Local Content Requirements and the Renewable Energy Industry - A Good Match?

Kuntze, Jan-Christoph; Moerenhout, Tom

doi:10.2139/ssrn.2188607

Cited by 27 publications

(12 citation statements)

References 19 publications

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“…In some countries, financial support measures for wind power plants were, or are, tied to the condition that these plants comprise a certain proportion of domestically-produced parts. These so called "local content" rules tend to increase wind power investment costs in the respective countries by reducing the number of qualified turbine suppliers [109].…”

Section: Regulatory Changesmentioning

confidence: 99%

A Review of Factors Influencing the Cost Development of Electricity Generation Technologies

Samadi

2016

Energies

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This article reviews the literature on the past cost dynamics of various renewable, fossil fuel and nuclear electricity generation technologies. It identifies 10 different factors which have played key roles in influencing past cost developments according to the literature. These 10 factors are: deployment-induced learning, research, development and demonstration (RD&D)-induced learning, knowledge spillovers from other technologies, upsizing, economies of manufacturing scale, economies of project scale, changes in material and labour costs, changes in fuel costs, regulatory changes, and limits to the availability of suitable sites. The article summarises the relevant literature findings for each of these 10 factors and provides an overview indicating which factors have impacted on which generation technologies. The article also discusses the insights gained from the review for a better understanding of possible future cost developments of electricity generation technologies. Finally, future research needs, which may support a better understanding of past and future cost developments, are identified.

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Section: Regulatory Changesmentioning

confidence: 99%

A Review of Factors Influencing the Cost Development of Electricity Generation Technologies

Samadi

2016

Energies

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“…This is because these requirements are used in a public procurement scheme, as opposed to a support scheme like that employed in connection with Ontario's FIT program. Public procurement is governed only by a single article in the General Agreement on Tariffs and Trade (GATT), which is unlikely to be applied by the WTO in cases of renewable energy (Kuntze and Moerenhout, 2013). 16 REIPPPP's job figures seem somewhat misleading.…”

Section: Manufacturingmentioning

confidence: 99%

Implementing the system of multifactorial economic analysis of national power markets in the context of the CIS: Key results

Mustafinov¹

2018

RETP

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“…Whether LCRs could be effective in terms of medium-term innovation is a useful question to address, in particular given the frequent use of LCRs in renewable energy policy. What can be observed with regards to LCRs used today, however, is that many are too restrictive to generate such benefits, that they sometimes focus on non-infant industries with a low learning-by-doing potential, and that policy often overly focuses on upstream manufacturing and ignores value in the downstream services sector (Kuntze & Moerenhout, 2013). It is curious that the AB seemingly wanted to avoid ruling on the matter of whether or not an FIT is a subsidy, since the issue is likely to return in WTO adjudication. Criticism of the AB report springs from that issue and its reasoning on market creation and benchmark markets to determine a subsidy-two issues discussed in more detail below.…”

Section: Box 2: the Local Content Questionmentioning

confidence: 99%

ASCM Disciplines and Recent WTO Case Law Developments: What Space for ‘Green’ Subsidies?

Rubini¹

2017

International Trade in Sustainable Electricity

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Liesbeth Casier and Tom MoerenhoutWhat constitutes appropriate state measures for incentivizing renewable energy development and deployment? This key question has been posed by the sustainable development community, and even more so by governments and investors around the world. On May 6, 2013, all eyes were focused on the Appellate Body (AB) of the World Trade Organization (WTO), 1 which gave its first ruling on measures affecting the renewable energy generation sector as part of a dispute brought by Japan and the European Union against Canada.2 It was expected that the ruling would provide legal clarification and interpretation of WTO rules on trade, investment measures and subsidies related to sustainable energy. 3 Our key question, however, remains largely unanswered. While the AB-the highest WTO court-ruled that local content requirements (LCRs) are unacceptable, the status of renewable energy support measures remains unclear.It is likely that a WTO Dispute Settlement Panel and potentially the AB will soon again be confronted with the question of whether a feed-in tariff (FIT) is a subsidy. WTO disputes similar to Canada -Renewable Energy include:• In November 2012, China requested consultations with the European Union on Italian and Greek FITs with attached LCRs. Besides GATT and TRIMs, China also cited the ASCM, under which the determination of whether the LCR is a prohibited subsidy requires a determination of whether the FIT without LCR provisions would constitute a subsidy (see Box 1).• In February 2013, the United States filed a request for consultations with India concerning certain measures relating to solar cells and solar modules. Again the dispute concerns incentive programs with attached LCRs and the complainant cited GATT, TRIMs and ASCM.1 A short description of key concepts can be found in the terminology box at the end of this commentary. If a measure is found to be an actionable subsidy, the analysis then continues to determine whether the actionable subsidy caused adverse effects to the interests of another WTO member. Only if such adverse effects are found is the subsidy in violation of WTO law. An actionable subsidy is in itself not illegal.In the Canada -Renewable Energy case, the question of whether the FIT conferred a benefit was key to determining whether an FIT in itself was a subsidy (not yet actionable) or not. To find that a benefit is conferred, the panel and AB ask whether the disputed measure makes firms better off than they would be under competitive market conditions. The issue in the Canada -Renewable Energy case was: where should these prevailing market conditions be found? Or, put differently, what was the benchmark market price to compare to electricity generated from wind and solar energy? BOX 2: THE LOCAL CONTENT QUESTIONJapan's main complaint in this case is not the existence of an FIT in and of itself, but rather the local content requirements attached to it. The fact that neither Japan nor the European Union argued that the subsidy was specific (a necessary step t...

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Local Content Requirements and the Renewable Energy Industry - A Good Match?

Cited by 27 publications

References 19 publications

A Review of Factors Influencing the Cost Development of Electricity Generation Technologies

A Review of Factors Influencing the Cost Development of Electricity Generation Technologies

Implementing the system of multifactorial economic analysis of national power markets in the context of the CIS: Key results

ASCM Disciplines and Recent WTO Case Law Developments: What Space for ‘Green’ Subsidies?

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