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MODEL INDIAN R E LAW
INTERNATIONAL COMPARATIVE TABLE |
DIFFERENTIAL TARIFFS FOR RENEWABLE ENERGY
Feed-in
tariffs stimulate the generation and entry of renewable energy into the
electricity grid by offering a minimum price per KWh produced. The price
varies across technologies and is set by the regulator.
Although
feed-in tariffs are designed to reflect long-term marginal production costs,
in practice they are set at higher levels to attract investors seeking
profits. This means they can prove to be an expensive instrument if they are
set too high and attract fickle investors. More research needs to be done in
fleshing out the three alternative:
►
Long-term marginal
production costs
►
Tariffs too low to
attract investors
►
Tariffs too high that
they are cost ineffective
In the
1980-90s IEA countries supported feed-in tariffs with investment incentives
and tax measures. Now on the market, feed-in tariffs in conjunction with
tradeable certificates are the main school of thought. Offsetting this
direction, however, is maintaining attractive rates for investors and
maintaining flexibility to ensure that prices are minimised and fall over
time.
|
Country |
Name |
Feed-in
Tariffs |
Comment |
|
Asia |
|
|
|
|
Australia
|
|
No
feed-in tariffs |
|
|
China |
China
Renewable Energy Law - Provisional Administrative Measures on Pricing
and Cost Sharing for Renewable Energy Power Generation |
Feed-in
tariffs differentiated by source. There are two methods by which the
tariff may be determined:
(i)
fixed Government
price; or
(ii)
Guidance price of the
Government. The Guidance price is determined through bidding by the
price authorities of the State Council. |
Effective
from January 1 2006. Responsible agency is the National Development and
Reform Commission.
The
pricing of electricity has two interesting features:
feed-in tariffs and tariff surcharges. Tariff surcharges are incurred on
the end-user and go into a separate China fund that is spend on
renewable project development.
|
|
Japan |
|
No
feed-in tariffs |
|
|
Korea |
Electricity Business Law |
Mandates the purchase and fixed feed-in price of renewable energy
supplied by renewable energy generators connected to the grid. Korea
Electric Power Corporation (KEPCO) responsible for purchasing renewable
electricity. |
Effective from 2001.
Contact is the Ministry of Commerce, Industry and Energy (MOCIE)
Further information at
www.go.mocie.kr
|
|
Non - Asia |
|
|
|
|
Denmark |
Adaptation of the Electricity reform Agreement |
Fixed
feed-in tariffs differentiated by source.
For
description of the different tariff rates:
http://www.renewable-
energy-policy.info/relec/
denmark/policy/
feed-in.html
and
http://www.iea.org/dbtw-
wpd/textbase/pamsdb/
detail.aspx?mode=
cc&id=18 |
The
current tariffs are too low to attract investment compared with the last
decade. |
|
France |
Electricity Law 2000 |
Feed-in tariffs but
only for renewable energy installations up to 12 MW that were
constructed after the adoption of the law in 2001. Tariffs depend on
source type and may include a premium for some sources. Rates are
adjusted for inflation and are guaranteed for 15 or 20 years. |
Tariff for wind is only high enough to attract small or
medium wind-energy projects. Tariffs generally are quite low and
guarantee periods are long enough to secure investment. Tariffs may be
more attractive if administrative and grid barriers are removed |
|
Germany |
Renewable Energy Sources Act (2004) |
Fixed feed-in tariffs
differentiated by technology.
For description of the
different tariff types:
http://www.iea.org/
textbase/pamsdb/ detail.aspx?mode= gr&id=2241
|
There has been a shift in support slightly from wind to
biomass because the later is lagging. Limited capacity on the grid in
northern geographies is a hindrance. Currently high feed-in tariffs and
subsidies has created a strong market. For example wind energy
generators receive 90% of government-set price |
|
United Kingdom |
|
No feed-in tariffs |
|
|
United States |
Public Utility Regulatory Polices Act |
Requires utilities to purchase electricity from certain
qualifying non-utility producers at feed-in tariffs prices. The
qualifying non-utility producers include small (below 80 MW) renewable
energy plants. |
Effective from 1978.
Further information
at:
http://www.iea.org/textbase/
pamsdb/detail.aspx?mode
=gr&id=1060
|
MANDATORY
RENEWABLE ENERGY TARGETS
Targets have
been set to increase the generation of energy on the electricity grid from
renewable energy sources. However targets have been under-utilised in the
Asia-Pacific compared with the US and Europe.
