Renewable Energies: Success Stories

Renewable Energies: Success Stories
1
Environmental issue report
Renewable energies: success stories
Prepared by:
Ecotec Research and Consulting Ltd.
and
Aphrodite Mourelatou
European Enviroment Agency
No 27
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Renewable energies: success stories
Layout: Brandenborg a/s
Photos: Dr.-Ing.habil. Volker Quaschning, Solar System Analysis
Legal notice:
The contents of this publication do not necessarily reflect the official opinions of the European Commission or
other European Communities institutions. Neither the European Environment Agency nor any person or company
acting on the behalf of the Agency is responsible for the use that may be made of the information contained in
this report.
All rights reserved
No part of this publication may be reproduced in any form or by any means electronic or mechanical, including
photocopying, recording or by any information storage retrieval system without the permission in writing from the
copyright holder. For rights of translation or reproduction please contact EEA project manager Ove Caspersen
(address information below).
A great deal of additional information on the European Union is available on the Internet.
It can be accessed through the Europa server (http://europa.eu.int).
Luxembourg: Office for Official Publications of the European Communities, 2001
ISBN 92-9167-407-9
© EEA, Copenhagen, 2001
European Environment Agency
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DK-1050 Copenhagen K
Denmark
Tel: (45) 33 36 71 00
Fax: (45) 33 36 71 99
E-mail: [email protected]
Internet: http://www.eea.eu.int
Foreword
Foreword
This report demonstrates the Agency’s determination not only to provide information to
support better policy-making, but also to gather and disseminate ‘best-practice’ information
that can help actors on the ground find better solutions for the environment and sustainable
development.
Renewable energy is increasingly becoming a vital component of the energy mix of the 21st
century, and its successful penetration of the market is already underway in many EU Member
States.
This publication examines examples of successful implementation of renewable energy
projects through case studies and analysis of EU Member State policies and activities. The
experiences described may help policy implementers in the Member States to learn from
each other’s experiences. We hope these success stories will breed further successes.
I believe that this publication could be useful not only to EU decision makers and policy
implementers but also to all countries interested in increasing their levels of renewable
energy sources.
The report sheds light on the factors that led to successful implementation of some renewable
energy technologies in some EU Member States and emphasizes the wide range of factors that
can determine whether projects succeed or not. All examples studied are reported following
the same methodology and format, thus creating a framework for reporting on success stories
that others could also use as a communication tool for promoting renewables.
This document is also available in electronic format on the Agency’s main web site at
http://reports.eea.eu.int/ as well as in EnviroWindows, an EEA web site for gathering and
disseminating information on environmental management and best practices, aimed at
businesses, local authorities and their stakeholders (http://ewindows.eu.org/
LocalAuthorities/renewables.pdf). It is my hope that this report will become the seed for the
creation of a clearing house for experiences in how best to promote renewable energies at
many levels, from national to local. The Agency is offering its electronic space and expertise
to anybody who would like to pick up the gauntlet and create a permanent site where success
stories on implementation of renewable energies are reported in a standardised way and
updated when new data become available.
I would like to thank the manager of this report, Aphrodite Mourelatou, for the valuable work
she put into this project; Ecotec Research and Consulting Ltd, who assisted with writing the
report; Eurostat, which provided the necessary data; and all others who contributed to the
report or reviewed it.
Domingo Jiménez-Beltrán
Executive Director
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Renewable energies: success stories
Contents
Foreword . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3
Executive summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6
1. Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
12
2. Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
14
2.1. The importance of renewable energy . . . . . . . . . . . . . . . . . . . . . . . . . . .
14
2.2. Targets for renewable energy use in the EU . . . . . . . . . . . . . . . . . . . . . .
15
2.2.1. Renewable energy and liberalisation of the energy markets in the EU
16
2.3. Technologies covered under this study . . . . . . . . . . . . . . . . . . . . . . . . . .
18
3. Identifying successful Member State/technology combinations . . . . . . . . . . .
19
3.1. Selection criteria for identifying successful Member State/technology
combinations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
19
3.2. Successful Member State/technology combinations and
country-specific trends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
20
4. Potential factors for success . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
26
4.1. Barriers to success . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
26
4.2. Factors influencing renewable energy deployment . . . . . . . . . . . . . . . .
27
4.2.1.
4.2.2.
4.2.3.
4.2.4.
4.2.5.
4.2.6.
4.2.7.
Political . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Legislative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Financial . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fiscal (taxation) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Administration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Technological development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Information, education and training . . . . . . . . . . . . . . . . . . . . . . . . . .
28
28
29
29
30
30
30
5. Member state/technology examples of successful penetration . . . . . . . . . . . .
31
5.1. Austria — Biomass district heating . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
33
5.2. Austria — Solar thermal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
35
5.3. Germany — Photovoltaics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
37
5.4. Germany — Solar thermal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
39
5.5. Germany — Wind energy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
41
5.6. Spain — Photovoltaics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
43
5.7. Spain — Wind energy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
45
5.8. Sweden — Biomass district heating . . . . . . . . . . . . . . . . . . . . . . . . . . . .
47
6. Analysis of Member State/technology examples of successful penetration . . .
48
6.1. Political . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
48
6.2. Legislative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
50
6.2.1. Power purchase . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6.2.2. Access to the grid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
50
52
6.3. Fiscal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
53
Contents
6.3.1. Environmental taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6.3.2. Tax incentives for investment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6.3.3. Biofuels — benefiting from lowering of excise duty . . . . . . . . . . . . . .
53
53
53
6.4. Financial . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
54
6.5. Administrative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
56
6.6. Technological development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
58
6.7. Education, information and training . . . . . . . . . . . . . . . . . . . . . . . . . . . .
58
7. Lessons learned . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
60
7.1. Energy policies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
60
7.2. Legislation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
61
7.3. Fiscal measures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
62
7.4. Financial support . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
63
7.5. Administration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
63
7.6. Technological development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
63
7.7. Education, information and training . . . . . . . . . . . . . . . . . . . . . . . . . . . .
64
References and bibliography . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
65
Annex 1: Other interesting Member State/technology examples of
successful penetration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
66
Denmark — Biomass power . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
66
Denmark — Wind energy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
68
Finland — Biomass power . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
70
France — Biofuels (biodiesel) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
72
France — Biomass district heating . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
73
France — Wind energy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
74
Germany — Biomass power . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
75
Greece — Solar thermal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
77
Ireland — Wind energy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
78
Italy — Wind energy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
80
Netherlands — Photovoltaics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
82
Portugal — Wind energy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
84
Spain — Biomass power . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
86
Sweden — Biomass power . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
88
Sweden — Wind energy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
90
Annex 2: Study contributors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
92
Annex 3: Study reviewers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
93
Annex 4: Offshore wind . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
94
Glossary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
96
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Renewable energies: success stories
Executive summary
Background
This study presents a series of examples of successful renewable energy development in EU
Member States. By analysing these cases it seeks to understand the factors that influence the
success of renewable energy schemes and to facilitate their widespread penetration in the
Member States. The study aims to provide policy-makers and policy implementers with an
opportunity to learn from each others' experiences, and thereby to contribute to EU and
Member State efforts to meet their renewable energy indicative targets for 2010.
Identifying progress in renewable energy deployment
The study evaluates the rate of penetration in each EU Member State of four renewable
energy sources — photovoltaics, solar thermal, wind and biomass (as biomass power, biomass
district heating and biofuels) — between 1993 and 1999. For consistency purposes only data
from Eurostat (the statistical office of the European Communities) have been used.
For the purposes of this study, two selection criteria have been applied to identify those
Member State/technology combinations where renewable energy has penetrated to a greater
degree of success than in others:
• An absolute increase equivalent to at least 10 % of the total EU-wide increase in renewable
energy output of that particular technology over the period 1993–99. The 10 % threshold
has been selected to identify those Member States that made the greatest contribution to the
increase in renewable energy output of each technology in the EU.
• A percentage increase of renewable energy output of the examined technology greater than
the EU percentage increase for that technology between 1993–1999. This compares the
percentage increase of each renewable energy source with the EU-wide percentage increase,
and identifies those Member State/technology combinations which exceeded the EU-wide
figure.
