Renewable electricity policies in The Netherlands

Many analysts agree that the support system for renewable electricity (RE) in the Netherlands has been opaque, confusing and lacking long-term security, due to the numerous instruments and to the several changes in the details of the policies. However, most analysts fail to notice that these factors per se are hardly responsible for the uncertainty observed in the Dutch market. This paper surveys the policies introduced in the last decade or so and discusses their effectiveness in facilitating the diffusion of RE. Although the government brought about a remarkable increase in demand for RE, the creation of domestic supply has lagged behind. This relatively slack expansion can be ascribed to the uncertainty in the Dutch framework, caused by the lack of a clear relation between policies stimulating demand and supply for RE. This also hindered the development of national industry and delayed the debate on the removal of planning and administrative bottlenecks.     

Tradable certificates for renewable electricity and energy savings

Tradable green certificates (TGCs) schemes have been developed and tested in several European countries to foster market-driven penetration of renewables. These certificates guarantee that a specific volume of electricity is generated from renewable-energy source (RES). More recently certificates (tradable white certificates (TWCs)) for the electricity saved by demand-side energy-efficiency measures (EEMs) have been introduced in some European countries. Recent advances in information and communication technology have opened up new possibilities for improving energy efficiency and increasing utilization of RESs. Use of technological resources such as the Internet and smart metering can permit real-time issuing and trading of TGCs. These technologies could also permit issuing of TWC. This paper reviews current renewable TGC and TWCs schemes in Europe and describes the possibilities for combining them in an Internet-based system. In the proposed combined tradable certificate scheme, both RESs and demand-side EEMs could bid in real time through the Internet to meet a specific obligation. The energy savings from the demand-side measures would be equivalent to the same amount of green electricity production. The paper describes the needed common targets and obligations, the certificate trading rules and the possible monitoring protocol. In particular, the paper focuses on the TWCs verification issues, including the assessment of the baseline, as these poses additional problems for TWCs compared to TGCs.     

Levelized cost of electricity (LCOE) of renewable energies and required subsidies in China

The development and utilization of renewable energy (RE), a strategic choice for energy structural adjustment, is an important measure of carbon emissions reduction in China. High cost is a main restriction element for large-scale development of RE, and accurate cost estimation of renewable power generation is urgently necessary. This is the first systemic study on the levelized cost of electricity (LCOE) of RE in China. Results indicate that feed-in-tariff (FIT) of RE should be improved and dynamically adjusted based on the LCOE to provide a better support of the development of RE. The current FIT in China can only cover the LCOE of wind (onshore) and solar photovoltaic energy (PV) at a discount rate of 5%. Subsidies to renewables-based electricity generation, except biomass energy, still need to be increased at higher discount rates. Main conclusions are drawn as follows: (1) Government policy should focus on solving the financing problem of RE projects because fixed capital investment exerts considerable influence over the LCOE; and (2) the problem of high cost could be solved by providing subsidies in the short term and more importantly, by reforming electricity price in the mid-and long-term to make the RE competitive.     

Model‐based approach for planning renewable energy transition in a resource‐constrained electricity system—A case study from India

Globally, electricity systems are going through transitions. The contributions from renewable energy‐based power generation, both in installed capacity and electricity generation, are moving from marginal to the mainstream. India is not an exception; it is aggressively pursuing this transition by fixing steep targets for renewable capacity additions. While the cost of renewable energy sources is expected to fast reach grid parity, the policy interventions play a critical role in ramping up the efforts to support the proposed investments in renewable capacity and renewable electricity generation. In this respect, this research attempts to analyze the effectiveness of renewable energy policies such as Renewable Purchase Obligation (RPO) and Renewable Energy Certificate mechanisms in tapping the renewable energy potential in India. We propose a mixed‐integer linear programming model‐based approach to evaluate the effectiveness of the above interventions in the Indian context. The model is developed and validated as a low carbon electricity planning tool to optimally meet the dynamic electricity demand and RPO targets as well as to manage the unmet total electricity demand and RPO targets. The Karnataka state electricity system (a state in south India) is chosen as a case study. The results suggest that Karnataka Electricity System is moving toward a sustainable renewable energy future even without any support from nonsolar Renewable Energy Certificate policy. However, policy interventions are critical for optimally utilizing the solar generation capacity.     

Supplementing an emissions tax by a feed-in tariff for renewable electricity to address learning spillovers

In the presence of learning spillovers related to renewable energy technologies, an optimal strategy to mitigate climate change should complement an emissions tax by a subsidy for renewables. This article addresses the question how such subsidy should be designed. It is shown that the widely-used approach of a revenue-neutral fixed feed-in tariff can yield an optimal outcome under restrictive conditions only. It has to be adapted continuously as the electricity price changes. Moreover, funding the tariff by a surcharge on the electricity price has important implications for the design of the emission tax. The optimal tax rate has to be below the Pigovian level, differentiated across fossil fuels and adapted over time as the patterns of technological development change. These requirements may pose a formidable challenge for practical decision-making. However, it is important to point out that the eventual choices made with respect to the design and funding of a feed-in tariff have to be based on a careful and more comprehensive policy assessment, including, inter alia, economic effects beyond the electricity sector and existing institutional constraints.     

The 2013 reforms of the Flemish renewable electricity support: Missed opportunities

The Flemish renewable electricity support system has struggled to address a number of problematic issues in the past. These included excessive profit margins and general malfunctioning of the green certificate market, as well as a lack of qualification of various existing renewable energy technologies. The Flemish government responded to these issues by introducing major reforms in 2013, including “banding” to differentiate the support for various technologies. However, reliable methods for differentiating renewable electricity technologies and calculating support levels have not been sufficiently developed. The main objective of the 2013 reforms was to reduce support costs, but application of German feed-in tariffs on 18 reference technologies has shown that most projects in Flanders continue to receive high levels of support. The 2013 reforms did not succeed in addressing malfunctioning of the green certificate market. On the contrary, the confidence of investors in renewable electricity plants has decreased as the terms of support can be altered retroactively by adjusting remuneration levels and through political interventions. Future adaptations are likely to be made which will further decrease the overall stability and effectiveness of the system.     

Off-grid electricity generation with renewable energy technologies in India: An application of HOMER

Renewable energy-based off-grid or decentralised electricity supply has traditionally considered a single technology-based limited level of supply to meet the basic needs, without considering reliable energy provision to rural consumers. The purpose of this paper is to propose the best hybrid technology combination for electricity generation from a mix of renewable energy resources to satisfy the electrical needs in a reliable manner of an off-grid remote village, Palari in the state of Chhattisgarh, India. Four renewable resources, namely, small-scale hydropower, solar photovoltaic systems, wind turbines and bio-diesel generators are considered. The paper estimates the residential, institutional, commercial, agricultural and small-scale industrial demand in the pre-HOMER analysis. Using HOMER, the paper identifies the optimal off-grid option and compares this with conventional grid extension. The solution obtained shows that a hybrid combination of renewable energy generators at an off-grid location can be a cost-effective alternative to grid extension and it is sustainable, techno-economically viable and environmentally sound. The paper also presents a post-HOMER analysis and discusses issues that are likely to affect/influence the realisation of the optimal solution.