Policies to Support Renewable Energies, Descriptions

Transcription

1 Austria Biofuels Plan Premium Tariffs for Renewables Green Electricity Act Belgium Electricity Distribution - Flanders Austria has transposed the European Directive 2003/30/EC on the promotion of the use of biofuels and other renewable fuels for transport. According to the Directive, Member States should ensure that a minimum proportion of biofuels and other renewable fuels is placed on their markets, and, to that effect, shall set national indicative targets. A reference value for these targets shall be 2%, calculated on the basis of energy content, of all petrol and diesel for transport purposes placed on their markets by 31 December Austria's draft for transposing the law calls for a share of 2.5% by April 2005 rather than the requirement of 2% by December The Federal Ministry of Economic Affairs and Labour has reinstated premiums for electricity output from renewables. By agreement with all nine provincial governors, the initial EUR 225mill fund has been increased to include EUR 37mill for 2004 and a ministerial decree has been issued which directs payment of the premiums ranging from EUR 0.03 to 0.06/kWh for new installations as from 1 April The cost of payments to the new entrants will be added to the initial surcharge through an additional 0.1 ct/kwh on electricity delivery bills. In July 2002, the National Council and Federal Council passed the new Green Electricity Act. The main content of the EU Directive from October 2001 has therefore been implemented and the proportion of energy generated from renewable energy sources increased. The Green Electricity Act governs the aid for green energy and combined heat and power generation throughout the country. Through this act, fees for eco power, which vary from state to state, will be replaced with a uniform fee for power generated by combined heat and power plants, renewable sources and small hydro power plants. The total cost of aid for green energy following nation-wide attainment of the objective set is much lower than it would have been for attaining the objective individually in each federal state (the government will support these plants with a maximum EUR 275mill /year, down from EUR 400mill /year). This is because the areas with renewable energy potential can now be used wherever they are located (wind power in Eastern Austria, hydroelectric power in Western Austria). The supply tariffs for the green plant operators are the same throughout Austria. The objectives laid down in the Green Electricity Act are namely to generate a proportion of 9% from small-scale hydroelectric plants and 4% from eco plants by providing aid in the form of supply tariffs until the year 2008 so that the overall objective of 78.1% of electricity from renewable sources can be reached (the rest being generated from large scale hydro). Other changes include: - The certificate system for small-scale hydroelectric power stations expires at the end of As of 1 January 2003, there will no longer be a quota obligation for the network operators and therefore also no more compensation payments as of this date. - All operators of green plants have the right to a listing of the certification of origin by the network operators. - The electricity identification system, which regulates the identification of the source of energy used to generate the electricity on bills, will be standardised after a transitional period up to 1 July 2004 and then all electricity dealers must identify a standard composition on all their end consumer bills ("standard dealer mix"). The Flemish government has passed legislation to exempt all Belgian green power from distribution tariffs. The exemption applies to tariffs for the use of the distribution network and associated services. The exemption applies to power from other regions of Belgium subject to an agreement on domestic burden-sharing arrangements for implementation of Kyoto targets. The original legislation decreed free transit for all green power, but the Flemish government then restricted these provisions to Flemish power only a few months before full deregulation of the Flemish market on 1 July Page 1 of 12

2 Belgium (cont.) Czech Republic Denmark Support Scheme - Wallonia Green Certificate Scheme - Federal Access to the Grid (Renewables and CHP) New Energy Act New Rules for Payment of Green Electricity - Adaptation of the Electricity Act Reform The Walloon government has defined a support framework for electricity produced from renewable energy sources to complement the existing green certificate scheme. Under the scheme, operators of renewable energy installations in operation since 30 June 2003 can decide to sell their certificates to the government rather than to the market. Under this scheme, the government and the operator must define an agreement for the purchase of green certificates for a fixed time frame of a maximum of 120 months. This agreement takes also the pay-back time of the plant into account. The price set by the government for the purchase of green certificates is EUR 65 per certificate. The Royal Decree on the promotion of electricity produced from renewable energy sources was adopted in July It addresses two fundamental issues: - It gives the conditions for issuing green certificates by the Federal regulator (CREG) for offshore wind energy production. - It states that the grid operator has the obligation to buy green certificates issued anywhere in Belgium for the minimum prices of EUR 90/MWh for offshore wind energy, EUR 50/MWh for onshore wind energy, EUR 50/MWh for hydro, EUR 150/MWh for solar energy and EUR 20/MWh for biomass. In April 2000, the federal government decided that all generators of electricity from renewable sources will become progressively free to choose their own electricity supplier if they need more electricity than they can generate. Also, consumers who buy a significant amount of their electricity from renewable sources are eligible to choose their electricity supplier. The Flemish Parliament approved the decree regarding the liberalisation of the electricity market and foresees the following categories as eligible: - producers using quality CHP (combined heat and power production) installations or renewables for