Policy Department Renewable Technologies

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Policy Department Renewable Technologies ( policy-department-renewable-technologies )

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Policy Department A: Economic and Scientific Policy ____________________________________________________________________________________________ The most comprehensive and effective instrument of supporting renewable energy technology deployment is the Feed-in-Tariff (FIT) as the case of Germany shows that has become a role model for dozens of renewable energy support schemes worldwide. This instrument needs to be followed continuously in order to gain from its benefits over certificates, i.e. avoiding “boom & bust” or “on & off” waves of support, interest and thus stakeholder engagement. The instrument provides a reliable framework for investments and can be fine-tuned as technology and markets develop. Examples for two successful French instruments are the Research Demonstration Fund (direct instrument) and the Crédit Impôt Recherche (indirect instrument). 4.2. EU policy 4.2.1. Energy regulatory policy The core elements of the energy and climate change package are the revised EU Emissions Trading System, in combination with the effort-sharing decision, and the directive for the promotion of renewable energy sources. Although it could be argued that with the EU ETS in operation, the effectiveness of all other policies to reduce CO2 emissions of the participating sectors becomes zero, there are some key systemic characteristics of the EU ETS as well as several other key benefits of renewable energy sources that warrant their continued support. These benefits include, amongst others, improvements in the security of supply, a reduction of the long-term price volatility the EU is subject to as a result of its dependence on imported fossil fuels, as well as increases in the competitiveness of EU energy technology industry. Similarly, expected effects of national RES policies should have been taken into account by member states when the aggregate EU ETS cap was defined. All in all, there is a case for continued support to renewables, however, a common European support scheme should be considered replacing the different national schemes currently in place. This will accommodate internal market concerns and will increase the efficiency of renewable energy sources in Europe. In terms of renewables in the context of the Second Strategic Energy Review, the Commission intends to develop the Southern Mediterranean solar and wind energy potential, as well as offshore wind in the North Sea. This is in line with its strategy to develop indigenous energy production to decrease dependence on imported fossil fuels. However, a European approach to such large-scale renewable energy sources requires a pan-European smart grid (i.e. “super grid”), which can bring electricity from renewables to where it is needed over long distances and which can balance the natural variability of renewables on a European scale. This needs to be a priority for Europe and the European Economic Recovery Plan shows that EU spending on infrastructure projects is possible. The third internal energy market package has been designed to ensure that internal electricity and gas markets operate smoothly in the future. This has been done in the belief that a well-functioning internal market in electricity should provide producers with the appropriate incentives for investing in new power generation, including in electricity from renewable energy sources. The internal market package thus aims to reduce barriers for renewables and to facilitate access of electricity from renewables to the network. Similarly, it encourages the long-term modernisation of electricity grids and provides the environment for the implementation of smart grids across Europe in view of supporting decentralised and small-scale generation and energy efficiency. In terms of unbundling, the package could have gone further to include unbundling at the DSO level. IP/A/ITRE/ST/2009-11 & 12 112 PE 440.278

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