fraunhofer institute systems and innovation research / mario ragwitz 1 wp5: options for policy...

Fraunhofer Institute Systems and Innovation Research / Mario Ragwitz 1

WP5: Options for policy harmonisation

Mario RagwitzFraunhofer Institute Systems and Innovation Research

RES-H PolicyKick-off meetingOctober 22nd 2008

Fraunhofer Institute Systems and Innovation Research


Content

• General concepts and options for

harmonisation at the example of RES-E

• Flexibility instruments in the Directive

proposal

• Objectives of WP5

• Tasks of WP 5


The general concept of The general concept of harmonisationharmonisation

- For the case of RES-E -- For the case of RES-E -


Analogy with the electricity sector

type of schemeapplied

Degree ofharmonisation

TGCTradeable

Green Certificates

FITFixed

Feed-in Tariff

FIPPremium Feed-in Tariff

Tender

technology-specific harmonisation

"Central co-ordination" (harmonised, binding framework conditions,

minimum design criteria independent of the type of support)

1 technology

.

.

.

.

.

all technologie

s

TGC FIT FIP Tender

"Convergence"(one support system, national design)

TGC FIT FIP Tender

"Full harmonisation"(one support system, same design in all MS)

Incre

asing de

gree o

f ha

rmo

nisatio

n

• Establishment of a unique support mechanism in all Member States possibly including a component to consider national circumstances • Equalisation of costs of the promotion system between EU Member States


Flexibility elements of the Flexibility elements of the new proposal for a RES new proposal for a RES

directivedirective

- Discussion on GO trade - Discussion on GO trade --


Green-X balanced scenario

0

200

400

600

800

1000

1200

199

7

199

8

199

9

200

0

200

1

200

2

200

3

200

4

200

5

200

6

200

7

200

8

200

9

201

0

201

1

201

2

201

3

201

4

201

5

201

6

201

7

201

8

201

9

202

0

RE

S-E

- e

ner

gy

ou

tpu

t [T

Wh

/yea

r] Wind offshore

Wind onshore

Tide & wave

Solar thermal electricity

Photovoltaics

Hydro large-scale

Hydro small-scale

Geothermal electricity

Biowaste

Solid biomass

Biogas

Historical development Future development

0

10

20

30

40

50

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

RE

S-T

- e

ner

gy

ou

tpu

t [M

toe/

yea

r]

Biofuels


0

20

40

60

80

100

120

140

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

RE

S-H

- e

ner

gy

ou

tpu

t [M

toe/

year

]

Solar thermalheat

Geothermal -heat pumps

Geothermal -non heat pumps

Biomass heat


Renewable Energy Renewable Energy Roadmap Roadmap (European (European Commission, Commission, January 2007)January 2007)European Union European Union

20% Renewable 20% Renewable Energies by Energies by 20202020

FutureFuture perspectives: perspectives: a scenario on how to meet the a scenario on how to meet the challengechallenge


National RES targets for 2020 – the proposed definitionNational RES targets for 2020 – the proposed definition

How the European Commission set the targets … „FLAT RATE“ & „GDP-Variation“

… i.e.: RES-target2020 = RES2005% + 50% *RESNEW % + 50%*“RESNEW % GDP-weighting“-“first mover

bonus“

20% RES by 2020 - proposed national RES targets

0%

10%

20%

30%

40%

50%

60%

70%

80%A

ust

ria

Belg

ium

De

nm

ark

Finla

nd

Fra

nc

e

Ge

rma

ny

Gre

ec

e

Irela

nd

Italy

Luxe

mb

ourg

Ne

the

rland

s

Po

rtug

al

Spa

in

Swe

de

n

Unite

d K

ing

do

m

Cyp

rus

Cze

ch R

ep

ub

lic

Esto

nia

Hung

ary

Latv

ia

Lith

ua

nia

Ma

lta

Po

land

Slo

vaki

a

Slo

venia

Bulg

aria

Ro

ma

nia

EU27

Share

in (fin

al) e

nerg

y d

em

and

by 2

020

[%]

