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1 Reinhard Haas Vienna University of Technology Efficiency and effectiveness of promotion systems for RES-E – An update on lessons learned from EU countries
1
Reinhard HaasVienna University of Technology
Efficiency and effectiveness of promotion systems for RES-E – An update on lessons learned
from EU countries
2
SURVEY
1. Introduction
2. Historical developments
3. Success of strategies
4. Conclusions
3
1 INTRODUCTION: KEY REFLECTIONS
5
INTRODUCTION
CORE MOTIVATION:
Policy targets for an INCREASE of RES-E!
e.g. 2020/20/20/20 targets
RES-E directive: increase share of RES-E from 12% 1997 to 22% in 2010)
7
0
100
200
300
400
500
600
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008
Ele
ctric
ity g
ener
atio
n [T
Wh/
a]
Large-scale hydro Small-scale hydro 'New' RES-E excl. hydro
RES-E EU-27 1997:12%
2009:17%
2. HISTORY
8
0
50
100
150
200
250
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
Str
omer
zeug
ung
[TW
h/a]
Geothermie
Photovoltaik
Biomüll
Biogas
Biomasse (fest)
Wind (Offshore)
Wind (Onshore)
ELECTRICITY GENERATION FROM „NEW“ RENEWABLES
IN EUROPE
1997: 1 %
2009: 7 %
9
Electricity in EU-27: Total and RES-E
0
500
1000
1500
2000
2500
3000
3500
1996 1998 2000 2002 2004 2006 2008 2010
TW
h
5%
7%
9%
11%
13%
15%
17%
19%
21%
Electricity from RES-E
Total
Percent RES-E
Total electricity and share of RES EU-27
* figures for 2009 and 2010 are preliminary!
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• Since about 1997 triggered by EU- directives and EU initiatives
REMARK ON RES – DEPLOYMENT IN THE EU-COUNTRIES
• Yet, specific country success stories very strongly related to national policies design!
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3. SUCCESS OF STRATEGIES
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EURO/kWh
kWh
Uncertaintypredicted
STATIC COST RESOURCE CURVES
cheapest capacities (Co-firing biomass)
more expensive capacities (wind, PV)
14
EURO/kWh
kWh
PFix
QOut
Costs
?
HOW FEED-IN TARIFFSWORK
15
EURO/kWh
kWh
PVar
Costs
?
QUOTA
HOW QUOTA-BASED TRADABLE GREEN
CERTIFICATES WORK
16
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
20%
2002 2003 2004 2005 2006 2007 2008 2009 2010
Qu
ota
an
d %
ach
ieve
dIT quota IT achieved
UK quota UK achieved
SE quota SE achieved
SWEDEN
QUOTAS
17
0
2
4
6
8
10
12
14
2002 2003 2004 2005 2006 2007 2008 2009 2010
Va
lue
of
ce
rtif
ica
te (
c/k
Wh
)
Sweden UK Belgium (average) Italy Poland Romania
PRICES OF CERTIFICATES
Continuous high level!
Shortage in banked certificates!
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0
1
2
3
4
5
6
7
8
9
2002 2003 2004 2005 2006 2007 2008 2009 2010
ce
nt/
kW
h
AT DE ES
LEVEL OF FEED-IN TARIFFS
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0
2
4
6
8
10
12
14
2002 2003 2004 2005 2006 2007 2008 2009 2010
Val
ue
of
cert
ific
ate
(c/k
Wh
)
Sw eden UK Belgium (average) Italy Poland Romania
0
2
4
6
8
10
12
14
2002 2003 2004 2005 2006 2007 2008 2009 2010
ce
nt/
kW
h
AT DE ES
SUPPORT LEVELS: COMPARISON
TRADABLE CERTIFICATES FEED-IN TARIFFS
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Total costs for customersTotal costs for customers
EURO/kWh
kWh
Market price
PF
IT_A
Target
Producer surplus
Cost curve
(PREMIUM) FEED-IN TARIFFS
PF
IT_BP
FIT
_C
C
A
B
Total costs =Generation
costs+
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EURO/kWh
kWh
Market price
Target
Producer surplus
Cost curve
TRADABLE G O CERTIFICATES
PC
ER
T
C
A
B
Generationcosts
Total costs for customersTotal costs for customers
Total costs =+
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EURO/kWh
kWh
Market price
Quota/ Target
Extra generation costs risk premium!!!
