SUPPORT TO RENEWABLE ENERGY: FACTORS AND SOLUTIONS

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1 SUPPORT TO RENEWABLE ENERGY: FACTORS AND SOLUTIONS EURONEST Workshop Eastern Partnership prospects on energy efficiency and renewable energy Vilnius, September 20, 2013 *Unless indicated otherwise all tables and graphs originate from the research of the IEA Reinis Āboltiņš Centre for Public Policy PROVIDUS 1

2 WHAT IS THE GOAL OF SUPPORT TO ENERGY PRODUCTION? (including both RES and fossil) 1. STIMULATE REGULAR ENERGY PRODUCTION THAT WOULD SUM UP TO A SUFFICIENT CAPACITY FROM DIFFERENT SOURCES 2. DECREASE DEPENDENCY ON IMPORTED ENERGY RESOURCES 3. GENERAL CONCLUSIONS (stemming from a number of EU and IEA studies): BEST MECHANISMS FOR REACHING THE [RES] GOAL FEED-IN TARIFFS OR FEED-IN PREMIUM MECHANISMS WITH THE HIGHEST RISK RENEWABLE OBLIGATION CERTIFICATES 2

3 WHAT IS THE GOAL OF SUPPORT TO ENERGY PRODUCTION? (including both RES and fossil) 4. FOSSIL ENERGY PRICES are often dictated by the global demand and supply: countries that depend on imported primary energy resources cannot influence the price; 5. INVESTMENT IN ENERGY SUPPLY is inevitably necessary and should ideally happen according to a long-term strategy. 3

4 RES are less subject to supply risks and in general improve energy availability (CEER Report on Renewable Energy Support in Europe, 2011) 4

5 BASIC TYPES OF SUPPORTING RES Table on the next slide illustrates, which types of RES support dominate in Europe FITs, FIPs, a few ROCs: 5

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7 Why RES support schemes are being reviewed in so called Old European countries? 7

8 Why RES support schemes are being reviewed in so called Old European countries? 8

9 Support level (EUR/MWh) to different RES technologies: a broad spectrum of support schemes depending on the goal and maturity of technology 9

10 Impact of RES support on employment The next slide illustrates RES support logic technology maturity, market development and support ideology: 10

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12 RES support in big economies that set global trends: GERMANY Considering a number of development scenarios with varying role of NPPs. Increasing role of RES in all scenarios, different support tactics (not strategy!); Growth also at times of permanently high energy prices main attention on efficiency and R&D; USA wants to compete on the global market and minimise dependency on foreign energy supplies, supports gas, but also RES as a matter of principle; The UK eager to increase the share of RES, believes this will secure competitiveness of economy in long-term; 12

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14 WHAT DO WE WANT TO ACHIEVE? ENERGY POLICY ENERGY STRATEGY / -IES TILL 2020 / 2030 / 2050: COMPETITIVE ECONOMY GROWTH, MANUFACTURING, EFFICIENCY, etc. SUSTAINABILITY (ECONOMIC, SOCIAL, ENVIRONMENTAL) SECURITY OF ENERGY SUPPLY + 50% RES IN 2030? + LESS DEPENDENCY ON IMPORTED ENERGY IN 2030 vs CURRENT LEVELS + HEAT CONSUMPTION IN BUILDING SECTOR NOT EXCEEDING 100kWh/m2 SUSTAINABLE DEVELOPMENT THE BEST GROWTH WITH THE LEAST NEGATIVE AND BIGGEST POSITIVE SOCIOECONOMIC AND ENVIRONMENTAL IMPACT 14

15 WHAT DO WE WANT TO ACHIEVE? RES SUPPORT policy shall be looked at IN A [broader] CONTEXT EASTERN PARTNERSHIP countries: are as diverse as the EU countries RES support models can be replicated, but require some tailor assistance; shall try to avoid making the same mistakes that EU member states have gone through; At times too little transparency in decision making; Playing with so called sunset clauses; At times too high a support for particular RES technologies; Generally too much dynamics in RES legislation, which leads to low investor confidence shall view RES potential in a strategic manner, not from a short-term lucrative investment business point of view. 15