Transcript Future of RECS market

EU policy for renewable
energy:
The European context
Daniel Becker
Ecofys, Berlin Office
28 April 2006, Ankara
Outline of the presentation
•
Principles of EU RES Directive
•
Current situation
•
Perspectives for reaching the targets
90
80
1997/1999
2002 Total Share
2010 TARGET
70
60
50
40
30
20
10
- Data 2002: Energy and Transport in figures, European Commission in cooperation with Eurostat, 2004
- Annex to the Directive 2001/77/EC
K
U
SE
FI
SK
SI
PT
PL
T
A
L
N
M
T
U
H
LU
LT
LV
Y
C
IT
IE
FR
ES
EL
EE
E
D
K
D
Z
C
E
B
EU
EU
Sources:
15
0
25
RES-E share in % of gross electricity
consumption
RES-E share in EU25 – current
situation
Principles of the Directive
2001/77/EC
•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
Adoption of national
targets in the EU
• All EU-15 Member States have adopted national targets, in
line with the reference values listed in Annex I of Directive
2001/77/EC.
• The 10 New Member States of the EU have set up national
targets published in the Accession Treaty in April 2003.
• 2010 Targets have been agreed with Bulgaria and
Romania.
If EU-15 Member States meet these national
targets, the 2010 target of about 20% (21% at
EU25) will be achieved.
The Commission
assessment report May
2004
• Commission has approved the communication COM(2004)
366 final:
“The share of renewable energy in the EU”.
• Commission Staff Working Document SEC(2004) 547: EU25 country reports
Main conclusion: An important first step has been
done, but extra efforts are still needed
Will the EU achieve its
2010 RES-E target?
• Extrapolation scenarios set out in the Commission Staff
Working Document show that Europe is in its half way
related to the 2010 target under current policies and
measures.
• This is even true if reductions in total electricity demand as
a result of new energy efficiency measures is taken into
account.
 Currently implemented policies will probably result
in a share of between 18% and 19%
Will the EU achieve its
2010 RES-E target?
RES-E share in 2010 – practicable scenario vs. current national policies
EU-15 Policy Scenario - Electricity 2010
22,1%
Biogas
Solid biomass
EU-15 national policies Electricity 2010
18,3%
Biogas
Solid biomass
Biowaste
Biowaste
Geothermal electricity
Geothermal electricity
Hydro large-scale
Hydro large-scale
Hydro small-scale
Hydro small-scale
Photovoltaics
Photovoltaics
Solar thermal electricity
Solar thermal electricity
Tide & wave
Tide & wave
Wind onshore
Wind onshore
Wind offshore
Wind offshore
Source: Communication from the Commission to the Council and
the European Parliament – The share of renewable energy in the
EU (SEC(2004) 547), p 13
Explanations
•Progress in achieving the national targets
differ strongly between the Member States.
•Not all Member States have adopted
complementary proactive measures geared
to national conditions.
•Success of wind energy is not outweighing
the slow growth of biomass electricity.
•Biomass is lagging behind.
Wind – the success story
• Installed wind energy capacity in EU15 grew 20% in the last 6
years. 34 GW total installed capacity at the end of 2004.
• In an average wind year this capacity can produce 74 TWh (=
around 2.4% of EU electricity consumption)
• Germany, Spain and Denmark contribute 80% of total EU15
wind power capacity:
30000
25000
20000
15000
10000
5000
0
1997
1998
1999
2000
2001
2002
2003
Luxembourg
Belgium
Finland
Ireland
Portugal
Austria
France
Greece
Sweden
United Kingdom
Italy
The Netherlands
Denmark
Spain
Germany
Source: Communication from the Commission
to the Council and the European Parliament –
The share of renewable energy in the EU (SEC(2004) 547), p
13
Biomass electricity
Estimation of the Biomass electricity trend and
comparison with the 22% objective (TWh)
180
162
160
140
120
91
100
80
42
43
60
40
20
0
1997 1998 1999 2000 2001 2002 2010
22% objective
fulfilled
Current trend
• 2010 target will only be
achieved if biomass
contributes 40% to it.
• Biomass electricity will need to
grow by 18%/year
compared to 7% during the
past 7 years.
• Additional need of around 32
Mtoe – indicative figure on the
biomass availability for energy
purposes at EU15 level is 150
Mtoe (additional 32 Mtoe for
EU10).
New initiatives – action at
European level
• Strengthening of the future Community Programme
“Intelligent Energy Europe”
• A Community action plan for biomass
• Developing renewable energy actions in heating &
cooling
• Offshore wind policy
• Research and technological development
• Future Financial Perspectives
• Using major Community financing instruments
Structural and cohesion funds, second pillar of the
CAP
• Placing biofuels on the market
Source: Communication from the Commission to the Council and the
European Parliament – The share of renewable energy in the EU
(SEC(2004) 547)
Next steps by the
European Commission
• The Commission acknowledges the importance of providing a
longer term perspective.
