policies to shape an alternative energy future measures to move towards a sustainable energy future...
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POLICIES TO SHAPE AN ALTERNATIVE ENERGY FUTURE Measures to move towards a sustainable energy future by Oliver Schäfer, Policy Advisor of the European Renewable Energy Council - EREC Edinburgh, 6th Interparliamentary Forum on Renewable Energy and Energy Efficiency, Thursday 07 October 2005. - PowerPoint PPT PresentationTRANSCRIPT
POLICIES TO SHAPEAN ALTERNATIVE ENERGY FUTURE
Measures to move towards a sustainable energy future
byOliver Schäfer, Policy Advisor of the European Renewable Energy
Council - EREC
Edinburgh, 6th Interparliamentary Forum on Renewable Energy and Energy Efficiency, Thursday 07 October 2005
EREC – European Renewable Energy CouncilEREC – European Renewable Energy Council
Umbrella organisation representing all RES sectors:Umbrella organisation representing all RES sectors:
AEBIOMAEBIOM European Biomass Association EGECEGEC European Geothermal Energy Council EPIAEPIA European Photovoltaic Industry Association ESHAESHA European Small Hydropower Association ESTIFESTIF European Solar Thermal Industry Federation EUBIAEUBIA European Biomass Industry Association EWEAEWEA European Wind Energy Association EURECEUREC AgencyAgency European Renewable
Energy Research Centres Agency
Please keep two things in mind:
• Investments in energy infrastructure are always long term investments and therefore we rely on forecasts (and visions – including the „unthinkable“ of a change in energy supply)
• Your decissions influence future generations
0
100
200
300
400
500
600
1950-1959
1960-1969
1970-1979
1980-1989
1990-1999
Growth and costs of major climate related naturaldisasters
billion €
source: Münchner Rück
The Reality Today Market Development in
Wind and PV
Cumulative Wind Energy Installed Capacity
05
101520253035404550
GW
EUROPE 0.4 0.6 0.8 1.2 1.7 2.5 3.5 4.8 6.5 9.7 12.9 17.3 23.2 28.6 34.2WORLD 1.7 2.0 2.3 2.8 3.5 4.8 6.1 7.6 10.2 13.6 17.4 23.9 31.1 39.3 47.3
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
Source: Source: EWEA EWEAGrowth rates 1994-1999 : 31.2%
1999-2004 : 28.3%
The Top-10 Markets in the World
0
2000
4000
6000
8000
10000
12000
14000
16000
18000
MW 2002 2003 2004
Source: Source: EWEA EWEA
The Top 10 Suppliers in the World
REPOWER (Germany)
3%
NORDEX (Germany)
2%
GE WIND (USA)11%
SUZLON (India)4%
VESTAS (Denmark)
32%
SIEMENS (Denmark)
6%
GAMESA (Spain)
17%
ECOTECNIA (Spain)
3%
ENERCON (Germany)
15%
Others4%
MITSUBISHI (Japan)
3%
Source: Source: BTM Consult BTM Consult
Cumulative Photovoltaic Installed Cumulative Photovoltaic Installed Capacity (MWp)Capacity (MWp)
Source: Source: Eurec Agency, EPIA, Observ‘ER Eurec Agency, EPIA, Observ‘ER
0
1000
2000
3000
4000
5000MWp
World 314 371 432 502 580 669 795 948 1150 1428 1829 2387 3151 4345
EU-25 90 128 188 284 392 594 1004
1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
Growth rates 1994-1999 : 18.0%1999-2004 : 30.5%
The Top PV Markets in the World
0
200
400
600
800
1000
1200
Japa
nG
erm
any
US
A
Indi
aP.
R.C
hina
Aust
ralia
Net
herla
nds
Spai
n
Italy
Luxe
mbu
rg
MWp 2001 2002 2003 2004
Source: Source: EPIA, Observ‘ER, IEA-PVPS EPIA, Observ‘ER, IEA-PVPS
The Top PV Manufactures in the World
0
50
100
150
200
250
300
350
Shar
p
Kyo
cera
BP S
olar
Mits
ibis
hi
Q-c
ells
Shel
l Sol
ar
Sany
o
Isof
oton
RW
E S
olar
Deu
tsch
e C
ell
MWp 2001 2002 2003 2004
Source: Source: EPIA, Observ‘ER, IEA-PVPS EPIA, Observ‘ER, IEA-PVPS
Policy Works!
