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Energy Systems and Technologies for the Coming Century ...

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1Efficiency <strong>and</strong> effectiveness of promotionsystems <strong>for</strong> electricity generation fromrenewable energy sources – An update onlessons learned from EU countriesReinhard HAAS, Gustav RESCH, Christian PANZER, Sebastian BUSCH<strong>Energy</strong> Economics Group, Vienna University of Technology, AustriaEmail: Reinhard.Haas@tuwien.ac.atMario RAGWITZISI, Fraunhofer Institut für System und Innovations<strong>for</strong>schung, KarlsruheAbstractCurrently, a wide range of strategies is implemented in different countries to increase <strong>the</strong>share of electricity from renewable energy sources (RES-E). The still most controversialdiscussion is whe<strong>the</strong>r trading-based quotas or technology-specific instruments – likefeed-in tariffs (FIT) or <strong>the</strong> Spanish premium system – lead to preferable solutions <strong>for</strong>society. The core objective of this paper is to extract <strong>the</strong> lessons learned from Europeancountries <strong>and</strong> to discuss <strong>the</strong> future perspectives of promotion schemes to ensure anefficient <strong>and</strong> effective fur<strong>the</strong>r increase of RES-E.The method of approach applied is based on a <strong>for</strong>mal framework analysing <strong>the</strong> economicper<strong>for</strong>mance of <strong>the</strong> programmes from societies points-of-view in comparison to <strong>the</strong>capacities deployed.The major results of this analysis are:The most important results <strong>and</strong> conclusions of this analysis are: (i) The success stories ofgrowth in RES-E in EU member states in recent years has been triggered by FITs. Awell-designed (dynamic) FIT provides a certain deployment of electricity generated fromRenewable <strong>Energy</strong> Sources (RES-E) fastest <strong>and</strong> at lowest costs <strong>for</strong> society; (ii) yetregarding future prospects <strong>for</strong> premium systems so far <strong>the</strong> perception from Spain is thatit ra<strong>the</strong>r leads to higher costs <strong>for</strong> society; (iii) certificate-based trading systems in recentyears have eroded gradually: <strong>the</strong>y have come closer <strong>and</strong> closer to FIT (like in UK orBelgium) or lost some of <strong>the</strong>ir attractiveness due to continuously lower per<strong>for</strong>mance asin Sweden; (iv) one major reason <strong>for</strong> this is that promotion strategies with low policyrisk lead to lower profit requirements by investors <strong>and</strong>, hence, cause lower costs <strong>for</strong>society.1 IntroductionIn Europe <strong>the</strong> European Union has set ambitious targets <strong>for</strong> increasing <strong>the</strong> share ofrenewable energy sources <strong>for</strong> electricity generation (RES-E) since <strong>the</strong> late 1990s, see e.g.EC [1], EC [2], Resch et al [3] <strong>and</strong> Johnston et al [4]. To meet <strong>the</strong>se targets <strong>the</strong>implementation of proper financial support systems is necessary. In this context a stillcontroversial discussion is whe<strong>the</strong>r quantity-driven – like Tradable Guarantee-of-OriginCertificates (TGCs) based on quotas – or price-driven (like feed-in tariffs (FIT))instruments lead to preferable solutions <strong>for</strong> society. Major pros <strong>and</strong> cons of supportsystems have been evaluated e.g. by. [7], [8], [9], [10], [11], [12], [13].Risø International <strong>Energy</strong> Conference 2011 Proceedings Page 67

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