Renewable heating remains an underdeveloped industry, with more than 80% of the EU’s heat and hot water production still reliant on oil and gas.
District heating systems represent low hanging fruit, offering opportunities for the integration of renewables on a large scale. However, financing is often a problem. Substantial public investment is usually required to carry out such transformations, which limits uptake.
In Sittard-Geleen (Netherlands) a Public-Private Partnership (PPP) facilitated the development of a biomass boiler plant, which provides renewable electricity and heat to resident’s homes.
The installation of a biomass boiler plant was initiated by a local entrepreneur, who was the majority investor, and retained ownership of the plant. The Municipality, recognising how the plant could contribute to the sustainable aspirations of the area, instigated a partnership.
As well as providing support to obtain the necessary permissions for the plant, the Municipality also contributed a small proportion of the investment. The partners arranged a deal with the existing energy supplier, linking the plant to the grid and ensuring continuity, and therefore affordability, in the retail price of energy passed on to residents.
The partnership inspired further synergies, with the Municipality raising consumer awareness, and promoting sustainable practices, by introducing a green waste collection service which also secured a steady supply of biomass for the plant.
The plant provides warmth and energy to 1,100 homes. This contributes 40% of the Sittard-Geleen target for the use of sustainable energy, for an investment of only €100,000.
PPPs are a good way of financing renewable energy schemes, which public authorities would be unable to deliver alone. By harnessing the expertise and financial resources of the private sector they can maximise the impact of public investment. A legal partnership also offers security to the public partner, in this case ensuring collaboration for a minimum of 15 years.
Private sector expertise was invaluable in Sittard-Geleen, where the partners had to overcome an arduous planning and permissions procedure. With the entrepreneur undertaking all the primary research the municipality made further savings by not having to employ a third party consultant.
Renewable schemes can face public opposition. Here however, the municipality pro-actively garnered public support for the initiative by engaging citizens through the green waste collection service and guaranteeing energy prices.
The potential benefits resulting from PPPs are not limited to district heating systems, nor indeed biomass plants. It is a very transferable approach, already replicated in many other countries, which can help finance any number of initiatives. It is therefore estimated to be a 9 on the GML scale.