has been steadily increasing through the years. Table 6 Production of thermal energy from RES (PJ) PJ RES heat total 39,9 40,3 40,7 40,9 40,9 41,2 41,8 42,0 42,0 Solar energy 2,34 2,64 2,93 3,14 3,31 3,43 3,60 3,73 3,89 Biomass total 37,4 37,6 37,6 37,6 37,4 37,6 38,0 38,1 38,0 Biomass Industry 8,00 8,16 8,16 8,21 8,00 8,16 8,62 8,75 8,58 Biomass residential 29,4 29,4 29,4 29,4 29,4 29,4 29,4 29,4 29,4 Biogas - - 0,04 0,04 0,04 0,04 0,04 0,04 0,04 Geothermal 0,13 0,13 0,13 0,13 0,17 0,13 0,13 0,08 0, RES heat total 42,3 43,8 44,9 45,9 43,8 44,3 45,8 45,4 - Solar energy 4,06 4,14 4,19 4,14 4,14 4,23 4,27 4,56 6,69 Biomass total 38,1 39,6 39,3 39,7 38,1 38,4 40,1 39,0 42,1 Biomass Industry 8,75 10,17 9,88 10,30 8,71 9,00 10,68 9,59 9,85 Biomass residential 29,4 29,4 29,4 29,4 29,4 29,4 29,4 29,4 32,3 Biogas 0,04 0,04 1,4 2,0 1,5 1,6 1,4 1,4 - Geothermal 0,08 0,08 0,08 0,04 0,04 0,04 0,04 0,46 0,6 Source: Ministry of Development 19

20 Current state of heating and cooling markets in Greece RES-H Policy Solar thermal Greece has a well developed solar thermal market, which has been active for almost 30 years; for many years Greece has held one of the highest solar thermal capacities within Europe. According to the Greek Solar Industry Association (GSIA) the surface of solar collectors per residents in 2002 was 272m 2 [15], while according to more recent data from the European Solar Thermal Industry Federation (ESTIF) in 2007 the collector s surface was around 320m 2 per capita [2]. In the history of the Greek solar thermal market the main solar thermal product was, and still is, the thermosiphonic water heater. The solar thermal market in its early stages was overwhelmed by a big number of manufacturers (around 300 manufacturers were active back then, according to GSIA), who produced most of the systems locally. Eventually, as national standards were introduced, improving the efficiency and reliability of the products, the number of manufacturers decreased and only the most experienced and well organized managed to continue. The solar systems' laboratory of "DEMOKRITOS" and the Centre for Renewable Energy Sources (CRES) have since then been cooperating closely with the manufacturers and have contributed to improving the products. The solar thermal market in its early stages was promoted by a large advertising campaign, which was supported by the Greek government. The advertising combined with the fact that low interest loans and tax credits were available at that time, helped the market to get started. Ever since, consumers are familiarized with solar thermal systems for water heating and it is estimated that the water heating needs in the residential sector are covered almost by 30% from solar thermal applications. [8]. Although solar thermal systems are well known among consumers, they have suffered an important loss of competitiveness, as VAT for electricity and gas is set to 8%, while the VAT for solar systems is (as for all other products) set to 19%. In addition, electricity price remains at a relativy low level in Greece. Thus, it can be understood why the electric heater is the main competitor of solar thermal applications. In the following table the market size of solar thermal in Greece is presented, in terms of collector s area and capacity. In 2007 the total glazed surface in operation was approximately 3,5million m 2, while in terms of capacity it was 2,4million kw th [2]. 20