This approach enables the identification of those Member State/technology combinations
where exploitation of the technology was well established in 1993 and continued to expand
over the next six years. It also highlights Member States where a technology was in an initial
stage of development at the start of the six-year period and achieved a rapid rate of increase
in penetration, but still only provides a limited quantity of energy output.
It should be noted that the criteria cannot be used to directly benchmark a country's
performance in promoting renewable energies. The study focuses on positive changes during
the period studied, and does not compare absolute levels of penetration.
The results of applying these two criteria are summarised in the table below.
Executive summary
Trends in renewable energy penetration, 1993–99
Technology:
Selection
criteria
(see note 1):
Photovoltaics
Solar
thermal
!
Austria
Wind
Biomass:
power
!
!
!
Biomass:
biofuels
(see note 2)
!
!
!
!
!
Belgium
Denmark
!
Finland
!
!
!
!
!
!
France
Germany
Biomass:
district
heating
(1993–98)
!
!
!
!
!
!
!
!
!
Greece
Ireland
!
!
Italy
!
!
!
!
!
Luxembourg
!
Netherlands
!
!
Portugal
Spain
!
!
!
UK
!
!
Sweden
!
!
!
!
!
Biomass district heating refers to heat output from heat plants only.
Note 1: Two criteria for selection are used:
! (left) represents a contribution of at least 10 % of the total EU increase in absolute terms, 1993–99;
! (right) represents a percentage increase greater than the EU percentage increase, 1993–99.
Note 2: Biofuels only:
! represents those Member States which indicate that they use biofuels (most do not).
The results show wide variations between the 15 Member States (see Table 3 on page 21).
For most technologies, only two or three Member States contributed more than 10 % (each)
of the total new output from the technology:
—
—
—
—
Germany and Spain contributed 78 % of new EU output from photovoltaics;
Austria, Germany and Greece contributed 80 % of new solar thermal installations;
Denmark, Germany and Spain contributed 80 % of new wind output;
Finland and Sweden contributed 60 % of new generation from biomass-fuelled power
stations (including biomass combined heat and power stations);
— Austria and Sweden dominated the increase in output from biomass district heating
installations;
— only four Member States use biofuels to any significant extent; France is the market leader,
producing about 40 % of the total.
More Member States, however, were starting to expand their rates of exploitation of certain
technologies, and had a percentage increase greater than the EU figure. Indeed, some
Member States with low initial levels of renewable energy use demonstrated rapid growth
rates even though the actual increase in output achieved was small over the period.
Only a small number of Member State/technology combinations met both criteria. Germany
achieved the greatest levels of new renewable energy penetration over the period and met
both criteria for all of the technologies studied except biomass. There were also positive
combinations in Austria, Spain and Sweden.
Success factors
The study drew on the considerable amount of previous work carried out at EU and Member
State level on the barriers that hinder the implementation of renewable energies. It identifies
a number of potential success factors likely to have a positive influence on the development of
renewable energy technologies.
Source: Eurostat.
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Renewable energies: success stories
The study examines the influence of these potential success factors in a series of case studies
selected from the Member State/technology combinations that have been identified by
applying the selection criteria summarised in the table above. In particular, it examines all
Member State/technology combinations that met both of the criteria for successful
penetration and the most interesting Member State/technology combinations meeting one
of the criteria. Where possible and appropriate, representative examples of renewable energy
projects have been used in the case studies.
The following conclusions summarise the results of the analysis carried out, based on the case
studies.
No single factor was identified as being of overwhelming significance. It is rather the
cumulative benefits of a series of supportive measures that determine the extent to which a
renewable technology is successfully exploited. There are, however, certain essential
components of successful renewable energy implementation that help to create an
environment in which renewable energy exploitation can succeed.
These are described below under the following seven sub-headings: political; legislative; fiscal,
financial; administrative; technological development; information, education and training:
Political support
• The EU countries which showed a rapid expansion of renewable energy during the 1990s
are most commonly those with long-established policies in support of renewable energy in
general or of a particular renewable energy.
Regional energy policies can also contribute towards encouraging renewable energy
development. For Member States with a high degree of regional autonomy, such as Austria,
Germany and Spain, many regional authorities have brought forward energy plans that are
even more supportive towards renewable energy than those at the national level.
Legislative support
• For electricity from renewable sources, the feed-in law system has given a great impetus to
renewable energy developments, in particular wind energy. This system combines
commercially favourable guaranteed feed-in tariffs with an obligation on utilities to
purchase renewable electricity at these tariffs.
Denmark, Germany and Spain (all countries using the feed-in law system) contributed 80 %
of new wind energy output in the EU-15 over the period 1993–99.
Biomass use in power stations also benefited from feed-in laws, particularly in these same
three countries. However, the expansion of biomass power has not been as rapid as that of
wind. Biomass use also increased significantly in some Member States without the support of a
feed-in mechanism (Finland and Sweden). Successful biomass development benefits from
feed-in tariffs but is also closely linked with other success factors, especially the availability of
financial support (see below).
The use of photovoltaics expanded significantly in those Member States that provided a high
level of support to projects through feed-in arrangements — the most successful being
Germany and Spain. However, successful penetration occurred where the feed-in support
initiatives were implemented together with capital subsidy programmes to encourage uptake
of the technology (again Germany and, to a lesser extent, Spain).
The main alternative to the feed-in mechanism is the competitive tendering process. This
system was chosen by Ireland and the UK (1) to support a range of technologies, including
wind and biomass, and by France (2) to support wind energy. Developers are guaranteed that,
if they win the tender, their power will be purchased at the price they bid in their proposal.
This resulted in an increase in capacity of a range of renewable energy technologies in these
(1)
(2)
The UK is replacing the competitive tendering system with a Renewables Obligation, under which suppliers
are legally obliged to provide an increasing proportion of their supplies from renewable sources.
From June 2001 France replaced competitive tendering with a system similar to the feed-in law.
Executive summary
Member States, but not to the same extent as was achieved where feed-in arrangements were
available. Compared with feed-in arrangements in other Member States, the competitive
nature of the tendering system has offered fewer guarantees to developers that they will
receive an acceptable tariff rate for their project.
• Renewable energy power generators need grid access to be able to distribute the electricity
generated. This requires the establishment of transparent and reasonable charging
structures so they can operate successfully within the electricity supply system.
Member States that took the biggest steps to address problems of grid access achieved the
greatest levels of renewable electricity penetration during the 1990s, especially for smallerscale renewable energy projects.
Grid access is an important component of the recently adopted EU directive (3) on renewable
energy in the internal electricity market. The directive requires Member States to take the
necessary measures to guarantee the transmission and distribution of electricity produced
from renewable sources and encourages such electricity to be given priority access to the grid.
Fiscal support
• Fiscal (taxation) measures are increasingly being used as a mechanism to reward the
environmental benefits of renewable energy compared with energy generated from fossil
sources.
During the period of this study, at least six Member States — Austria, Denmark, Finland, Italy,
Netherlands and Sweden — put in place some form of energy-related taxation which
penalises the use of fossil fuels or other environmentally damaging activities. In Sweden, the
introduction of taxes on carbon dioxide emissions and energy from which biomass is
exempted helped the expansion of both biomass district heating and biomass combined heat
and power plants. The taxes made other options, in particular coal-fired district heating and
coal-fired combined heat and power plants, more expensive.
An alternative fiscal approach developed in other Member States is to allow various tax
exemptions or reductions for individuals or companies who invest in or use renewable-related
products or services. The installation of solar thermal water-heating systems has been
stimulated by this approach (in Greece, for example). Individual investors in wind energy
benefit from tax exemptions in Germany and Sweden, while Dutch companies benefit from
accelerated depreciation for investment in energy-saving schemes that include renewable
projects.
Biofuels for transport represent a special example of the role of fiscal initiatives to support
renewable energy. Some Member States took advantage of opportunities to apply lower fuel
excise duty rates to support biofuels. France in particular used this option to stimulate the
growth of the EU’s largest biofuels industry.