Total realisable RES potential up to 2020

Proposed RES targets for 2020


In order to give MS a maximum of flexibility for reaching In order to give MS a maximum of flexibility for reaching their targets different options for trade of guarantees of their targets different options for trade of guarantees of origin are foreseenorigin are foreseen

In the original EC proposal this meant to In the original EC proposal this meant to open national open national systemssystemsMain Challenges:

►National governments need national targets and action plans to deliver necessary regime for planning, grid access, balancing and congestion management

►Investment risk to be minimised in a potentially complex policy environment

►One support price creates potentially large windfall profits and fails to support technology portfolio

Proposed RES directive: flexibility based on GO tradeProposed RES directive: flexibility based on GO trade


Rationale for flexibility between Member StatesRationale for flexibility between Member States

►Renewable energy potentials are distributed unevenly across Europe.

►A trading option could help MS with low RE potential to achieve their targets at lower societal cost (depending on the trade design).

►Potentially, this could lead to lower overall costs for reaching the European 2020 targets (up to 8 bn €/a according to Directive impact assessment).

►Using standardised GOs for trade and disclosure may avoid double counting and double selling of RE.

Proposed RES directive: Proposed RES directive: flexibility based on GO tradeflexibility based on GO trade


Implementation of GO trade in the Directive proposalImplementation of GO trade in the Directive proposal

►Directive aims to open the opportunity for both private party trade as well as MS trade

►The default option is private participant trade according to art. 8.1 (b), 8.2 and 9.3

►MS may restrict private participant trade using "prior authorisation" based on art. 9.2 – it is however unclear, whether such restrictions will be effectively possible under EU law

►Trade between MS is possible based on art. 8.1 (a) and 9.1 - only between MS, which have reached their interim targets

Proposed RES directive: Proposed RES directive: flexibility based on GO tradeflexibility based on GO trade


State of discussion on trade options in the Directive in State of discussion on trade options in the Directive in Parliament and Council:Parliament and Council:

The current draft of the EU parliament defines a clear

separation between government trade and joint projects

based on statistical transfers and flexibility on plant level

based on so called transfer accounting certificates (TACs)

The current draft of the Council concentrates on

government trade and joint projects based on statistical

transfers

Negotiated RES directive: Negotiated RES directive: flexibility based on GO tradeflexibility based on GO trade

Besides the GO trade the Directive proposal contains a Besides the GO trade the Directive proposal contains a use obligation for new and existing buildings (the latter use obligation for new and existing buildings (the latter under strong debate) and minimum efficiencies for RES under strong debate) and minimum efficiencies for RES H/C technologiesH/C technologies


General questions addressed to the WP

■ What is meant by “harmonisation”? Harmonising support schemes could range from defining generally binding framework conditions suitable for various instruments versus applying one common, precisely defined support scheme in the EU, as well as many discrete variations.

■ Which specific conditions apply to different support instruments in the heat sector that may affect the feasibility of any kind of harmonisation? What limitations on harmonisation will be effected by different combinations of mechanisms?

■ Which level of harmonisation is already resulting from the Directive proposal COM(2008) 19?


General questions addressed to the WP

■ Which consequences can be derived from the Directive proposal for national policy frameworks and what could be an optimised national implementation of the proposed heating obligation? Which design features can be recommended from a national viewpoint?

■ Which could be the role of Guarantees of Origin, if they are introduced in the RES-H/C sector and used for trading the RES attributes between Member States?

■ What lessons regarding harmonisation of RES-H/C policy can be learned from efforts to harmonise RES-E policy at the European level and the likely efforts of Member States to subscribe to the harmonisation process?


Task 5.1 Preparation of previous results - best practices of implemented support schemes

• Prepare results of previous and ongoing activities in this area also based on similar discussions in the RES-E sector.

• Focus on the consequences from a national viewpoint – in particular for the target countries

• Based on the work in WP2 elaborate on best practices of the main policy instruments at national level – i.e. investment schemes, tax measures, building standards, installation obligations, quota obligations and bonus systems – from a historical perspective.

• The results of this task will form the basis for the first chapter of D 17.


Task 5.2.Coordination / harmonisation – defining a common framework

A) Harmonisation could mean to prescribe a set of generic criteria that apply to all main instruments in Europe.

