Drivers for renewable energy: A comparison among OECD countries

The difference in the shares of renewable energy in total primary energy supply among OECD countries is immense. We attempt to identify some key factors that may have driven this difference for renewable energy in general and bioenergy in particular. We found that besides country-specific factors, gross national product (GDP) and renewable energy and bioenergy market deployment policies have significant and positive impacts on the per capita supply of both renewable energy and bioenergy in OECD countries. R&D expenditures, energy prices, CO₂ emissions, and other energy policies are statistically insignificant in terms of their impact on renewable energy and bioenergy supply. However, this does not necessarily mean that they are not potential drivers for renewable energy and bioenergy, but rather suggests that their magnitudes have not been big enough to significantly influence energy supply based on the historical data from 1994 to 2003. These findings lead to useful policy implications for countries attempting to promote renewable energy and bioenergy development.     

Renewable energy and policy options in an integrated ASEAN electricity market: Quantitative assessments and policy implications

Energy market integration (EMI) in the ASEAN region is a promising solution to relieve the current immobilization of its renewable energy resources and would serve the fast increasing demand for electricity in the region. EMI could be further extended with coordinated policies in carbon pricing, renewable energy portfolio standards (RPS), and feed-in-tariffs (FIT) in the ASEAN countries. Using a linear dynamic programming model, this study quantitatively assesses the impacts of EMI and the above-mentioned policies on the development of renewable energy in the power generation sector of the region, and the carbon emissions reduction achievable with these policies. According to our results, EMI is expected to significantly promote the adoption of renewable energy. Along with EMI, FIT appears to be more cost-effective than RPS and is recommended for the ASEAN region, albeit political barriers for policy coordination among the countries might be a practical concern. In addition, an RPS of 30% electricity from renewable sources by 2030, which is considered politically a “low-hanging fruit”, would achieve moderate improvements in carbon emissions reductions and renewable energy development, while incurring negligible increases in the total cost of electricity.     

Implications of CO2 reduction policies for a high carbon emitting economy

This paper uses a dynamic computable general equilibrium model to compare the macroeconomic and sectoral impacts of three environmental policies in Australia — an emissions trading scheme (ETS), an ETS combined with technological innovation in the renewable energy sector and a fuel tax as an alternative to the ETS. Overall, the impacts of the ETS were not significantly adverse. Although the fuel tax had similar impacts to the ETS on key macro-variables such as real GDP, employment, household consumption, exports and imports, it was however not effective compared to the latter in reducing emissions. Neither policy led to inflation growth of more than 0.8% for any coal mining and non-mining Australian state. At the sectoral level, the GDP growth of energy-intensive industries such as coal, iron ore, steel and coal-powered electricity generators is adversely affected while electricity generators who use gas and renewable energy sources and the forestry sector gain. It was also found that a 10% technological change in the renewable energy sector over a decade did not significantly improve the outcome when coupled with the ETS. Thus the Australian government's industry assistance to invest in low pollution technologies needs to be more aggressive to meet current and future international emission abatement targets.     

Modelling the impacts of bioenergy markets on the forest industry in the southern United States

The main objective of this article was to analyse the impacts of emerging bioenergy markets on traditional forest product sector markets in the USA. An econometric model was developed to obtain the equilibrium estimates for the bioenergy and traditional forest markets. The results from the econometric model, using data-set for the state of Florida, suggested that biomass for bioenergy and pulpwood and biomass for bioenergy and sawtimber act as substitutes while sawtimber and pulpwood act as complements to each other. A price subsidy policy scenario was considered to simulate a 30% increase in the demand for biomass for bioenergy. The simulation results suggested that inclusion of this policy scenario might generate additional benefits to forest landowners and bioenergy sector, while sawmill and pulpmill sectors might face adverse financial impacts.     

Evaluation the potential economic impacts of Taiwanese biomass energy production

The Taiwanese rice paddy land set-aside program diverts a substantial land area. Given today’s high energy prices and interests in energy security, that set-aside area could be converted to produce bioenergy feedstocks. This study evaluates the economic and environmental impacts of such a policy change using a Taiwanese agricultural sector model. The results show that such a strategy provides increased farm revenue, increased rural employment, increased energy sufficiency and reduced greenhouse gas emissions but also increased government expenditures. These outcomes indicate that the agricultural sector could play a positive role by producing renewable energy.     

