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Home Barriers to the energy cooperation and solutions Framework perspective barriers

Framework perspective barriers

Legal/Regulatory/Policy

Missing legislative regulatory framework

Inter-industrial energy cooperation is barely strengthened by policies up to now despite the recommendation of eco-industrial parks in various policies as mentioned above. Generally said, the legal complexity is very high for eco-industrial parks and energy (efficiency) cooperation between several companies, because many topics are addressed and regulations differ regionally, nationally and internationally.

Discrepancies between legislation and policies

In general, there are discrepancies between local, regional, national and EU-wide legislations and policy goals, which create uncertainties and location-related disadvantages.

Consequently, there is also a lack of suitable subsidies and financial incentives, since the legal basis for joint energy projects is not given. There is the urgent need of developing normative and legislative standards, followed by international and national financial incentives as well as promotion.

Companies cannot rely on political roadmaps only, since short legislative periods can lead to unpredictable political U-turns. Therefore, planning and investment security is not given, especially when a company relies on government-funding for their project, say for a technical measure with very high upfront investment costs, which the company cannot lift itself.

electricity exchange

Direct electricity exchange

The limits of the legal feasibility of such a direct line are on the one hand quite broad, but on the other hand also very restrictive.

So, it is conceivable that a company within an industrial park installs a power plant and subsequently sells this electricity to the other companies and thus supplies the customers directly, but this approach also afflicts some uncertainties or barriers.

Closed distribution systems

The limits of legal feasibility of such a closed distribution system are very strict. However, there is the possibility that the corresponding geographical limit is met within the respective industrial plant.

Successive activities of the individual companies, like in the form of a value chain, are quite common in an industrial or commercial park. This would also go along with the clarification of certain uncertainties due to the provisions of EU law.

electricity heating

District heating sector

The DH sector is not regulated, but individual frameworks depending on the local requirements and conditions are in place.

Usually the participation of industrial waste heat producers is not regulated by these frameworks, which makes it necessary to develop contracts and conditions for each new case individually.

External waste heat utilization-private agreement

When a company cannot make use of its waste heat internally, it is obvious to generate indirect energy savings and financial profit by injecting the heat into a DH network or delivering it directly to a large customer, e.g. another company within an industrial park.

At this point problems arise, since there must be a contractual framework established. Metering, energy prices and load profiles must be thought of. The legal status of the participating companies is unclear as well as the declaration of waste heat as green or conventional energy, depending on the initial energy source, which has impact on the emission trading market.

The transfer of operational heat in the form of steam or water at different temperature levels requires a more specific regulation which takes into account each individual case, when it comes to the cross-company exchange of energy, the heat-generator may be an operation that generates a certain heat quality and quantity in the interests of both.


Big data management- privacy problems arise

When establishing a hybrid energy network with various participants, such as in an industrial park, collection of various data sets is needed, to ensure a trouble-free operation of the network.

Therefore, not only a complex EDP infrastructure is needed, which is a technical barrier, but also data management, processing and backup must be clarified. Legally seen, big data management is very complex as well.

Compliance for business with data regulation and privacy concerns is now a huge issue. It must be ensured compliance with privacy law, data security, confidentiality and data protection for each organisation, customers and employees. This is of course an extensive task but is more than important to ensure compliance with data protection law.

Funding and Subsidy “Jungle”

One important barrier is the complexity of regional, national and international funding and subsidy schemes with their various conditions, maturities, exemptions etc. If you do not treat these issues in your day-to-day business, as most companies do, because it is not their core business, it is no surprise that they are overwhelmed by the topic.

It is therefore quite possible that companies are quickly frustrated, especially if they try to deal with the issue of energy efficiency without professional support.

Standardisation

Joint electricity purchase

Joint electricity purchase or generation is limited by different fixed costs of power supply, which are caused by different supply voltages and different electricity demands. Merging various consumers and establishing one contract, demands a changed calculation of fixed costs. One problem arises when different safety standards are in use because of different voltage and current levels.

Another problem are existing tax structures such as depreciation periods. If several companies make use of the same energy network and have all partially paid for installations and joint contracts, the calculation of separate taxes and depreciation periods becomes complicated depending on national regulations.

Transversal instruments

EU-level:

  • EU framework for physical energy cooperation

European and national level:

  • Simplification and alignment of subsidy schemes
  • Allow regulatory “test beds”

National and park level:

  • Establishing individual data (safety) guidelines for each industrial park

Specific instruments

  • Adjusting the legal framework of the electricity market
  • Changing district heat/cold law
  • Preferential treatment of physical cooperation
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