IEA urges governments to adopt effective policies based
on key design principles to accelerate the exploitation of the large
potential for renewable energy
29 September 2008 Berlin --- The International Energy Agency (IEA)
estimates that nearly 50% of global electricity supplies will have to
come from renewable energy sources if we want to halve CO2 emissions by
2050 in order to minimise significant and irreversible climate change
impacts. This is a huge challenge and part of the entire energy
revolution we need to achieve. Meeting these very ambitious objectives
will require unprecedented political commitment and effective policy
design and implementation.
“Only a limited set of countries have
implemented effective support policies for renewables and there is a
large potential for improvement”, said Nobuo Tanaka, Executive Director
of the IEA today in Berlin at the launch of the new study, Deploying
Renewables: Principles for Effective Policies. “Several countries have
made important progress in recent years in fostering renewables, with
renewable energy markets expanding considerably as a result. However,
much more can and should be done at the global level - in OECD member
countries, large emerging economies and other countries - to address the
urgent need of transforming our unsustainable energy present into a
clean and secure energy future.”
In this publication, the IEA has for
the first time carried out a comparative analysis of the performance of
the various renewables promotion policies around the world. The study
encompasses 35 countries, including - all OECD members and the BRICS (Brazil,
Russia, India, China and South Africa), and addresses the three relevant
sectors electricity production, heating and transport. In 2005, these 35
countries accounted for 80% of total global commercial renewable
electricity generation, 77% of commercial renewable heating/cooling (excluding
the use of traditional biomass) and 98% of renewable transport fuel
production.
The report shows that there are still significant barriers
which hamper a swift expansion and increase the costs of accelerating
renewables’ transition into the mainstream. If these were removed, it
“could allow the great potential of renewables to be exploited much more
rapidly and to a much larger extent”, Mr. Tanaka emphasised.
“Governments need to do more”, Mr. Tanaka continued. “Setting a carbon
price is not enough. To foster a smooth and efficient transition of
renewables towards mass market integration, renewable energy policies
should be designed around a set of fundamental principles, inserted into
predictable, transparent and stable policy frameworks and implemented in
an integrated approach.”
Renewable policy design should reflect five key
principles:
- The removal of non-economic barriers, such as
administrative hurdles, obstacles to grid access, poor electricity
market design, lack of information and training, and the tackling of
social acceptance issues (“not in my backyard” - NIMBY), with a view to
overcome them - in order to improve market and policy functioning;
- The
need for a predictable and transparent support framework to attract
investments;
- The introduction of transitional incentives, decreasing
over time, to foster and monitor technological innovation and move
technologies quickly towards market competitiveness;
- The development
and implementation of appropriate incentives guaranteeing a specific
level of support to different technologies based on their degree of
technology maturity, in order to exploit the significant potential of
the large basket of renewable energy technologies over time; and
- The
due consideration of the impact of large-scale penetration of renewable
energy technologies on the overall energy system, especially in
liberalised energy markets, with regard to overall cost efficiency and
system reliability.
“Governments need to take urgent action”, Mr. Tanaka
concluded. “We encourage them to develop carefully designed policy
frameworks, customised to support technologies at differing stages of
maturity, and eventually to apply appropriate incentives such as a
carbon price for more mature renewables. Moving a strong portfolio of
renewable energy technologies towards full market integration is one of
the main elements needed to make the energy technology revolution happen.”
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