Long-term strategies for an efficient use of domestic biomass resources in Austria

In this study, long-term perspectives for the Austrian bioenergy sector are analyzed. The focus is on the achievable contribution of biomass to the heat, electricity and transport fuel supply as well as to the total primary energy supply under different framework conditions. Also, the achievable GHG mitigation and the costs related to GHG reduction are assessed.The analyses are based on scenarios which are compiled with the simulation model Green-X_Bio-Austria. Within this model a myopic optimization of the bioenergy sector with regard to energy generation costs up to 2050 in eleven scenarios is carried out. The scenarios differ in the following aspects: the projections for fuel price development and for the energy demand as well as bioenergy policy measures assumed.The major conclusions are: With respect to greenhouse gas emission reduction and economic efficiency, the simulations make clear that bioenergy policies should focus on the promotion of heat an – to some extent – combined heat and power generation. A focus on liquid biofuels for transport has adverse effects on the development of the bioenergy sector due to increased competition for limited biomass resources. For significantly increasing the share of biomass in the Austrian energy supply, it is crucial to both subsidize bioenergy and reduce the overall energy consumption. In the case of highly increasing fossil fuel prices, the economics of bioenergy systems will improve significantly.     

Renewable electricity in Sweden: an analysis of policy and regulations

This study aims to analyse the developments in renewable energy policy making in Sweden. It assesses the energy policy context, changes in the choice of policy instruments, and provides explanations behind policy successes and failures. Swedish renewable energy policy has been developing in a context of uncertainty around nuclear issues. While there has been made a political decision to replace nuclear power with renewables, there is a lack of consensus about the pace of phasing out nuclear power due to perceived negative impacts on industrial competitiveness. Such uncertainty had an effect in the formulation of renewable energy policy. Biomass and wind power are the main options for renewable electricity production. Throughout 1990s, the combined effect of different policy instruments has stimulated the growth of these two renewable sources. Yet, both biomass and wind power are still a minor contributor in the total electricity generation. Lack of strong government commitment due to uncertainty around nuclear issues is a crucial factor. Short-term subsidies have been preferred rather than open-ended subsidy mechanisms, causing intervals without subsidies and interruption to development. Other factors are such as lack of incentives from the major electricity companies and administrative obstacles. The taxation system has been successful in fostering an expansion of biomass for heating but hindered a similar development in the electricity sector. The quota system adopted in 2003 is expected to create high demand on biomass but does not favour wind power. The renewable energy aims are unlikely to be changed. Yet, the future development of renewable energy policies especially for high-cost technologies will again depend strongly on nuclear policies, which are still unstable and might affect the pace of renewable energy development.     

The Japanese energy sector: Current situation,and future paths

As the world’s third leading economy and a major importer of fuels, the choice of future energy paths and policies that Japan makes in the next few years will have a significant influence on the energy security of the world as a whole, and of the Northeast Asia region in particular. In this article we describe the current status of and recent trends in the Japanese energy sector, including energy demand and supply by fuel and by sector. We then discuss the current energy policy situation in Japan, focusing on policies related to climate change targets, renewable energy development and deployment, liberalization of energy markets, and the evolution of the Japanese nuclear power sector. The final section of the article presents the structure of the Japan LEAP (long-range energy alternatives planning software system) dataset, describes several alternative energy paths for Japan – with an emphasis on alternative paths for nuclear power development and GHG emission abatement – and touches upon key current issues of energy policy facing Japan, as reflected in the modeling inputs and results.     

