1. Gas Industry micro CHP workshop 2008 Paris, France May 29 – 30, 2008 Subsidizing mCHP. What is the situation? Impact of different models A. H. Pedersen / DONG Energy A/S

2. Policies in selected countries Portugal Japan UK Germany Holland US 2

3. Huge investments needed to overcome the jump from niche – to mainstream market Present mCHP technologies – without public support - are only available for: "rich" technology interested consumers and "rich" technology interested consumers and energy companies with a strong believe in future business in the mCHP market. energy companies with a strong believe in future business in the mCHP market. Market – and demonstration - are necessary to create a competetive product. For some mCHP products the industry is facing reduction of production cost to 1/5 of the present production cost to create a competitive product. 3

4. Portugal 4 : Two laws 1: Power < 150 kW – Price depending on technology. Up to 50% of produced power can be delivered to public network. 50% must be used for own purpose – at grid price of 11 c/kWh Prices for power delivery to network depending of technology: ICE – 12 c/kWh Stirling engine – 13 c/kWh FC's – 32 c/kWh 2: Power < 3,68 kW. Prices for power delivery depend on fuel: Fossil fuel – 11 c/kWh Biofuel – 19 c/kWh Solar – 65 c/kWh

5. Japan 5 1 kW PEFC units Subsidy to energy companies for technology development 2005 – 50.000$/unit (1 kW), 2006 – 38000$/unit, 2007 – 30000$/unit 2008 – 22000$/unit (planned) ( > 2000 units installed end 2007 )

6. Field test number of installed units Fuel kind 2005 year 2006 year 2007 year Total Tokyo GasCity gas150160210520 Osaka GasCity gas6316081224 Toho GasCity gas12403890 Saibu GasCity gas10 1333 Hokkaido GasCity gas － 10 20 Nippon Gas City gas － 336 LP gas － 7714 New Nippon Oil LP gas134226250610 Kerosene － 75146221 Idemitsu KosanLP gas334050123 Japan EnergyLP gas304034104 Iwatani & Co., Ltd.LP gas10342973 Cosmos oil LP gas10191443 Kerosene －－ 55 Taiyo OilLP gas8131839 Kyushu OilLP gas8101230 Showa Shell OilLP gas610 26 Lemon gasLP gas6 －－ 6 Total4807779302,187 1 ｋ W ＰＥＦＣ Ｆｕｅｌ Ｃｅｌｌ 2005 – 50.000$/unit (1 kW), 2006 – 38000$/unit, 2007 – 30000$/unit 2008 － 22000 $/unit planned Ｎａｔｕｒａｌ ｇａｓ 893 ｕｎｉ ｔｓ

7. ICE engines installed – end 2007  about 65000 – 1 kW units  about 3500 units in the range from 1 to 10kW 100 JPY = 1 US$ 1 kW

8. UK 8 VAT reduction from 17,5% til 5% Beneficial description Easy access to ROC’s Partly funding from Energy companies

9. Germany 9 5,1 cent/kWh + 0,8 c/kWh (avoiding high and medium voltage grid) + 0,55 c/kWh gas used (discount on app. 5,5 c/m3 natural gas - or app. 1 c/kWh electricity produced) In total: app. 7c/kWh sold to grid.

10. Feed-in tariffs for microCHP in Germany

11. Holland 11 No incentives for households to buy MicroCHP – only for industries (tax breaks) Up to 3000 kWh/y delivered to net – can be subtracted from delivered power from public network

12. US 12 Subsidy: 1000 – 2000 $/unit Depending on state

13. Impacts of models for public support to mCHP 13 Subsidy to energy companies has shown most remarkable results. In Japan is now installed :  65000 – 1 kW gas engine units  2000 FC – 1 kW units  3500 mCHP units from 1 - 10kW Other kinds of public support still have to prove markable effect Global sale of mCHP Delta mCHP summit 2008