Institutional - Wind Energy: Renewable Energy and the Environment - page 234

TABLE 11.1
Models of Compensation in Europe (€ 2003)

Country Minimum Price €/kWh

Netherlands 9.2

Germany 6.6-8.8

France 8.4

Portugal 8.1

Austria 7.8

Spain 6.4

Greece 6.4

Quota

Italy 13.0

United Kingdom 9.8

In Denmark the Windmill Law requires electric utilities to purchase energy from private wind
turbine owners at 85% of the consumer price of electricity plus ecotax relief of about $0.09/kWh.
Electric utilities receive about $0.015/kWh subsidy for wind power. The development of wind power
was tied to the Energy 21 goal of reducing CO 2 emissions by 20% by 2005.
Germany accounted for half the European market after 1995. Germany adopted the Electricity
Feed Law (EFL) in 1990 as an instrument for climate protection, saving fossil fuels, and promot-
ing renewable energy. The law obliged utilities to buy any renewable energy from independent
power producers at a minimum price defined by the government, which is based on the aver-
age revenue of all electricity sales in Germany. The initial value in 1991 was €0.16/kWh. The
EFL was modified in 1998, which set a regional cap of 5% for renewable electricity. Since the
Renewable Energy Sources Act was enacted, the electricity generation in Germany from renew-
able energy almost doubled from 6% in 2000 to 13% in 2007 [45]. Most of that is generated
by wind.
Earlier programs for promoting wind (100 MW and expansion to 250 MW program) received
kWh support. Because so much wind was installed, in 2004 it was changed to €0.085/kWh for
5 years and then €0.055/kWh for the next 15 years. There was a decrease of 2.5% per year, which
meant in 2010 the price would be €0.079/kWh for 5 years and then €0.05/kWh for 15 years. Some
states in Germany also gave a 50% investment grant in the late 1980s and early 1990s. Special
low-interest loans for environmental conservation measures were also available for financing wind
projects. These factors contributed to the massive growth of wind in the 1990s in Germany, which
ranks number one in the world in installed capacity.
India ranks fifth in the world in installed capacity due to a favorable fiscal/policy environment. In
the last 10 years, wind power development in India has been promoted through R&D, demonstration
projects and programs supported by government subsidies, fiscal incentives, and liberalized foreign
investment procedures.

Central government: Income tax holiday, accelerated depreciation, duty-free import, energy
capital/interest subsidies.
State governments: Buyback, power wheeling and banking, sales tax concession, electricity
tax exemption, demand cut concession offered to industrial consumers who establish
renewable power generation units, and capital subsidy. Tamil Nadu and several other state
electric boards purchase wind energy at about $0.064/kWh.