Producer surplus
Total costs
Minimal Monetary
generationcosts
TRADABLE GREEN CERTIFICATES
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[GWh/year]
[cen
t/kW
h]
Biomass
Small HydroWind Loc. A
Wind Loc. B
Quota
IMPACT OF THE SHAPE OF THE COST CURVE
Producer Surplus
PZert
Costs
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[GWh/year]
[cen
t/kW
h]
Biomass pure
Small Hydro
Munic. waste
Wind
Quota
IMPACT OF THE SHAPE OF THE COST CURVE
Producer Surplus
PZert
Biomass cofiring
Costs
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0
20
40
60
80
100
120
140
160
0 200 400 600 800 1000
Additional (up to 2020) realisable potential for RES-E [TWh]
Gen
erat
ion
Cos
t [€
/MW
h el
e]
Cost-resource curve (RES-E in the EU27)
Power price
Required RES-E
deployment
Marginal cost for RES-E
Producer Surplus
THE SHAPE OF THE COST CURVE E U - 27
RequiredRES-Edeployment
Electricity market price
Additional generation
costs
Producer surplus
Total costs
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SUCCESS CRITERIA FOR STRATEGIES
MW /Number of plants(=effectiveness)
Co
sts
(EU
R/ k
W)
(=ef
fici
ency
) Major objectives:
• increase the
amount of
electricity from
renewables and
• reduce costs!
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0
2
4
6
8
10
12
0 50 100 150 200kWh/cap/yr
Su
pp
ort
(c
/kW
h)
AT DE ES PT CZ BE IT UK SE PL
Figures excl. PV, Figures for 2008/9 preliminary
Av. 2003-2006 ---> Av. 2006-2009
EFFECTIVENESS VS COSTS
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THE CASE OF SWEDEN
Major characteristics:
* since 2002: quota-based system of Tradable Certificates
* also „old“ capacity allowed to fulfill quota
* additional investment subs. for wind!
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[GWh/year]
[cen
t/kW
h]
Biomass
Wind Loc. A Wind Loc. B
Quota
IMPACT OF INVESTMENT SUBSIDIES
Pcert_th
Costs (Supply curve)
Invest. Subsidiesfor wind
Pcert_act
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PRICES OF CERTIFICATES IN SWEDEN
0
2
4
6
8
10
12
14
16
18
2003 2004 2005 2006 2007 2008 2009 2010
TW
h/y
r
TGCs issued
TGCs redeemed
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4. CONCLUSIONS (1)4. CONCLUSIONS (1)
• There should be a clear focus on NEW capacities!
• To ensure significant RES-E deployment in the long-term, it is essential to promote a broad portfolio of different technologies
• A well-designed FIT provides RES-E-deployment fastest and at lowest costs;
• Strategies with lower (financial) risk -> less profit requirements -> lower costs for society.
IMPROVE/OPTIMIZE THE CURRENT SYSTEMS
BEFORE HARMONISING OR IMPLEMENTING MAJOR CHANGES!
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4. CONCLUSIONS (2)4. CONCLUSIONS (2)
• Trading certificates in Sweden successful due to very specific favourable conditions (“Long”)
• Promoting RES in EU successful? Yes, but increase in energy consumption outweighed …
• a dual system as in Spain in the long term is more expensive, and therefore it represents a higher burden for consumers, than a well designed single system.
• A European- wide trading system would lead to a much higher burden for European citizens than a comparable FIT for meeting the 2020/20%RES target!
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Download reports from: www . eeg . tuwien . ac . at www . green-x . at www . optres . fhg . de
E-Mail to: Reinhard.Haas @ tuwien. ac.at
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