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barrier for future development of hydropower in Europe.87 Table 5.10 highlights policies that support small hydropower in EU countries. TABLE 5.10 Support policies for small hydropower in the EU, 2011 Type of policy Feed-in tariff (guarantees a certain price per kWh for power generated) Feed-in premium (FIP) (offers a premium above the average spot electricity market price) Quota obligation/green certificates (require electricity suppliers to show that a certain amount of electricity delivered to consumers comes from renewable energy) Investment grants (direct support to research and investment projects) Tax exemptions, deductions, or other fiscal incentives (permits project owners to deduct a percent of investment costs from taxable profits) Tendering (contracts offered by the government for designated projects) Source: ESHA, Small Hydropower Roadmap: Condensed Research Data for EU-27, 2013, 14–16. Until 2012, there was considerable incentive for developers to build small hydropower plants in Italy, including a comprehensive FIT system for hydropower projects up to 1 MW. The success of the sector prompted communities to look into small hydropower projects and pursue joint public-private opportunities. Although this has encouraged some development, some observers believe that the incentives created a problem by overly encouraging development of small hydropower plants anywhere in the country. Starting in 2013, a new incentive system is in force in Italy that decreases all tariffs and is expected to reduce new small hydropower plant installations as a result.88 In Spain, in an effort to reduce government deficits, new measures were approved in February 2013 to cut the revenue that renewable energy plants receive from the FIT. FITs for clean energy, as well as other power system costs, will now rise annually based on a reduced inflation index. In addition, generators will no longer be able to switch between a tariff and subsidized market rates. The measures were expected to save between €600 million ($775 million) and €800 million ($1.0 billion) in 2013.89 Relevant countries Austria, Bulgaria, Czech Republic, Estonia, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Portugal, Slovakia, Spain, United Kingdom Czech Republic, Denmark, Estonia, Netherlands, Slovenia, Spain Belgium, Italy, Lithuania, Poland, Romania, Sweden, United Kingdom Belgium, Czech Republic, Finland, Greece, Luxembourg, Poland, Slovakia Belgium, Germany, Greece, Netherlands Belgium, France 87 IEA, 2012 Hydropower Technology Roadmap, 2012, 23. 88 Under the new system, the following tariffs apply: for plants rated at 1–20 kW, the tariff is €57/MWh; for plants rated at 20–500 kW, it is €219/MWh; and for plants rated at 500–1,000 kW, it is €115/MWh. HydroWorld.com, “The Road to Sustainable Development,” February 1, 2013. 89 Roca, “Spain Limits Payments to Renewables,” February 1, 2013; BNEF database, http://www.bnef.com (accessed February 12, 2013). 5-24PDF Image | Renewable Energy and Related Services: Recent Developments
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