The international experience of feed-in tariffs David Jacobs Environmental Policy Research Centre Freie Universität (Berlin) Sponsored by
Environmental Policy Research Centre Forschungsstelle für Umweltpolitik
The international experience of feed-in tariffs Generating Business from the feed-in tariff
David Jacobs Environmental Policy Research Centre
Freie Universität Berlin Bristol (UK), 29 September 2009
EU framework and international experience
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EU Directives 2001:
• No binding target (EU indicative target of 21% electricity consumption until 2010) • Including national indicative targets - also set for new Member States • No agreement on harmonisation 2009: • Binding 20% overall renewables target until 2020 •
No specific target for the electricity sector
• No agreement on harmonisation Germany as a Model - Germany's Energy and Environmental Strategy
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Diffusion of feed-in tariffs in the EU FITs accumulated
New FITs
25 20 15 10 5
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06 20
04 20
02 20
00 20
98 19
96 19
94 19
92 19
90 19
19
88
0
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RES-e support schemes in the EU
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The German case (international good and bad practise)
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Bad FIT design: The Electricity Feed Law 1990 • Limited number of eligible technologies •Tariff calculation based on avoided costs of conventional power generation (coincidental success for few technologies)
• Lack of sufficient tariff differentiation (solar/wind) •Plant size: limitation to 5 MW (biomass and hydro)
• Upper limit for electricity fed into the grid of a grid operator: 5% (total capacity cap) • No national equalization scheme (bad financing mechanism) Germany as a Model - Germany's Energy and Environmental Strategy
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Good FIT design: EEG (2000/04/09) • Tariff calculation based on technology specific generation costs • Transparent tariff calculation methodology • “Shallow” grid connection charging approach • Tariff differentiation according to technology, size, location, and fuel type • Inclusion of all renewable energy technologies
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Good FIT design: EEG (2000/04/09) •Long tariff payment duration (20 years) • Tariff degression (automatic, annual reduction) • Equal burden sharing between all consumers (exeption for energy intensive industry) • No more limit to the expansion of RES-E • Reporting and ambitious targets
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RES-e generation (1990-2007)
Source: BMU 2009
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RES-e share of total electricity consumption
16
15.2 14.2
14 12
12 10.3 9.3
10 7.6
8 6.3
7.9
6.7
6 4 2 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 Share of gross electricity consumption (%)
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Good FIT design for market integration (e.g. Spain)
• Premium feed-in tariffs (cap and floor) • Demand-oriented tariff differentiation • Additional tariff payment for combining technologies • Forecast obligation (penalties) • Additional tariff payment for grid services (provision of reactive power, capacity of supporting voltage dips)
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Summary International best practise has clearly been analysed and taken into account when designing the UK FIT scheme • Tariffs calculation based on generation costs • Inclusion of large number of technologies
• Tariff degression • Long duration of tariff payment • Revision of FIT scheme (3 years)
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Remaining questions and outcomes • Tariff level and share of each technology
• 2% target or cap? (potential market distortions in case of a cap) • Interaction with RO (will FIT share increase if ROO will not deliver?) • Impact of RES-h feed-in tariff (new concept) • Premium FIT for small producers (biomass and biogas) – Alternative: demand-oriented tariff differentiation
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How to design good feed-in tariffs? Online policy advice: Make your own FIT law www.onlinepact.org
The feed-in tariff handbook: http://www.earthscan. co.uk/?tabid=92822
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Thank you for your attention!
David Jacobs Environmental Policy Research Centre
[email protected] http://www.fu-berlin.de/ffu/
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