Financial support
• The capital costs of renewable energy projects, which are often high, can be a significant
barrier to development, especially for newer technologies. Subsidies or favourable loans for
renewable energy developments are common where successful penetration occurs.
Wind energy has become increasingly cost-competitive over the 1990s, and grants are
required less often where feed-in arrangements are available. Where such arrangements are
not available, subsidies are still the main mechanism for successfully supporting wind energy
schemes.
Biomass installations usually still need capital subsidy to be financially viable as they have high
capital costs. This is true even in countries with feed-in arrangements. For example, capital
(3)
Directive of the European Parliament and of the Council on the promotion of electricity from renewable
energy sources in the internal electricity market (2001/77/EC).
9
10
Renewable energies: success stories
grants are provided for biomass power schemes in Germany to augment feed-in tariffs, but for
wind power only limited grants are currently provided.
Photovoltaics (PV) is still an immature technology and projects need considerable subsidy.
Member States showing significant increases in PV use are those that have established subsidy
support mechanisms, usually in association with feed-in tariff arrangements.
Solar thermal installations are not always able to compete on costs with fossil fuel heating
sources and require subsidies to achieve a high level of uptake. Substantial subsidies were
made available to households or industry in the three Member States showing the greatest
level of development of solar thermal power over the period of this study (Austria, Germany
and Greece).
Administrative support
• Successful replication of renewable energy projects can be achieved on a wide scale only
where there is active support for renewable energy at the level at which individual projects
are brought forward for approval. In most cases this is the local or regional level.
Administrative support at national level is also an important component for success.
The case studies identified a wide range of ways in which local or regional administrations or
municipalities have successfully supported renewable energy uptake, including:
—
—
—
—
developing local or regional targets for renewable energy uptake;
providing planning guidance for locating renewable projects;
providing funding support for local renewable energy projects;
improving building regulations to stimulate uptake of photovoltaics or solar thermal
installations;
— implementing district heating schemes;
— supporting the development of new indigenous manufacturing capacity.
Some of the projects studied received a strong level of public sector support at regional or
local level. This shows the regional or local authorities’ appreciation of the benefits that the
projects would bring to the local population not only in terms of the environment but also in
terms of economic development and employment.
Technological development
• The development of renewable energy technologies requires support at all stages —
research, demonstration and implementation — to help achieve strong and competitive
indigenous industry capabilities in renewable energy.
Public sector funding to develop renewable energy has been provided over the past 20 years,
both by the European Commission and at Member State level. This support has helped to
achieve considerable cost reductions and technological improvements. Member States that
have focused national research funding support towards specific technologies are now
reaping the rewards of this investment. For example, Denmark now has the world’s leading
wind industry, Finland and Sweden have strong capabilities in biomass technologies, and
Germany and the Netherlands are home to photovoltaic cell manufacturing.
Information, education and training
• Activities that raise awareness of the benefits of renewable energy among the general public
are a vital component of national, regional and local renewable energy support
programmes.
The success of a renewable energy project, and its subsequent replication, ultimately depends
on its public acceptability at local level. At this level, communicating the non-energy benefits
is an important component in the acceptability of renewable energy, especially its role in
providing revenue and local jobs. Cooperative participation in a project can be a successful
way of involving the local community in a new renewable energy development. The role of
the developer could also be important for public acceptance and requires that developers
Executive summary
work with the local community to provide information about the nature of new renewable
energy projects and their potential benefits.
Energy agencies at local or regional level are one of the most successful initiatives to help raise
public awareness of the benefits of renewable energy and increase public acceptance of new
renewable energy developments. Their role is to stimulate the expansion of renewable energy
and energy efficiency in their area through public and private sector initiatives and local
community involvement.
11
12
Renewable energies: success stories
1. Introduction
Photo: Volker Quaschning
EU targets for renewable energy will be achieved through actions at the national, regional
and, increasingly, local levels. Member States differ considerably in terms of the contribution
made by renewable energy to their energy consumption. Member States also have very
variable levels of exploitation of different types of renewable energy sources.
This study provides policy-makers and policy implementers with background information and
analysis into the successful penetration of a number of renewable energy technologies in EU
Member States. The report examines examples of successful penetration, through case
studies and analysis of Member State policies and activities. It attempts to shed light on the
factors which led to successful implementation of renewable energy in some Member States
and in some technologies. The study aims, through the provision of this information, to help
policy implementers learn from each others’ experiences and contribute to the efforts to
meet indicative renewable energy targets.
Section 2 provides background information on what renewable energy is, the importance of
renewable energy, renewable energy targets and the rationale behind the choice of the
renewable energies covered in this study.
The renewable energy sources covered are:
—
—
—
—
solar photovoltaics
solar thermal
wind
biomass energy (as biomass power, biomass district heating and biofuels).
Section 3 develops and applies, for the purposes of this study, a set of selection criteria in
order to identify those Member State/technology combinations where renewable energy has
penetrated to a greater degree of success than in others.
Introduction
Section 4 presents the wide range of factors that can influence the likely successful
penetration of renewable energy technologies in different Member States, drawing on the
considerable amount of previous work carried out at EU and Member State levels on the
barriers that hinder implementation of renewable energies.
Section 5 and Annex 1 present examples of successful Member State/technology
combinations in the light of the potential success factors identified previously.
Section 6 draws together some of the key issues and potential success factors identified in the
examples of successful Member States/technology combinations.
Section 7 draws some conclusions on factors which may contribute to successful penetration
of renewables in the Member States.
13
14
Renewable energies: success stories
2. Background
Photo: Volker Quaschning
2.1. The importance of renewable energy
Renewable energy is the term used to describe a wide range of naturally occurring,
replenishable energy sources — in particular, sun, wind, water and a range of biomass
resources. Renewable energy sources can be used to generate heat or electricity, or can be
used to produce liquid fuels for transport. For a general description of the various renewable
energy sources see Box 1.
Box 1
Sun: The sun’s energy can be used to generate power from photovoltaic cells, which convert light directly into
electricity. Solar thermal energy is available by transferring energy from the sun via a liquid to heat water or air.
Wind energy is extracted by wind turbines, situated onshore or offshore. These transfer the momentum of
passing air to rotor blades, which is then converted into electricity.
Biomass is a general term for material derived from growing plants or from animal manure. Biomass includes
waste materials such as straw, or crops specifically grown as biomass fuel. Energy can be recovered through
combustion of solid material, or of gases generated from the anaerobic fermentation of liquid material.
Water can be exploited as a renewable resource in a number of ways. Hydroelectric power is generated from
the potential energy of inland water resources such as streams, rivers and lakes. Tidal energy is produced by
the rotational energies of the earth, moon and sun, and can be used to generate electrical energy. Electricity
can also be generated from waves. Waves receive their energy from the wind, which is mainly driven by the
effects of solar heating in the atmosphere.
Geothermal: Some definitions include geothermal energy as a renewable energy source. Geothermal energy
is the heat energy contained in rocks beneath the earth’s surface and can be exploited to produce heat or
generate electricity.
Background
Renewable energy plays an important role in the process of integrating the environment into
energy policy, through its potential to contribute to the objectives of sustainable
development.
At the point of generation, renewable energy sources generally emit no greenhouse gases,
with the notable exception of biomass, which is neutral over its life cycle in greenhouse gas
terms. They also produce significantly lower levels of environmental air pollutants than fossil
sources. Each EU Member State has committed itself to national targets to reduce or limit
greenhouse gas emissions in order for the EU as a whole to meet the Kyoto Protocol
obligation of reducing greenhouse gas emissions by 8 % from 1990 levels by 2008–12.
Individual governments are working towards appropriate measures to achieve their own
targets. The energy sector is one of the major emitters of carbon dioxide (CO2) and other
greenhouse gases, so increasing the use of renewable energy in place of fossil fuels can
contribute towards achieving these targets.
