The importance of comprehensiveness in renewable electricity and energy-efficiency policy

Based on extensive research interviews and supplemented with a review of the academic literature, this article assesses the best way to promote renewable energy and energy efficiency. It begins by briefly laying out why government intervention is needed, and then details the four most favored policy mechanisms identified by participants: eliminating subsidies for conventional and mature electricity technologies, pricing electricity accurately, passing a national feed-in tariff, and implementing a nationwide systems benefit fund to raise public awareness, protect lower income households, and administer demand side management programs. Drawing mostly from case studies in the United States, the article also discusses why these policy mechanisms must be implemented comprehensively, not individually, if the barriers to renewables and energy efficiency are to be overcome.     

Rejecting renewables: The socio-technical impediments to renewable electricity in the United States

If renewable power systems deliver such impressive benefits, why do they still provide only 3 percent of national electricity generation in the United States? As an answer, this article demonstrates that the impediments to renewable power are socio-technical, a term that encompasses the technological, social, political, regulatory, and cultural aspects of electricity supply and use. Extensive interviews of public utility commissioners, utility managers, system operators, manufacturers, researchers, business owners, and ordinary consumers reveal that it is these socio-technical barriers that often explain why wind, solar, biomass, geothermal, and hydroelectric power sources are not embraced. Utility operators reject renewable resources because they are trained to think only in terms of big, conventional power plants. Consumers practically ignore renewable power systems because they are not given accurate price signals about electricity consumption. Intentional market distortions (such as subsidies), and unintentional market distortions (such as split incentives) prevent consumers from becoming fully invested in their electricity choices. As a result, newer and cleaner technologies that may offer social and environmental benefits but are not consistent with the dominant paradigm of the electricity industry continue to face comparative rejection.     

Renewable energy policy and electricity market reforms in China

The article examines the potential effectiveness of the renewable energy policy in China and its regulatory Law framework. It frames the option of renewable energy technology within the background of the long-lasting electricity problems that China has faced including serious supply shortages, reliance on coal, and severe environmental contamination. Its dual administrative and ownership system based on state and privately owned industry is discussed together with the market reform measures adopted in the sector. Current renewable energy policy is analysed, and the scope of the 2005 Renewable Energy Promotion Law is investigated. This is conducted within the context of the electricity sector reform that China adopted, and its effects upon the prospects of encouraging as well as expanding the development of renewable energy. This study draws upon primary information collected from interviews with stakeholders on the policy adequacy, and identifies three main types of shortcomings that have interfered with a more successful expansion of renewable energy in China.     

Green electricity market development: Lessons from Europe and the US

This study compares the development and implementation of green electricity policies in Germany, the Netherlands, Sweden, and the United States, a set of countries applying a range of policy instruments to encourage electricity from renewable energy sources. A general tendency is identified that policies shift emphasis from R&D stimulation towards dissemination and market application of renewable energy technologies. We argue that in light of the long term nature of policy goals on energy security, mitigation of climate change, and environmental protection, the applied range of policy instruments may be lacking in providing incentives for the long term development of new technologies. Clarifying policy objectives would allow careful selection of policy instruments, including support for R&D. Improved capacity building for policy implementation is also important.     

Use of economic instruments in the German renewable electricity policy

This article surveys the Economic Instruments adopted in Germany since the start of the previous decade and analyse the factors determining their effectiveness. It is found out that their effect has always diminished in correspondence of increased uncertainty on the future of the system. In particular, while in two of these instances uncertainty was mainly due to national factors, in the other the debate on the European Renewable Directive played a very important role. Recent changes in the production incentives have introduced a process simulating the effect of competition among renewable generators. It is pointed out that the biennial revision of the rates can increase the uncertainty intrinsic in the policy. On the other hand this process also provides a forum for the debate on the future of the renewable sector. One can notice that currently Germany, the biggest renewable market in Europe, is granting one of the lowest production incentives. This is rather curious as Germany never relied on market competition in order to increase the renewable electricity production.     

Low-carbon off-grid electrification for rural areas in the United Kingdom: Lessons from the developing world

Low-carbon off-grid electrification for rural areas is becoming increasingly popular in the United Kingdom. However, many developing countries have been electrifying their rural areas in this way for decades. Case study fieldwork in Nepal and findings from United Kingdom based research will be used to examine how developed nations can learn from the experience of developing countries with regard to the institutional environment and delivery approach adopted in renewable energy off-grid rural electrification. A clearer institutional framework and more direct external assistance during project development are advised. External coordinators should also engage the community in a mobilization process a priori to help alleviate internal conflicts of interest that could later impede a project.     