electricity generation (up to a certain ceiling), - consumers of renewable electricity generated by means of a CHP unit (for the amount of electricity) or consumers using heat from CHP units or renewables, - consumers using heat from a supplier who generates this heat by means of CHP units or renewables (for maximum 500 kwh electricity per GJ heat). In Wallonia, the corresponding decree has been approved; it will also aim at the gradual opening of the market for producers using CHP and renewables for electricity generation, as well as consumers using renewable electricity and/or electricity generated by means of a CHP unit or using heat from CHP units or renewables. The Energy Act, which came into force in January 2001, sets out conditions for the business activities, state administration and regulation in energy sub-sectors, such as electricity, gas and heat as well as the rights and obligations of individuals. It defines a framework for the liberalisation of the electricity and gas markets. It supports the use of renewable energy sources and CHP. It defines conditions for the obligatory purchase of electricity and heat produced from renewables and from CHP through the creation of the Energy Regulation Office. From 2002 electricity consumers with annual consumption of more than 40 GWh will have the right to choose their supplier; and the threshold will be lowered gradually. Full liberalisation of the market is scheduled for Access to the networks by generators will be liberalised by Generators of electricity from CHP and from renewable sources will have the right to sell their electricity to the local distributor. The introduction of competition in the natural gas market will start in In June 2001, the EU Commission approved the rules for payment of green electricity from new renewable energy plants notified by Denmark to the Commission as a step in the gradual transition to market-based prices pursuant to the Danish Electricity Reform Agreement. The new rules will be stipulated in a revised Statutory Order on Wind Turbines. With the Commission's approval, new wind turbines will in future be guaranteed a fixed settlement price of DKK 0.33/kWh for the first 22,000 full-load hours, corresponding to approximately 10 years' production. When these hours have been used up, remaining electricity produced by the wind turbine is to be settled at the market price. Furthermore, a premium of DKK 0.10/kWh is added to the market price. The premium will be replaced by Green Certificates for electricity production once the coming green market for renewable energy is established (2004). Electricity from biomass-based plants is currently settled at a price of approximately DKK 0.60/kWh. The Danish Energy Agency also submitted the economic outlines of proposed biomass-based electricity production for consideration by the parties behind the Electricity Reform Agreement. Page 2 of 12

3 Finland France Germany Action Plan for Sources ClimBus Technology Programme Guidelines to French Department Prefects on the Promotion of Wind Power Tender Procedure for Biomass and Biogas Power Generation Extension of Tax Credit in Favour of Equipment in New Housing Investment Fund for the Environment and Energy Management Feed-in Tariffs The Renewable Energy Sources Act The Action Plan for Sources was revised due to the parliamentary statements that were given in connection with the decision-inprinciple on the construction of a fifth nuclear power plant unit. In the new Action Plan, the use of renewable energy was suggested to be increased by c. 30% by the year 2010, compared to the year Among central actions are development and commercialisation of new technology and financial steering instruments, such as energy taxation, investment aid and subsidies for the production chain of forest chip. The action plan proposed by the working group is expected to cut the carbon dioxide emissions by mill tons from the Business-as-Usual scenario in Reduction of greenhouse gas emissions offers new possibilities for companies to increase their business and ClimBus Technology Programme aims to find and promote technological options to mitigate climate change. The programme lasts for five years ( ) and it is managed by Tekes, the National Technology Agency of Finland. Tekes also provides approximately half of the funding. The Ministry of Industry, the Ministry of Ecology and Sustainable Development and the Ministry of Transport and Equipment have provided guidelines to the prefects of all French departments aimed at facilitating the development of on-shore and off-shore wind energy. Following the official documentation published on 7 March 2003 on the multi-annual power generation investment programme, a tender procedure has started with regards to power generation capacity up to In order to attain the objectives set in terms of renewable energy production, the tender process offers specific support to biomass and biogas power generation. It targets power generation up to a cumulative capacity of 200 MW for biomass and 50 MW for biogas. These power generations units must be operational before 1 January The Finance law of 2003 extends the tax credit for acquiring energy production equipment which uses a renewable source of energy, and which is installed in new housing. The credit is equal to 15% of the amount of the purchase price. CDC IXIS and Banca OPI (SanPaolo IMI group), in association with the French Agency for the Environment and Energy Management (ADEME) have launched the Investment Fund for the Environment and Energy Management (FIDEME). This private / public partnership will finance projects in the field of renewable energy and waste management with EUR 45mill initial funding. Feed-in tariffs have been set. According to the new law, the burden of providing balancing power for intermittent renewables generation is spread across all network companies. Generation from biomass plant will be paid for 20 years. The payment rates are 11.5 ct/kwh for a plant up to 150kWh, 9.9 ct/kwh for up to 500 kwh and 8.9 ct/kwh for up to 5 MW capacity. The rate fixed for new plants drops by 1.5% each year. A bonus is added to the basic payment rates for plants using fuel crops, or which use cogeneration or innovative technologies. The new law also provides support for biogas transported in the natural gas pipeline network, assuming it has the same heat equivalent of biogas fed into the pipeline at a separate point. Payment rates for small geothermal plant are increased in the new law. Plants up to 5 MW get 15.0 ct/kwh, up to 10 MW get 14.0 ct/kwh, and up to 20 MW get 8.95 ct/kwh. Beyond 20 MW, generation is paid 7.16 ct/kwh. Hydro plants get premium rates for as long as 30 years, although for larger plants (5 MW-150 MW), the period extends to only 15 years. Plants up to 500 kw get 9.67 ct/kwh, and plants up to 5 MW get 66.5 ct/kwh, assuming certain environmental conditions are fulfilled. Electricity from larger hydro stations benefits only If the plant is modernised before the end of 2012 to increase capacity by at least 15%. Only electricity generated from increased capacity benefits from premium payments, and rates are lower than those for new plants. Page 3 of 12