Energy policy and the role of bioenergy in Poland

Poland, as many other countries, has ambitions to increase the use of renewable energy sources. In this paper, we review the current status of bioenergy in Poland and make a critical assessment of the prospects for increasing the share of bioenergy in energy supply, including policy implications. Bioenergy use was about 4% (165 PJ) of primary energy use (3900 PJ) and 95% of renewable energy use (174 PJ) in 2003, mainly as firewood in the domestic sector. Targets have been set to increase the contribution of renewable energy to 7.5% in 2010, in accordance with the EU accession treaty, and to 14% in 2020. Bioenergy is expected to be the main contributor to reaching those targets. From a resource perspective, the use of bioenergy could at least double in the near term if straw, forestry residues, wood-waste, energy crops, biogas, and used wood were used for energy purposes. The long-term potential, assuming short rotation forestry on potentially available agricultural land is about one-third, or 1400 PJ, of current total primary energy use. However, in the near term, Poland is lacking fundamental driving forces for increasing the use of bioenergy (e.g., for meeting demand increases, improving supply security, or further reducing sulphur or greenhouse gas emissions). There is yet no coherent policy or strategy for supporting bioenergy. Co-firing with coal in large plants is an interesting option for creating demand and facilitating the development of a market for bioenergy. The renewable electricity quota obligation is likely to promote such co-firing but promising applications of bioenergy are also found in small- and medium-scale applications for heat production. Carbon taxes and, or, other financial support schemes targeted also at the heating sector are necessary in the near term in order to reach the 7.5% target. In addition, there is a need to support the development of supply infrastructure, change certain practices in forestry, coordinate RD&D efforts, and support general capacity building. The greatest challenge for the longer term lies in reforming and restructuring the agricultural sector.     

Macroanalysis of the economic and environmental impacts of a 2005-2025 European Union bioenergy policy using the GTAP model and life cycle assessment

This paper describes a new tool to assess the medium- and long-term economic and environmental impacts of large-scale policies. The approach - macro life cycle assessment (M-LCA) - is based on life cycle assessment methodology and includes additional elements to model economic externalities and the temporal evolution of background parameters. The general equilibrium model GTAP was therefore used to simulate the economic consequences of policies in a dynamic framework representing the temporal evolution of macroeconomic and technological parameters. Environmental impacts, expressed via four indicators (human health, ecosystems, global warming and natural resources), are computed according to policy life cycle and its indirect economic consequences. In order to illustrate the approach, two 2005-2025 European Union (EU) energy policies were compared using M-LCA. The first policy, the bioenergy policy, aims to significantly increase energy generation from biomass and reduce EU energy demand for coal. The second policy, the baseline policy, is a business as usual policy where year 2000 energy policies are extended to 2025. Results show that, compared to the baseline policy, the bioenergy policy generates fewer impacts on three of the four environmental indicators (human health, global warming and natural resources) at the world and EU scales, though the results may differ significantly at a regional level. The results also highlight the key contribution of economic growth to the total environmental impacts computed for the 2005-2025 period. A comparison of the results with a more conventional consequential LCA approach illustrates the benefits of M-LCA when modeling the indirect environmental impacts of large-scale policies. The sensitivity and uncertainty analysis indicates that the method is quite robust. However, its robustness must still be evaluated based on the sensitivity and uncertainty of additional parameters, including the evolution of economic growth.     

Modeling Lebanon’s electricity sector: Alternative scenarios and their implications

This paper is concerned with modeling possible future paths for Lebanon’s electricity future and evaluating them. The baseline scenario (BS) reflects the business-as-usual state of affairs and thus describes the most likely evolution of the power sector in the absence of any climate change-related or other policies. Two alternative scenarios are examined in contrast to the BS; the renewable energy scenario (RES) and the natural gas scenario (NGS). Using the Long range Energy Alternatives Planning System (LEAP) software we conduct a full-fledged scenario analysis and examine the technical, economic, and environmental implications of all scenarios.From an economic standpoint as well as from an environmental perspective both alternative scenarios are superior to the baseline. Hence, the results of the simulation show that the alternative scenarios are more environmentally and economically attractive than the BS. They would help Lebanon meet its social, environmental, and economic development goals, while at the same time providing other unquantifiable benefits that are discussed further in the paper. Anticipated barriers to the shift in energy mix from conventional sources to renewable energy sources are also presented and discussed     

Interactions between renewable energy policy and renewable energy industrial policy: A critical analysis of China's policy approach to renewable energies

This paper analyzes China's policy approach to renewable energies and assesses how effectively China has met the ideal of appropriate interactions between renewable energy policy and renewable energy industrial policy. First we briefly discuss the interactions between these two policies. Then we outline China's key renewable energy and renewable industrial policies and find that China's government has well recognized the need for this policy interaction. After that, we study the achievements and problems in China's wind and solar PV sector during 2005–2012 and argue that China's policy approach to renewable energies has placed priority first on developing a renewable energy manufacturing industry and only second on renewable energy itself, and it has not effectively met the ideal of appropriate interactions between renewable energy policy and renewable energy industrial policy. Lastly, we make an in-depth analysis of the three ideas underlying this policy approach, that is, the green development idea, the low-carbon leadership idea and indigenous innovation idea. We conclude that Chinas' policy approach to renewable energies needs to enhance the interactions between renewable energy policy and renewable energy industrial policy. The paper contributes to a deeper understanding of China's policy strategy toward renewable energies.     

