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GSR 2015

94 04 POLICY LANDSCAPE SIDEBAR 7. INTEGRATED RENEWABLES HEATING AND COOLING POLICIES FOR BUILDINGS AND DISTRICT HEATING NETWORKS Thermal energy makes up about 50% of worldwide energy use, although only 8% of the heating and cooling load is served by modern renewables. Widespread deployment of renewable heating and cooling (RE-H/C) will be necessary to achieve goals for energy security, greenhouse gas emissions reduction, and economic development. To scale up renewable heating and cooling, jurisdictions are developing innovative and integrated energy policies that incorporate RE-H/C into new and existing buildings as well as smart district heating networks. Several new policies—including incentives, mandates, building exhibitions, and planning initiatives—have been deployed recently to align RE-H/C with broader energy and climate goals. RE-H/C IN NEW AND EXISTING BUILDINGS Aside from a few global leaders (such as Upper Austria and Denmark), most of the world has overlooked the need for RE-H/C policies in buildings. This is starting to change. For example, in 2012, the United Kingdom launched the Renewable Heating Incentive (RHI) for commercial and industrial consumers, the first comprehensive performance-based incentive for heat; in 2014, it was expanded to include the residential sector. The RHI pays a set tariff to residential, commercial, public, and industrial consumers for every unit of renewable heat generated on a pence per kWh basis. In 2008, Germany established a legally binding RE-H/C target of 14% by 2020. German policymakers seek to achieve this mandate by requiring all new building construction to incorporate RE-H/C, including solar hot water, biomass, ground-source heat pumpsi , and other RE-H/C technologies. The German state of Baden-Württemberg took this mandate a step further, requiring that existing residential buildings supply at least 10% of their heat from renewable energy sources when central heating systems are replaced. Starting in July 2015, Baden-Württemberg is increasing this requirement to 15%. In 2012, Kenya issued legislation mandating that within five years, all existing buildings using over 100 litres of hot water a day must install solar water heating systems to cover 60% of demand, a mandate that applies to all new buildings. While these policies have sought to encourage use of RE-H/C in buildings directly, RE-H/C also is receiving a boost from policies designed to promote construction of net zero energy (NZE) buildings. Because heating and cooling is the number one energy user in buildings, RE-H/C technologies are essential to achieve NZE building status. As a result, NZE targets, mandates, and other programmes serve as de facto policies that drive adoption of RE-H/C. For example, under the EU Energy Performance of Buildings Directive (2002/91/EC, EPBD), EU member states are required to achieve near zero energy status for all new construction by 2020. In the United States, California has a robust planning process in place to make all new buildings NZE by 2020 for residences and 2030 for commercial buildings. Other US states, including Massachusetts and New York, are implementing pilot building grants or building competitions, respectively, to explore potential for NZE development. Japan aims for all new public buildings to be NZE by 2020, and private buildings by 2030. In every case, policymakers, building owners, developers, and designers are considering the role of RE-H/C technologies as part of the integrated energy system to achieve building energy goals. RENEWABLE HEATING AND SMART DISTRICT ENERGY NETWORKS Historically, conventional district heating networks have consisted of a few large, centralised generators that distribute heat one-way to end-users. Smart heating networks, by contrast, enable many decentralised generators to feed energy back into the grid. This provides thermal networks with greater flexibility and reliability. It also enables greater use of RE-H/C and energy efficiency technologies in district heating networks. However, widespread deployment of smart district heating networks is prevented by numerous technical and market barriers, which policymakers and grid operators (especially in Europe) are just beginning to tackle. Conventional district heating networks traditionally have supplied consumers using high- or medium-temperature heat (in high-pressure systems). These systems typically are served by only biomass, CHP, or fossil fuel boilers, and have hindered the widespread integration of low-temperature RE-H/C technologies such as solar hot water or advanced heat pumps. To address this technical barrier, district heating providers and energy planners are preparing to pilot (or, as in the cases of Canada and Denmark, already are piloting) low-temperature district heating grids. Due to their lower operating temperatures, such networks are much more efficient and can enable end- users to deliver low-temperature surplus heat from buildings back into the thermal grid. Low-temperature networks are expected to “serve as the backbone of smart cities,” increasing communities’ flexibility to integrate RE-H/C and energy efficiency technologies into buildings. New interconnection, dispatch, and tariff policies are needed to address market barriers and to incentivise decentralised generators to feed heat into smart heating grids. To that end, the International Building Exhibition in Hamburg recently developed a pilot project in the district of Wilhelmsburg that showcased new regulatory policies. The regulatory structure enabled operation of a smart heating grid that incorporates centralised heat generation, decentralised RE-H/C generation, and thermal storage. The community association overseeing the Wilhelmsburg project applied principles from Germany’s renewable feed-in tariff to heating. In 2012, the regulations gave decentralised heat i - The energy output of heat pumps is at least partially renewable on a final energy basis. (See Sidebar 4, GSR 2014.)

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