Claus Huber

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.

Promotion of renewable energy sources: effects on innovation

To meet existing and future targets for renewable energy sources, national governments, EU policymakers and electricity market stakeholders have a pronounced interest in designing optimal instruments for the promotion of Renewable Energy Sources in the Electricity sector (RES-E). This paper characterises the present status of the RES-E markets in Europe, the portfolio of promotional instruments currently applied across the EU and the progress the Member States have made in reaching the targets. In particular, existing support schemes are analysed in terms of their effectiveness in achieving additional RES-E generation and in terms of their ability to meet the targets at minimum costs (efficiency). Our empirical findings show that instruments which are effective also tend to be efficient. Further, the short- and long-term diffusion of specific RES technologies depends on the support schemes in place. Finally, the paper discusses the compatibility of different instruments to support RES-E in the context of more general energy policy objectives.

Economics of large-scale intermittent RES-E integration into the European grids: analyses based on the simulation software GreenNet

Market integration of Renewable Energy Technologies for Electricity (RES-E) generation is one of the core topics in the energy policy agenda of the European Commission (EC). However, legislation in this context still faces a variety of lacks (e.g. ignoring unbundling principles) in almost all countries of the European Union (EU). The recently finished EC-Project GreenNet addresses these existing inadequacies and models dynamic time paths up to the year 2020 for a variety of least-cost RES-E grid integration cases in the EU for different degrees of unbundling and different cost allocation schemes. The major results derived from GreenNet clearly demonstrate that the degree of unbundling and the implemented allocation principles of different disaggregated cost elements significantly influence RES-E deployment both on national as well as on EU level up to the year 2020. The major conclusion is that serious unbundling and correct allocation of RES-E related grid integration costs only guarantee the fulfilment of the ambitious EC goals with minimal costs for society.

Prospects of Renewable Energy Development in the European Electricity Sector: Results of the Simulation Tool Green-X

This paper presents the results of selected simulation runs based on the computer model Green-X. The results suggest that the most significant efficiency gains -measured in terms of premiums to support renewables - can be achieved by optimising national RESE support measures - between two thirds and three quarters of the overall cost reduction potential can be attributed to the optimisation of national support schemes. Further efficiency improvements at a considerably lower level (at about one quarter to one third of the overall cost reduction potential) are possible through an EU-wide harmonisation of support schemes provided that a common European power market exists. Regional coordination represents an essential step towards EU wide harmonisation; half the additional cost benefits of an EU-wide harmonisation can already be tapped through regional coordination compared to the nationally optimised schemes. If a harmonised policy is pursued, technology-specific support is superior to non-specific support with respect to cost minimisation.

Experience Curves vs Dynamic Cost-Resource Curves and their Impact on the Assessment of the Future Development of Renewables

The recent development of several Renewable Energy Sources for electricity generation (RES-E) is characterised by decreasing investment costs and limited resources. In this paper we analyse the ambiguous role of these two effects and the consequences for deriving effective promotion policies for RES-E. Dynamic costresource curves will be derived which combine both approaches. They represent a tool to assist policy makers in deriving efficient and effective promotion instruments. By its application results can be gained with respect to both costs (i.e. efficiency) and penetration (i.e. effectiveness). Due to the combined consideration of resource restrictions and dynamic cost developments, dynamic cost-resource curves assist in deriving the optimal time-path for policy instruments.

Organising a joint green European electricity market: the model ElGreen

In this paper, the features and the most important results of the computer model ElGreen will be presented. With the help of the computer model it is possible to simulate various promotion strategies for different technologies in all EU countries. Policies that can be selected are the most important price driven strategies (feed-in tariffs, investment subsidies, tax incentives), capacity driven instruments (tradable green certificates, national or international wide trading system) and a voluntary green pricing system.

Financial incentives to promote renewable energy systems in European electricity markets: a survey

Renewable energy systems may contribute to sustainable development. Therefore, one of the challenges for energy policy is to ensure that renewable energy options have a fair opportunity to compete with other supply resources. This paper presents a survey on promotion mechanisms to enhance the market penetration of renewable energies in European electricity markets. Strategies include rebates and tax incentives, regulated rates, system benefit charges, bidding-oriented mechanisms and various types of green pricing programs. The paper concludes that efficient promotion mechanisms should focus on incentives per kWh generated rather than on rebates on the investment in generating capacity (kW), and that there is no one single program type which has the best application to the promotion of all renewable technologies. For example, enhanced buy-back rates work as a dissemination strategy for wind energy but they do not work for photovoltaics.

Lessons Learned from Recent Promotion Strategies for Electricity from Renewables

To increase the share of renewable energy for electricity generation is a major target in many countries world-wide. Yet, to bring about a significant breakthrough a series of barriers has to be overcome and proper policy strategies have to be launched. In recent years, a wide range of such strategies has been implemented in different EU-countries. The major ones were investment subsidies, feed-in tariffs (FIT), tax incentives, quota-based tradable green certificates (TGC) and tendering systems. Which of the different instruments is most effective for increasing the dissemination of renewables still remains a controversial topic. The major objective of this paper is to evaluate the performance of various strategies in EU member states in recent years and to present the lessons learned.

Internationale Förderungsstrategien für erneuerbare Energieträger zur Stromerzeugung

ZusammenfassungDer vorliegende Aufsatz beschäftigt sich mit der Effizienz von internationalen Förderstrategien, um die Marktdurchdringung erneuerbarer Energieträger zur Stromerzeugung zu erhöhen. Es werden finanzielle Zuschussprogramme, gesetzlich festgelegte Erzeugungsanteile und “grüne” Tarife untersucht. Als wichtigste Schlussfolgerung kann festgestellt werden, dass sich Förderungen auf die tatsächlich produzierte Strommenge konzentrieren sollten — vor allem, um den nachhaltig effizienten Betrieb der Anlage gewährleisten zu können-und, dass bei technologiespezifischer Orientierung zu beachten ist, dass unterschiedliche Förderprogramme die höchste Effizienz aufweisen können.AbstractThe paper analyzes the efficiency of international promotion strategies to enhance the market penetration of renewable energy systems in electricity markets. Financial rebates and regulated rates, portfolio standards as well as various types of “green” tariff models are investigated. The most important conclusions are that (i) programmes should focus on incentives per kWh and that (ii) no single programme type applies best to the promotion of renewable energy systems.

Supporting Renewable Electricity in Europe —an Assessment of Future Policy Options

Energy policy is the main driver for the enhanced deployment of electricity from renewable energy sources (RES-E) as observed in several countries worldwide. It is the core objective of this paper to provide a concise summary of recommendations on how to derive effective and cost-efficient support schemes for RES-E which are necessary to steer our energy system in the direction of sustainability and supply security.