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Stick. On June 3rd, 1990 the National Heat Supply Act was passed targeting the goals of Energy 2000. This act gave the Minister of Energy authority to control the choice of fuel in block heating units, district heating plants, and decentralised CHP plants to promote the expansion of decentralized CHP. Existing installations were to be converted to CHP and the use of natural gas and environmentally friendly fuels such as biomass were to be increased. This conversion away from coal and oil took place in 3 phases: from 1990-1994, 1994-1996, and beginning in 1996. Carrot. Subsidies for biomass heating plants were offered until 2001. Up to 21% of installation costs for households and 26% for businesses were available in areas not covered by the collective supply system. Carrot. The Combined Heat and Power Fund was established in 1992 (January 3) under Law Number 3 supporting conversion of district heating systems from conventional-fuel to biomass-based CHP by subsidizing 10-25% of the costs of conversion. A ceiling subsidy of 50% was established for development- oriented projects. In its first fiscal year €1.69 M was disbursed and around €3.25 M each subsequent year (Lorenzen, 2000). It was originally scheduled to expire in 1997 but was extended until 2002. Carrot. Law no. 837, the Development and Demonstration Programme for Renewable Energy (October 7, 1992), established investment subsidies between 15% and 30% for the construction costs of renewable installations including solar thermal, heat pumps, and straw and wood based boilers (but not for residential wood stoves already common in Denmark). The programme is scheduled to cease activities in accordance with the commercialisation of renewable technologies. Average annual contributions to renewable investments are around €5.9M. Stick. In June of 1993 the Biomass Agreement was established with the aim of expanding biomass in electricity and heating supply sectors (see Section 4 on Good Policy Practices). Utilities are required to buy and incinerate at least 1.2 Mt of straw and 0.2 Mt of wood chips per year by 2000, thereby replacing 6% of their total consumption of coal with straw and wood (Odgaard, 2000). In addition, a feed-in tariff of €0.05 /kWh was set for a 10 year production period. In the following 10 year period, a subsidy of 145 €0.01 was offered as a supplement to the market price for electricity. Following its implementation, power companies and district heating plants faced problems with price hikes due to a limited market competition leading to a 1997 amendment allowing utilities more flexibility in their choice of biomass supply. The targets for the end supply of biomass remained the same at 19.5 PJ by 2000. New stipulations were defined for 1.0 Mt of straw, 0.2 Mt of wood chips, and the choice of 0.2 Mt of either straw, wood chips, or chips from willow (Odgaard, 2000). Further amendments were made in 2000, making new stipulations for the conversion to biomass to take place not before 2005, but when the conversion is technologically and economically feasible. Stick. On May 6 1994, Denmark implemented a Ban on Electric Heating prohibiting existing households from installing electric heaters especially in areas of publicly supplied natural gas or district heating. Properties with central-heating installations were prohibited from removing radiators and hot-water tanks and replacing them with electric heating appliances. Individual residences that had installed electric heating prior to the ban were not affected (DEA, 2005). Carrot. The subsequent energy plan of April 1996, Energy 21, expanded upon the goals of Energy 2000 and established a long-term perspective based on new assessments of natural resources. Targets were set for an increased use of biomass (including municipal solid waste) from 52 PJ by year in 1995 to 85 PJ by 2005 and 145 PJ by 2030. This plan also set a target for 1 million m2 solar thermal collector area. In 1997 under the umbrella of Energy 21, the Development Programme for Renewable Energy was established in accordance with the rules of the Development and Demonstration Programme for Renewable Energy. This new program allocated €7.4 M of basic grants in support of solar thermal installations and €780 000 annually for biomass-fired district heating and large solar heating systems (IEA, 2004). These grants were cancelled in 2001.PDF Image | RENEWABLES FOR HEATING AND COOLING
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