The-biogas-handbook-Science-production-and-applications

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The biogas handbook
1.3 Political drivers and legislation
Energy markets, considered on a global scale, very rarely follow the rules of
a free market economy. The reason for this is that the price of energy in the
market is not determined by demand and supply alone but, in addition, is
subject to a multitude of political and government regulations. These
regulations follow the core requirements of economy, ecology and security
of supply and differ in the different weightings they give to these three
requirements. Besides, monopolistic or at least oligopolistic market
structures, in which the market is dominated by a few energy suppliers,
are often found in the energy industry. For the most part, electricity and
natural gas are distributed through lines and networks that until not so long
ago belonged to the energy supply companies. Although, under current
European legislation, network operators and energy suppliers were
‘unbundled’, the system had been averse to any structural change in the
energy sector for many years. Today, however, network operators and
energy suppliers in Europe are formally separated from each other, and
consumers find it much easier to opt for another supplier.
Another typical feature of the energy markets is that the emission of
greenhouse gases due to the production of energy – a major cost factor of
the economy of any country – is not reflected in the pricing policies in the
energy markets. One attempt at integrating the external cost of energy
provision in the prices is the trade in ‘pollution rights’ in the form of CO 2
certificates. This tool has not been working well on a global scale because
there is no political will of helping a genuine market into being at the
international level.
If the provision and utilization of renewable energy is a target of energy
policy, the required mechanisms that cause potential actors to supply
renewable energies must be adopted. In other words, demand for energy
that is more expensive but ‘cleaner’ than energy from conventional sources
must be generated. In this process, the quantitative and qualitative
potentials of the different sources of renewable energy must be considered
if the targets of using renewable energy are, in fact, to be attained. It will not
do, for example, to subsidize the most cost-effective renewable energies with
low resources and not to use the more expensive ones with large resources as
this may prevent the quantitative target to be met and power will not be
available when it is needed. Therefore, the urgent need is for a mechanism
that, while making fullest use of the available quantity potential, also takes
care that electricity, heat and transport fuel are supplied in accordance with
demand. So far, no mechanism that would meet all these requirements is
known. The EU has defined the target to reduce, by 2050, greenhouse gas
emissions by 85–90% from the level released in 1990. The share that
renewable energies will have in the reduction of greenhouse gas emissions
© Woodhead Publishing Limited, 2013