Several MEPs in the Industry, Research and Energy committee of the European Parliament have tabled amendments seeking to boost the Renewable Energy Directive’s (RED) capacity to promote innovation.
MEP Markus Pieper wants “each Member State [to] set an indicative target to ensure that at least 5% of new installed renewable electricity capacity between 2025 and 2035 is innovative renewable energy technology.” MEPs from all the other political groups talk of “renewable energy capacity” rather than “renewable electricity”, which would bring heating and cooling technologies including solar thermal into its scope.
Pieper offers this definition: “‘innovative renewable energy technology’ means technology that improves in at least one way a comparable state-of-the-art renewable technology, or makes exploitable a largely untapped renewable energy resource and that is generally not able to attract low-cost private finance.”
Member States would have to put in place measures to ensure the target is reached. These could include specific subsidy schemes based on CAPEX subsidies or preferential rates for units of delivered energy, loan schemes or guarantees underwriting technology or commercial risks, changes to planning rules.
Would SHIP qualify as an “innovative renewable energy technology” under the amendments proposed by the European Parliament to the Renewable Energy Directive?
Allowing that solar thermal is “largely untapped” for the purpose of industrial processes, SHIP qualifies as an innovative technology according to Pieper. SHIP is a niche of the solar thermal business, accounting for 0.3% of worldwide installed solar thermal capacity (solar thermal is mainly installed on homes and in district heating systems). Furthermore the sector has difficulty “attracting low-cost private finance“, for which reason a special effort is being made in Task 64 IEA, Subtask E.3 to prepare a promotion campaign towards financial institutions. A problem that will remain even after the technology is well accepted by financial institutions is that SHIP installations need to be custom-designed for every factory they are integrated into. More training seems to be needed to be a SHIP installer than an installer of PV on factory roofs. This is because, in the case of PV, a grid is always present to which excess electricity may be exported, or from which electricity may be taken.
There is a learning-by-doing effect: a company that performs five integrations of solar thermal into industry process heat systems will manage to do the next five faster and more cheaply, but the first five will need special and possibly rather substantial support.
Under the more restrictive definition for “innovative renewable energy” offered by another MEP, Nicolás González Casares (S&D group), SHIP would probably not qualify. He proposes:
“’innovative renewable energy technologies: means renewable energy generation technologies based on demonstration projects as defined in Article 2, point (24) of Regulation (EU) 2019/943, or a renewable energy generation technology with expected environmental benefit significantly higher than the improvement resulting from the general evolution of the state of the art in comparable technologies and when the innovative nature of the technology involves a clear degree of risk, in technological, market or financial terms, which is higher than the risk generally associated with comparable noninnovative technologies or activities;”
The reference to Regulation 2019/943 would mean only “a project which demonstrates a technology as a first of its kind in the Union” would be innovative, which doesn’t allow for more than one project, and not even one project per Member State. The alternative condition he offers is that the “environmental benefit [be] significantly higher than the improvement resulting from the general evolution of the state of the art.” Instead of new measures that aim to accelerate the “general evolution of the state of the art”, the measures that his definition would inspire would relate to R&D, as technologies capable of leapfrogging current performance are only at the R&D stage. SHIP is beyond the R&D stage but still needs help to gain market share.
Contribution of SHIP to 2030 installed capacity
5% of all renewable energy capacity installed from now to 2030 – which is the amount that Pieper says should be “innovative” – is many tens of GW. The PV and wind industries combined expect to install around approximately 1 TW in Europe by that date. The solar thermal industry is campaigning for EU action that will allow it to make an annual contribution of 500 TWh per year by 2030, of which 200 TWh will be from heat supplied to industry for processes, implying 140 GWth of SHIP. Not all of this should be considered innovative, but it is reasonable that a large part of the first 14 GWth would be, and that further innovation could come in other markets, such as the adaption of district heating to inputs from fields of solar collectors and in collector design. Solar Heat Europe sees the industry segment, tiny today, growing fastest, becoming the biggest by 2030 and remaining so in 2050 (chart below).
Conclusion: a broadly drawn and quantitative innovation target in RED III would benefit SHIP
SHIP will remain a small share of cumulative solar thermal installations for the next 2-3 years even as it grows spectacularly. Installers need to familiarise themselves with designing optimally integrated solar heat systems in industrial processes. A numerical target will force Member States to put in place measures to help the early commercialisation and attract interest in this sector. The prize will be potentially very great decarbonisation of industries involved in mining, food & beverage, tobacco, pulp & paper, machinery and transport equipment manufacturing.