The new German federal funding scheme Bundesförderung für effiziente Wärmenetze (BEW) ("Federal funding for efficient district heating networks") has started September 15, 2022. We had already summarized the draft version from last year in our Newsletter issue 15. One major change in the final version compared to the draft concerns the subsidies for operating heat pumps which feed in to district heating networks. While in the draft, the subsidies were calculated based on the electricity demand of the heat pump, the final version defines the calculation to be based on the amount of source heat the heat pumps uses. For a quick overview of what this final version means for the operation of heat pumps and the subsidies, we have created the following infographic.
The BEW defines subsidies for the operation of heat generators for solar thermal plants as well as for heat pumps. The requirements are that the heat pumps feed in to a district heating network and that they have been funded in module 2 of the funding scheme (new built or transformation of existing networks) or module 3 (for separate improvement measures). Furthermore, heat pumps must reach a seasonal coefficient of performance (SCOP) of at least 2.5. When these requirements are met, the operation of the heat pump can be subsidized for 10 years starting from the commissioning of the plant.
To calculate the subsidies, the BEW defines 2 different equations. For this post and our infographic, we look at the case when the electricity is drawn from the public grid or a connected distribution grid. In this case, the subsidies are calculated as a function of the SCOP and the source heat input to the heat pump (which the BEW considers as ambient heat or recycled waste heat). These subsidies are limited to a maximum of 9.2 ct/kWh of source heat. Furthermore, subsidies are limited to a maximum amount of 90 % of the total electricity costs of the heat pump operation. In addition, applying for the subsidies requires proof that the subsidies are necessary for an economical operation of the system.
As shown in the upper part of our figure above, the subsidies decrease as the SCOP increases. This means that more efficient heat pumps receive less funding. Yet, the total economic feasibility does not only depend on the amount of subsidies but rather on the total electricity costs.
To illustrate this, the figure at the center of our infographic shows how the shares of electricity and source heat vary at different SCOP values. We assume that a heat pump supplies 1 MWh of useful heat to a district heating network. This amount of useful heat is the sum of the electricity input and the source heat input to the heat pump. And the SCOP is calculated as the useful heat output divided by the electricity input. As a result, with increasing SCOP the electricity demand of the heat pump decreases while the source heat input must increase at the same rate.
Evaluating both effects in combination, we can compare the total electricity costs with and without subsidies in the lower part of our infographic. Of course, the absolute values depend on the assumed price of electricity, which has a great uncertainty currently and especially as a forecast to the next 10 years. Yet, we can see that in general the total costs decrease with better SCOP values, even if the subsidies decrease, because the total electricity demand also decreases.
We hope that this quick overview helps you to put the new subsidies for heat pumps according to the BEW scheme into better context. And if you have additional questions or require a detailed analysis for your specific case, please don't hesitate to contact us. And of course we are also happy to support you with your feasibility study or your transformation plan according to the BEW or any other related topics.
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