5.1 Evaluation of the Literature Review …
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The BF-BOF steel manufacturing process does not use hydrogen as feedstock.
However, a partial decarbonization of this steel manufacturing process can be
achieved by adding hydrogen in the BF process. A full decarbonization can be
achieved by replacing the BF-BOF production process by the DRI-EAF process.
In the DRI process, the reduction of the iron ore is entirely done by the hydrogen.
The EAF process is a process powered by electricity.
The decarbonization of the industry sectors falling in the scope of the research
work is therefore possible from a technical point of view. However, from a business rationale point of view, the production of renewable hydrogen is not yet cost
competitive with the fossil fuel-based hydrogen production.
5.1.3 The Policy Instruments
The renewable energy policy instruments
The documentation review shows that auctions have become the most utilized
policy instruments to allocate new renewable energy projects. To win the right
to build a project, the renewable energy project developers are competing on
the price but also on some other criteria depending on the design of the auction
system.
The auction is just one element of a wider policy system. Once the project is
awarded, some other policy instruments may come into play. The feed-in tariffs
are still widely utilized. However, in Europe, some projects allocated through auction do not receive any support or subsidy afterwards. This exposes the renewable
energy project developers to the merchant risk and to the volatility of the electricity market. To mitigate this risk, renewable project developers secure the quality
of their revenue streams by developing PPAs. Another mitigation measure is the
integration of the power-to-gas technology in the renewable energy system, with
the assumption that renewable hydrogen production can secure an additional and
complementary stream of revenue.
With this background, the review of the renewable energy policy framework in
the APAC markets under the scope of the research work have shown that China
has stopped using direct financial subsidising of renewable energy production.
Feed-in tariffs have been used to support the initial growth of the renewable
energy capacity installation until 2019. A new mechanism is being designed and
will be put into use to support the 14 th Five-Year Plan.
In Australia, large-scale generation certificates (LGCs) are the main supporting
mechanism for renewable energy projects. The amount of LGCs to be produced
49
The BF-BOF steel manufacturing process does not use hydrogen as feedstock.
However, a partial decarbonization of this steel manufacturing process can be
achieved by adding hydrogen in the BF process. A full decarbonization can be
achieved by replacing the BF-BOF production process by the DRI-EAF process.
In the DRI process, the reduction of the iron ore is entirely done by the hydrogen.
The EAF process is a process powered by electricity.
The decarbonization of the industry sectors falling in the scope of the research
work is therefore possible from a technical point of view. However, from a business rationale point of view, the production of renewable hydrogen is not yet cost
competitive with the fossil fuel-based hydrogen production.
5.1.3 The Policy Instruments
The renewable energy policy instruments
The documentation review shows that auctions have become the most utilized
policy instruments to allocate new renewable energy projects. To win the right
to build a project, the renewable energy project developers are competing on
the price but also on some other criteria depending on the design of the auction
system.
The auction is just one element of a wider policy system. Once the project is
awarded, some other policy instruments may come into play. The feed-in tariffs
are still widely utilized. However, in Europe, some projects allocated through auction do not receive any support or subsidy afterwards. This exposes the renewable
energy project developers to the merchant risk and to the volatility of the electricity market. To mitigate this risk, renewable project developers secure the quality
of their revenue streams by developing PPAs. Another mitigation measure is the
integration of the power-to-gas technology in the renewable energy system, with
the assumption that renewable hydrogen production can secure an additional and
complementary stream of revenue.
With this background, the review of the renewable energy policy framework in
the APAC markets under the scope of the research work have shown that China
has stopped using direct financial subsidising of renewable energy production.
Feed-in tariffs have been used to support the initial growth of the renewable
energy capacity installation until 2019. A new mechanism is being designed and
will be put into use to support the 14 th Five-Year Plan.
In Australia, large-scale generation certificates (LGCs) are the main supporting
mechanism for renewable energy projects. The amount of LGCs to be produced