Policy is defined as the course or principle of action adopted by a government to meet an outcome. (1) Effective policy will be critical in building a sustainable future. Germany presents an effective model of a regulation system that encourages biomass energy. First of all, power companies have an obligation to purchase and transmit digester energy produced. Second is an obligation to pay a predetermined rate for the electricity, with added incentive for increasing efficiency. 3.9 cents per kilowatt hour is added for using food waste and 2 cents for utilizing combined heat and power. (5) This leads to Germany having over 5000 digesters while the U.S has around 200 (in 2010) (3). Our visit validated that the FIT was the main gear that torqued anaerobic digesters into existence. Every digester of energy crops we visited mentioned the FIT and how it made their business viable, and also how changes in policy can make or break businesses overnight.
In the 1970’s, there was an oil crisis that caused many countries to rethink their energy policy. Many countries responded to this crisis by upping their domestic oil production. Since Sweden was lucky enough to have virtually no drillable oil, they took the conservation approach. The policy in Sweden is therefore designed to encourage sustainability. In 1991 Sweden took a leading regulatory role in the world by taxing CO2 emissions (3). This didn’t cripple the economy as our propaganda would suggest but instead boosted Sweden’s GDP to above the U.S’s by the mid-2000’s (4). This was accomplished due to the increased efficiency coupled with new jobs, infrastructure and energy from what was once waste (4). We saw this oil scenario played out at the pump where we shelled out big bucks for our shell shale. However, running on alternative fuels was incentivized, ethanol was only 9 krona/liter while gasoline was around 15 krona/liter.
The government encourages this transition through regulation and incentive, providing grants for start up costs. The city of Kristianstad received 144 million to build a centralized biomass district heating system. This paid for the construction of a new incineration plant, laying a new network of pipes, replacing furnaces and installing generators. Now the government is saving 3.8 million a year on fossil fuels and electricity. The government also subsidies the purchase of pellet furnaces for homeowners and businesses, as wood pellets are half the cost of oil. In addition, farm factories pay fees to the heating plants to dispose of their waste, thus generating a profit. (3) Recent developments include every town having a biogas filling station for cars and trucks, and owners of biogas vehicles getting perks like free parking and tolls, even discounts on their vehicle. (4) We saw examples of the government subsidizing efficiency everywhere. At the Skelleftra Kraft pulp and paper plant they installed a combined heat and power system that supplied district heating to the city using government money.
(2) Lang, M. (2012). German Feed in Tariffs 2012.
(3) Rosenthal, E. (2010). Europe Finds Clean Energy in Trash, but U.S. Lags – New York Times
(4) Strauss, W. (2012). Energy policy lessons from Sweden. Biomass Power and Thermal. Retrieved May 7, 2012 from http://www.biomassmagazine.com/articles/6299/energy-policy-lessons-from-sweden
(5) Renewable Energy Sources Act.