Abstract
New technologies, like renewable energy systems, usually need support to become established. Some governments have focused on initial direct state aid in the form of grants (e.g. for R&D) and then direct operating subsidies for new projects, while others have sought to make use of market mechanisms, including emission trading and green certificate systems, in order to bring emergent technologies to the market while keeping prices down. The latter approach is represented by the EU Emission Trading System and the UK’s Renewable Obligation (RO). However, most EU countries have adopted variants of another approach, Renewable Energy Feed in Tariffs (‘REFIT’), first used in Germany, which provides a guaranteed market with fixed prices. This has been clearly more successful so far than the competitive market/trading approach in terms of delivering much more generating capacity — for example, despite having a much worse wind regime, by 2004 Germany had installed over 20 times more wind capacity than the UK. And, perhaps surprisingly, it has also cost less. This chapter explains why.
This is a preview of subscription content, log in via an institution to check access.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
Preview
Unable to display preview. Download preview PDF.
References
Bechberger, M. and Reiche, D. (2005) ‘Europe banks on fixed tariffs’, New Energy, No. 2 April.
Butler, L. and Neuhoff, K. (2004) ‘Comparison of Feed in Tariff, Quota and Auction Mechanisms to Support Wind Power Development’, Cambridge University, Dept. of Applied Economics, Dec.
BWEA (2006) BWEA response to the Energy Review, July.
Carbon Trust (2006) ‘Policy frameworks for renewables’, London.
CEC (2006) ‘The support of electricity from renewable energy sources’ COM (2005) 627 final, SEC(2005) 1571, Commission of the European Communities, Brussels.
DTI (2005a) Marine Renewables: Wave and Tidal-stream Energy Demonstration Scheme, Department of Trade and Industry, London, Jan.
DTI (2005b) Statutory Consultation on changes to the Renewables Obligation, Department of Trade and Industry, London Sept. www.dti.gov.uk/renewables/ renew_2.2.5.htm
DTI (2006a) ‘The Energy Challenge’ Government report of the Energy Review, Department of Trade and Industry, London, July.
DTI (2006b) Renewable Energy: Reform of the Renewables Obligation and Statutory Consultation on the Renewables Obligation Order 2007, Department of Trade and Industry, London, October.
EEA (2001) ‘Renewable energies: success stories’, Environmental issue report No. 27: Ecotec Research and Consulting Ltd. and A. Mourelatou, for the European Environment Agency, Copenhagen.
Elliott, D. (2003) ‘Energy, Society and Environment’, Routledge, London.
Elliott, D. (2006) ‘Diffusion: consumers and innovation’ Block 4: T307 ‘on: Designing for a sustainable future’. Open University, Milton Keynes.
EWEA (2006) Maria McCafferty BWEA CEO, interviewed in Wind Directions, Vol. 25, No. 5, European Wind Energy Association, July/Aug, pp. 20–2.
Grotz, C. and Fouquet, D. (2005) ‘Fixed prices work better’. New Energy, No. 2, April. Also see Grotz & Fouquet (2005), Fixed prices work better, German Wind Energy Association (BWE), downloadable from http://www.wind-energie.de/ index.php?id=166
Junfeng, L., Jinli, S. and Lingjuan, M. (2006) ‘China: Prospect for Renewable Energy Development’ paper commissioned for the UK Treasury Stern Review: http://www.hm-treasury.gov.uk/independent_reviews/stern_review_econom-ics_climate_change/stern_review_supporting_documents.cfm
Lauber, V. (ed) (2005) ‘Switching to Renewable Power’, Earthscan, London.
NAO (2005) ‘Department of Trade and Industry: Renewable Energy’, National Audit Office, London, Feb.
PIU (2002) The Energy Review, Performance and Innovation Unit, Cabinet Office, London.
ReFocus (2006) ‘Europe rejects single green power scheme for continent’, Refocus Weekly, March 1.
Scottish Executive (2006) Renewables Obligation (Scotland) — Statutory Consultation http://www.scotland.gov.uk/Topics/Business-Industry/infrastructure/19185/ROSConsWaveTidal06Paper
Stern, N. (2007) ‘The Economies of Climate Change’ Review for HM Treasury by Sir Nicholas Stern, Cambridge University Press, http://www.hm-treasury.gov.uk/ independent_reviews/stern_review_economics_climate_change/sternreview_index.cfm
Toke, D. (2004) ‘Are Green electricity certificates the way forward for renewable energy?’. Paper to 4th International Conference on Business and Sustainable Performance’, Aalborg, Denmark, 14-15 April.
Toke, D. (2005) ‘Don’t write off community wind power’. Renew 158 Nov–Dec, pp. 20–1.
WPM (2006) Windpower Monthly, On-Line Focus article, Oct.
Author information
Authors and Affiliations
Editor information
Editors and Affiliations
Copyright information
© 2007 David Elliott
About this chapter
Cite this chapter
Elliott, D. (2007). Supporting Renewables: Feed in Tariffs and Quota/Trading Systems. In: Elliott, D. (eds) Sustainable Energy. Energy, Climate and the Environment Series. Palgrave Macmillan, London. https://doi.org/10.1057/9780230378384_9
Download citation
DOI: https://doi.org/10.1057/9780230378384_9
Publisher Name: Palgrave Macmillan, London
Print ISBN: 978-0-230-24174-9
Online ISBN: 978-0-230-37838-4
eBook Packages: Palgrave Political & Intern. Studies CollectionPolitical Science and International Studies (R0)