Negative environmental impacts from renewable energy are, in general, lower than those
encountered from fossil or nuclear energy sources and are usually more significant at the
local level, near to the plant. Renewable energy installations may cause visual, noise or
interference impacts, especially at the local level, although generally these can be minimised
if the installation is planned and sited sensitively. The use of biomass necessitates additional
transport. Biomass combustion also generates potentially polluting emissions, which need to
be carefully regulated. The environmental consequences of growing biomass crops may
include an impact from the use of agrochemicals, changes to water use, as well as changes to
biodiversity and habitat, and visual alterations to the landscape. Hydro installations, in
particular large installations, can have a local impact through construction activities, but will
also affect water quality and flow, with consequent potential impact on the aquatic ecosystem.
Photovoltaic (PV) systems have few effects when in operation, but the manufacture of PV cells
needs to be carefully controlled due to the use of potentially toxic or hazardous materials.
Renewable energy can make an important contribution to security and diversity of energy
supply, by providing a secure, indigenous source of energy that is available in a variety of
forms to all Member States.
Renewable energy use is also important for reasons of social and economic cohesion.
Renewable energy technologies are generally situated in regions with lower levels of
investment or employment, such as rural or remote regions. Investment in new renewables
plants in such areas can therefore benefit the local and regional economy.
The renewable energy industry is one of Europe’s fastest-growing sectors, as Member States
develop manufacturing capabilities to meet the growing demand for renewable energy, both
domestically in the EU, and increasingly worldwide (4). Building on a strong domestic
market, European renewable energy companies already lead the world in their skills and
expertise.
2.2. Targets for renewable energy use in the EU
At the EU level, the European Commission's 1997 White Paper on renewable energy sources
(European Commission, 1997a) set out the objective of increasing the share of renewable
energies to 12 % of gross inland energy consumption(5) by 2010.
(4)
(5)
A recent EU study estimated that the renewable energy industry may generate up to 500 000 jobs by 2020
(ECOTEC, 1999).
The gross inland energy consumption is the total amount of energy which is consumed in an economy. See
also Glossary.
15
16
Renewable energies: success stories
Figure 1
Renewable energy sources as a contribution to gross inland energy consumption, EU
Source: Eurostat.
EU indicative target
12 % by 2010
6
5
%
4
3
2
1
0
1990
1991
Solar and wind
1992
1993
Geothermal
1994
1995
Hydropower
1996
1997
1998
1999
Biomass
Renewable energy‘s share of gross inland energy consumption was 5.9 % in 1999, well short of
the 12 % indicative target. Clearly the target is challenging for the EU. Indeed, even if the
high growth rates observed between 1996 and 1999 are extrapolated, the share of renewable
energies still falls short of the 2010 indicative target (6).
As a follow-up to the 1997 White Paper, in 1999 the Commission launched the Campaign for
Take-Off (European Commission, 1999b). The campaign identified three key renewable
energy sectors to be promoted during the period 1999–2003: solar energy (photovoltaics and
solar thermal), wind and biomass (combined heat and power biomass installation, dwellings
heated by biomass, biogas installations and biofuels). These also correspond to those
technologies or market sectors where rapid uptake of renewable energy use is more likely to
occur over this short timescale (to 2003), since they are already being successfully
implemented in a number of Member States.
2.2.1. Renewable energy and liberalisation of the energy markets in the EU
The ongoing process of liberalisation of the electricity and gas markets in Europe has
significant implications for renewable energy, particularly the proportion of electricity
produced from renewable sources in the EU.
As a result of the 1996 EU directive on the internal market for electricity (7), Member States
have been obliged to gradually open up an important proportion of their national electricity
markets to competition which, combined with some other developments, has led to reduced
prices for power from conventional sources.
However, despite many technological advances in the past decade, electricity from renewable
sources is still more expensive than equivalent conventional power. This is mainly due to the
relatively smaller size of renewable energy plant (which therefore cannot benefit from
economies of scale) and the fact that external costs of fossil fuels have often not been fully
internalised to level out the playing field between fossil and renewable energy. As the EU
market becomes increasingly liberalised, it may become progressively more difficult for
(6)
(7)
This assumes that gross inland energy consumption will grow at the levels forecast by the Commission in its
1999 Primes baseline scenario (European Commission, 1999a).
Directive 96/92/EC of the European Parliament and of the Council of 19 December 1996 concerning
common rules for the internal market in electricity.
Background
17
renewable energy to compete in these changing markets without some support mechanisms
over the medium term.
The recently adopted Directive to promote renewable electricity in the EU (8) attempts to
address these issues. It aims to create a framework for electricity from renewables which will
contribute towards achieving the indicative target of a 12 % renewables share in gross inland
energy consumption (i.e. the total amount of energy consumed in an economy, including
both heat and electricity) by 2010. The Directive requires Member States to take appropriate
steps to encourage greater consumption of electricity produced from renewable energy
sources by setting and achieving annual national indicative targets consistent with the
Directive and national Kyoto commitments. The national indicative targets should be
consistent with an increase in the share of electricity generated from renewable energy
sources in the EU from 13.9 % in 1997 to 22.1 % by 2010. Such national indicative targets, as
well as the 1999 levels of renewable electricity share in gross electricity consumption (9) are
shown in Figure 2.
Renewable energy contribution to gross electricity consumption, 1999
Figure 2
Indicative targets
All other renewables
Belgium
L uxembourg
UK
Netherlands
Ireland
Germany
Greece
S pain
Denmark
France
Italy
Portugal
Finland
S weden
Aus tria
EU-15
%
Source: Eurostat.
85
80
75
70
65
60
55
50
45
40
35
30
25
20
15
10
5
0
Large hydropower
Notes:
1. Industrial and municipal waste has been included in ‘All other renewables’. According to the renewable
electricity directive (2001/77/EC) only the biodegradable part of industrial and municipal waste is renewable.
Data on industrial and municipal waste presented here include all industrial and municipal waste, as there are
no data available on the biodegradable part only. The share of renewable electricity in gross electricity
consumption is therefore overestimated by an amount equivalent to the electricity from non-renewable
industrial and municipal waste.
2. National indicative targets shown here represent reference values that Member States agreed to take into
account when setting their indicative targets by October 2002, according to the renewables electricity
directive (2001/77/EC).
In 1999 renewable sources contributed 14.2 % of gross electricity consumption: 10.5 % from
large hydropower installations (a capacity of 10 MW or more) and 3.7 % from all other
renewables.
Due to site limitations, the contribution of electricity from large hydro is expected to remain
approximately constant between 1999 and 2010. Between 1996 and 1999 electricity from nonlarge hydro renewables (i.e. all other renewables except large hydro) grew rapidly. However,
(8)
(9)
Directive of the European Parliament and of the Council on the promotion of electricity from renewable
energy sources in the internal electricity market (2001/77/EC).
See glossary.
18
Renewable energies: success stories
non–large hydro renewables will have to grow significantly faster if the 2010 target is to be
reached.
2.3. Technologies covered under this study
This study concentrates on the technologies promoted under the Campaign for Take-Off.
For the purposes of the study the following renewable energy sources have been chosen:
•
•
•
•
Table 1
Source: Eurostat.
solar photovoltaics
solar thermal
wind
biomass energy (biomass power including combined heat and power, biomass district
heating and biofuels).
Renewable energy sources/technologies studied
Renewable energy source/
technology
Description
Units of measurement used
in this study
Solar photovoltaics
Power generated using photovoltaic cells to
convert light directly into electricity.
Power output (Gigawatt
hours, GWh)
Solar thermal
Transfer of energy from the sun via a liquid to
heat water or air.
Heat output (thousand
tonnes of oil equivalent,
ktoe)
Wind
Wind turbines extract energy from the wind by
transferring the momentum of passing air to
rotor blades, which is then converted into
electricity.
Power output (GWh)
Biomass
A range of biomass fuels such as forestry and
agricultural residues, and energy crops can be
used to generate electricity in power stations
including in combined heat and power plant,
or can be used to produce heat in district
heating plant.
In addition, biomass can be used to produce
transport fuels (liquid biofuels), primarily
biodiesel and bioethanol, from processed
agricultural crops and other biomass
feedstocks.
