Carbon Lock-Out: Advancing Renewable Energy Policy in Europe

Abstract

As part of its climate strategy, the EU aims at increasing the share of electricity from renewable energy sources (RES-E) in overall electricity generation. Attaining this target poses a considerable challenge as the electricity sector is "locked" into a carbon-intensive system, which hampers the adoption of RES-E technologies. Electricity generation, transmission and distribution grids as well as storage and demand response are subject to important path dependences, which put existing, non-renewable energy sources at an advantage. This paper examines how an EU framework for RES-E support policies should be designed to facilitate a carbon lock-out. For this purpose, we specify the major technological, economic and institutional barriers to RES-E. For each of the barriers, a policy review is carried out which assesses the performance of existing policy instruments and identifies needs for reform. The review reveals several shortcomings: while policies targeting generation are widely in place, measures to address barriers associated with OPEN ACCESSEnergies 2012, 5 324 electricity grids, storage and demand are still in their infancy and have to be extended. Moreover, the implementation of policies has been fragmented across EU Member States. In this respect, national policies should be embedded into an integrated EU-wide planning of the RES-E system with overarching energy scenarios and partially harmonized policy rules.

Quality uncertainty and the market for renewable energy: Evidence from German consumers

“…Currently, electric utilities owned by municipalities compete for customers with investor-owned firms and newly formed consumer-owned cooperatives. In the fulfillment of international agreements, European countries also strive for greening their energy systems, and various policy instruments have been established to ensure a reduction in carbon emissions from electricity generation (Lehmann et al, 2012). For instance, Germany -Europe's largest economy -has decided to phase out the utilization of nuclear power and increase its share of renewable energy sources in electricity generation to at least 40 percent by the year 2025 (Renewable Energy Act, 2014).…”

Coordination of Renewable Energy Remuneration Schemes Through Information Exchange

“…For instance, remuneration levels or tariff adjustment mechanisms can be fully harmonised across the EU or adapted to regional conditions or national requirements. While EU wide harmonisation of remuneration rules for renewable electricity generation might realise cost saving potentials from clustering installations in beneficial areas (PV in the south, wind turbines in coastal areas), there are additional costs associated with grid extension and long-distance transmission, and different national and local benefits of renewable electricity generation (Lehmann et al, 2012). Moreover, completely harmonised schemes like harmonised tariff levels are difficult to implement, because of large differences in market conditions (resource conditions, differences in installation prices, etc.…”

Pricing Energy and Ancillary Services in a Day-Ahead Market for a Price-Taker Hydro Generating Company Using a Risk-Constrained Approach

“…Detailed ancillary services models are important in order to encourage competitiveness and introduction of new ancillary services providers which consequently results in higher penetration of renewable energy sources (RES) particularly wind [15][16][17].…”

“…An easy way to incorporate a risk into linear model is to use CVaR [16] as a measure of risk. β-CVaR is defined as an average loss of a 1-β worst scenarios, thus called tail loss (Figure 2a).…”

“…Expected electricity produced when committed in the simultaneous energy, regulation and spinning reserve DAM in a time period t and a price scenario ω Equation (16).…”