General
issues that need to be considered regarding the implementation of targets
include:
|
Country |
Name |
Target |
Authority |
Comment |
|
Asia |
|
|
|
|
|
Australia |
Mandatory Renewable
Energy Target, Renewable Energy (Electricity) Act 2000 |
World-first mandatory
renewable energy target that guarantees an additional 9500 GWh of
electricity from renewable energy sources by 2010 (MRET). Incorporates
tradeable permits – Green Certificates. |
Office of the Renewable
Energy Regulator |
Effective as of April 1 2001
Further information at:
http://www.greenhouse. gov.au/ markets/mret/
|
|
China |
China Renewable Energy Law |
The Law sets a
obligatory target of 10% of power capacity generated from renewable
sources by 2010, effective from 1 January 2006. Policy target of 20 %
by 2020 announced in November 2005. |
National Development and Reform
Commission |
An unofficial translation of the new Law
can be found at
http://www.martinot.info/
China_RE_Law_WWF.pdf
|
|
Japan |
New Energy Indicator |
The government set the obligatory target
of 3% of primary energy supply in 2010 to be sourced in new energy
forms. |
Japanese government advised by advisory
committee of ANRE (METI). |
Further information at:
http://www.iea.org/ textbase/pamsdb/ detail.aspx?mode =gr&id=1695
|
|
Korea |
2nd Basic Plan for New & Renewable
Energy Technology Development & Dissemination with Detail Plan
|
The Plan has a
obligatory target of increasing the percentage contribution of
renewable energy in the energy mix to 3% in 2006 and 5% in 2011. The
Plan has legal force under the Promotion Act for NRSE Development,
Utilisation and Dissemination. |
Ministry of Commerce, Industry and
Energy
|
The Plan was announced in 2003.
Further information at:
http://www.oja-services
.nl/iea-pvps/ar03/kor.htm
|
|
Non-Asia |
|
|
|
|
|
Denmark |
EU Directive target |
29% of gross electricity consumption by
2010 to be sourced from renewable energy. |
|
|
|
France |
EU Directive target |
21% of gross electricity consumption by
2010 to be sourced from renewable energy. |
|
|
|
Germany |
Renewable Energy Sources Act (2004)
Target |
The Act sets a obligatory target of
12.5% of gross electricity consumption by 2010 to be sourced from
renewable energy, and 20% by 2020. |
Ministry for Environment, Nature
Conservation and Nuclear Safety |
Effective from 2004 Further information
at:
www.bmu.de/files/
english/renewable_energy/
downloads/application/pdf/
eeg_gesetz_merkmale
_en.pdf#search='Renewable
%20energy%20sources%20
act%20EEG%20Germany |
|
United
Kingdom |
Renewable Obligation
Order |
The Order sets a
obligatory target of 10.4% of electricity sold by 2010 to be from
renewable sources. It has been announced that this will be extended to
15.4% by 2015 |
•
Her
Majesty's Treasury
• Department
of Trade and Industry (DTI) |
Effective from 2002
Further
information at:
http://www.dti.gov.uk/
renewables/
renew_2.2.htm
|
|
United
States |
New York State
Energy Plan |
The Plan sets a goal
of 50% of the State's energy to be generated by renewable energy by
2050. This is only a framework policy |
New
York State Energy Research and Development Authority |
Implemented in 2002
Further
information at:
http://www.nyserda.org/ |
RENEWABLE OBLIGATIONS
AND CERTIFICATES
There has been a policy
trend over the last 30 years towards tradeable certificates.
|
Country |
Name |
Description |
Agency |
Implemen
-tation |
Comments |
|
Asia |
|
|
|
|
|
|
Australia |
Green Electricity Market |
Voluntary, industry-owned programme that trades 'green electricity
rights' under the Renewable Energy Commercialisation Programme (RECP).
It incorporates the Renewable Energy Certificates traded under the
MRET. Compliance based system with primary obligations on electricity
retailers. Renewable energy certificate creation, transfer and
surrender. Penalties for non-compliance. |
Australian Greenhouse Office, Department of Environment and Heritage |
In
force
since 2001. |
The
government decided to discontinue the scheme after 2010. The
legislation stimulated large investment renewable technologies, esp
biomass, wind, hydro and solar PV projects.