4 Germany (cont.) Ireland Solarthermie 2000Plus CHP Law (Kraft-Wärme- Kopplungsgesetz) Law to Amend the Mineral Oil Tax Law and Renewable Energy Law Funding for Using Willow as a Renewable Energy Use For wind energy generation, the period of time over which a bonus (3.2 ct/kwh) is added to the standard rate of payment (5.5 ct/kwh) is shortened. Further, the annual payment decrease for new projects is set at 2% - rather than the current 1.5%. Off-shore plants on line before the end of 2012 will get a standard rate of 6.19 ct/kwh, and also a 12-year bonus of 2.91 ct/kwh. The solar law that took effect at the start of 2004 has been folded into the new renewable energy law. The basic rate of payment for solar generated electricity is 45.7 ct/kwh. The aim of the Act is to increase the share of renewables in total electricity supply to at least 12.5% by 2010, and to at least 20% by To achieve this, improvements have been made to the framework conditions for feeding electricity from renewables into the grid and for transmitting and distributing this electricity. "Solarthermie2000Plus" is a Research and Development Programme with an annual volume of about EUR 4mill. The aim of the research programme is to optimise solar thermal systems in terms of cost, solar coverage rate and level of system utilisation. It will assist new technical developments for solar-assisted, combined potable water heating and room heating systems, solar-assisted heating networks, and cost-effective and efficient storage concepts for centralised long-term storage, incorporation of solar thermal installations into district heating networks, solar-assisted air conditioning. Research projects at universities, public research institutes and industry, collaborative projects between universities/research institutes and industry, and cluster projects (joint research by several industrial companies at the pre-competitive stage in collaboration with research institutes) will be considered for project selection. Grants are depending on the kind of applicant body, they vary from 50 to 90% of the investment costs. The Co-generation Act which came into force in April 2002, guarantees temporary bonus-payments from the operators of the public grid for CHPelectricity transferred to the public grid. The amounts of bonus-payments vary according to the type of CHP-installation, and are declining. An accreditation from the Federal Office of Economics and Export Control (BAFA) for the installation is requested. The amount of the bonus-payments varies from 1.53 ct/kwh in 2002 reduced annually to 0.97 ct and phasing out in 2006 for existing CHP-plants, to 5.11 ct/kwh for new small installations up to 50 kw if continuous operation is taken up until end of 2005 as well as for fuel cell plants for ten years. A legal reform, the "Law to Amend the Mineral Oil Tax Law and Other Laws", was passed by Parliament in June The law raises the cap on total photovoltaic capacity that is eligible for premium payments under the renewable energy law, and extends mineral oil tax exemption to cover all biomass fuels. This law was accepted by the EU in February On the photovoltaic front, the Law, EEG (erneuerbare Energiengesetz), passed in April 2000, stated that only electricity from the first 350MW of photovoltaic plant capacity installed was eligible for premium payments. The feed-in tariff was originally EUR 0.505/kWh but is now EUR 0.457/kWh due to an automatic annual -5% ratchet built into the law. The reform raises this cap to 1,000 MW. The new law benefits biofuels by exempting them from oil tax from January 2004 until the end of The law requires that the Federal Finance Ministry draw up a report with the aid of other relevant ministries every two years, with the first due at the end of March 2004, to chart progress in the market introduction of biofuels, and to examine price developments of biomass, crude oil and automobile fuels. If deemed necessary, the ministry may recommend adjusting the size of the tax break for biofuels to fit the market situation. The Irish Ministry of Agriculture has decided to fund the use of willow as a renewable energy. The Challenge Fund for Short Rotation Coppice Energy Crops aims to increase the amount of willow grown for an energy end use. Up to EUR 2.9mill of funding may be available, depending on the quality of applications. The Challenge Fund will be open to farmers, District Councils, co-operatives, and other landowners. At least three hectares must be established on land that is capable of being ploughed prior to planting. Applicants will have to show that an energy user is prepared to buy their harvested coppice, or that they will burn it themselves, either in existing plant or in planned installations. Page 4 of 12

