World Energy Outlook 2006

pricing, a voluntary measure, has not so far proven to have a significant impact.
Increasing public funding of research, development and deployment can help
speed up the decline in the capital costs of renewables as they enter the market. 2
But all these incentives are costly, either to governments themselves (through
increased public spending) or to consumers (through higher taxes or prices).
Pursuing such policies with the vigour assumed in the Alternative Policy
Scenario depends on their being demonstrated to be cost-effective.
Other constraints will also apply. Planning periods are long for some types of
renewables projects, particularly wind farms and hydropower. To facilitate
investment in renewables, a clear and effective planning system is essential. The
integration of intermittent renewables in the electricity grid has also to be
planned with care.
Enhancing the Role of Nuclear Power
In many parts of the world, barriers to the adoption of policies encouraging the
construction of nuclear reactors are particularly high. Public attitudes vary
widely. In several countries in the European Union, there is vocal public
opposition to nuclear power and, in some cases, governments have even fallen
over the issue of plant lifetime extension or expansion of nuclear capacity.
Opposition is based on concerns over reactor safety, the safety and cost of longterm
waste disposal and proliferation of nuclear weapons. In developing
countries, obtaining financing for large-scale initial investment is another
major hurdle. Chapter 13 examines in detail the economics, prospects and
current policy framework for nuclear power.
Overcoming Hurdles to Government Action
It will take considerable political will to push through the policies and measures
in the Alternative Policy Scenario, many of which are bound to encounter
considerable resistance from industry and consumer interests. This is largely
because of the way costs fall under present conventions. Much effort needs to
be expanded in communicating clearly to the general public the benefits of
change to the economy and to society as a whole. In many countries, the public
is becoming increasingly familiar with the energy-security and environmental
advantages of action to encourage more efficient energy use and to boost the
role of non-fossil fuels. The high oil prices experienced over the past few years
have helped to increase the awareness of the benefits of change.
To make the Alternative Policy Scenario a reality, private-sector support for
more stringent government policy initiatives would be essential, together with
a strong degree of co-operation between industry and government and between
2. The share of renewable energy technologies in total government energy R&D spending has
remained relatively stable over the past two decades (IEA, 2006a).
Chapter 10 - Getting to and Going Beyond the Alternative Policy Scenario 255
10
© OECD/IEA, 2007