photo by lant_70 via flickr
In an example of how differing incentive systems produce different results in stimulating growth of renewable energy comes two stories from the UK.
Only 6% from renewables by 2020 with current policies
The Guardian is reporting that the Renewables Advisory Board has said that the UK will miss its target of meeting 15% of its energy needs through renewable sources by 2020, even if significant new policy changes and massive new investment is made. If radical changes are made, perhaps 14% is attainable, but if current policies continue 6% from renewables in more likely.
Green technologies will have little chance of making a significant enough penetration in the heating and transportation sectors by 2020, so the electric sector will have to carry most of the weight, RAB reports. Approximately 40% of electricity will have to be generated renewably to reach the best case estimate of 14% total energy from renewables.
This would mean that in addition to massive increases in onshore and offshore windfarms—increases of 1,850MW to 13,000MW and 394 MW to 18,000 MW respectively—one in every 38 homes would have to install photovoltaic systems for electricity. Last year 270 panels were installed in the UK, while in Germany 130,000 PV panels were installed. This brings us the second part:
Quota system to blame for slow renewable uptake in Britain
If the German deputy environment minister, Matthias Machnig, is correct (and I tend to think he is) a good part of the reason which UK deployment of renewable energy is languishing while it is flourishing in Germany is the differing forms of incentives the two nations have.
Britain has a quota system, wherein electric companies have to generate a given percentage of their electricity from renewable sources. The complexity of the system is such that a whole series of these posts might not be enough to explain how there is actually an economic disincentive in place if too much energy gets produced from renewables.
The really fuzzy sketch version: It’s based off an auction of renewable energy certificates, which are given to producers of renewable energy and have to be bought by the companies who distribute the energy to prove how much of their electricity is from renewable sources. Since those two groups are often the same people, and the cost of the certificates decline as more of the electricity is generated renewably, there is an economic benefit to not meeting the goal fully. Is your head spinning yet? I said it would be fuzzy.
photo by Bernd Sieker
German feed-in tariffs working to stimulate expansion of renewables
You’ll just have to look at the numbers to see that something’s not working: the UK currently in generates 4% of its electricity renewably. Germany on the other hand produces 15% and the industry is booming, "creating 250,000 and billions of euros in exports a year," according to Machnig.
At the heart of this is the feed-in-tariff system in place, which pays producers of renewable energy an above-market rate for the electricity they produce and then distributes the cost among all consumers of electricity. According to Machnig the cost to an average family is a €2 increase in their bill per month.
The result is that Germany will easily meet the EU target of 20% by 2020 and will likely surpass it by half. Machnig says 30% from renewables by 2020, and 45% by 2030 is attainable.
via :: The Guardian
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