Efficiency and effectiveness of promotion systems for electricity generation from renewable energy sources - Lessons from EU countries

Currently, a wide range of strategies is implemented in different countries to increase the share of electricity from renewable energy sources (RES-E). A still controversial discussion is whether quantity-driven (like Tradable Green Certificates (TGCs) based on quotas) or price-driven (like feed-in-tariffs (FIT)) instruments lead to preferable solutions for society. The core objective of this paper is to compare the perspectives of quota-based certificate trading systems for an efficient and effective increase of RES-E with FIT. The major results of this analysis are: (i) The success stories of growth in RES-E in EU member states in recent years has been triggered by FIT implemented in a technology-specific manner at modest costs for European citizens; (ii) At present, TGC systems in most countries applied show a low effectiveness with respect to RES-E deployment of less mature technologies such as solar PV (with improving tendencies in e.g. the UK or Italy with respect to certain technologies); (iii) Compared to short term trading in TGC markets the intrinsic stability of FIT systems appears to be a key element for success; (iv) Hence, currently a well-designed (dynamic) FIT system provides a certain deployment of RES-E in the shortest time and at lowest costs for society.     

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.     

美国可再生能源配额制最新进展及对我国的启示

到目前为止,美国已有30个州依据本州资源、市场、政策背景制定并实施了可再生能源配额制,产生效果不尽相同。为了识别配额制特点及其作用和影响,本文在概述美国配额制最新进展基础上,选取德克萨斯州、加利福尼亚州、新墨西哥州和麻萨诸塞州为例,比较其设计和运行特点,为我国设计实施配额制政策提供借鉴。     

State renewable energy electricity policies: An empirical evaluation of effectiveness

Over the past decade, state governments have emerged as US energy policy leaders. Across the country, states are adopting policy instruments aimed at carbon mitigation and renewable energy deployment. One of the most prevalent and innovative policy instruments is a renewable portfolio standard (RPS), which seeks to increase the share of renewable energy electrification in the electricity market. This analysis evaluates the effectiveness of state energy programs with an empirical investigation of the linkage between state RPS policy implementation and the percentage of renewable energy electricity generation across states. We use a variant of a standard fixed effects model, referred to as a fixed effects vector decomposition, with state-level data from 1998 to 2006. Results indicate that RPS implementation is not a significant predictor of the percentage of renewable energy generation out of the total generation mix, yet for each additional year that a state has an RPS policy, they are found to increase the total amount of renewable energy generation. These findings reveal a potentially significant shortcoming of RPS policies. Political institutions, natural resource endowments, deregulation, gross state product per capita, electricity use per person, electricity price, and the presence of regional RPS policies are also found to be significantly related to renewable energy deployment.     

State-scale evaluation of renewable electricity policy: The role of renewable electricity credits and carbon taxes

We have developed a state-scale version of the MARKAL energy optimization model, commonly used to model energy policy at the US national scale and internationally. We apply the model to address state-scale impacts of a renewable electricity standard (RES) and a carbon tax in one southeastern state, Georgia. Biomass is the lowest cost option for large-scale renewable generation in Georgia; we find that electricity can be generated from biomass co-firing at existing coal plants for a marginal cost above baseline of 0.2–2.2 cents/kWh and from dedicated biomass facilities for 3.0–5.5 cents/kWh above baseline. We evaluate the cost and amount of renewable electricity that would be produced in-state and the amount of out-of-state renewable electricity credits (RECs) that would be purchased as a function of the REC price. We find that in Georgia, a constant carbon tax to 2030 primarily promotes a shift from coal to natural gas and does not result in substantial renewable electricity generation. We also find that the option to offset a RES with renewable electricity credits would push renewable investment out-of-state. The tradeoff for keeping renewable investment in-state by not offering RECs is an approximately 1% additional increase in the levelized cost of electricity.     

An assessment of exploiting renewable energy sources with concerns of policy and technology

In recent years, the Taiwanese government has vigorously promoted the development of renewable energy to engage the challenges of gradual depletion of fossil fuels and oil, as well as the intensification of the greenhouse effect. Since the Sustainable Energy Policy Principles were announced in 2008, Taiwanese government has declared that the development of renewable energy should take into account goals that pertain to energy, the environment, and the economy (3E goals). This study aims to assess the 3E goals and renewable energy sources regulated by the Renewable Energy Development Bill that passed in 2009. The fuzzy analytic hierarchy process (FAHP) is used to resolve the multi-goal problem for achieving our research purposes. That is, this research attempts to reveal the suitable renewable energy sources for the purposes of meeting the 3E policy goals. The results first show that environmental goal is the most important to the development of various renewable energy technologies in Taiwan, followed by the economic and energy goals. Additionally, hydropower, solar energy, and wind energy would be the renewable energy sources utilized in meeting the 3E policy goals.     

