harmonisation of support and the continuation of national instruments in order to: ... the resulting transfer cost due to RES support between the countriesâ¦
Coordination of national feed-in systems - a promising model to achieve flexibility for a cluster of countries Mario Ragwitz Gustav Resch Corinna Klessmann
5th Workshop of the International Feed-in Cooperation
Brussels, April 7th 2008 Fraunhofer FraunhoferISI ISI
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Renewable energy sources (RES)… • reduce CO2 emissions • decrease import dependency by diversifying sources of production • create competitive industries with lead market potential. Recent policy developments in Europe … 7 December 2005 The Commission publishes evaluation of support schemes "The & 23 January 2008 support of electricity from renewable energy sources" 10 January 2007 … The Commission publishes the Renewable Energy Road Map (COM (2006) 848 final) 9 March 2007 …
The Council of the European Union agrees … Æ to increase RES-share in EU energy mix up to 20% by 2020 Æ on binding overall RES target for each Member State Æ National targets covering the whole energy sector. Æ Minimum 10% biofuels in each Member State.
23 January 2008 … The Commission publishes the Proposal of the new RES directive … … the overall 20% target for RES was broken down into national RES targets for 2020 …
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Dominating support schemes for RES-E in the EU
Feed-in tariff FI
Quota / TGC
SE EE DK IE
UK
NL BE BE FR
LT PL
DE
Tax incentives / Investment grants
CZ SK
LU
AT SI
HU RO
ES
Other system
BG
IT PT
Feed-in tariff and Quota / TGC
LA
GR MT
CY
A clear majority of EU countries uses feed-in tariffs as main instrument 6 countries have implemented a quota obligation with TGCs Fraunhofer ISI
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"This report presents an updated review of the performance of support schemes using the same indicators presented in the 2005 report. It finds that, as in 2005, welladapted feed in tariff regimes are generally the most efficient and effective support schemes for promoting renewable electricity." Fraunhofer ISI
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Challenges with respect to support schemes Policy makers are looking for the right balance between a harmonisation of support and the continuation of national instruments in order to: (1) not disrupt currently successful instruments by superimposing a harmonized system that may or may not be optimally designed; (2) increase the overall effectiveness and efficiency on a European scale (3) improve the compatibility of RES support with other community policies such as creating a single European electricity market and establishing an effective CO2 abatement framework and (4) allow Member States to reach their national targets if efficient and effective national instruments are implemented. Two approaches discussed are GO trade or common premium Fraunhofer ISI
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Approaches for flexibility between Member States need methodologies for sharing costs and benefits
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Approaches for sharing costs and benefits All benefits are allocated as international gains only Additional costs due the RES-E generation for producers, which must / should be reimbursed to generators
Costs [Euro/MWhel]
National benefits due the RES-E generation (employment, rural development, etc.)
Transfer
Net additional costs due the RES-E generation internationally relevant (= additional costs – national benefits) Average net additional costs due the RES-E generation, internationally relevant Additional (transfer) costs for society due to unique burden sharing
A
B
Costs due to RES-E generation
A
B
Cost sharing among the countries
Source: Green-X (www.green-x.at) Fraunhofer ISI
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Approaches for sharing costs and benefits All benefits are allocated as national gains only Costs [Euro/MWhel]
Additional costs due the RES-E generation for producers, which must / should be reimbursed to generators National benefits due the RES-E generation (employment, rural development, etc.)
Transfer
Net additional costs due the RES-E generation internationally relevant (= additional costs – national benefits) Average net additional costs due the RES-E generation, internationally relevant Additional (transfer) costs for society due to unique burden sharing
A
B
Costs due to RES-E generation
A
B
Cost sharing among the countries
Source: Green-X (www.green-x.at) Fraunhofer ISI
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Approaches for sharing costs and benefits Benefits are allocated as national and international gains Additional costs due the RES-E generation for producers, which must / should be reimbursed to generators
Costs [Euro/MWhel]
National benefits due the RES-E generation (employment, rural development, etc.)
Transfer
Net additional costs due the RES-E generation internationally relevant (= additional costs – national benefits) Average net additional costs due the RES-E generation, internationally relevant Additional (transfer) costs for society due to unique burden sharing
A
B
Costs due to RES-E generation
A
B
Cost sharing among the countries
Source: Green-X (www.green-x.at) Fraunhofer ISI
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Clustering of Feed-in Systems
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Clustering of feed-in systems
Alternative flexibility measure based on clustering of different countries.
RES feed-in premium systems
-
Group of participating countries mutually fulfils the target of (additional) renewable (electricity) share
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Clear and transparent methodology is needed for sharing the resulting transfer cost due to RES support between the countries…
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… which should, in principle, reflect the share of national and international costs & benefits caused by additional RES deployment.
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Clustering of feed-in systems To illustrate the principle …
A three country case Gross electricity demand
A
RES-E potential
B
RES-E target
C
Country A
Country B
Country C
Electricity demand
High
Low
Moderate
RES-E potential
Moderate
Low
High
Moderate
High
Low
(compared to demand)
RES-E target (compared to demand)
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Clustering of feed-in systems Three cases studied with regard to the level of harmonisation of RES-E
support:
Case 1
country specific premiums
Case 2
partially harmonised premiums
Case 3
fully harmonised premiums
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(for a pure national target fulfilment)
(harmonised premiums for low- to moderatecost RES-E technologies and country-specific premiums for novel RES-E options) (equal technology-specific premiums among all partipating countries)
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Clustering of feed-in systems Case 1
country specific premiums
Case 2
partially harmonised premiums
Resulting RES-E deployment
Case 3
fully harmonised premiums
Deployment of NEW RES-E (installed 2011 to 2020)
3 cases studied with regard to the level of harmonisation of RES-E support:
125% 100%
113% 100% 99% 97%
100%
100%
120% 100% 100%100%
87% 86%
75% 50% 25% 0% A
B
C
Cluster
Æ In case of partial / full harmonisation: … Less deployment especially in Country B, but also in Country A … Higher exploitation in Country C … At cluster level similar deployment in all cases Fraunhofer ISI
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Clustering of feed-in systems 3 cases studied with regard to the level of harmonisation of RES-E support:
Resulting transfer costs / consumer expenditures
Case 1
country specific premiums
Case 2
partially harmonised premiums
Case 3
fully harmonised premiums
Cumulative transfer cost due to (NEW) RES-E support (in line with national RES-E deployment)
Æ In case of partial / full harmonisation: … Cost benefits at cluster level are getting apparent (-2% … -8%) 200%
203%
150% 141%
100%
100% 98%
100%
100%
100%
98% 92%
72%
50%
59%
51%
0%
A
B
C
Cluster
>> The key challenge is how to split the support costs Note: 100% … default country-specific value (national target fulfilment) among all participating countries. Fraunhofer ISI Ideally, a “win-win” situation should then occur. negotiated premiums for surplus Thank you for your attention