21 RES-H Policy Current state of heating and cooling markets in Greece Table 7 Market size of solar thermal in Greece in term of collector s area and capacity. In operation Market (=Newly installed) Market Growth /2006 Total Total Total Total Flat Plate Vacuum Total Glazed % Glazed m 2 Glazed m 2 Glazed m 2 Glazed m 2 m 2 collectors m % In operation Market (=Newly installed) Market Growth /2006 Total Glazed kw th Total Glazed kw th Total Glazed kw th Total Glazed kw th Flat Plate kw th Vacuum collectors kw th Total Glazed % % Source: ESTIF, Solar thermal markets in Europe 2007 According to GSIA, 99% of the installed collector area is for thermosiphonic type water heaters, mainly closed loop systems. The closed loop systems use antifreeze liquid to avoid the freezing of the collector loop. The storage tank can be vertical or horizontal and is mounted higher than the collectors. The average size of thermosiphonic type systems is 2,4m 2 collector area and 150lt storage tank. The range of the most common used systems is between 120lt 220lt with 1,8 4m 2 collector area. All the systems are equipped with electric back-up heaters 30% of them are equipped with an additional heat exchanger connected with the fuel or gas heating system. The solar fraction is usually over 75%. A typical thermosiphonic water heater for domestic use produces kWh/year and helps to reduce CO 2 emissions by kg/year. The breakdown of solar thermal applications in Greece, according to the GSIA, is as follows: Domestic hot water production (~98% of installed collector area). Mainly thermosiphonic water heaters, including hotel studios, small commercial and industrial consumers. Large collective solar systems (~1% of installed collector area) are installed mainly in hotels for hot water production. Space heating, air conditioning and industrial process heating combined have less than 1% of the installed collector area. The costs of solar thermal systems may vary among the different manufacturers. In table 8, indicative costs for typically sized systems are given. 21

22 Current state of heating and cooling markets in Greece RES-H Policy Table 8 Breakdown of solar systems costs. Solar Systems Costs for Typically Sized Systems Individual Project (large scale) Total costs (excl. VAT) 250 /m /m 2 VAT (18%) 47,5 /m 2 38 /m 2 Total cost (incl. VAT) 297,5 /m /m 2 Typical size of system 2,4 m m 2 Source: GSIA, Greek Solar Industry Association Biomass Biomass burning is the main contributor to renewable heating in the residential sector (see table 6). Although biomass burning has such a prominent place in the RES heating production it is not backed up with the appropriate legislation. As mentioned in the previous chapter, according to a Ministerial Decision of 1993 (MD 103/1993/B -369) central heating systems using biomass as an energy source are not allowed in the two biggest cities of Greece (Athens and Thessaloniki). It is only allowed to have central heating systems with oil or gas boilers. This exemption of biomass from the central heating systems was legislated back then, because the burning of biomass didn t meet any environmental criteria and it contributed to having bad air quality in cities. Of course, big changes have occurred since then, as biomass boilers have become environmental and energy efficient. Tables 9 and 10 present figures for the heat that derives from gaseous and solid biomass respectively for year 2005, according to the findings of another IEE project named Thermal energy from Renewables Therra. Solid biomass is mainly used for space heating in households, while biogas is used in CHP plants. 22

23 RES-H Policy Current state of heating and cooling markets in Greece Table 9 Penetration of gaseous biomass in year 2005 Heat from biogas, CHP plants Input method 1 (PJ) 0,168 Output method 2 (PJ) 0,193 National method 3 (PJ) 1,381 Source: Thermal energy from renewables Therra EIE project Table 10 Penetration of solid biomass in year 2005 Heat from solid biomass stoves in households Use of solid biomass (ton) Input method (PJ) 28,12 Output method (PJ) 16,87 National method (PJ) 29,39 Final use of solid biomass not in households Number of installations Thermal output capacity (MW) 489 Use of solid biomass (ton) Input method (PJ) 9,06 Output method (PJ) 6,34 National method (PJ) 9,15 Total Input method (PJ) 37,18 Output method (PJ) 23,21 National method (PJ) 38,55 Source: Thermal Energy from renewables Therra EIE project 1 In the Therra project the input method was established in order to calculate heat produced by renewables. The definition given of renewable heat on the input side is: Renewable heat is the energy content of a renewable source that is converted into useful heat. 2 On the output side the definition is: Useful renewable heat output is the heat coming from conversion of a renewable energy source that is used by an end user or in a follow-up conversion process. 3 The national method is the method that Greece uses for calculating the heat produced from renewable energy sources, and in most of the cases it is identified with the input method. 23