5 Ireland (cont.) Italy New Renewables- Based Electricity Generating Capacity to be Installed Sustainable Energy Ireland Promotion of Electricity Produced from renewable energy sources in the internal electricity market In order to attain the 500MW target for renewables based electricity generating capacity the sixth competition in the Alternative Energy Requirement Programme, AER VI, was launched in February The closing date for receipt of applications was 24 April Through AER VI, and the previous competition, AER V, contracts for up to the target figure in large and small scale wind, biomass and small scale hydro have been offered to the market. Projects successful in the competitions must be installed and selling electricity by 31 December 2004.Prospective generators are invited to make a formal application to build, own and operate newly built plant and to supply electricity from these to the Electricity Supply Board (ESB) under a Power Purchase Agreement (PPA) of up to fifteen years duration. The technologies supported include wind energy, small-scale hydropower, combined heat and power (CHP) and biomass (landfill gas). AER VI offered support for the first time for offshore wind energy, biomasscombined heat and power and biomass-anaerobic digestion. The functions of the Sustainable Energy Ireland, as set out in the Act, are: - to promote and assist environmentally and economically sustainable production, supply and use of energy; - to promote and assist energy efficiency and renewable sources of energy; - to promote and assist the reduction of greenhouse gas emissions and transboundary air pollutants associated with the production, supply and use of energy; - to promote and assist the minimising of the impact on the environment of the production, supply and use of energy; - to promote and assist research, development and demonstration of new energy technologies; - to provide advice, information and guidance to the Minister and such other Ministers or bodies as the Minister may direct, and to energy suppliers and users. In conjunction with the launch of Sustainable Energy Ireland, the new body published its five-year strategy document, which outlines its priorities and targets. During the period of the five year strategy Sustainable Energy Ireland will be responsible for an expenditure of EUR 89mill through its operations and programmes, which are being funded under the Economic and Social Infrastructure Programme of the National Development Plan. The decree, which entered into force on 31 January 2004, sets in 20 articles a national reference framework for the promotion of renewable energy sources (RES) and particularly for their use in micro-generation plants. It sets a timetable for the periodic reporting, review and monitoring - by the Ministry of Productive Activities (MPA) - of progress towards the implementation of the objectives. It also sets for the period a 0.35% annual rate of increase of the minimum share of electricity produced from RES that should be fed to the national grid, and deadlines for the MPA to plan further increments over the periods and Sanctions are established for non-compliance and applied by the Regulatory Authority (AEEG) based on the reports of the Grid manager (GRTN). To assess the exploitable energy potential from biomass, an ad-hoc experts committee is created which should assist in designing appropriate legislation to support this form of energy. A six-month deadline is also set for the adoption of legislation and criteria (minimum requirements, possibility to cumulate incentives, preferential tariffs, capacity targets, use of Green certificates") for granting incentives to power produced from solar energy. The decree includes specific provisions to favour hybrid plants (i.e. those producing part of their power from renewables) over conventional fossil fuelled ones in dispatching. A five year program agreement between the MPA and ENEA on RD&D measures to support renewables and energy efficiency is established. Regional targets for renewable-based electricity are encouraged and regional governments can establish their own plans for RES support. Specific articles address the issue of certification of origin for electricity produced from renewables: this certification, which can be requested for plants producing >100MWh/year, is made by the GRTN. Conditions under which the electricity produced can be sold in the power market or purchased by GRTN are indicated. Specific rules are set for the streamlining of authorisation procedures for plants and infrastructure devoted to power production from RES. The decree (Art. #17), extends the benefits granted to RES to waste and fuels derived from waste, including the non-biodegradable fraction of urban, agricultural and industrial waste. Page 5 of 12

6 Italy (cont.) Luxembourg Production From Small PV Installations - PV Roofs 2% Renewables Target - Green Certificates Subsidies Netherlands Guarantees of Origin MEP: Environmental quality of electricity production (Milieukwaliteit van de Elektriciteitsproductie) Voluntary Agreements with Coal Power Companies A regulation adopted in 2000 liberalises electricity production from small PV installations and fosters the implementation of the project "10,000 PV roofs" promoted by the Ministry of the Environment and ENEA (the Italian National Agency for New Technologies, Energy and Environment).The regulation concerns local exchanges (purchase, sale) of electricity between the grid manager (Manager of the Electric Market, responsible for electricity transmission) and small autoproducers of electricity from photovoltaic plants of less than 20 kw of installed capacity. According to this regulation, the sale price of excess power to the grid is to be set equal to the purchase price from the grid, regardless of the time of the day and the season. The legislative decree 79/1999 entitled Implementing the European Directive 96/92/EC with common rules for the single market of electricity has introduced many rules regarding renewable energy sources. First, electricity from renewables is entitled to priority access to the electricity grid. Secondly, a new support mechanism has been introduced, based on minimum quota obligation: as from 2002, those subjects producing or importing electricity from non-renewable sources exceeding 100 GWh/year (excluding combined heat and power generation, export and plant consumptions) are obliged to put into the grid a minimum quota of electricity produced from plants fed by renewable energy sources and entering into operation after 1st April The quota is fixed at 2% (corresponding to an additional production capacity of 9,000 GWh), but the legislative decree provides for an increase. Suppliers that have no clean electricity sources can use energy from other companies by buying "green certificates", which will be valid for 8 years and will be sold