Federal policies for renewable electricity: Impacts and interactions

Three types of policies that are prominent in the federal debate over addressing greenhouse gas emissions in the United States are a cap-and-trade program (CTP) on emissions, a renewable portfolio standard (RPS) for electricity production, and tax credits for renewable electricity producers. Each of these policies would have different consequences, and combinations of these policies could induce interactions yielding a whole that is not the sum of its parts. This paper utilizes the Haiku electricity market model to evaluate the economic and technology outcomes, climate benefits, and cost-effectiveness of three such policies and all possible combinations of the policies. A central finding is that the carbon dioxide (CO₂) emissions reductions from CTP can be significantly greater than those from the other policies, even for similar levels of renewable electricity production, since of the three policies, CTP is the only one that distinguishes electricity generated by coal and natural gas. It follows that CTP is the most cost-effective among these approaches at reducing CO₂ emissions. An alternative compliance payment mechanism in an RPS program could substantially affect renewables penetration, and the electricity price effects of the policies hinge partly on the regulatory structure of electricity markets, which varies across the country.     

Top down strategy for renewable energy investment: Conceptual framework and implementation

Electricity market is undergoing a tremendous transformation throughout the world. A drastic reduction of carbon emission cannot be realized if renewable energy resources are not increased in share of generation mix. Currently, most of the traditional mechanisms, including regulatory policies, fiscal incentives and public financing, are initiated from and heavily relied on policymakers and governments. However, not only these schemes do not necessarily align with business interests of investors, but also the motivations for renewable energy developments are always initiated by governments. In order to realize the full potential of renewable energy investment, an innovative approach is necessary to motivate investors and lessen government expenditures.In this paper, we present a top down strategy for renewable energy investment. The proposed approach is a three-step framework. By applying the approach, renewable energy global market leaders and trends will be identified and analyzed that included: (1) economics and renewable energy policy, (2) specific renewable energy sectors that presents the most attractive investment opportunity, (3) and finally the most promising renewable energy investment vehicles for investors. Other stakeholders can also use the developed framework, such as consumers and policymakers, to make socio-economic decisions and assess renewable energy investments.     

Biofuels for transport in Europe: Lessons from Germany and the UK

The utilisation of biofuels is attracting growing support from the European Union and member states as a strategy to tackle climate change, enhance energy security, and contribute to regional development. This paper describes, compares, and analyses the markets for biofuels in Germany and the UK. The introduction of biofuels for transport in these member states provides contrasting pictures, and the success or failure of biofuels here is pertinent to the development and diffusion of biofuels across Europe. This paper concentrates on the socio-political context for the biofuels industry in Germany and the UK, discusses the lessons learned from the German and British experiences, and presents general conclusions for policy-makers that are predominantly relevant for the early stages of a biofuels industry.     

A comparative analysis of renewable electricity support mechanisms for Southeast Asia

This study evaluates the applicability of eight renewable electricity policy mechanisms for Southeast Asian electricity markets. It begins by describing the methodology behind 90 research interviews of stakeholders in the electricity industry. It then outlines four justifications given by respondents for government intervention to support renewables in Southeast Asia: unpriced negative externalities, counteracting subsidies for conventional energy sources, the public goods aspect of renewable energy, and the presence of non-technical barriers. The article develops an analytical framework to evaluate renewable portfolio standards, green power programs, public research and development expenditures, systems benefits charges, investment tax credits, production tax credits, tendering, and feed-in tariffs in Southeast Asia. It assesses each of these mechanisms according to the criteria of efficacy, cost effectiveness, dynamic efficiency, equity, and fiscal responsibility. The study concludes that one mechanism, feed-in tariffs, is both the most preferred by respondents and the only one that meets all criteria.     

The portfolio of renewable energy sources for achieving the three E policy goals

Renewable energy is considered by many policy-makers to contribute to achieving at least three major policy goals: the energy goal, the environmental goal, and the economic goal (3E goals). As an innovation-oriented island country with scarce natural resources, Taiwan announced the Sustainable Energy Policy Principles in 2008 that stated that Taiwan’s renewable energy policy should accomplish the 3E goals. Several studies point out that specific renewable energy policy goals lead to specific renewable energy sources and technologies because each type of renewable energy has different features. In order to achieve the renewable energy policy goals, this research aims to examine how different policy goals lead to corresponding renewable energy sources. The relative importance of each goal is evaluated by using analytic hierarchy process (AHP). The weight of each policy goal is adjusted separately to construct policy scenarios by the sensitivity analysis. According to the results, non-pumped storage hydropower, wind energy, and solar energy are three sources that could meet the three policy goals at the same time.     

How do energy & environmental policy goals and instruments affect electricity demand? A framework for the analysis

Several measures in the environment and energy realms are currently being implemented in the EU and its Member States. Three of these instruments, with an impact on the electricity market, are demand side management activities, promotion of electricity from renewable energy sources and measures aimed at the mitigation of Greenhouse Gas (GHG) emissions. The objective of this paper is to analyse the impact of these energy efficiency and environmental goals and instruments on electricity demand and costs to electricity consumers when electricity markets are either national or international and when those policies are implemented by a national or an international institution. The paper shows that the effectiveness and impact of those measures largely depends on the demand response in the electricity market. An additional conclusion is that, when either the electricity markets or the support policies are national, distortions may occur, i.e. the reductions in electricity demand in one country may be subsidised by consumers or taxpayers in another country.     

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.     

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.