Environmental Engineering Reference
In-Depth Information
with research activity right across the Organisation for Economic Co-operation and
Development (OECD) and a number of prototype devices are currently under test.
1.2.1.1 Support mechanisms
Although some renewable energy sources can - and do - compete commercially
with fossil sources of energy, their emerging status is generally recognised by
various methods of support. Over the last decade or so, several types of system
support have appeared:
Capital subsidies: These were at least partially responsible for a very rapid
expansion of wind energy activity in California in the early 1980s. (Generous
production subsidies were also a contributory factor.) Capital subsidies also
appeared in Europe, but are now rare.
●
Several European countries have supported renewables through a system of
standard payments per unit of electricity generated - often a percentage of the
consumer electricity price. Of these mechanisms, the German and Danish
mechanisms have stimulated the markets extremely effectively. The German
support mechanism for wind generation is now more sophisticated as it is
tailored to the wind speed at the specific sites.
●
Competitive bidding: This is exemplified by the Non-Fossil Fuel Obligation
(NFFO) in the United Kingdom. Developers bid for contracts, specifying a price at
which they are able to generate. Those bidding underneath a hurdle set by gov-
ernment, in the light of the capacity that is required, are then guaranteed long-term
contracts. This mechanism underwent various changes in the United Kingdom and
has been emulated in France and Ireland, but will shortly be replaced.
●
Partial subsidies of the energy price: The U.S. production tax credit is a good
example of this; successful renewable energy projects qualify for a premium of
$0.021 for each unit of electricity generated.
●
Obligations: These are typified in the Renewables Portfolio Standard in the
United States and the Renewables Obligation (RO) in Britain. In essence,
electricity suppliers are mandated to source specified percentages of their
electricity from renewable sources by specified dates. Failure to meet the
obligation is penalised by
buy-out
payments.
●
Standard payments in general have been relatively successful in encouraging
deployment, although they do not provide strong incentives to reduce prices.
(The current German system attempts to overcome this difficulty by stepping
down the payment, year-by-year.) Competitive schemes, such as the NFFO, are
sometimes less successful in terms of deployment, although the UK NFFO was
very successful in bringing prices down.
1.2.1.2 EU and UK renewable energy - capacity and targets
The EU Directive 2009/28/EC on renewable energy, implemented by December
2010, sets ambitious targets for all Member States, such that the EU will reach a
20% share of energy from renewable sources by 2020 and a 10% share of renew-
able energy specifically in the transport sector.
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