Main policy issue: Create a level playing field
• Energy prices do not reflect the true social costs of generation - a market failure: The social and environmental costs of polluting energy
are not internalised There are still massive subsidies to ‘conventional’
energy sources
• To achieve the benefits of Renewable Energy, support frameworks should be established They should be viewed as compensation mechanisms
for correcting these market failures.
Renewables would not need special provisions if markets were not distorted by the fact that it is
still virtually free for energy producers to pollute.
EU Power Production Mix 2003Other
renewable energy1.7% Nuclear
31.5%
Coal30.4%
Gas17.0%
Large Hydro10.0%
Oil6.1%
Wind Power2.1%
Other1.2%
Competition in the internal electricity market ?
“Much work still has to be done to deal with the dominant and even monopolistic positions of the incumbent operators and investments will be needed to guarantee the interoperability of grids and networks, interconnection and an adequate level of capabilities and infrastructure”
Loyola de Palacio, 13 October 2004
“The current level of competition is not encouraging. (…) In most national markets, customer switching rates are modest, substantial barriers remain for new entrants, market structures are highly concentrated and, last but not least a single European energy market has not been achieved.”Mario Monti, 21 September 2004
Distortions in the internal electricity market
• 4 Commission benchmarking reports: Endless distortions• National and regional monopolies / oligopolies• No real consumer choice• Lack of interconnectors• Little separation of production and transmission• Power companies acting on both demand and supply side
in the wholesale market• 75% of electricity subsidies goes to conventional power• Euratom shields nuclear (33% of total EU production) from
internal market rules (since 1958!)• Complete absence of any meaningful internalisation of
environmental costs
Liberalised Markets?Liberalised Markets?• 95% of the EU power market is still affected by huge
market distortions• Electricity prices do not reflect full costs as long as
polluter pays principle is missing• Subsidies -direct and indirect- to conventional power
production is still massive• National and regional monopolies / oligopolies
Competition not effective, but precondition for competition on RES market
Let´s be honest• A liberalised market is not existing• No support mechanism is market oriented• Any support mechanism relies on the
political willNo electricity generating technology in
history has ever been developed, introduced and become competitive
without initial support.
National Policy MeasuresEstablish a successful framework for the development
of renewable energy
A successful framework requires political effort in four vital fields : Well designed support scheme ensuring investor confidence Appropriate administrative procedures Fair grid access and strategic grid planning Public acceptance and support
If one or more of these key components are missing, little progress will happen.
National Policy Measures• Establish legally binding targets for renewable energy
National targets for the share of renewable energy are vital for maintaining and further stimulate investor confidence
• Establish incentive mechanisms which provide defined and stable returns for investors– The price for renewable power must allow for risk return
profiles that are competitive with other investment options.– The duration of a project must allow investors to recoup
their investment.Available options:– Capital Grants– Price-based Mechanisms
• feed-in price• fixed premium
– Quantity-based Mechanisms• quotas with tendering• quotas with trading- green certificates
National Policy MeasuresThe Reforms Needed to Address Market Barriers to Renewables :
• Streamlined and uniform planning procedures and permitting systems and integrated least cost network planning;
• Fair access to the grid at fair, transparent prices and removal of discriminatory access and transmission tariffs;
• Fair and transparent pricing for power throughout a network, with recognition and remuneration for the benefits of embedded generation;
• Unbundling of utilities into separate generation and distribution companies;
• The costs of grid infrastructure development and reinforcement must be carried by the grid management authority rather than individual renewable energy projects;
Policy Measures – International Level
• Establishment of legally binding RES targets• More emphasis on RES projects in development
policy• Support from International Financial Institutions,
Export Credit Agencies and Multi-lateral Development Banks– A defined and increasing percentage of overall energy sector
lending directed to RES projects– A rapid phase out of support for conventional, polluting
energy projects• Increased research and development• Increase awareness of RES• Substantial measures beyond Kyoto
Conclusion• RE has the technological potential to replace fossil
fuels as mainstream energy source.
• RE is integral part of the energy supply in many countries today.
• RE has tangible economic, ecological and social benefit.
• BUT: RE market development depends on a coherent, predictable, supportive political & legal framework.
Thanks for your attention
For more information please visit
www.erec-renewables.orgOr write me on schaefer@erec-
renewables.org