Regulation for renewable energy development: Lessons from Sri Lanka experience

The paper examines the key features of the renewable energy development environment in Sri Lanka which led to sector's rapid expansion. The recent development framework of the renewable energy sector was based on the importance of using indigenous resources, recognizing the positive environmental impacts and the avoidance of high cost alternative thermal generation. This framework also recognized the pioneering effort of the developers in site identification by giving rights to develop on a first-come first-served basis. The policy framework was later extended with a renewable energy portfolio standard to achieve 10% of power generation through renewable energy. The standard power purchase arrangements reduced the transaction costs. The feeding tariffs originally based on avoided costs later shifted to cost based, technology specific tariffs encouraging diversification of the renewable energy portfolio. The introduction of net-metering for renewable energy based distributed generation and the limited interventions in the form of green-tariffs also assisted the renewable energy development. The paper concludes that the policy and regulatory frameworks and different approaches to implementing them have been mostly successful experiences in Sri Lanka and they would provide useful lessons for similar countries when formulating and implementing related polices, regulations and legal frameworks.     

Dynamic analysis of policy drivers for bioenergy commodity markets

Biomass is increasingly being considered as a feedstock to provide a clean and renewable source of energy in the form of both liquid fuels and electric power. In the United States, the biofuels and biopower industries are regulated by different policies and have different drivers, which impact the maximum price the industries are willing to pay for biomass. This article describes a dynamic computer simulation model that analyzes future behavior of bioenergy feedstock markets given policy and technical options. The model simulates the long-term dynamics of these markets by treating advanced biomass feedstocks as a commodity and projecting the total demand of each industry, as well as the market price over time. The model is used for an analysis of the United States bioenergy feedstock market that projects supply, demand, and market price given three independent buyers: domestic biopower, domestic biofuels, and foreign exports. With base-case assumptions, the biofuels industry is able to dominate the market and meet the federal Renewable Fuel Standard (RFS) targets for advanced biofuels. Further analyses suggest that United States bioenergy studies should include estimates of export demand in their projections, and that GHG-limiting policy would partially shield both industries from export dominance.     

Financing investments in renewable energy : the impacts of policy design

The costs of electric power projects utilizing renewable energy technologies (RETs) are highly sensitive to financing terms. Consequently, as the electricity industry is restructured and new renewables policies are created, it is important for policymakers to consider the impacts of renewables policy design on RET financing. This paper reviews the power plant financing process for renewable energy projects, estimates the impact of financing terms on levelized energy costs, and provides insights to policymakers on the important nexus between renewables policy design and financing. We review five case studies of renewable energy policies, and find that one of the key reasons that RET policies are not more effective is that project development and financing processes are frequently ignored or misunderstood when designing and implementing renewable energy policies. The case studies specifically show that policies that do not provide long-term stability or that have negative secondary impacts on investment decisions will increase financing costs, sometimes dramatically reducing the effectiveness of the program. Within U.S. electricity restructuring proceedings, new renewable energy policies are being created, and restructuring itself is changing the way RETs are financed. As these new policies are created and implemented, it is essential that policymakers acknowledge the financing difficulties faced by renewables developers and pay special attention to the impacts of renewables policy design on financing. As shown in this paper, a renewables policy that is carefully designed can reduce renewable energy costs dramatically by providing revenue certainty that will, in turn, reduce financing risk premiums.     