by renewable firms. Certificate prices will be market led. Under a new decree approved in July 2004, the Ministry of Environment has modified the amount of incentives given to owners of solar panels and gas boiler heat pumps. The modifications apply to investments made after 1 June, The Dutch government has introduced production certificates to enable a distinction to be made between electricity produced from renewable energy sources and standard' electricity. These certificates constitute a guarantee of origin' and serve as proof that electricity was produced in an ecologically sound manner. CertiQ is the organisation managing the certificate issue system. The support mechanisms for renewable energy were revised leading to an amendment to the 1998 Electricity Act called Environmental Quality of Electricity Production which took force in July The MEP aims to increase certainty to investors and improve the cost-effectiveness of renewable electricity support. The MEP provides for operating support through a combination of reduced ecotax exemptions and subsidised feed-in tariffs. In effect, the ecotax exemption was reduced to ct 2.9/kWh for most forms of renewable electricity for consumption up to 10 MWh/year. The ecotax exemption will be gradually decreased and the subsidies will be increased to compensate for the ecotax reduction. Under MEP, Dutch renewable electricity generators receive subsidies which depend on the difference in costs (including investment, operation and maintenance cost) between their facilities and conventional (non-renewable) units. The maximum level of the subsidy is set at the difference between the production cost of offshore wind power and the average selling price of fossil-fuel powers. The renewables eligible for subsidies are wind energy, bio-energy (including waste incineration, landfill gas, and digestion) hydropower, photovoltaics and wave and tidal energy. Furthermore, the producer must be connected to the Dutch electricity grid and the installation must be maintained and exploited for at least ten years. Finally, only installations put into use after 1 January 1996 are eligible. The subsidies cease in ten years for each installation but thereafter it can still benefit of the ecotax exemption. The feed-in tariff levels are reviewed annually, taking into account the decline in costs resulting from learning curves. In the annual reviews, tariffs are fixed for the next 2-3 years. The government prefers annual reviews over a pre-set reduction scheme to be able to use the latest market parameters to define the appropriate tariff level. The MEP tariffs are financed through an annual MEP levy on all connections to the electricity grid in the Netherlands. The Dutch government and six owners of coal fired power plants agreed upon increasing the use of biomass in the power generation mix. In the socalled 'coal covenant' a CO 2 reduction of nearly 6 million tonnes is foreseen between 2008 and 2012: - 3.2mill tons by the use of biomass - 2.0mill tons by measures taken in the framework of the Benchmark covenant - 0.5mill tons by additional measures, to be further investigated. Page 6 of 12

7 Portugal Spain Support Measures for the Maximisation of Energy Potential and for Streamlining Consumption New Tariffs for Renewables Mandatory Solar Panels on New Houses Modified Aid for Electricity Generated from Renewable and CHP Sources Modification of Corporate Tax Regulation Financing for Renewables and Energy Efficiency Modification to the Biomass, Waste and Wind Energy Premiums Plan on Renewables Under this law, the Government allocates support to projects with a minimum eligible investment, designed for production of electric and thermal power from renewable sources, rational use of energy and conversion of consumption to natural gas. In 2001, the payback tariffs for renewables have been increased (up to 25% for wind energy), in order to develop more electricity generation under the special regime for co-generation and renewables. The Ministry of Industry announced in November 2004, that from 1 January 2005, anyone who intends to build a home will be obliged to include solar panels in their plans. The new system for renewable energy sources and combined heat and power (CHP) aims that by 2010, 30% of electricity production will be fuelled by renewable energy sources. This Royal Decree unifies the regulations for enacting Law 54/1997 on the Electrical Sector, providing the special regime with a new regulatory framework. This new Royal Decree defines a system based on the free will of the owner of the installation, who can opt to sell the production or surplus of electrical energy to the distributor or directly on the market. If sold to the distributor, the owner of the installation receives a set payment in the form of a regulated rate, which is unique for all the periods of the programme, defined as a percentage of the average or reference electrical rate regulated in Royal Decree 1436/2002, of 27 December, which is therefore indirectly based on the production market price. Should the owner of the installation decide to sell his production or surplus directly on the market, he will receive the negotiated market price, plus an incentive for participating and a premium, if the installation is entitled to receive one. This incentive and the complementary premium are defined as a percentage of the average or reference electrical rate, although, in the enactment of the Royal Decree, this percentage is established on a case by case basis. The Royal Decree 436/2004 improves the incentives for the first 200 MW of solar thermal electricity production in Spain. Solar thermal electricity generators who cede their production to the distributor may receive as fixed tariff 300% of the reference price during the first 25 years after their start-up and 240% afterwards. Solar thermal electricity generators who sell their electricity on the free market may receive a premium of 250% of the reference price during the first 25 years after their start-up and 200% afterwards, plus an incentive of 10%. On 14 March, the Spanish government enacted a modified tax code, Royal Decree 252/2003, which includes a 10% deduction for companies investing in renewable energy sources. In under the Plan a financing line has been provided by the Official Credit Institute (ICO) and the Institute for Diversification and Energy Saving (IDAE) for renewable energies and improving efficiency projects (saving and fuel switching in industry, energy efficiency in buildings, etc.). The maximum that could be financed in a project would be 70% of the investment by means of loans at low interest rates. The premium for the energy from biomass has been increased from 2.79 ct/kwh in 2002 to 3.32 ct/kwh in 2003, and also for the livestock manure management from 2.71 ct/kwh to 2.94 ct/kwh. Conversely, the premium for the wind energy has been reduced from 2.90 ct/kwh to 2.66 ct/kwh. It calls for doubling the RES share in the primary energy supply quota from 6 to 12%. The main energies and areas that are considered by the plan are: biomass, wind, hydropower, solar and the urban solid waste. Page 7 of 12

