Arturo Lorenzoni

How to promote renewable energy systems successfully and effectively

This paper summarises the major recommendations and conclusions of the third Forum of the European Network on Energy Research (ENER) which took place in June 2002 in Budapest. The major perceptions of this meeting as well as the most important conclusions and recommendations for energy policy makers are compiled in this summary. The statements compiled in the following represent a consensus within the ENER Network while on some questions differences in perception and analysis persisted.

The Italian Green Certificates market between uncertainty and opportunities

With the overall reform of the electricity industry in 1999, Italy has started the implementation of a new support mechanism for renewable energy sources that is based upon a Green Certificates market. Such certificates will be delivered for 8 years for electricity production to renewable power plants commissioned after 31 March 1999. All the electricity production based on non-renewable energy sources and import have an obligation to cover 2% of its total with Green Certificates. This support mechanism is open to foreign production, but only from countries with reciprocal opportunities for Italian production. The new market has formally started on January 2002, even if some important rules have not yet been defined. This paper describes the new support mechanism, investigates the critical aspects for its activation and shows some possible trends for the quantity of the supplied certificates and their prices in the coming years.

Promoting electricity from renewable energy sources -- lessons learned from the EU, U.S. and Japan

Promoting electricity from renewable energy sources – lessons learned from the EU, U.S. and Japan Reinhard Haas 1 , Niels I. Meyer 2 , Anne Held 3 , Dominique Finon 4 , Arturo Lorenzoni 5 , Ryan Wiser 6 , Ken-ichiro Nishio 7 Energy Economics Group, Vienna University of Technology, Gusshausstrasse 27-29/373-2, A-1040 Vienna, AUSTRIA, Tel. ++43-1-58801-37352, Fax. ++43-1-58801-37397 E-mail: Reinhard.Haas@tuwien.ac.at BYG, Technical University of Denmark, Brovej building 118 DK-2800 Kgs. Lyngby, DENMARK Tel.: ++45 45 25 17 00 E-mail: nim@byg.dtu.dk Fraunhofer Institute for Systems and Innovation Research, Breslauer Str. 48; 76139 Karlsruhe, GERMANY Tel. ++49-721-6809-358, Fax ++49-689-152, E-mail: Anne.Held@isi.fhg.de CIRED (Centre International de Recherche pour l’Environnement et le Developpement), 32 avenue de la Belle Gabrielle, 94736 Nogent sur Marne, FRANCE Affiliation: Ecole des Hautes Etudes en Sciences sociales et Centre National de la Recherche Scientifique, Tel. ++33 1 4394 7384; Fax: ++33 1 4394 7370; E-mail: finon@centre-cired.fr IEFE, Bocconi University, Viale Filippetti 9, 20122 Milan, ITALY Tel: ++39-02-5836 3820, Fax ++39-02-5836-3890 E-mail: arturo.lorenzoni@unibocconi.it Lawrence Berkeley National Lab 1 Cyclotron Road, MS 90-4000, Berkeley, CA 94720 Tel: ++510-486-5474, Fax: ++510-486-6996 E-Mail: rhwiser@lbl.gov Central Research Institute of Electric Power Industry, 2-11-1 Iwado Kita, Komae-shi, Tokyo 201-8511, Japan Tel: ++81 3 3480 2111, Fax: ++81 3 3480 3492 E-Mail: nishio@criepi.denken.or.jp

Electricity auctions: A European view on markets and practices

The present market structure of most of European countries offers several opportunities to market agents (producers, consumers, traders, etc.). In this paper the main European electricity markets are analyzed and compared from the point of view of bidding mechanism, price formation and timing. The focus is on the Day Ahead Market (DAM), the IntraDay Market (IDM), the Balance Market (BM). A deep knowledge of the electricity markets rules may be fundamental to plan a profitable operation of a single plant or of a portfolio of plants. This paper analyzes the projects promoted by European Agencies, i.e. ACER and ENTSOE, aimed at increasing the level of harmonization in EU electricity markets. As a matter of fact different options chosen in different countries may complicate the international contracts. Instead, the standardization of contracts may help create a common EU market for electricity. The paper gives a cross-country view of electricity auctions rules in the EU and compare them to highlight the most attractive solutions for auctioning contracts.

Renewable electricity costs in Italy: an estimation of the cost of operating in an uncertain world

The promotion of Renewable Energy Sources (RES) is a priority of the agenda of governments in most European countries. The target of renewable energy for Italy, calculated as a share of renewable generation to gross final energy consumption, is set at 17% for 2020 (from 5.2% in 2005). With particular reference to renewable electricity (RES-e) in Italy, its development is often burdened by costs not strictly related to the plant construction and operation, but rather to the risks associated with its development, which lead to indirect costs. This paper therefore focuses on the costs related to the risks perceived by investors in the sector in Italy and the link between risk and success of the incentive system, estimating the additional cost of capital which investors pay when operating in a risky environment. Some policy indications are given to reduce the non-technology-related costs for a faster and more efficient growth of the sector.

