European Commission Communication on Support Schemes for electricity from renewable energy sources External Costs of energy and their internalisation in Europe Beatriz Yordi DG Energy and Transport
External costs and support systems for renewable energy Best solution: Create a level playing field Internalise external costs of all energy sources Abolish energy-related subsidies Finish the internal energy market 2 nd best solution: Compensate renewables Use support systems in order to compensate renewables for avoided external costs & external benefits (environment, innovation, employment, growth)
Principles of the Renewables Directive 2001/77/EC Main objective: Promotion of electricity from renewable energy sources Quantified national targets for consumption of electricity from renewable sources of energy National support schemes plus, if necessary, a harmonised support system Simplification of national administrative procedures for authorisation Guaranteed access to transmission and distribution of electricity from renewable energy sources
Where are we? Setting of national targets All EU25 Member States have adopted national targets, in line with the reference values listed in Annex I of Directive 2001/77/EC. The New EU10 targets are published in the Accession Treaty in April 2003. Targets have been also agreed with Bulgaria and Romania: -Bulgaria from current 6% to 11% by 2010. -Romania from current 28% to 33% by 2010 The 2010 target If EU-25 Member States (+BL+RO) meet these national targets, the 2010 target of 21% at 2010 will be achieved.
Production of new RES-E (without hydropower) in 2003 is equivalent to the combined overall electricity production in Portugal, Denmark and Slovenia Electricity generation [TWh/year] _ 100 80 60 40 20 Wind off-shore Wind on-shore Photovoltaics Geothermal electricity Biowaste Solid biomass Biogas 0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003
90 80 70 60 50 40 30 20 10 0 Share of green electricity in the Member States consumption of electricity compared to the national targets for 2010 1997 2002 2010 Denmark Finland France Germany Greece Ireland Italy Luxembourg The Netherlands Portugal Spain Sweden United Kingdom Cyprus Czech Republic Estonia Hungary Latvia Lithuania Malta Poland Slovakia Slovenia Belgium Austria
Price ranges for direct support of wind onshore in EU-15 member states compared to the long term marginal generation costs 160 140 Minimum to average generation costs [ /MWh] Average to maximum support level [ /MWh] 120 100 80 60 40 20 0 AT BE DK FI FR DE GR IE IT LU NL PT ES SE UK
Price ranges for direct support of wind onshore in EU-10 member states compared to the long term marginal generation costs 160 140 Minimum to average generation costs [ /MWh] Average to maximum support level [ /MWh] 120 100 80 60 40 20 0 CY CZ EE HU LA LT MT PL SK SI
2003 effectiveness indicator example biogas in UK Growth and Existing Potential - Biogas UK 20 18 [TWh] 16 14 12 10 8 6 Additional realisable Potential in 2002 until 2020 C Effectiveness Indicator represents the RES-E produced compared to the remaining potential E = (B-A)/C 4 2 0 A B 2002 2003 Total potential for 2020
Effectiveness indicator for wind onshore electricity in the period 1998-2004 EU-15.
Effectiveness indicator for wind onshore electricity in the period 1998-2004 EU-10 12% 10% Average effectiveness indicator - Wind on-shore - 8% 6% 4% 2% 0% CY CZ EE HU LA LT MT PL SK SI EU10 Feed-in tariff Quota / TGC Tender Tax incentives / Investment grants
Historically observed efficiency of support for Wind: effectiveness indicator in relation to the annuity of expected profit
Evaluation of support schemes Main conclusions Feed-in tariffs have been more effective and more efficient than quota systems High prices for tradable green certificates due to higher risk cost and immature certificate markets? Harmonisation would be premature, more experience needs to be gained, especially with quota systems Administrative and grid barriers need to be addressed
Recommendations to Member States Optimise the support system Adapt the support level to the generation costs Half of the Member States give not enough support to ensure deployment of RES-E Increase stability instability increases risk cost avoid stop-and-go nature of the support Reduce investment risk especially green certificate markets need a high liquidity
Recommendations to Member States Optimise the framework conditions Reduce administrative barriers reduce administrative requirements use clear guidelines, one-stop-authorisation agencies and pre-planning mechanisms Ensure fair grid access grid access conditions must be transparent and nondiscriminatory grid infrastructure should be improved to accommodate RES-E, associated costs should be covered by grid operator
Support for renewables What s next? 2020 targets (overall and/or by sectors) Communication on the share of RES-E by 2006 Directive proposal on Heating & Cooling Review of the biofuels Directive
Thank you for your attention!
Support for renewables What s next? 2020 targets (overall and sectoral) Communication on the share of RES-E Directive proposal on Heating & Cooling Review of the biofuels Directive
Thank you for your attention!
