IEA Energy Policy DK 06, UK 06, SP 05, JP 03

Denmark (2006)
Renewable energy section of this report VERY pro-market. Despite the previous meteoric rise of wind power under FITs and almost complete stagnation under new, more market-based regime, the authors commend the new approach. Box on Vestas, however, attributes rise of company to domestic demand created by financial incentive policies. New system is confusing and applies different rules to turbines depending on when they were installed, but upshot is that premium is now less than it used to be. Clearly not high enough for new turbines to support market introduction. Lots of information on cost, including a table on p. 104 comparing renewables support in DK, FR, DE, and SP. Renewable energy now supported through a Public Service Obligation (like a public benefits fund) that assesses a surcharge on electricity purchased. Study by Denmark's Economic Council in 2002 concluded that all the RE investment in the 1990s was actually a negative social cost, even after attributing relatively high costs to CO2. Discusses high costs of grid integration; reliance on other forms of electricity and power from other countries to balance intermittant RE supply. Shows high costs of CO2 reduction through RE (PV esp) compared to efficiency and CHP. Report says that government hasn't committed to RE targets, but I thought I read somewhere that they had. Offshore wind, unlike onshore, part of competitive tender syste with predetermined tariff for 12 years. Government also supports decommissioning of older, smaller turbines, and report expects lots of decommissioning in end of 2009, when this program expires, since the owners of older turbines can get higher premium until then.

Spain (2005)
Spain's renewables primarily from large hydro, but wind growing rapidly, and plans for expansion of small hydro, solar, biomass. Low heating requirements and high penetration of CHP leave little room for expansion of RE into heat. Growing demand for electricity swamping gains of RE. Report reviews status in achieving goals of Plan for Promotion of RE in Spain (2000-2010). Wind has exceeded goals, but sm hydro, solar, and bio-energy all falling behind targets. Says regulated price, calculated on basis of market price, may become too high when cost of CO2 incorporated in market price unless calculation method changed. Gov't can change premium amt in annual review, which creates uncertainty for RE operators. New method for calculating premium: can either sell to distributor for premium that is fixed % of avg electric rate or sell to market at market price + incentive for market participation + premium. Generators who opt for new system can switch to old after one year if they prefer. Mentions preferential tax treatment for RE, but no specifics. Direct support include new building regulations (including mandatory solar water heating systems), R&D. Says "public subsidies are oriented to the interest rates...[for] renewable energy projects and efficiency projects." Also, "the subsidy has led to private investment of about five times the subsidy volume." Recommends, as usual, more market determination. Fair point that FIT/premium scheme should apply for predetermined time, so projects aren't subsidized past point of amortization. Suggests green certs scheme.

UK (2006)
Low levels of RE but rapid growth. Describes Renewables Obligation (RO) system; table on p. 96 with supplier obligation levels. Since program started, the obligation has yet to meet target; consequently, ROC prices are high. UK Energy Review report of July 2006 recommended technology banding, removing risk of oversupply of ROCs (how? - perhaps by maintaining obligation levels above actual level of RE production), removing increases of buy-out price with inflation after 2015 (bad!). Capital grants for offshore wind and biomass. Capital grants, R&D money, demonstration programs for PV. Obligation for RE in transport fuel beginning April 2008, plus already-existing tax incentives. Assessment: ROC not yet generating RE intended, not keeping costs down for consumers, more expensive per unit of CO2 reduced than efficiency. Recommends looking to Australia and Sweden for good cert schemes. For siting/planning issues, recommends looking at Denmark example, where citizens own shares in turbines.

Japan (2003)
Japan not ideal for wind, since resources relatively low, space is scarce, and grids not set up for it. Leads world in PV production and is second in PV power generation; about 1.5 times cost of wind energy in Europe and US. Documents cost decline of 260yet per kWh in 1993 to 66yen per kWh in 1999. Discusses policies to promote RE very vaguely. Says RPS adopted in 2002, launched in April 2003 is most significant policy. Quite similar to UK, but non-compliance fines high (up to 1 million yen). Budget for promotion of "new energy" (excludes large-scale hydro and geothermal) doubled from 1997-2002. In 2002, 38.8 billion yen spent on technology development, 10 billion on demonstration, 96.1 billoion on promotion of introduction. In critique section, "Its [RPS] pitfall is that it maximises short-term benefits at the cost of the development of technologies and energies which may be more promoising in the longer term." Recommends enhanced R&D and demonstration funds.