8 Sweden Green Certificate Scheme Investment Grant for Solar Heating Bio-energy Infrastructure Scheme Energy Bill Regional Approval for Projects Clear Skies - Household and Small Community Renewable Energy Fund Under this scheme, generators using solar, wind, biomass geothermal, wave or small (<1.5MW) hydro are awarded one certificate for each 1MWh produced, and all consumers are obliged to buy these certificates to cover a set proportion of their use. This requirement starts at 7.4% in 2003, rising to 16.9% in Energy-intensive industry is exempted from the requirement. There is a floor and a ceiling set on certificate prices. Should generators find no buyers for their certificates, the government will pay SEK 60/MWh (EUR 6.6/MWh) in 2003, with the price falling in future years. For consumers who fail to buy enough certificates, there is a penalty of 150% of the annual average price for certificates with a sealing at SEK 175/MWh (EUR 19.3/MWh) in 2003 and SEK 240/MWh (EUR 26.5/MWh) in The Swedish government in June 2000 introduced an investment support scheme for solar heating. Homeowners can apply for an investment grant corresponding to SEK 2.50/kWh of calculated yearly supply for investments in solar heating installations. In December 2004, Parliament decided to extend the support scheme for the period An additional SEK 25mill was allocated, bringing the total resource for the investment grant up to SEK 75mill for the period from June 2000 to The Bio-energy Infrastructure Scheme was launched on 15 October It will be run by Defra (Department for Environment, Food, and Rural Affairs) in partnership with the devolved administrations and the Forestry Commission. The Scheme will provide: - Grants to farmers and foresters to set up producer groups to supply eligible biomass to energy end-users (SRC producer groups in England are not eligible as these are funded under Defra's Energy Crops Scheme). Grants are likely to be available towards administrative start-up costs, training costs and possibly for the purchase of specialist capital items. - Grants to new or established businesses entering into the supply of eligible biomass to energy end-users. Grants are likely to be available towards training costs and the purchase of specialist capital items (e.g. dryers, chippers, pelleters, specialised handling equipment, storage and hard standing etc). The amount of grant will vary according to which activities are undertaken by the group or business. The maximum grant per application will be GBP 200,000. Eligible crops are short rotation coppice willow or poplar, miscanthus, switch grass, reed canary grass, prairie cord grass, rye grass, forestry woodfuel, straw and other energy crops at Defra's discretion. The Government's Energy Bill received Royal Assent 22 July Regarding climate change mitigation, the Act is important since it provides the framework for the development of offshore wind and other marine renewable energy sources outside territorial waters. This ensures that further progress can be made in meeting the 10% renewable energy target by 2010 and beyond. Regional authorities have been given the authority to promote the use of renewable power sources when granting permission for new building and infrastructure developments. According to the Planning Policy Statement 22 (PPS22), which updates the Planning Policy Guidance Note 22 issued in 1993, the approval for alternative energy projects such as wind farms, and those involving biomass or solar panels, is simplified. According to the PPS22 on renewable energy, local and regional planning officers should favour renewable energy proposals across England in locations where the technology is viable and environmental, economic, and social impacts can be addressed satisfactorily Clear Skies aims to give householders and communities a chance to realise the benefits of renewable energy by providing grants and access to sources of advice. Householders can obtain grants between GBP 500 to GBP 5000 whilst not-for-profit community organisations can receive up to GBP 100,000 for grants and up to GBP 10,000 for feasibility studies. Clear Skies supports projects in England, Wales and Northern Ireland. Scottish householders and not-for-profit community organisations can apply for grants from the Scottish Community and Household Renewables Initiative. Clear Skies vets installers to ensure good quality of service. Applicants need to use registered installers and products that are listed by Clear Skies. Page 8 of 12