Price ranges for direct support of agricultural biogas in EU-15 member states compared to the long-term marginal generation costs. 160 140 Minimum to average generation costs [ /MWh] Average to maximum support level [ /MWh] 120 100 80 60 40 20 0 AT BE DK FI FR DE GR IE IT LU NL PT ES SE UK
Price ranges for supported agricultural biogas in EU-10 member states compared to the long-term marginal generation costs. 160 140 Minimum to average generation costs [ /MWh] Average to maximum support level [ /MWh] 120 100 80 60 40 20 0 CY CZ EE HU LA LT MT PL SK SI
Effectiveness indicator for biogas electricity in the period 1998-2003. 4% 3% Average effectiveness indicator - Biogas - 2% 1% 0% AT BE DK FI FR DE GR IE IT LU NL PT ES SE UK EU15-1% Feed-in tariff Quota / TGC Tender Tax incentives / Investment grants
Effectiveness indicator for biogas electricity in the period 1998-2003. 4% 3% Average effectiveness indicator - Biogas - 2% 1% 0% CY CZ EE HU LA LT MT PL SK SI EU10-1% Feed-in tariff Quota / TGC Tender Tax incentives / Investment grants
Price ranges for supported biomass electricity production from forestry residues in EU-15 member states compared to the long-term marginal generation costs. 200 180 160 Minimum to average generation costs [ /MWh] Average to maximum support level [ /MWh] * system gives the option for co-firing 140 120 100 80 60 40 20 0 AT* BE* DK FI FR DE GR IE IT* LU NL* PT ES SE UK*
Price ranges for supported biomass electricity production from forestry residues in EU-10 Member States compared to the long-term marginal generation costs 160 140 120 Minimum to average generation costs [ /MWh] Average to maximum support level [ /MWh] * system gives the option for co-firing 100 80 60 40 20 0 CY CZ * EE* HU* LA LT MT PL* SK* SI*
Effectiveness indicator for biomass electricity in the period 1998-2003. 5% 4% Average effectiveness indicator - Solid Biomass - 3% 2% 1% 0% AT BE DK FI FR DE GR IE IT LU NL PT ES SE UK EU15-1% Feed-in tariff Quota / TGC Tender Tax incentives / Investment grants
Effectiveness indicator for biomass electricity in the period 1998-2003. 5% 4% Average effectiveness indicator - Solid Biomass - 3% 2% 1% 0% CY CZ EE HU LA LT MT PL SK SI EU10-1% Feed-in tariff Quota / TGC Tender Tax incentives / Investment grants
Historically observed efficiency of support: effectiveness indicator in relation to the expected annuity. BIOMASS 10% DK 8% Effectiveness indicator 6% FI 4% AT UK HU DE 2% BE- IT FR SE Flanders 0% -1 0 1 2 3 BE- 4 5 6 Wallonia -2% Expected Annuity [ Cent/KWh] Feed-in tariff Quota / TGC Tax incentives / Investment grants
Price ranges for direct support of small-scale hydro in EU-15 Member States compared to the long-term marginal generation costs. 160 140 120 100 80 60 40 20 0 AT BE DK FI FR DE GR IE IT LU NL PT ES SE UK Minimum to average generation costs [ /MWh] Average to maximum support level [ /MWh]
Price ranges for direct support of small-scale hydro in EU-10 Member States compared to the long-term marginal generation costs. 160 140 120 Minimum to average generation costs [ /MWh] Average to maximum support level [ /MWh] 100 80 60 40 20 0 CY CZ EE HU LA LT MT PL SK SI
Effectiveness indicator for small hydro electricity in the period 1998-2003. 25% Average effectiveness indicator 1998-2003 - Small Hydro - 20% 15% 10% 5% 0% AT BE DK FI FR DE GR IE IT LU NL PT ES SE UK EU Feed-in tariff Quota / TGC Tender Tax incentives / Investment grants
Effectiveness indicator for small hydro electricity in the period 1998-2003. 25% 20% Average effectiveness indicator - Small Hydro - 15% 10% 5% 0% CY CZ EE HU LA LT MT PL SK SI EU10 Feed-in tariff Quota / TGC Tender Tax incentives / Investment grants
Price ranges (average to maximum support) for direct support of photovoltaic electricity in EU-15 Member States compared to the longterm marginal generation costs. 1200 1000 Minimum to average generation costs [ /MWh] Average to maximum support level [ /MWh] 800 600 400 200 0 AT BE DK FI FR DE GR IE IT LU NL PT ES SE UK
Effectiveness indicator for photovoltaic electricity in the period 1998-2004. 3% Average effectiveness indicator - Photovoltaics - 2% 1% 0% AT BE DK FI FR DE GR IE IT LU NL PT ES SE UK EU15 Feed-in tariff Quota / TGC Tender Tax incentives / Investment grants