Power output (GWh) or
energy output as heat or
fuel (ktoe)
In 1999, the renewable technologies covered under this study together represented
approximately 23 % of the non-hydro (10) renewables gross inland consumption (both heat
and electricity) and 64 % of the non-hydro renewables gross electricity consumption. The
remaining renewable energy sources not covered in this study are mainly waste combustion,
including industrial and municipal waste (11) as well as contributions from other biomass
sources and from geothermal energy.
Energy from biogas is included in the Campaign for Take-Off but is not considered in this
study. Biogas generation is derived from the safe disposal of animal manure residues. Its
exploitation is therefore dependent to a great extent on animal husbandry and waste
management legislation. For this reason, the technology has not been studied further here.
Offshore wind energy is at an early stage of implementation, and so far there are only a few
offshore plants in operation. This is why the penetration of offshore wind energy has not been
included. Nevertheless Annex 4 provides a short analysis of lessons that could be learnt from
previous experiences of renewable energy developments onshore, and in particular from the
case studies presented here.
(10) Hydro power is either large hydro power (over 10 MW) or small hydro power (less than 10 MW). The vast
majority of hydro power in the EU is large hydro power. The contribution of large hydro power is expected to
remain approximately constant in the coming decades due to site limitations. Hydro power (both large and
small) is a site-specific resource dependent on water availability and thus has a number of different
characteristics from those of other resources (such as wind and solar) which can be developed at a variety of
sites.
(11) In general, industrial and municipal waste also contains waste from non-renewable sources.
Identifying successful Member State/technology combinations
3. Identifying successful Member State/
technology combinations
Photo: Volker Quaschning
3.1. Selection criteria for identifying successful Member State/technology
combinations
In order to identify those Member State/technology combinations where there has been most
success in achieving renewable energy penetration, the following two selection criteria have
been applied. This approach was carried out in each Member State and for each technology
covered in this study, over the six-year period 1993–99.
• An absolute increase equivalent to at least 10 % of the total EU-wide increase in renewable
energy output for that particular technology over the period 1993–99. The 10 % threshold
was selected to identify those Member States which made the greatest contribution to the
increase in renewable energy output of each technology in the EU.
• A percentage increase of renewable energy output of the examined technology greater than
the EU-wide percentage increase for that technology between 1993 and 1999. This compares
the percentage increase of each renewable energy source with the EU-wide percentage
increase, and identifies those Member State/technology combinations which exceed the
EU-wide figure.
19
20
Renewable energies: success stories
This two-stage approach gives an opportunity to identify those Member State/technology
combinations where exploitation of the technology is already well established, and continues
to expand. It also highlights those Member States where a technology may be in its initial
stages of take-up, with a rapid rate of increase in penetration but still with only limited
quantities of energy output.
For the six-year period 1993–99, Eurostat data provides comprehensive statistics for all
Member States and all energy sources. Although data for many Member States and energy
sources are available for 1990–93, some of the annual data in this earlier dataset are not
comprehensive. This period also pre-dates the time of greatest activity for renewable energy
exploitation for most of the energy sources and Member States. This study therefore uses the
1993–99 dataset to identify the levels of penetration of each renewable energy source in each
Member State.
3.2. Successful Member State/technology combinations and country-specific
trends
The results of applying these two criteria are summarised in Table 2. This shows which
Member State/technology combinations meet either of these two criteria. Background data
relating to Table 2 are shown in Table 3. Figures 3–8 illustrate graphically the data presented
in Table 3, by technology.
Table 2
Source: Eurostat.
Application of selection criteria to identify successful Member State/technology
combinations for the period 1993–99
Technology:
Selection criteria
(see note 1):
Photovoltaics
Solar
thermal
!
Austria
Wind
Biomass:
power
!
!
!
Biomass:
biofuels
(see note
2)
!
!
!
!
!
Belgium
Denmark
!
Finland
!
!
!
!
!
!
France
Germany
Biomass:
district
heating
(1993–98)
!
!
!
!
!
!
!
!
!
Greece
Ireland
!
!
Italy
!
!
!
!
!
Luxembourg
!
Netherlands
!
!
Portugal
Spain
!
!
!
UK
!
!
Sweden
!
!
!
!
!
A tick (!) indicates that the selection criterion was met, except in the case of biofuels (note 2 below).
Biomass power includes combined heat and power and refers to electricity output only; biomass district heating
refers to heat output from heat plants only.
Note 1: Two criteria for selection are used:
! (left) represents a contribution of at least 10 % of the total EU increase in absolute terms, 1993–99;
! (right) represents a percentage increase greater than the EU percentage increase, 1993–99.
Note 2: Biofuels only:
! represents those Member States which indicate that they use biofuels (most do not).
Identifying successful Member State/technology combinations
Application of selection criteria to identify successful Member State/technology combinations, 1993–99
Background data relating to Table 2
Photovoltaics
Solar thermal
Wind
Biomass power
1993–99
1993–99
1993–99
1993–99
21
Table 3
Biomass
district heating
1993–98
Absolute % increase Absolute % increase Absolute % increase Absolute % increase Absolute % increase
increase
increase
increase
increase
increase
(GWh)
(ktoe)
(GWh)
(GWh)
(ktoe)
Austria
1.4
Belgium
0
0
Denmark
0
3.7
100
1 994.8
Finland
0
0.2
8 270
45.0
France
Germany
233
0
32.0
1 070
37.1
150
42.0
4.9
574.9
59
47.5
140.3
238
0
193
316.0
189
-15.3
-8
1 125
2 697.0
47
20.2
33
113
60
4.2
30
32.5
928
223.0
18
9.0
54.4
260
4 854.0
720
258.0
61
0
Greece
0
31.9
34
114.5
241
0
0
Ireland
0
0.1
90
171.9
1 138
0
0
3.7
70
398.6
9 059
241.3
Italy
Luxembourg
5.3
50
0
0
18.0
812
0
Netherlands
5.3
757
4.0
140
471.0
270
0
Portugal
0.5
100
2.9
20
112.0
1 018
179.0
Spain
15.8
1 330
3.2
0
20
0
6.5
30
2 628.0
2 266
432.0
89
0.5
0.6
10
319.3
618
898.0
42
205.4
United Kingdom
1.0
4.8
90
678.0
310
0
EU increase 1993–99:
61.3
154.1
65
11 884.5
502
5 959.5
10 % of EU increase
1993–99:
6.1
Criteria thresholds used:
Higher
than
6.1 GWh
358
15.4
Higher
than
358 %
Higher
than
15.4 ktoe
1 188.5
Higher
than
65 %
Higher
than
1 189 GWh
Higher
than
596 GWh
Data in shaded cells meet the selection criteria, that is:
• at least 10 % of the total EU increase;
• a percentage increase greater than that for the EU.
Blank cells indicate that the value for 1993 is equal to zero.
Biomass in power includes combined heat and power and refers to electricity output only;
biomass district heating refers to heat output from heat plants only, and data refer to the period 1993–98.
Source: Eurostat.
56
0
50
596.0
Higher
than
502 %
58
0
0
Sweden
62
270.5
39
27.1
Higher
than
50 %
Higher
than
27 ktoe
Higher
than
39 %
22
Renewable energies: success stories
Figure 3
Photovoltaics: absolute and % increase in generation, 1993–99
Source: Eurostat.
1400
60
1200
50
1000
40
800
30
600
20
400
10
200
GWh
70
%
0
Ita
ly
m
bo
ur
N
g
et
he
rla
nd
s
Po
rtu
ga
l
Sp
ai
n
Sw
U
ee
ni
de
te
n
d
Ki
ng
Eu
do
ro
m
pe
an
U
ni
on
Lu
G
xe
ce
er
m
an
y
G
re
ec
e
Ire
la
nd
d
Fr
an
Fi
nl
an
m
ar
k
lg
iu
m
D
en
Be
Au
s
tri
a
0
absolute increase
Figure 4
overall % increase
Solar thermal: absolute and % increase in generation, 1993–99
Source: Eurostat.
