Environmental Engineering Reference
In-Depth Information
Table 7.6
Summary of support mechanisms for renewable energy. (Courtesy of David Milborrow)
Type
Country
Comments
Non - fossil fuel obligation
UK, IRL, FR
Generators made bids for renewable generation. If
successful, they were given contacts for fi xed terms
Feed - in tariffs
DE, ES, DK
Fixed payments made for renewable energy schemes.
Tends to be expensive, but has been very successful
in stimulating growth
Supply side obligations
UK, US
states
Tends to be costly (UK), although this depends on
precise rules
Production tax credit
USA
Fixed sum (1.8 USc/kW h or 1.4
€
cents/kW h) added
to generation from renewable plant. Works well, but
depends on periodic renewals of mandate
Carbon trading
EU
Premium for renewables depends on quotas for fossil
plant. Modest impact at present
This reasoning may be simplistic but it is nevertheless the principle behind
net metering
,
which is used by several US utilities to remunerate renewable energy generators at 100% of
the supply cost. A modifi ed version of the approach has been used in Denmark and Germany
where renewable generators were paid 80-90% of the domestic tariff.
Although studies in the US and elsewhere point to the fact that renewable energy may have
a high value in certain locations [9], this point is not widely accepted within EU utilities,
many of whom continue to assign renewable energy a value based only on its fuel saving
capability. The cost, price and hence the value of electricity varies on a geographical basis.
Above-average costs are incurred when energy has to be transmitted long distances from the
generating plant. The need to supply remote locations increases the costs of the distribution
network and, in addition, electrical losses are incurred in feeding the energy to the extremities
of the system. In many instances renewable electricity generating technologies deliver energy
closer to consumer demand than centralized generation. It substitutes for electricity that has
accrued a higher selling price than the generation costs of large thermal plant, due to its
passage through the network. This rising level of 'value' with reducing voltage is refl ected
in higher charges for customers connected at lower voltage levels. These concepts are illus-
trated in Figure 7.10, which includes typical selling prices for electricity at various voltage
levels in the UK system.
Electricity utilities rarely ascribe exact costs to account for all geographical and temporal
factors. Tariffs build in cost averaging so that blocks of consumers with similar requirements
and locations pay similar rates.
7.5.2 A Cash - fl ow Analysis
As part of an EU-funded study [10], an analysis of the cash fl ows through the electricity
network in England and Wales was carried out. Data were compared with information from
