6.3 Barriers and opportunities to AE system development: insights from WaterWarmth pilots

The main research question that guides the analysis for this Work Package 6 Deliverable 6.3 report is: What are the barriers and opportunities that govern niche development and scaling of aqua thermal energy (AE) systems? In answering this research question, we map and analyze the enabling policy and opportunities that support AE system niche development, as well as policy that can also play a role in up-scaling and outscaling of AE systems and practices through demonstration pilots. The report also identifies barriers that (could potentially) hinder AE system niche development. The focus of the report is on the AE pilots of the Interreg North Sea WaterWarmth Project and is therefore primarily based on interviews and pilot text documents. We compiled a set of key questions that were designed to explore issues related to governance and implementation of renewable energy systems. For this report we particularly explored issues about the tensions and challenges faced by the pilots as well as enabling factors that lead to successes in the implementation and scaling of their projects. We studied nine pilot projects using an exploratory multi-case study approach. The first questions for mapping the AE projects were asked to the pilots in an on-line online survey April 2024. A workshop was then held in Caen May 2024 and in the next step semi-structured interviews were carried out with key respondents involved in the nine pilots during the Fall of 2024. The results are first analyzed case-by-case, and then a multi-case synthesis is presented followed by conclusions and policy recommendations.

Results show that all the nine pilot projects have experienced several barriers that hinder AE niche development but also referred to important enablers. Policy and regulation barriers were observed in all cases. Lack of clear policy and regulations included complex regulations and inconsistent policies for AE systems. Working closely with policy and governance stakeholders was regarded as an enabling factor in developing the projects, especially at the early phases. Having no internal vision was considered a barrier as it leads to difficulty in formulating a business plan that in turn may hinder securing funding. Lack of financial support is in turn one of the key barriers for the projects having challenges in securing bank guarantees for equipment and operation costs as well as permitting costs. The novelty of the technology in some countries also created barriers in convincing permitting authorities and finance stakeholders about project viability. Further, lack of expertise was seen as something that could be overcome through sharing experiences with similar projects in the same regions or in other countries. Exchange of lessons lead to strengthening of the project and peer-to-peer feedback. Support of fossil fuels by governments reduces subsidies for innovations such as AE systems and leads to lack of incentives for adapting AE or large-scale collective energy systems and is therefore regarded as unfair competition for renewable energy alternatives. Reluctance and lack of acceptance of AE technology due to skepticism about renewable energy technologies is also a hindrance to AE development. Finally, lack of public awareness is a related barrier which can partly be attributed to key
stakeholders withholding information that could benefit the projects through information exchange. Regarding enablers, networks and stakeholder collaboration were regarded as fundamental in the implementation and
success of projects. Good communication with these stakeholders was also seen as a key success and an enabling factor to ensure a full understanding of the project details and expectations. Through this analysis of barriers and enablers a solid basis is created for mapping and developing insights into how to resolve such hurdles, which is also a key component of the coming WP6 report D6.4., which will present a key vision, strategy and transition policy pathways. This may include developing and implementing specific policy instruments or policy mixes, or by using networking and participatory arrangements.