160
300
8270 %
140
250
120
150
60
100
40
50
20
de
n
Ki
n
Eu
gd
ro
om
pe
an
U
ni
on
U
ni
te
d
Sw
ee
Sp
ai
n
ly
m
bo
ur
N
g
et
he
rla
nd
s
Po
rtu
ga
l
Ita
Lu
xe
ce
er
m
an
y
G
re
ec
e
Ire
la
nd
G
Fr
an
d
Fi
nl
an
m
ar
k
D
en
Be
lg
iu
m
0
tri
a
0
Au
s
ktoe
80
absolute increase
overall % increase
%
200
100
Identifying successful Member State/technology combinations
Wind: absolute and % increase in generation, 1993–99
23
Figure 5
Source: Eurostat.
4000
14000
9 059 %
3500
12000
3000
10000
2000
%
GWh
2500
8000
6000
1500
4000
1000
2000
500
Ita
Lu
ly
xe
m
bo
ur
Ne
g
th
er
la
nd
s
Po
rtu
ga
l
overall % increase
Sp
ai
n
Sw
ee
Un
de
ite
n
d
Ki
n
gd
Eu
om
ro
pe
an
Un
io
n
absolute increase
Ire
la
nd
Fr
an
ce
G
er
m
an
y
G
re
ec
e
0
Au
st
ria
Be
lg
iu
m
De
nm
ar
k
Fi
nl
an
d
0
Biomass power generation and combined heat and power: absolute and percentage
increase in generation, 1993–99
Figure 6
Source: Eurostat.
900
7000
800
6000
700
5000
600
500
3000
400
%
GWh
4000
300
2000
200
1000
100
ni
te
d
Sw
ee
Sp
ai
n
de
n
Ki
n
Eu
gd
ro
om
pe
an
U
ni
on
overall % increase
U
xe
Lu
absolute increase
m
bo
ur
N
g
et
he
rla
nd
s
Po
rtu
ga
l
ly
Ita
d
ce
la
n
Ire
y
re
e
G
er
m
an
G
d
ce
Fr
an
Fi
nl
an
m
ar
k
D
en
Be
Au
s
lg
iu
m
0
tri
a
0
24
Renewable energies: success stories
Figure 7
Biomass district heating: absolute and % increase in generation, 1993–98
Source: Eurostat.
500
130
110
400
90
300
ktoe
70
%
200
50
100
30
-100
absolute increase
Figure 8
Sp
ai
n
Sw
ee
de
U
ni
n
te
d
Ki
ng
do
Eu
m
ro
pe
an
U
ni
on
Po
rtu
ga
l
Ita
ly
Lu
xe
m
bo
ur
g
N
et
he
rla
nd
s
e
Ire
la
nd
G
re
ec
G
er
m
an
y
Fr
an
ce
Fi
nl
an
d
Au
st
ria
Be
lg
iu
m
D
en
m
ar
k
0
overall % increase
Liquid biofuels production in the EU, 1993–99
Source: Eurostat.
350
300
250
ktoe
200
150
100
50
0
1993
Germany
1994
France
1995
Austria
1996
1997
1998
1999
Italy
Table 2, Table 3 and Figures 3–8 show that the overall increase in renewable energy
penetration achieved in the EU is not shared equally among the 15 Member States.
10
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Identifying successful Member State/technology combinations
In terms of the absolute increase in renewable energy penetration, for most of the
technologies only a few Member States contributed more than 10 % (each) of the total new
resource output for the EU over the six-year period 1993–99(12):
— two Member States (Germany and Spain) contributed 78 % of the new total EU output
from photovoltaics;
— three Member States (Austria, Germany and Greece) contributed 80 % of new solar
thermal installations;
— three Member States (Denmark, Germany and Spain) contributed 80 % of new wind
output;
— two Member States (Finland and Sweden) contributed 60 % of new generation from
biomass fuelled power stations (including biomass combined heat and power stations);
— two Member States (Austria and Sweden) dominated the increase in output from biomass
district heating installations. Denmark’s policy of replacing heat-only biomass district
heating plants with biomass combined heat and power generation was evident from its
reduced output over the period 1993–98;
— only four Member States use biofuels to any significant extent. France is the market leader,
producing about 40 % of the total.
When the second selection criterion is applied, a greater number of Member States achieved
a percentage increase in output higher than the percentage figure for the EU as a whole over
the period 1993–99(13). Three Member States surpassed the EU percentage figure for
photovoltaics. For solar thermal and wind, eight Member States exceeded the EU figure and
for biomass in power stations (including combined heat and power stations) six Member
States exceeded the EU figure over this period. The data for biomass district heating show
that over the period 1993–98, only four Member States achieved percentage increases higher
than that for the total EU.
Only a few Member State/technology combinations recorded positives for both criteria, i.e. a
rapid and a significant increase in renewable energy output over the period (see Tables 2 and
3). Germany achieved the greatest levels of new renewable penetration over the period and
met both of the criteria for all the technologies except biomass. Positive combinations are
also highlighted in some other Member States — in Spain (photovoltaics and wind), Sweden
(biomass district heating) and Austria (solar thermal and biomass district heating).
Many Member States show either a large absolute increase in renewable energy output for
individual technologies, or a large percentage increase. The fact that only a small number of
Member State/technology combinations meet both of the criteria usually relates to their
starting level of renewable energy output for the technology in 1993. Thus Member States
with only very low initial levels of renewable energy use may demonstrate rapid growth rates
even though the actual quantity of output is still only small. Examples here include Finland,
which increased its solar thermal output over the period by 8 270 %, but in absolute terms
output rose by a very small quantity (0.2 ktoe).
Conversely, Member States with levels of renewable energy use that were already relatively
high in 1993 show a less rapid percentage growth rate, but these Member States may still have
added significant quantities to the overall output. For example, Denmark’s wind industry was
already well established by 1993, but it added a further 1 995 GWh by 1999, an increase of
193 %. In Finland, power from biomass was already high in 1993, but continued to expand
steadily, adding 2 697 GWh over the period, a 47 % increase over the 1993 level.
One Member State (Luxembourg) did not meet either of the two criteria for any of the
technologies, while Belgium, Greece, Portugal and the UK met one of the criteria only once.
(12) For biomass district heating, the period examined was 1993–98.
(13) Idem.
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Renewable energies: success stories
4. Potential factors for success
Photo: Volker Quaschning
4.1. Barriers to success
Successful penetration of renewable energy can only be achieved after overcoming many
varied obstacles to an increase in their exploitation.
A large amount of information and research has already been carried out at both the EU and
Member States levels focused on identifying and breaking through these barriers. Much of
the work at European level was drawn together through a series of consultations to set out the
framework for future initiatives and a strategic action plan for overcoming the barriers to
renewable energy implementation (European Commission, 1997b). The EU White Paper on
renewable energy sources (see Section 2.2) also summarises these barriers and the measures
to be taken to counter them.
Renewable energy projects are generally of a smaller scale than conventional energy projects
and consequently cannot benefit from economies of scale to the same extent. In relative
terms, they also have high capital costs which need guarantees of long-term stable income
streams to ensure financial viability. It is therefore important that the non-technical
Potential factors for success
27
frameworks in place do not discriminate against these kinds of projects but enable them to be
brought forward as attractive and financially viable schemes.
Table 4 summarises the main types of barrier that have been identified together with the
general obstacles associated with them.
Barriers and obstacles to renewable energy deployment
Barrier
Obstacle
Political
Lack of political motivation to support the market initiatives needed for the
development of renewables
Legislative
Lack of an appropriate legal framework and legislation at EU and national levels
that support the development of renewables
Difficulties with linking electricity or heat from renewables into the existing
electricity and heat networks
Financial
Lack of appropriate financing for long-term financial benefits
Fiscal
Renewable energy technologies suffer from distorted competition from
conventional energy sources (e.g. coal, nuclear) in terms of final end-user prices
Administrative
Lack of practical support at the regional and local level to stimulate
development of renewable energy projects
Technological
Technological obstacles related to research, development and demonstration
Information, education and
training
Lack of awareness of the potential and possibilities for renewables
The expansion in the use of renewable energy during the 1990s demonstrates that, for some
technologies in some Member States, there are factors that appear to be acting in favour of
implementation. Nevertheless, as shown in Table 2 and Table 3 in the previous section, it is
apparent that for other technologies and in other Member States, the level of
implementation is not as rapid, and obstacles are still preventing implementation.