24 Current state of heating and cooling markets in Greece RES-H Policy Geothermal Greece holds a prominent place in Europe regarding the existence of promising geothermal resources (both high and low-enthalpy), which can be economically exploited. The technical potential (the part corresponding to existing wells) for direct geothermal uses exceeds 400MW t [4], while the potential for power generation exceeds 250MW e, but this potential is located in the non-interconnected islands of the Aegean [1]. In table 11, the penetration of geothermal energy per type of use is presented. Currently, no geothermal electricity is produced in Greece. The installed thermal capacity of the direct uses in Greece increased from 75MW t in 2004 [4] to 88MW t in 2007 [1]. Most of that increase is due to the rapid expansion of geothermal heat pump installations. According to Andritsos et al., 2007, more than 160 applications of ground heat pump units have been recorded in Greece, with a total installed capacity of 7 MW. The exact number of such units presently installed in the country is not known, but the above figure can be at least doubled. Table 11 Penetration of geothermal energy in 2007 Use Installed Capacity (MW t ) Annual Energy Use (PJ) Space heating 1,4 0,016 Green house & soil heating 26,5 0,248 Agricultural drying 0,8 0,004 Aquaculture 9,3 0,076 Bathing and swimming 36 0,182 Geothermal heat pumps 12 0,080 Total 88 0,606 Source: Update and characteristics of low-enthalpy geothermal applications in Greece, N. Andritsos et al., In table 12 the RES penetration for each available technology according to the findings of Therra [10] project is summarized. It is estimated that for year 2005 the renewable fraction in the heat demand is around 10-15%. 24

25 RES-H Policy Current state of heating and cooling markets in Greece Table 12 Summary of RES penetration per sector in year Data refer to 2005 Solar thermal Solid biomass Liquid biomass Gaseous biomass Geothermal Ambient Heat Total Renewable Heat All Heat Renewable fraction (%) Input method (PJ) Output method (PJ) National method (PJ) Source: 14,6 1 37,18 0 0,17 0,047-52,0 356,1 15 4,57 23,21 0 0,19 0,038-28,0 286,6 10 4,22 38,55 0 0,19 0,047-43,0 355,8 12 Thermal Energy from renewables Therra IEE project 4.2 RES-H potential When it comes to exploring RES potential, most of the available studies refer to RES-E potential. Relevant to RES-H potential, is presented below the biomass production potential (table 13) from the RES2020 EIE project where the Pan European TIMES model for RES 2020 was used [9]. Table 13 Biomass Production Potential (PJ/yr) Potentials [PJ/tr] Year Rape seed 3,00 8,00 13,00 18,00 23,00 29,00 Starch crops 5,00 10,00 16,00 22,00 28,00 35,00 Sugar crops 5,00 13,00 21,00 28,00 38,00 47,00 Grassy crops 9,00 14,03 25,68 37,91 49,67 65,32 Woody crops 9,00 14,80 26,55 40,34 52,63 70,25 Agricultural waste 16,57 16,57 17,70 18,84 Forestry residues 8,40 8,40 8,40 8,40 Wood waste 11,25 11,40 12,40 13,40 Source: RES 2020, IEE project, The Pan European TIMES model for RES

26 Current state of heating and cooling markets in Greece RES-H Policy There is also one study of the Ministry of Development named: Assessment of the national potential for combined Heat and Power (CHP) of November 2008, which examines the potential for generation of heat and power in the residential and industrial sector [7]. In this study the potential of biomass and biogas CHP applications is also examined. The applications which are considered in this study include combustion technologies using biomass products to produce heat and electricity. The heat produced is used either to cover the needs of the producer, such as they may be, or to cover neighbouring heating loads in the residential sector by developing a heat distribution network. The types of biomass fuel which were investigated are: Byproducts associated with processing of agricultural and forestry residues (wood working industry, food, etc.) Agricultural residues as well as forestry residues which can be used after being preprocessed and transported from harvest areas to proposed processing facilities. Such facilities for energy production could be located: In places where there is already production or use of biomass byproducts (agricultural industry plants or woodworking industries which in many instances use biomass byproducts to cover their heating needs). In places near small or larger urban centres which are located in areas with a large supply of biomass (agricultural areas, forests) and have heating loads which could be covered by small scale district heating. In places where the above two conditions are met. The calculations refer to: 1. The assessment of the heating loads of the industrial units with biomass byproducts. 2. The assessment of heating loads in the residential sector which can be covered at a short distance from the candidate facilities. 3. The assessment of the available biomass potential available for energy production, and finally 4. The potential of CHP to meet the above heating loads and this forms the evaluation of the biomass potential for CHP applications. Based on the assessments from processing the data and the models used, this potential amounts to 373 MWe, out of which: 290 MWe can be installed in locations where there is already proven industrial activity related to the agricultural or wood working sectors. 26

