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Efficiency and effectiveness of promotion systems for RES-E – An update on lessons learned from EU countries. Reinhard Haas. Vienna University of Technology. SURVEY. 1. Introduction. 2. Historical developments. 3. Success of strategies. 4. Conclusions. 1 INTRODUCTION: KEY REFLECTIONS.
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Efficiency and effectiveness of promotion systems for RES-E – An update on lessons learned from EU countries Reinhard Haas Vienna University of Technology
SURVEY 1. Introduction 2. Historical developments 3. Success of strategies 4. Conclusions
INTRODUCTION CORE MOTIVATION: Policy targets for an INCREASE of RES-E! e.g. 2020/20/20/20 targets RES-E directive: increase share of RES-E from 12% 1997 to 22% in 2010)
2. HISTORY RES-E EU-27 2009:17% 1997:12%
2009: 7 % ELECTRICITY GENERATION FROM „NEW“ RENEWABLES IN EUROPE 1997: 1 %
Total electricity and share of RES EU-27 * figures for 2009 and 2010 are preliminary!
REMARK ON RES – DEPLOYMENT IN THE EU-COUNTRIES • Since about 1997 triggered by EU- directives and EU initiatives • Yet, specific country success stories very strongly related to national policies design!
STATIC COST RESOURCE CURVES more expensive capacities (wind, PV) cheapest capacities (Co-firing biomass)
HOW FEED-IN TARIFFSWORK EURO/kWh Costs PFix ? QOut kWh
HOW QUOTA-BASED TRADABLE GREEN CERTIFICATES WORK Costs EURO/kWh PVar ? kWh QUOTA
QUOTAS SWEDEN
PRICES OF CERTIFICATES Continuous high level! Shortage in banked certificates!
SUPPORT LEVELS: COMPARISON TRADABLE CERTIFICATES FEED-IN TARIFFS
Total costs for customers (PREMIUM) FEED-IN TARIFFS Total costs = EURO/kWh + Producer surplus Generationcosts C PFIT_C B PFIT_B PFIT_A A Cost curve Market price Target kWh
Total costs for customers TRADABLE G O CERTIFICATES Total costs = EURO/kWh + Producer surplus Generationcosts C PCERT B A Cost curve Market price Target kWh
TRADABLE GREEN CERTIFICATES Extra generation costs risk premium!!! EURO/kWh Producer surplus Total costs Minimal Monetarygenerationcosts Market price kWh Quota/ Target
IMPACT OF THE SHAPE OF THE COST CURVE [cent/kWh] Producer Surplus PZert Biomass Wind Loc. B Small Hydro Wind Loc. A Costs Quota [GWh/year]
IMPACT OF THE SHAPE OF THE COST CURVE Small Hydro [cent/kWh] Producer Surplus Biomass pure PZert Wind Costs Biomass cofiring Munic. waste Quota [GWh/year]
THE SHAPE OF THE COST CURVE E U - 27 Producer surplus Additional generationcosts Electricity market price RequiredRES-Edeployment Total costs
SUCCESS CRITERIA FOR STRATEGIES • Major objectives: • increase the amount of electricity from renewables and • reduce costs! Costs (EUR/ kW)(=efficiency) MW /Number of plants(=effectiveness)
THE CASE OF SWEDEN Major characteristics: * since 2002: quota-based system of Tradable Certificates * also „old“ capacity allowed to fulfill quota * additional investment subs. for wind!
IMPACT OF INVESTMENT SUBSIDIES Costs (Supply curve) [cent/kWh] Wind Loc. A Wind Loc. B Pcert_th Invest. Subsidiesfor wind Pcert_act Quota Biomass [GWh/year]
4. CONCLUSIONS (1) • There should be a clear focus on NEW capacities! IMPROVE/OPTIMIZE THE CURRENT SYSTEMS BEFORE HARMONISING OR IMPLEMENTING MAJOR CHANGES! • To ensure significant RES-E deployment in the long-term, it is essential to promote a broad portfolio of different technologies • A well-designed FIT provides RES-E-deployment fastest and at lowest costs; • Strategies with lower (financial) risk -> less profit requirements -> lower costs for society.
4. CONCLUSIONS (2) • Promoting RES in EU successful? Yes, but increase in energy consumption outweighed … • a dual system as in Spain in the long term is more expensive, and therefore it represents a higher burden for consumers, than a well designed single system. • Trading certificates in Sweden successful due to very specific favourable conditions (“Long”) • A European- wide trading system would lead to a much higher burden for European citizens than a comparable FIT for meeting the 2020/20%RES target!
INTERESTED IN FURTHER INFORMATION? • Download reports from: www . eeg . tuwien . ac . at www . green-x . at www . optres . fhg . de • E-Mail to: Reinhard.Haas @ tuwien. ac.at