Further
information at:
www.greenhouse.
gov.au
www.greenelectricity
market.com
|
|
China |
China
Renewable Energy Law |
Electricity users are encouraged to voluntarily purchase electricity
generated from renewable energy. |
National Development and Reform Commission |
January
1, 2006 |
|
|
India |
Model
Renewable Energy Law |
Requires State Commissions to introduce a mandatory obligation for
electricity utilities to compulsorily acquire electricity from
renewable generating sources |
|
N/A |
|
|
Japan |
New
Energy Obligation Bill, |
Electricity suppliers are obligated to supply a certain percentage of
energy generated by solar, wind, biomass, geothermal and small to
medium hydro projects. Utilities must meet mandatory goals for
renewable energy generation set annually until 2010. |
Ministry of Economy, Trade and Industry |
In
force since Bill passed in June 2002. |
Bill
targets 12.2 billion kWh of electricity generated from renewable
sources in 2010.
Further
information at:
www.meti.go.jp
|
|
Korea |
Introduction to a domestic emission trading scheme |
Framework policy will be introduced to test the possibility of a
domestic carbon market. At present only a demonstration project. |
Ministry of Commerce, Industry and Energy |
In
force
since 2002 |
Further
information at:
www.mocie.go.kr/
english/policies/
policy/default.asp;
http://www.iea.org/
textbase/pamsdb/
detail.aspx?mode
=gr&id=1687
|
|
Non-Asia |
|
|
|
|
|
|
Denmark |
Law on
CO2 Quotas |
Ceiling
for total CO2 emissions from the electricity sector. Implements the EU
Directive.
No
obligations at present but green certificate market has been
announced. |
Danish
Ministry of Economic and Business Affairs |
In
force
since 2004 |
Delay
of the implementation of the green certificate scheme.
Further
information at:
www.ens.dk/
sw1277.asp
|
|
France |
|
No
obligations |
|
|
|
|
Germany |
Greenhouse Gas Emissions Trading Law (2004) |
Implements EU Directive 2003/87/EC re establishment of GHG emission
allowance trading (see EU). Germany's allocations amount to 499Mt CO2
over the period 2005-7 |
Federal
Ministry for Environment, Nature Conservation and Nuclear Safety |
In
force
from 2004 |
The
National Allocation Plan covers approx 1850 installations.
Further
information at:
www.bmu.de/files/
pdfs/allgemein/
application/pdf/
tehg.pdf
|
|
United
Kingdom |
Renewables Obligation Order |
Requires all licensed electricity providers in England, Wales and
Scotland to supply to a specified and growing proportion of their
sales from renewable energy. Target of 10% by 2010. Obligations are
met via Renewable Obligation Certificates (ROCs) |
•Her Majesty's Treasury
•Department of Trade and Industry (DTI) |
In
force
from 2002 |
Further
information at http://www.dti.
gov.uk/renewables/
renew_2.2.htm |
|
United
States |
California Renewable Energy Production Regulation |
Requires all companies selling retail electricity in California to
increase their use of renewable energy by 1% up to the point at which
17% of the electricity they sell is from renewables sources by 2017 |
California State Government |
In
force from Sept 2002 |
Further
information at
www.state.ca.us |
PREFERENTIAL TREATMENT FOR
GRID CONNECTION OF RENEWABLE ENERGY
|
Country |
Name |
Grid
Connection treatment |
|
Asia |
|
|
|
Australia |
|
No
obligations re grid connection |
|
China |
China
Renewable Energy Law |
Under
the new law, there is a requirement on grid operators to:
provide
grid connection to renewable generators; and
purchase a portion on energy from renewable sources. |
|
India |
Model
Renewable Energy law |
Electricity and system grid operators must give preference to
renewable energy generators. Any costs of upgrade to the transmission
and distribution system to be borne on system operator,
|
|
Japan |
|
No
preferential treatment |
|
Korea |
|
No
preferential treatment |
|
Non-Asia |
|
|
|
Denmark |
Legislation on Electricity Favourable to Renewables. |
All
renewable electricity given priority access to the grid.
|
|
Germany |
Renewable Energy
Sources Act (2004) |
Grid
operators obliged to give priority access to renewable energy
generators and purchase at feed-in prices.
The Act
requires plant operators to pay for grid connection but obliges grid
operators to bear the cost of grid reinforcement |
|