ICT Tools to Foster Small-and-Medium-Enterprise Collaboration in the Energy-Retrofitting Sector

Since decades, the European Commission has turned the spotlight on energy efficiency in the building sector. While the technological domain has been investigated achieving interesting results, on the organizational and financial sides there is still a lot of room for new advancements. Especially in certain countries, the construction sector has to face many challenges. The highly fragmented markets, the cumbersome organizational models adopted by big enterprises on the one hand and the lack of knowledge and skills of Small and Medium Enterprises (SMEs) on the other hand, the perpetual variability of supporting schemes, and the plethora of regulation frameworks represent huge barriers in leveraging new ways to collaborate. Focused on SMEs, the NewBEE EU-project sheds light on innovative methodologies to set-up new collaborative business models in the energy-retrofitting sector that may accelerate the transition towards more sustainable buildings and cities. SMEs currently face two main problems: (a) the availability of easy-to-access knowledge and (b) the ineffectiveness of existing organizational and business models. To tackle these issues, NewBEE provides a comprehensive ICT platform to foster innovative methodologies facilitating the collaboration of actors in the energy-retrofitting chain, enabling the adoption of the business models. The paper briefly introduces the NewBEE-project approach followed by the description of the core modules of the tools: a. Prompt and accessible information about emerging technologies and business model are collected in the information repository. b. The pre-assessment tool enables buildings’ owners to roughly estimate the energy-saving potentials of common renovation processes, receiving in return an order of magnitude of the investment’s costs. c. The virtual breeding environment is the main module of the tool: it is where SMEs collaborate, putting in place virtual collaborative networks to make a proposal. d. The financial simulator enables building owners, investors, and SMEs to understand the effects of different financing schemes and the implications of energy-cost variations on the profitability of the investment. e. The energy assessment module provides a professional tool to simulate the building performance before and after the refurbishment process. The application of the NewBEE methodology has been tested in four real business cases: Spain, Slovenia, Germany and Finland. Recommendations raised during the demonstration phase are reported. In a mature market like the building one, the NewBEE project shows how innovative ICT technologies may help SMEs to fine-tune their business model, creating opportunities to collaborate both in a virtual and a real way.

Transmission and distribution networks regulation through dedicated cableway plants

The interest on storage systems connected to transmission and distribution grids to supply ancillary services is growing fast. The paper investigates the opportunities achievable through a dedicated Cableway Storage System in supplying ancillary services to the grid, compared with traditional storage plants based on pumped hydro or modular construction batteries approaches. The basic idea, its advantages and a realistic case study are presented to qualitative define the proposed technology, its requirements and a first preliminary design.

The Support Schemes for the Growth of Renewable Energy

The paper deals with the efficiency and effectiveness of renewable energy support in Europe in order to achieve the target of 20% of final consumption in 2020. The reconciliation of subsidisation of carbon free energy sources and competition in the energy sector creates serious problems to the coherence of the European energy policy. At the same time, it is important to give value to the taxpayer or consumer money used to promote renewable energy, maximising the result achieved in terms of greenhouse gas emission reduction, technological development and competitiveness of the European industry. The paper gives an overview of the support schemes adopted in the different European countries, evaluating their performance according to the policy targets and investigates the possibility to start a trading of the national quotas among EU member States, aware that the efficient achievement of the long term target requires a form of trading of quotas. It is focused mainly on renewable electricity (RES-E), even of it acknowledges the importance of renewable heat (RES-H) to achieve the long term target of 20% of final consumption from renewables.

A comprehensive ex-post assessment of the Italian RES policy: deployment, jobs, value added and import leakages

A massive deployment of renewable electricity generation took place in Italy in less than eight years. A generous feed-in tariff, coupled with favourable institutional conditions, allowed the installation of more than 28 GW of PV, wind and other RES technologies. By 2014, Italy has already attained its 2020 goals on RES production. Besides, environmental objectives and compliance with EU targets, the policy was aimed at promoting green jobs and industrial production of RES technologies. Exante economic analyses advocated considerable economic and industrial spill-overs from the introduction of RES support policies. Despite official rhetoric and ex-ante studies about jobs and economic growth associated to RES adoption, at scholarly level there is no consensus on the actual effects and implications of these policies on National economies. This paper provides a first comprehensive ex-post analysis of the Italian case, filling an important gap. Our analysis is carried out with the development of a specific input-output model, with refined technological vectors and with the internalization of trade coefficients. We show that the effects have been unequivocally lower than expected; that most of the jobs created belonged to the service sector and not to the industrial sector and that the value added was much lower than expected due to significant export leakages.

Local Climate Action Plans - Tools to Address Energy Consumption and Improve Environmental Performance of Local Communities

Achieving the ambitious 2020 targets in greenhouse gases’ emissions reduction is a challenging task for industrialized economies and requires a coordinated action. A pivotal role is given to local administrations, that are called to drive the conversion of the energy sector towards low carbon technologies. The paper proposes a decision support tool based on local climate action plans for a holistic approach to the emission reduction in different energy intensive sectors (transport, constructions, electricity supply, energy generation). The tool is aimed at identifying suitable measures for the design and control of GHG actions. A set of indicators to evaluate the performance of local policies, linked to GIS based maps for an effective impact on territories is proposed. A smart use of existing information can help to optimize the energy supply at local level, to follow the improvement of performances and to weigh future scenarios.