Clearly, the situations in individual Member States and for individual technologies have
created different framework conditions, some of which are more favourable towards
increased exploitation of renewables than others. However, in many instances it can be
difficult to identify the conditions that have resulted in successful implementation of projects
— or it may be difficult to replicate these conditions in new market conditions.
4.2. Factors influencing renewable energy deployment
This study aims to identify the range of factors that can influence the likely successful
implementation of renewable energy projects and assess how they work.
The principal factors studied are based around the key criteria given in Table 4.
•
•
•
•
•
Political: How strong is political support for renewable energy?
Legislative: How accessible is the energy market to independent electricity producers?
Financial: How accessible is funding for investments in renewable energy projects?
Fiscal: How favourable is the fiscal infrastructure for renewable energy?
Administration: How favourable are the administrative arrangements for obtaining
permission to construct a renewable energy project?
• Technological development: Is there support for the development of strong national
capabilities in renewable energy technologies?
• Information, education and training: Is support given to widely disseminate information on
the benefits of renewable energy?
Each factor is discussed in more detail below. These factors will be used in the following
section to evaluate those Member State/technology combinations that met both the selection
criteria for successful penetration. They will also be used in Annex 4 to evaluate the most
interesting cases of those Member State/technology combinations that met only one
criterion.
Table 4
28
Renewable energies: success stories
4.2.1. Political
How strong is political support for renewable energy?
EU-wide support for a greater use of energy from renewables is demonstrated strongly
through the 1997 EU White Paper on renewable energy sources, and more recently the 1999
Campaign for Take-Off and the 2001 directive on renewable energy in the internal electricity
market. All of these form the basis for action plans for subsequent implementation at
Member States level, through coordinated activities at national, regional and local levels. In
particular, support is demonstrated through the adoption of policies in favour of renewables.
These are often developed in conjunction with the development of an overall national energy
plan. One of the most important elements to consider here is the adoption of official targets
for the level of uptake of renewables, usually expressed as a target level of use of renewable
energy (heat and/or power) in the Member State. For Member States that have strong
regional governments, these national targets may also be translated to appropriate regional
targets. Alternatively, there may be no national targets at all, but only targets developed at the
regional level.
4.2.2. Legislative
How accessible is the energy market to independent electricity producers?
For small independent power generators (renewable or fossil-fuelled), it is essential that there
are access agreements that permit them access to the electricity grid to distribute their
electricity. The costs and logistics of connecting to the grid can be significant for small energy
schemes, and the imperfections associated with grid connection arrangements have not yet
been removed in many Member States.
Another important aspect for renewable power producers is the availability of a market for
their power, usually achieved by connection and transmission via the main electricity supply
grid. Due to the generation characteristics of renewable energies and their higher generation
costs compared with other forms of energy, the absence of a guaranteed market for renewable
power seriously jeopardises the financial viability of many renewable energy projects.
Different Member States have adopted different approaches to providing support for a
guaranteed market for renewable generation, but generally there have been two main
mechanisms which governments have used:
‘Feed-in’ arrangements — with a fixed price for electricity generated, and purchase/sale
arrangements available continually, coupled with a purchase obligation by the utilities. The
feed-in arrangement is a legal obligation on utilities to purchase electricity from renewable
sources. It also sets the prices to be paid for electricity generated from these renewable
sources, generally higher than the price that would be available outside the tariff mechanism.
These tariffs may vary for different renewable energy technologies, and are generally linked
to prices paid by final consumers.
Tendering arrangements — a competitive process based on periodic calls for tender, to
support a certain predetermined quantity of renewable electricity. Under this system, a fixed
amount of renewable energy is supported through a levy on electricity consumers, which is
directed at specific renewable technologies through a tendering system. This system enables
specific renewable technologies to be supported, even those at differing stages of
technological development, because the tendering system encourages competition within
technologies. This has resulted in cost reductions for many of the technologies supported.
There are two more recent developments in new initiatives to support electricity from
renewable sources:
Green pricing schemes. Green pricing allows consumers to support the generation of
electricity from renewable sources by paying a voluntary premium. The schemes being
developed are varied in their design, ranging from consumers paying a fixed premium per
year to support new renewables developments (whilst themselves still receiving some ‘brown’
or non-renewable power), to receiving all of their power from renewable sources.
Potential factors for success
Green certificates. Green certificates benefit producers of renewable electricity and are
issued according to the amount of renewable electricity produced or sold into the grid.
Demand for green certificates can come from several sources. There may be voluntary
demand from consumers who wish to purchase ‘green electricity’. The government can also
stimulate demand by stipulating that suppliers should provide their consumers with an
increasing proportion of their power from renewable sources. The value of the certificate can
assume a separate market value through trading between electricity suppliers. Trading in
green certificates is being developed in a number of Member States and at a European-wide
level.
4.2.3. Financial
How accessible is financial support for investments in renewable energy projects?
The capital costs of building renewables projects are a significant barrier to their
implementation, especially for newer technologies that are more costly and that have less of a
track record in implementation (e.g. photovoltaics). Finance may be provided from either
public or private sources:
Public support can be made available for renewable energy projects through grants or loans:
• grants — public sector support at EU, national, regional or local level;
• low-interest loans — usually through national or regional financial institutions with public
subsidy support;
• loan guarantees — again, usually provided with public subsidy support.
Private sector funding of renewables projects from banks and other financial institutions such
as venture capital organisations is of vital importance to the long-term commercialisation of
renewables. It can be provided either in conjunction with or without public funds, depending
on the financial viability of the project.
4.2.4. Fiscal (taxation)
How favourable is the fiscal infrastructure for renewable energy?
Energy produced from renewable sources currently competes against energy from
conventional sources at a disadvantage in many cases. There are several reasons for this. Many
of the fossil and nuclear fuel plants operating in Europe today were built with significant
subsidies, while much of the large fossil generation is from older power plants where the
capital costs have now been recovered. Both of these factors enable these types of plant to
generate at lower cost compared with new plant which must take capital investment costs into
account. This is particularly challenging for renewable energy plant because capital costs
contribute a very high proportion of total plant costs.
In addition, the external costs of energy production from fossil or nuclear sources are
sometimes not fully taken into account when deriving electricity generation costs. External
costs from nuclear or fossil fuel plant include their contribution to pollution through carbon
dioxide, sulphur dioxide, nitrogen oxides and other emissions and pollutants (fossil fuel
plant), or to nuclear waste generation and to risks of radioactive contamination (nuclear
plant). Benefits from renewable energy reflect the benefits of energy provision from nonfossil, clean energy sources, and the potential benefits of providing decentralised power
production (embedded generation).
As a result of all these and other issues discussed in this section, costs of renewable generation
are currently higher than that of conventional (fossil or nuclear) generation.
Some Member States have started to address these issues, usually through the imposition of a
carbon or energy tax. These aim to modify energy consumption levels and patterns to
encourage greater energy efficiency and a greater use of renewable resources. Some Member
States also provide tax exemptions/reductions or tax incentives (for example accelerated
depreciation of capital investments in renewable energy) to companies or individuals making
use of or investing in renewables-related goods or services. These encourage investment in
clean energy projects.
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Renewable energies: success stories
4.2.5. Administration
What are the administrative arrangements for obtaining permission to construct a renewable
energy project?
Public authorities have an important role to play in supporting the conception, siting and
development of new renewable energy projects. Achieving planning permission can be one of
the biggest barriers to implementation of new renewables projects in some countries or
regions. This is especially true for wind projects, but larger biomass and many hydro
installations also encounter problems related to their construction. However, the ease with
which planning permission can be obtained varies between different Member States.
Responsibility for giving permission may be at the local, regional or national level, and may be
carried out on a project-by-project basis, or may form part of a wider planning process that
has already provided a framework for the location of new projects.
4.2.6. Technological development
Is there support for technological development of strong national capabilities in renewable
energy technologies?
