Fossil Fuel and Biofuel Boilers in Ukraine: Trends of Changes in Levelized Cost of Heat

Abstract

An increase in the share of renewables in heat supply systems is a promising direction to reach sustainable development goals and decarbonization. Decision makers should consider various factors, including energy market prices, the availability of biofuels, boiler and auxiliary equipment costs, logistic costs, and the taxation system. In the European Union, the energy crisis causes a rapid increase in fossil fuel prices. Moreover, the use of fossil fuels results in greenhouse gas emissions, which threatens the achievement of sustainable development goals. We studied the influence of the delivery cost and the value of environmental tax rates on the levelized cost of heat. Low-capacity boilers (up to 1 MW) and different fossil and renewable fuels were analyzed. An analysis was carried out on the example of Ukraine. The European trends were factored in. The obtained results showed that biofuel boilers had lower levelized costs of heat than fossil fuel boilers. Delivery costs and environmental taxes have a significant impact on heat energy costs.