9 United Kingdom (cont.) Norway Switzerland Australia Major PV Demonstration Programme Incentives for Non- Electric Heating Technologies Subsidies for Energy Efficiency and Renewables SwissEnergy Action Plan Advanced Electricity Storage Technologies Biofuels Capital Grants Program Development Initiative A GBP 20 million budget has been allocated to provide grants for PV installations with the objective of preparing a secure platform for long-term and sustained growth of PV. Funding under the Major Photovoltaics Demonstration Programme (PV MDP) is avaiable for the private and public sector to install solar systems on new or existing buildings. A consortium led by the Energy Saving Trust has been appointed to manage the programme. The two types of grants that are available: - Stream 1 grants for small scale PV installations between 0.5kWp and 5kWp are defined for home owners, small to medium-sized enterprises (SMEs), public sector organisations (e.g. schools, local authorities) and charitable, voluntary, community groups. - Stream 2 grants for medium to large-scale PV installations between 5 kwp and 100 kwp are defined for large commercial organisations (e.g. large corporations, businesses, industry, property developers), social housing groups (e.g. housing associations, local authorities) and other public sector organisations (e.g. universities, health centres), charitable, voluntary, community groups and small to medium-sized enterprises (SMEs). The Norwegian State Housing Bank offers financial incentives for new homes incorporating non-electric heating technologies. Loans are being made available for builders to incorporate technologies such as heat pumps, solar systems and biofuel boilers in their work. Subsidies for energy efficiency and renewables come from a fee on the transmission tariffs and from ordinary grants over the state budget. The government has granted NOK 280 million in the budget for 2002 and the income from the fee is stipulated at NOK 200 million. The income is directed to a new energy trust that was established on 1 January Enova will be in charge of this trust, which will secure a long-term financial frame over the years to come. Enova will use the money to reach government objectives, which include: - Reaching an annual increase in the use of central heating based on new renewable energy sources, heat pumps and waste heat by 4 TWh/ year by Constructing wind generators with a production capacity of 3 TWh/year by Limiting energy use considerably more than would be the case if developments were allowed to continue unchecked. The Swiss Energy action plan started in January 2001, following on the Energy 2000 programme, in order to achieve the Swiss energy and climate change policy objectives by reducing the consumption of fossil fuels, stabilising the consumption of electricity and increasing the contribution of renewables to the energy supply. The targets are being pursued in extensive co-operation with the cantons, communities and the private sector. Voluntary agreements, funding measures favouring energy savings, promotion of renewables, dissemination of research information and energy consumption standards for buildings, equipment and vehicles are the main elements of SwissEnergy. The aim is to achieve a 10% reduction of consumption of fossil fuels compared to 1990, an increase of less than 5% of electricity consumption, and an increase of consumption of renewable energy. The intermittency of important low-emission technologies such as wind and solar presents an impediment to the wide uptake of these technologies as it means they are unable to always deliver electricity on demand. This program aims to help address this issue, by supporting the development of advanced electricity storage technologies. Low-cost ability to store generated energy and use it when required will increase the attractiveness of intermittent technologies. The Australian Government announced on 25 July 2003 its intention to provide a capped amount of AUD 37.6 million to fund one-off capital grants for projects that provide new or expanded biofuels production capacity. The Biofuels Capital Grants Program aims to increase the availability of biofuels for the domestic transport market. Grants will be provided at a rate of 16 cents per litre for new or expanded projects producing a minimum of 5 million litres of biofuel per annum. Grants will be limited to a maximum of AUD 10mill per project. This program aims to support renewable energy technology development projects through competitive grants to promote the strategic development of renewable technologies, systems and processes that have strong commercial potential. It will continue Australian Government support for innovative Australian companies and technologies, ensuring that there is a continuing supply of ideas for low-emission technologies for the long term. Page 9 of 12

10 Australia (cont.) Canada Fuel Tax Reform Mandatory Renewable Energy Target Photovoltaic Rebate Programme Equity Fund Ethanol Expansion Program Extending Tax Incentives for Renewable and Alternative Energy Excise has been introduced on ethanol and biodiesel. This is accompanied by a subsidy that reduces the effective excise (that is, excise less grant) for those fuels for a transitional period. These subsidies will be progressively reduced, raising the effective excise for untaxed fuels from zero, before 1 July 2011, to their final rates in five even annual instalments beginning 1 July 2011 and ending 1 July The Federal Government has reformed fuel tax arrangements to bring all currently untaxed fuels used in internal combustion engines (including biofuels) into the excise (and customs) duty system by 1 July Excise rates for alternative fuels have been set at 50% of the energy content equivalent excise rate. The broad reform framework will be fully implemented by 1 July 2015, when all fuels used in internal combustion engines will be subject to excise (and customs) duty based on factors including energy content, providing tax neutrality between fuels. The reforms aim to establish a fairer and more transparent fuel excise system, and enable currently untaxed fuels to establish their commercial credentials in the marketplace. These new arrangements fulfil the Federal Government's commitments concerning the tax treatment of fuel and deliver on the Measures for a Better Environment commitment to encourage the production of alternative fuels. The Australian Government s world-first Mandatory Target guarantees an additional 9,500 GWh of electricity from renewable energy sources by The Photovoltaic Rebate Program (PVRP) AUD 31mill funding - was introduced in It provides rebates to householders and community organisations that install roof-top PV power systems. The level of rebate is based on peak PV output. The minimum system size is 450-Watt peak output. There is no maximum size, although the rebate of AUD 5.00 per peak watt (ppw) for new systems is capped at AUD 7,500 (or 1.5 kw) for each installation. Extensions to existing PV systems can receive rebates of AUD 2.50 ppw capped at AUD 2,500 (1.0 kw). The community buildings component is similar in minimum