Legal Conditions for RE: Comparison of National Legislation

Niels I. Meyer. "Legal Conditions for RE: A Comparison of National Legislation." Paper for Berlin Conference, May 2003. Paper date: 10 June 2003.

• Says short-term goals of market not in line with long-term planning needed for energy infrastructure development. Disagrees with liberalization of electricity market in EU 1996 - says based on ideological principles, not rational evaluation.
• Ways wind capacity is ranked: total MW, percent of electricit, capacity per area, capacity per capita, capacity per GNP. Top ranked are Germany, Denmark, Denmark, Denmark, Denmark.
• 6 Top environmental concerns are noise and visual - but varies from place to place. Denmark cooperative ownership structure renders wind turbines more acceptable.
• 6 Some issues with variable supply of wind resources. Says most promising solutions involve using excess wind power to produce hydrogen and charging batteries for electric cars.
• 8 Offshore wind farms just beginning to penetrate Europe. Mostly in Denmark so far. At end of 2002, 279MW of offshore wind in Europe, 233MW of which in DK.
• 8 Author favors feed-in model. Cost can be passed on to consumers. Possibility for windfall profits can be remedied by a stepped reduction of tariffs.
• 10 Tender (offer of a bid for contract) system used in UK: winners get fixed price per kWh for length of contract period. Blames local opposition to wind farms and bureaucratic planning procedures for lack of success - less than 1/3 of winning bids realized.
• 11 Dutch system combines elements of certs and FIM (feed-in model). Old model: green electricity producers got certificates, which could be traded for 6 cent eco-tax exemption, plus got subsidy of 2 cents per kWh. New system has 2.9 cent exemption with higher subsidy, guaranteed for 10 years, but with new subsidy rates determined every year by gov't.
• 12 Danish system in flux at time of writing. Switching from successful FIM sytem to CTM, but created uncertainty. Present tariff was market price plus premium of 0.1DKK/kWh, not to exceed specified cap. Reduction of premium calculated on hourly basis - not transparent and does not create friendly environment for investment. Also, 450 MW of offshore wind being divided into three farms in international public tender process. HOW DID THIS GO?
• 13 Sweden has straight up certificate trading model (CTM). In beginning, gov't offered minimum cert price, linearly reduced to 0 by 2008. Maximum price corresponds to penalty for not fulfilling quota, 150% of avg cert price during year, with specified max.
• 13 Brief discussion of Belgium, Italy (gov't decides price of certs for specified amount of RES-E once a year), Britain.
• 13 Author dislikes CTM - price fluctuation leads to investment uncertainty.
• 13 Says electric companies wishing to buy more than quota should get special certificates, so as to not release others from their obligation
• 14 Table shows 16 European countries and whether they are using FIM, tender, green pricing (voluntary), or CTM
• 14 Possibility of international trading through Renewable Energy Certificate System between group of utilities in Austria, Belgium, Finland, France, Denmark, Germany, Holland, Italy, Norway, Sweden, UK. IS THIS WORKING?
• 14 Interplay between trading of RE certs and GHG certs? Cites Morthorst 2003 article in Energy Policy on National Targets.
• 15 Says neither CTM nor FIM are fully market conforming; one sets quantity while other sets price. Further, after wind turbines are installed, they have no flexibility to compete in a market where prices are fluctuating.