27 RES-H Policy Current state of heating and cooling markets in Greece 83 MWe can be installed at locations without proven activity in these sectors, but which are located next to areas with a potential supply and residential sector loads. The total biomass used, based on the existing data and the estimates of the model, amounts to TJ (6.393 TJ to cover industrial loads and TJ for district heating of neighbouring settlements). The thermal energy produced amounts to GW th h ( TJ) without the calculation of losses during end use. For exploring the biogas potential the sewage treatment plants, the sanitary landfills and the main organic wastes of Greece, were examined. According to the report s calculations, the technical potential for biogas in Greece is presented in the following table. Table 14 Technical potential of biogas. Electric Thermal Electricity Heat Production Primary En- Capacity Capacity Production (MWthh) ergy Supply (MWe) (MWth) (MWeh) (MWh) Sludge 11,93 18, Landfill gas 37,50 50, Organic waste 350,21 466, TOTAL 399,64 535, Source: Ministry of Development, Assessment of the national potential for combined Heat and Power (CHP), November

28 Current state of heating and cooling markets in Greece RES-H Policy 5 Historical and ongoing policies to support RES Heating 5.1 General RES policy context of Greece The RES policy background has been the content of study both in government reports (e.g. 4 th national report regarding the penetration level of RES up until 2010, of the ministry of Development) as well as in European projects such as in the European Life project Etres Emissions Trading & Renewable Energy Support [3]. As established in those reports, the RES-support scheme currently in effect in Greece consists of two basic components. The first one is a price-support component, comprising a feed-in tariff for RES-produced electricity and the second one is an investment support component, providing capital subsidies to RES investment projects. The RES-support scheme has been in place since 1994 (Law 2244/94), but it was practically activated in 1998, when the National Development Law 2601/98 was passed and the Community Support Framework II public funds for RES/RUE/CHP investments were made available for the first time. Macroscopically, the Greek RES support scheme appears to have produced, in its 6-year course, substantial positive and measurable results, as far as development, construction and operation of commercial-scale RES power capacity in Greece is concerned. From only 71 MW e in 1997, the RES installed capacity in the country reached 500 MW e in 2004 and 1100MW e in The largest part of this RES capacity, concerns wind parks. Law 2773 of 1999, on the liberalization of the domestic electricity market and Law 3468 of 2006, on electricity production from RES and CHP, constitute the basic legal background in today s RES energy market. With these two laws the transposition of the EU Directives 96/92/EC and 2001/77/EC was achieved respectively. Unfortunately at present state, there is no Greek law dealing specifically with heat production from RES. The key provisions of Law 2773/99 and Law 3468/06 concerning renewables are summarized below: a) According to Law 2773/99 the Regulatory Authority of Energy (RAE) and the Hellenic Transmission System Operator (TSO) have been created. Both these companies are basic factors of the free electricity market. b) Law 2773/99 instituted a new license, the so-called electricity generation license, which is the first license required to be obtained by any electricity producing station, conventional or RES-based, in a long planning / licensing procedure that also includes presiting permit, land-use permit, approval of environmental terms and conditions, installation license and operation license. c) The Transmission System Operator (TSO) is obligated to grant priority access to RES electricity-producing installations up to 50 MW e in power capacity (and up to 10 MW e in the case of small hydroelectric units). 28