size and rebates, but these are generally capped at AUD 10,000 (2.0 kw) unless exceptional circumstances apply. The Equity Fund (REEF) provides venture capital to small, innovative companies for the development of renewable technologies. The fund is managed by CVCReef, an independent company with oversight provided by the Industry Research and Development board and the AGO. The Commonwealth is both the regulator and a major investor. It has allocated AUD 17.7mill, which is matched by private equity on a 2:1 basis, amounting to a total of AUD 26.6mill over 10 years. REEF targets the renewable energy industry sector and is operates in the same way as other venture capital investment funds. The fund manager raises capital from investors and assesses small businesses in which to invest based on the expected rate of return. Eligible investor companies may receive a maximum investment of AUD 3mill or 10% of the initial capital (smallest of the two). The Ethanol Expansion Program (EEP) aims to contribute to the expansion of fuel ethanol production and use in Canada and the reduction of transportation-related GHG emissions that contribute to climate change. The EEP builds on the existing Future Fuels Initiative. It has three components: a) provides one-time capital contributions to ethanol producers to enable the construction of new fuel ethanol facilities or the expansion of existing ones; b) extension of the existing National Biomass Ethanol Program; and c) discussions to identify ways of supporting the cellulose-based ethanol industry in Canada. The Ethanol Expansion Program is expected to greatly increase Canada's ethanol production capacity. Budget 2003 broadens eligibility for capital cost allowances in Class 43.1 to include certain stationary fuel cell systems, equipment acquired for electricity generation using bio-oil (created from biomass found in forestry and plant residues), and certain types of equipment used in greenhouse operations, such as ground source heat pumps. The Government will continue to review the list of eligible investments under Class 43.1 to ensure appropriate tax treatment for renewable energy and energy conservation investments. In 2001, the Government announced consultations with industry to identify additional improvements to capital cost allowances in Class 43.1, which provides accelerated tax depreciation for certain renewable and alternative energy investments. Page 10 of 12

11 Canada (cont.) Ontario Electricity Pricing, Conservation and Supply Act Nova Scotia Energy Strategy - Renewable Energy Sources Public Investment in Green Power On 9 December 2002, the government passed the Electricity Pricing, Conservation and Supply Act, The act gives the Minister of Energy and the Ontario Energy Board powers to promote Ontario's supply of electricity. It also provides a series of measures that will encourage conservation and the use of alternative fuels, as well as support additional clean energy production, including: - Energy Conservation in Government Operations - Government Purchase of Green Power - Energy Self-Sufficient Government Buildings (for newly built buildings) - Comprehensive Tax Incentives for Producers of Clean Power, including a 10-year corporate income tax holiday for new electricity generation from clean, alternative and renewable energy sources; a 10-year property tax holiday for newly-created assets that generate electricity from such sources; a 100 per cent corporate income tax write-off in the year of acquisition for the cost of newly acquired assets used to generate electricity from clean, alternative or renewable sources; a capital tax exemption for newly acquired assets used to generate electricity from such sources, and a full retail sales tax rebate for building materials purchased and incorporated into clean, alternative or renewable electricity generation facilities. - Encouraging Self-generation and Small-scale Projects - Reducing Barriers to Clean Generation (through the modification of environmental assessment requirements). - Support Green Power Marketing (through electricity labelling). - Tax Breaks for Energy-Efficient Equipment: Regulations will be introduced to provide a 100% corporate income tax write-off in the year of acquisition for new investments in qualifying electrical energy efficient equipment. The write-off would be available for corporations that purchase eligible assets after 25 November 2002, and before 1 January Tax Rebate for Solar Energy Systems in Residential Premises - Retail Sales Tax Rebate for Efficient Appliances - Gas Tax Waiver for Ethanol - Creation of a Centre of Excellence for Alternative Energy Nova Scotia's provincial government has adopted a new energy strategy that sets a short-term voluntary renewables target of 50MW and pledges to establish a mandatory renewable energy portfolio standard (RPS) after three years. The power from the initial 50MW will be marketed as a premium-priced green product. Among the early green power customers in the province will be the provincial government itself. At least 20% of the electricity used in public buildings will come from renewable sources, and municipalities and public sector agencies will be encouraged to do the same. The federal government is already negotiating with Nova Scotia Power (NSP), the Atlantic province's monopoly utility, to buy enough green power to cover about 70% of its power usage in the province. The new strategy also opens the door to increased competition in Nova Scotia's electricity industry, including a plan to give Nova Scotia-based renewable energy producers open access to NSP's transmission system and allow them to market green power directly to retail customers. In October 2000, Natural Resources Canada announced a contribution of CAD 12.4 million over 10 years to SaskPower, Saskatchewan's electrical utility, for the development of a green power market in Saskatchewan. Under the project, by 2002 half of the power consumed by governmentowned and operated facilities in Saskatchewan will be wind-powered. The agreement aims to develop a green power market in Saskatchewan to supply 25,000 MWh over ten years to power their facilities starting in This should represent a reduction of emission of about 20,000 tons of CO 2 per year. Page 11 of 12