Bioenergy production and use in Italy: Recent developments,perspectives and potential

The renewable energy policies in the European Union have already led to a significant progress; the energy mix should further change until 2020. Italy is planning to meet the 2020 targets on renewable energies also thanks to a relevant paradigm shift in renewable energy exploitation. Indeed, in 2005 the sector where RES were more present in Italy was electricity production with 203 PJ of renewable origin, while in the heating and cooling sector renewable energy penetration was limited to 80 PJ. On the contrary, in 2020 heating and cooling is expected to absorb the highest amount of renewable energy (438 PJ) with renewable electricity expected to count for 356 PJ. Bioenergy, a renewable energy resource particularly suitable for electricity, heating & cooling and in transport, will be at the core of this sectorial shift in renewable energy production and use and is expected to become the dominant form of RES before 2020. The paper makes a detailed analysis of the recent developments and expected evolution of the Italian energy mix in next decade. It provides an overview of the Italian bioenergy sector in comparison with other Renewable Energy Sources (RES) and with leading countries in the European Union with a special focus on the production, exploitation and potentials on the basis of the analysis of the Italian National Renewable Action Plan.     

Do state renewable portfolio standards promote in-state renewable generation?

Several US states have passed renewable portfolio standard (RPS) policies in order to encourage investment in renewable energy technologies. Existing research on their effectiveness has either employed a cross-sectional approach or has ignored heterogeneity among RPS policies. In this paper, we introduce a new measure for the stringency of an RPS that explicitly accounts for some RPS design features that may have a significant impact on the strength of an RPS. We also investigate the impacts of renewable portfolio standards on in-state renewable electricity development using panel data and our new measure of RPS stringency, and compare the results with those when alternative measures are used. Using our new measure, the results suggest that RPS policies have had a significant and positive effect on in-state renewable energy development, a finding which is masked when design differences among RPS policies are ignored. We also find that another important design feature – allowing “free trade” of REC’s – can significantly weaken the impact of an RPS. These results should prove instructive to policy makers, whether considering the development of a federal-level RPS or the development or redesign of a state-level RPS.     

Green electricity policies in the Netherlands: an analysis of policy decisions

Over the last decades, fundamental changes can be observed in both market conditions and the national policy framework for green electricity in the Netherlands. The Dutch Government has regularly intervened in markets, demonstrating fundamental shifts in policy and approach. This study aims to analyse the developments in renewable energy policy making in the Netherlands. It assesses changes in the choice of policy instruments and target groups, the role of stakeholders, and offers explanations behind policy successes and failures. Dutch green electricity policy over the last decade can be characterised roughly by three phases: in the early 1990s, the government negotiated voluntary agreements with the energy distribution sector on targets for green electricity sales, which were never met. In the second half of the 1990s, a regulatory energy tax was introduced, from which customers of green electricity were exempt. This led to a substantial increase in demand, which was largely met by green electricity imports, and did not lead to additional domestic renewable energy capacity. Finally, a change in policy has taken place recently (2003) shifting the focus from promotion of demand to the promotion of supply through a system of regulated feed-in tariffs. Despite the renewable energy policies, growth of the renewable energy market in the Netherlands has been small and targets have not been fully met. The Dutch government has not yet succeeded in substantially reducing market uncertainties and in building confidence among market parties, because the policies have not been stable and policy objectives have frequently been partly ambiguous. In addition, the influence of stakeholders in renewable energy policy making has been small which has the early acceptance and implementation of alternative policies.     

Adoption of renewable energy technologies in oil-rich countries: Explaining policy variation in the Gulf Cooperation Council states

While the member states of the Gulf Cooperation Council have economically and politically been dominated by the exploitation of fossil fuels, recent years have seen an increasing adoption of renewable energy technologies, the reasons of which are not yet sufficiently understood. This paper argues that the recent adoption of renewable energy technologies in the Gulf and its striking variation can be explained by theories of policy transfer. In addition, we find some support for the alternative hypothesis of endogenous policy development regarding political leadership. Yet there is no support for the alternative hypothesis of a strong direct influence of the international climate regime. Furthermore, the policy transfer hypothesis and political leadership stand as coexisting influences on renewable energy adoption, rather than competing ones. Based on an extensive study of primary and secondary sources, local reports and country analyses of international organizations, and personal interviews with key experts, this paper lays out in detail how transfers of renewable energy policies take place in the Gulf; their drivers; and their impacts. We also discuss the factors that lead countries to lag behind, which can be helpful for prospective research on a more extensive utilization of renewable energy in the region and beyond.