• The Commission will carry out regular reviews of
progress in the development of renewable energy sources.
• In 2007 the Commission will set targets for the period
after 2010.
• Studying the national measures taken to implement the
RES-E Directive in the 25 countries of the EU and to take, if
necessary, legal actions.
A closer look at the EU
Member States – EU 15
• Assessment of progress at the national level by the
European Commission:
On track:
DK, DE, ES, FI
About to be on track:
NL, UK, SE, AUT, BE, IE, FR
Not on track:
GR, PT
No information available: LU, IT
Source: Communication from the Commission to the Council and the European Parliament – The share of renewable energy in the EU (SEC(2004) 547)
On track
•DK:
–likely to achieve 2010 target in 2005
•DE:
–increased the share of RES-E from 4.5% in 1997 to
>9% in 2004
•ES:
–second largest European country for wind power
•FI:
–impressive evolution of the biomass sector
 Driving force: attractive support system in
a stable and long-term framework
About to be on track
• UK, NL:
– activity in a new policy; full results still have to materialize
• IE:
– support system through tendering; difficulties of grid connection
of wind farms
• BE:
– Green certificate system since 2002; no visible results yet
• FR:
– attractive tariff system in place; too soon for a review
• SWE:
– green certificate system since May 2003; RES-E production rose
hardly
• AU:
– good perspective for growth
Not on track
•GR:
–High administrative barriers prevent considerable
exploitation of RES
•PT:
–High administrative and grid barriers
Feed-in systems and Green
Certificates
Daniel Becker
Ecofys, Berlin Office
28 April 2006, Ankara
Inhibitory forces ti increase RES-E share
Inhibitory forces
Weak support
instruments
Structural
barriers
Financial
restrictions
Amount
of tariffs
Technical
Access to capital
Design of instruments
Administrative
Weak domestic
financial power
Grants
Socio-economic
Elements to launch RE-S successfully
take-off barrier
public support
administrative structures
support schemes
political support
• Federal law (further development
of the Power Feed-In Law of 1991)
• Priority for feed-in of RE
• Extensive regulation for grid access
• legally regulated payment rates
– Long-term perspective and
investment security (15–30
years)
– Incentive for the opening up
new potentials and
technologies (esp. biomass and
geothermal energy)
– Strong incentive for efficiency
boost, by degression of
payment rates
Cost of electric power for households
Net cost, incl.
cogeneration fee
6.56 Cent/kWh
Electric-power
generation and sale
3.00 Cent/kWh
VAT
2.33 Cent/kWh
Measuring costs
0.90 Cent/kWh
Concession fee
1.60 Cent/kWh
EEG levy
0.43 Cent/kWh
Electric-Power Tax
2.05 Cent/kWh
Of which EEG levy 1.88%
Source: Kernenergie.net (a nuclear-power website)
Prof. Alt, Versorgungsicherheit im Europäischen Verbundnetz 2004
(Supply Security in the European Integrated Grid System, 2004)
EEG: Legal Foundations
Renewable Energy Sources Act (EEG)
Features of EEG and its incentives for success
Sales at fixed rate are guaranteed for 20 years
Produced electricity must be purchased
Balances competitive advantage of conventional
energy sources
Legal certainty (20 years amortisation period)
Attractive rate of return for investors
Does not put a burden on public funds
€
EEG – how does it work?
Feed-in tariffs
Transmission grid operator
Supply
company
Grid operator
Transmission grid operator
Supply
company
Grid operator
Renewable Energy Sources Act (EEG)
Implications of EEG
RE power supply increased from 4.7% (1998)
to 10% (2004)
more than 8 million Germans are supplied solely with
RE power
Additional costs for private households are low (0.4
cent/kWh) i.e. € 14 per household / year = 2% of
annual electricity budget
Some 120,000 people now working in RE sector –
twice as many as in 1998
Feed-in and Green Certificates
• Feed-in Systems should have an integrated
GoO-component
• What happens with gererated RE-kWh:
1. With remuneration by feed-in tarriff, GoO is generated
and used at once
2. If not remunerated (e.g. biomass-cofiring, bilateral
agreements, amortised hydropower), GoO can be
traded
• Advantages:
– avoids abuse (double selling of green electricity)
– Transparency for customers („Greenness“ is
purchased)
Green Certificates and ETS
•Green Certificates can not be integrated into ETS
and, because no additionality is given (as REStarget exists)
•CDM can not be counted as GoO
•Qualitative distinction: CDM is counting CO2Reduction, while GoO certifies produced kWh