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© OECD/IEA - 2008 Deploying Renewables: Principles for Effective Policies Press Conference, OECD Berlin, 29 September 2008 Dr. Paolo Frankl Head, Renewable.

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Presentation on theme: "© OECD/IEA - 2008 Deploying Renewables: Principles for Effective Policies Press Conference, OECD Berlin, 29 September 2008 Dr. Paolo Frankl Head, Renewable."— Presentation transcript:

1 © OECD/IEA Deploying Renewables: Principles for Effective Policies Press Conference, OECD Berlin, 29 September 2008 Dr. Paolo Frankl Head, Renewable Energy Unit International Energy Agency

2 © OECD/IEA Global Power Generation Mix Scenarios 46.5% Renewables [Source: ETP 2008] Renewables would have to play a particularly significant role in the power sector, increasing from 18% today to nearly 50% by Non-hydro renewables show the highest growth rate.

3 © OECD/IEA Comparative assessment of effectiveness and efficiency of renewables support policies (market deployment and RD&D policies) OECD countries plus Brazil, Russia, India, China, South Africa Electricity, Heat and Transport Fuel sectors Distillation of the best policy practices and of main challenges encountered Learn from success stories but also from failures Co-funded by German BMU, Japanese NEDO, and Enel Global Renewable Energy Markets and Policies Programme (GREMPP)

4 © OECD/IEA Incremental RE generation in a given year Remaining additional realisable potential (by 2020) Quantitative Analysis Chosen policy effectiveness indicator on a yearly basis:

5 © OECD/IEA Achieved (by 2005) and Additional realisable mid-term potential (by 2020) for RES-Electricity Achieved (2005) and additional realisable mid-term (up to 2020) potential for RES-Electricity by country (OECD+BRICS) – in absolute terms (TWh) Source: IEA & EEG, 2008

6 © OECD/IEA Effectiveness & Efficiency Wind On-shore 2005 (OECD & BRICS) Source: IEA & Fh-ISI, 2008 Long-term predictable incentives (FIT or FIP) + Appropriate framework Higher risk (TGC) + Non-economic barriers Efficiency

7 © OECD/IEA Effectiveness & Efficiency Solid biomass el (OECD+BRICS) Source: IEA & Fh-ISI, 2008 TGC FIT/FIP

8 © OECD/IEA Effectiveness & Efficiency Solar PV 2005 (OECD & BRICS) Source: IEA & Fh-ISI, 2008 FIT

9 © OECD/IEA Main Lessons Learnt and Conclusions

10 © OECD/IEA Effective policies only in a limited set of countries Sometimes depending on specific technology Perceived risk, more than profit, is key to policy effectiveness & efficiency Price support can not be adequately addressed in isolation; non-economic barriers must be addressed concurrently Grid barriers Administrative barriers Social acceptance issues Other barriers (e.g. training, information, financial, etc.) Effective systems have, in practice, frequently been the most cost efficient Technology-specific support is key for both effectiveness and cost-efficiency Main Lessons Learnt (1)

11 © OECD/IEA Main Lessons Learnt (2) Move beyond Feed-In Tariff vs. Quota Obligation System/ Tradable Green Certificate debate Both systems show success and failures depending on specific country and technology Precise design criteria and fine-tuning are key Signs of convergence: Feed-In Tariff: Premium tariff option, time digression Quota System/Tradable Green Certificate: Technology banding

12 © OECD/IEA Remove non-economic barriers to improve market functioning 2. Establish predictable support framework - to attract investments 3. Set up transitional incentives decreasing over time – to foster and monitor technological innovation and move towards market competitiveness 4. Ensure specific support in function of technology maturity to exploit potential of large RET range 5. With increasing mass-scale RET penetration impact on overall energy system must be taken into account Continuity Certainty Key Principles for Effective Renewable Energy Policies

13 © OECD/IEA Fostering REs transition towards mass market integration Niche marketsMass market Low cost-gap (e.g. wind onshore) High cost-gap (e.g. PV) Mature tech (e.g. hydro) Prototype & demo stage (e.g. 2 nd gen biofuels) Time Market Deployment Development 1. Development RD&D financing, capital cost support, investment tax credits, rebates, loan guarantees 2. Stable, low-risk, sheltered FIT, FIP, Tenders 3. Shared/imposed market risk, guaranteed minimum but declining support FIP, TGC (technology banding) 4. Technology-neutral competition TGC, Carbon trading (e.g. EU ETS)

14 © OECD/IEA Realise urgency to implement effective policies to exploit major potential of RETs in terms of energy security and climate change mitigation 2. Remove and overcome non-economic barriers first 3. Exploit substantial potential for improvement of policy effectiveness and efficiency: learn from good practice 4. Focus on rigorous and coherent implementation of key policy design principles with regard to long-term cost efficiency and national circumstances 5. Create level playing field by pricing in GHG emissions and other externalities 6. Allow a combination framework of incentive schemes in function of technology maturity level Urgent action for Energy Technology Revolution Recommendations


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