• These criteria could aim at guaranteeing the effectiveness of the applied measures, to set certain minimum requirements with respect to the economic efficiency or to ensure investment stability.

• leading to a convergence of national policies• define and elaborate convergence criteria and common design rules • derive suggestions for the specific implementation of these criteria

into national policies.

B) Define the key elements of ONE harmonised support scheme (policy package / basket) in Europe for the most promising policies identified in WP4

• Propose different design variants of main instruments, which will be quantitatively analysed in task 5.3.

• The results of this task will form the basis for the second chapter of D 17.


Task 5.3. Assessment of costs & benefits of RES-H/C harmonisation

• Analyse the technology deployment and the costs associated with the different policy strategies for RES-H/C based on the INVERT scenarios for policies selected in task 5.2

• Focus on the elaboration of purely national strategies for selected Member States versus a coordination of support between these Member States.

• Consequences of different cases of a harmonised policy to be analysed regarding generation costs, costs for consumers and the effect on public expenditures

• Assessment will model an increasing degree of harmonisation, deriving the quantitative consequences on the technology portfolio, the costs and use of fossil fuels.

• Work will be based on the quantitative outcomes of WP3/4 as well as on available outcomes of existing studies

• The results of this task will form the basis for the third chapter of D 17.


Task 5.4. Methodologies to share cost & benefits of a future harmonised European policy for RES-H/C

• Focus on the conception of a methodology to share costs & benefits of a future harmonised European policy for RES-H/C among all Member States.

• The main idea is to differentiate between national and international costs and benefits in order to derive a reasonable mechanism to share the occurring costs by allocating the corresponding benefits in an adequate manner.

• The results of this task will form the basis for the fourth chapter of D 17.


Task 5.5. Using Guarantees of Origin for the trade of the renewable attribute of RES-H/C between Member States

■ The current concept of Guarantees of Origin (GOs) in the proposed RES Directive covers large-scale RES-H applications as well as RES-E.

■ In the future, further extensions of the application of GOs to medium to small scale heating possible.

■ The consequences and the practicality of this concept for the different sub-sectors of the RES-H sector, i.e. small-scale decentralised versus large scale grid-connected applications, will be assessed.

■ Recommendations will be made as to how to optimally design such a system and to implement it on a Member State level.

■ The implications of a stronger use of the GOs in the RES-H sector will be assessed based on the INVERT model in close connection to the task 5.3.

■ Discussion to be based on the final version of 2020 Directive.■ The results of this task will form the basis for the fifth chapter

of D 17.


Task 5.6. Consultation Workshops: Consultation with stakeholders on EU and Member State level

■ Two consultation workshops directed to the issue of RES-H/C policy harmonisation at EU and Member State level

■ The first consultation workshop will be on the common framework for a coordinated/harmonised RES-H policy framework (task 5.2).

■ The second workshop will be on the costs and benefits of RES-H/C harmonisation (tasks 5.3 and 5.4) as well as the GoO on RES-H (task 5.5).

■ The findings of the relevant tasks will be circulated at least 14 days before each workshop.


Distribution of work among partners

• Fraunhofer ISI: WP Coordinator, responsible for the overall coordination of this WP, responsible for the WP report (D 17), responsible for the organisation of the two consultation workshops

• ECN: Contribution to analysis in tasks 5.1-5.3 and 5.5; leader of task 5.4

• ULUND: Contribution to analysis in tasks 5.1, 5.3 ands 5.4; leader of task 5.2

• Oeko: Contribution to analysis in tasks 5.1, 5.2, leader of task 5.5

• UNEXE: Contribution to analysis in tasks 5.1-5.4• EEG: Contribution to tasks 5.1 and 5.3 (INVERT modelling)• KAPE, LEI, ESV: Contribution to analysis in task 5.1• All partners: participation at both consultation workshops


Thank you for your attention

Contact

Mario Ragwitz

[email protected]

fraunhofer institute systems and innovation research / mario ragwitz 1 wp5: options for policy...

Documents

innovation research

national res targets

res new

trade slide

trade slide

national targets

example of res

case of res