Innovative Feed-In Tariff Designs that Limit Policy Costs

Kreycik, Claire; Couture, Toby D.; Cory, Karlynn

doi:10.2172/1219216

Cited by 13 publications

(13 citation statements)

References 7 publications

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“…To control the effectiveness and efficiency of FIT systems, it is crucial to install a feedback mechanism which automatically and promptly adjusts the remuneration to changes in real technology costs [32,41,42]. First FIT feedback mechanisms are currently implemented in Germany, Spain, California and Oregon [42,43].…”

Section: Policy Reviewmentioning

confidence: 99%

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Carbon Lock-Out: Advancing Renewable Energy Policy in Europe

et al. 2012

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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.

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Section: Policy Reviewmentioning

confidence: 99%

“…First FIT feedback mechanisms are currently implemented in Germany, Spain, California and Oregon [42,43]. However, an early announced policy revision can lead to a "last-minute panic": many investors may try to finish a project before the FIT is reduced.…”

Section: Policy Reviewmentioning

confidence: 99%

Carbon Lock-Out: Advancing Renewable Energy Policy in Europe

et al. 2012

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“…This approach can create uncertainty with regard to total policy impact and policy cost, and in some cases (involving short lead-time generation with ample resource potential), has led to substantial rate impacts (e.g., photovoltaics in Spain). In order to address these concerns, there are mechanisms that can be used to limit market growth and contain costs, such as caps and payment level adjustment mechanisms (Kreycik et al 2011). …”

Section: Addressing Geothermal Barriers and Risks Through Policymentioning

confidence: 99%

“…Establishing FIT cost-containment mechanisms, such as volume caps, price adjustment mechanisms, and/or automatic triggers for policy review, appear to help avoid FIT oversubscription and provide greater certainty about policy outcomes (Kreycik et al 2011). It is worth noting that the experiences with oversubscription have been primarily with FITs established for solar and wind power, technologies with substantially shorter lead times and greater rates of technological advance (price evolution) than geothermal.…”

Section: Policy and Contract Timingmentioning

confidence: 99%

Geothermal FIT Design: International Experience and U.S. Considerations

Rickerson¹,

Gifford²,

Grace³

et al. 2012

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NOTICEThis report was prepared as an account of work sponsored by an agency of the United States government. Neither the United States government nor any agency thereof, nor any of their employees, makes any warranty, express or implied, or assumes any legal liability or responsibility for the accuracy, completeness, or usefulness of any information, apparatus, product, or process disclosed, or represents that its use would not infringe privately owned rights. Reference herein to any specific commercial product, process, or service by trade name, trademark, manufacturer, or otherwise does not necessarily constitute or imply its endorsement, recommendation, or favoring by the United States government or any agency thereof. The views and opinions of authors expressed herein do not necessarily state or reflect those of the United States government or any agency thereof.Available electronically at http://www.osti.gov/bridge Available for a processing fee to U.S. Department of Energy and its contractors, in paper, from: Geothermal market development faces a range of unique barriers related to the cost and uncertainty of resource exploration and confirmation drilling. In addition, geothermal projects face risks similar to other generation project development, including finding buyers for power, ensuring adequate transmission capacity, competing to supply electricity and/or renewable energy certificates (RECs), securing reliable revenue streams, navigating the legal issues related to project development, and reacting to changes in existing regulations or incentives. U.S. Department of EnergyInstead of addressing all these risks and all the policies in the same analysis, this analysis focuses on the design of FIT incentive policies for geothermal electric projects and how FITs can be used to reduce risks other than the physical risk of drilling unproductive exploratory wells. The guarantee of a stable revenue stream over the life of the generation plant lowers the risk that large investments in exploration and development will not yield an off-take agreement. The combination of a guaranteed purchase, a pre-determined payment price, and a standardized offtake agreement can relieve some of the cost, risk, and pressure associated with overall project development since the project does not need to compete for or negotiate a contract before final project costs are known. Addressing exploration risk 2 by incorporating some/all of the drilling costs in the FIT payment level can incentivize some amount of risk taking in the exploration phase. Policy risks should be considered too. The greatest risk associated with FITs-rapid and dramatic development in a timeframe too short to react and adjust-appears far less likely for geothermal projects due to: (1) longer development lead times and (2) geographic limitations on project locations. In short, policymakers should be able to see a problem coming with plenty of time to adjust. In sum, FIT policies can include risk-mitigating elements and can be tailored to support a few key finan...

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“…Impacts of electricity pricing structures on REµGs have also been studied in [5][6][7][8][9][10][11][12][13][14][15][16][17] and it has generally been found that exposing electricity consumers to variable ET structures encourages demand response and promotes demand side management. FIT policies have proven successful in the growth of renewable energy implementations [8,[16][17][18][19][20]. Li et al [21] developed and validated energy forecasting models for a building cluster with multiple buildings and distributed energy systems, while also creating a collaborative operation framework to determine the optimal operation strategies of said building cluster.…”

Section: Introductionmentioning

confidence: 99%

A Decision Support Tool for Building Integrated Renewable Energy Microgrids Connected to a Smart Grid

2017

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Abstract:The objective of this study was to create a tool that will enable renewable energy microgrid (REµG) facility users to make informed decisions on the utilization of electrical power output from a building integrated REµG connected to a smart grid. A decision support tool for renewable energy microgrids (DSTREM) capable of predicting photovoltaic array and wind turbine power outputs was developed. The tool simulated users' daily electricity consumption costs, avoided CO 2 emissions and incurred monetary income relative to the usage of the building integrated REµG connected to the national electricity smart grid. DSTREM forecasted climate variables, which were used to predict REµG power output over a period of seven days. Control logic was used to prioritize supply of electricity to consumers from the renewable energy sources and the national smart grid. Across the evaluated REµG electricity supply options and during working days, electricity exported by the REµG to the national smart grid ranged from 0% to 61% of total daily generation. The results demonstrated that both monetary saving and CO 2 offsets can be substantially improved through the application of DSTREM to a REµG connected to a building.

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Innovative Feed-In Tariff Designs that Limit Policy Costs

Cited by 13 publications

References 7 publications

Carbon Lock-Out: Advancing Renewable Energy Policy in Europe

Carbon Lock-Out: Advancing Renewable Energy Policy in Europe

Geothermal FIT Design: International Experience and U.S. Considerations

A Decision Support Tool for Building Integrated Renewable Energy Microgrids Connected to a Smart Grid

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