29 RES-H Policy Current state of heating and cooling markets in Greece d) The TSO was obligated at first to enter into a 10-year contract (afterwards with law 3468/06 it was expanded to 20 years) with the RES electricity producer for the purchase of his electricity. The contract always includes a renewal option. e) Law 3468/06 aims to simplify and speed up the licensing procedures and also establish a fixed electricity tariffi system, applicable to the sales of RESproduced electricity to the grid. As for the second component of the RES-support scheme (that is the investment support) the former and ongoing main investment-support instruments that provide substantial public subsidies to RES investment projects (among other type of investment) are: 1. Law 3299/04, issued in December 2004, (often called as National Development Law). 2. The Greek Operational Programme for Competitiveness (OPC) under the 3 rd Community Support Framework (CSF III; ). 3. The National Strategic Reference Framework (NSRF) under the 4 th Community Support Framework (CSF IV; ). The National Development Law (3299/04) is a financial instrument-umbrella, which covers all private investments of enterprises having business activities in all sectors of the economy: primary sector (e.g. greenhouses, fisheries etc), secondary sector (e.g. manufacturing, energy etc) and tertiary sector (e.g. tourism, services etc). This law has a strong regional character, as the amount of the investment subsidy depends on which geographic region the investment plans to be realized. According to this law the country is divided in three regional zones, while the business activities which fall under its provisions are divided in five categories. As far as investments in RES installations are concerned, Law 3299/04 grants subsidies for investments of RES electricity and heat production, as well as for investments of biofuel production and production of biomass in order to use it as a primary energy source for energy production. Nonetheless, the most common type of investment is in the area of RES electricity production. More specifically, the main provisions of Law 3299/04, concerning public support of RES investments are as follows: 35% public subsidy is granted on the total eligible RES investment cost (including grid connection cost). The level of subsidy can be 40% in certain geographic regions, while it is 30% in the prefectures of Attica and Thessaloniki. Alternatively, 100% tax deduction of the total eligible RES investment cost is granted for a 10-year period. The level (%) of public subsidy is increased by 5 to 15 (bonus) percentage points in some certain cases (e.g. new enterprise). In all case above, the overall level of public subsidy cannot exceed 55%. 29

30 Current state of heating and cooling markets in Greece RES-H Policy The level of subsidy or tax deduction is independent of the RES technology (wind, biomass, small hydro, etc.). Required own capital: 25% (min) of the total investment cost. Minimum investment cost required: Euro (depending on size of enterprise). Maximum subsidy granted: 20 million Euro (cumulative over 5 years). Installation license is required for project application (grant proposal). In the National Operational Program for Competitiveness (NOPC)/ CSF III ( ), measure 2.1 of Subprogramme 2 was devoted entirely to providing State support (grants) to private investments in: a) renewables, b) rational use of energy and c) small-scale (<50 MW e ) cogeneration. The main provisions of Measure 2.1 of NOPC, concerning public support of RES investments, are as follows: Public subsidy (grant) on the total eligible RES investment cost: - Wind parks, conventional solar thermal units: 30% - Small hydro, biomass, geothermal, high-tech solar thermal units, passive solar: 40% - Photovoltaics: 40-50% Level of subsidy (%) is independent of the geographical region of the country (except for photovoltaics). Required own capital: 30% (min) of the total investment cost. Minimum investment cost required: Euro. Maximum investment cost subsidised: 44 million Euro. Installation license is required for project application (grant proposal) The National Operational Program for Competitiveness under the CSF III has ended but as a follow-up has come the National Strategic Reference Framework (NSRF) , which has just began and is expected to cover all sectors of economic activities, including investments in the energy sector. According to a recent press release of the Ministry of Development the order of importance in the energy sector is as follows: electricity production from RES, saving energy and energy efficiency, heating and cooling production from RES, biomass and cogeneration [16]. 5.2 Policies related to RES-H As it can be seen up until now the Laws for RES financial support currently available in Greece have focused mainly on RES electricity production, while there is little provision for RES heating and cooling production. 30