Support for research and development (R&D) plays a vital role in the progression from
research and technological development through demonstration to final full-scale
commercialisation of a new technology. All renewable energy technologies benefit from R&D
support to ensure the continued development of a strong and competitive industry. Support
is especially important where renewable energy technologies are still at early stages of
development — for example photovoltaics.
Technological support focuses not only on R&D, but also on demonstration and
implementation of new technologies as they mature. For a Member State to build up its
indigenous capabilities in a developing market such as the renewables market, it is important
for the emerging industry to be given consistent and targeted support for demonstration and
implementation projects.
4.2.7. Information, education and training
Is support given to widely disseminate information on the benefits of renewable energy?
Dissemination activities to promote the benefits of renewables are a vital component of a
national renewables support programme. These include the provision of information to all of
the principal actors and groups involved with the development of renewables — financiers,
planners, politicians (local and national), and the general public — to raise awareness and
educate about the potential of renewable energy. It is also very important to support training
initiatives for new renewable energy developments, such as for solar heating installers or for
farmers wishing to grow new energy crops.
The development of renewable energy is closely linked to its level of acceptance by the people
who will benefit from it and who will see the new renewable energy projects being built in
their area. Public acceptability is vitally important for new renewable energy developments,
particularly since projects are often smaller scale and their greatest impacts occur at the local
(community) level.
Member state/technology examples of successful penetration
31
5. Member state/technology examples of
successful penetration
Photo: Volker Quaschning
Table 2 (Section 3) highlighted the principal Member State/technology combinations that
appear to be successful, in terms of rate and/or the amount of increase in output over the six
years 1993–99.
The preceding discussion has summarised the key factors that may influence the likely
successful penetration of renewable energy technologies. These factors are now assessed in a
series of case studies which reflect the successful Member State/technology combinations
identified in Section 3. Where possible and appropriate these case studies give representative
examples of renewable energy projects.
In this section, case studies are evaluated which demonstrate those Member State/technology
combinations that meet both the criteria for successful penetration. These combinations are
listed in Table 5:
Member State/technology combinations meeting both the criteria for successful penetration, 1993–99
Country
Renewable energy technology
Applications
Austria
Biomass
District heating
Germany
Spain
Sweden
Solar thermal
Solar thermal collectors
Photovoltaics
Photovoltaics in urban areas
Solar thermal
Heating initiatives in various cities
Wind energy
Wind farms
Photovoltaics
Grid-connected photovoltaics
Wind energy
Wind farms
Biomass
District heating
Table 5
32
Renewable energies: success stories
In Annex 1 the most interesting case studies of Member State/technology combinations that
meet one of the criteria for successful penetration are evaluated. These combinations are
listed in Table 6.
Table 6
Most interesting Member State/technology combinations meeting one of the criteria for successful
penetration
:
Country
Renewable energy
technology
Applications
Denmark
Biomass
Power
Wind energy
Wind cooperative
Finland
Biomass
Combined heat and power
France
Biomass (biofuels)
Biodiesel
Biomass
District heating
Wind energy
Wind developments
Germany
Biomass
Power and district heating
Greece
Solar thermal
Solar hot-water systems
Ireland
Wind energy
Wind farm
Italy
Wind energy
Wind farms
Netherlands
Photovoltaics
Roof-integrated photovoltaics
Portugal
Wind energy
Wind projects
Spain
Biomass
Power
Sweden
Biomass
Power
Wind energy
Wind farms
Member state/technology examples of successful penetration
5.1. Austria — Biomass district heating
Austria has extensive forestry and other
biomass resources that are used as energy
resources. Between 1993 and 1998, it
achieved significant increases in its level
and rate of use of biomass for heat
production in general and especially for
district heating purposes.
In 1993:
In 1998:
77.1 ktoe
124.6 ktoe
Increase 1993–98: 47.5 ktoe, 62 %
District heating is very common in Austria, and the use of biomass as fuel is increasing. By
2000 there were more than 500 district heating plants (totalling more than 650 MW installed
capacity) operating throughout Austria.
Success factors:
• Political: National and regional support to expand the use of biomass
Austria has few indigenous fossil fuel resources, so its energy policy addresses security of
supply issues through promoting energy efficiency and reducing use of imported fuels,
combined with stimulating the use of renewable energy. Austria’s large biomass resources play
an important role in increasing the use of renewable energy. The government and, in
particular, the regions provide active political support for biomass energy. Several regions
have biomass-related targets.
• Fiscal: Energy taxes favour renewable energy schemes
Austria introduced an energy tax on the use of gas (EUR 0.0435/m3 (cubic metre) + 20 %
VAT) and electricity (EUR 0.003/kWh + 20 % VAT) in 1996. The tax applies to small-scale as
well as industrial users. Part of the tax revenue is made available to the Länder and to the
communities for the implementation of energy saving and environmental protection
measures, including measures to promote renewable energy.
• Financial: Public grants and subsidies for biomass installations
Support is provided at both the national and regional level for biomass installations,
particularly for district heating schemes. Eligible regions have also benefited from EU
Structural Funding support targeted at renewable energy schemes including biomass.
The support includes:
— subsidies of 10–30 % of eligible costs through a national environmental support
programme;
— regional support plans that provide subsidies of up to one third of the costs;
— local and regional support targeted towards private households to subsidise the cost of
connection to heating networks;
— special support programmes by the farmers’ association to encourage farmers to invest in
biomass plants.
• Administration: Long history of public support for and use of biomass as a fuel resource
Austria has a decentralised population structure and a densely wooded landscape, and has
been using wood as an energy resource for centuries. Decentralised heat production from
biomass is accepted and promoted by the local and regional authorities.
The local council implements planning decisions at the local level. There can be initial
opposition to district heating proposals. In some cases where this occurred, public authorities
took the lead and established connections to public buildings to demonstrate the benefits.
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Renewable energies: success stories
• Technological development: Indigenous manufacturing expertise
New technological developments for biomass production processes are supported both within
Austrian universities and in association with industry. There is already a well-established local
industry that developed to meet the demand for new biomass district heating plants,
including boiler and pipework manufacture, and installation services.
• Information, education and training: Long history of use of biomass as fuel, benefits to key local
economic actors from biomass projects, promotion of benefits from biomass use by energy agencies
Biomass use is very well established and accepted in Austria, both at the local level for smallscale applications and at the industrial level, due to the country’s extensive wood-based
industries. At the larger-scale and industrial level, farmers are supportive of new biomass
projects because of the additional income that will be generated. Wood users such as sawmills
also benefit because they have an additional market for their wood wastes. These actors, in
particular the farmers, have been key in increasing public acceptance of biomass projects.
At the local level, most regions carry out active dissemination activities to promote the
economic and environmental benefits from using biomass as a fuel by individuals or
communities. These activities are usually coordinated through regional or local energy
agencies, which place strong emphasis on the importance of institution building and on
activities in the information, communications and training sectors. The overall result of these
activities is that the general public is well informed about the benefits and use of renewables.
Member state/technology examples of successful penetration
5.2. Austria — Solar thermal
Austria’s rapid increase in its use of solar
energy for heating purposes demonstrates
that solar thermal can provide an
important source of energy even in less
sunny regions.
In 1993:
In 1999:
24.9 ktoe
62.1 ktoe
Increase 1993–99: 37.1 ktoe, 150 %
One of the most successful regions to encourage solar thermal uptake is Upper Austria. In
1994, the Upper Austrian Energy Plan established targets to reduce fossil fuel consumption,
improve energy efficiency and increase the use of renewable energy in the region. These
targets, which were met, included reducing domestic energy use by 20 % and increasing the
proportion of energy provided from renewable sources to 30 % by 2000. The Upper Austrian
Energy Agency has been one of the main promoters of actions to achieve these targets, and
has been very successful through a combination of support measures from both national and
local sources, combined with a high level of information dissemination activities to raise
awareness in the region.
More than 500 000 m2 of thermal solar collectors had been installed in Upper Austria by 2000
as a result of the energy plan, for space heating and producing hot water, mainly in domestic
buildings. By 2000 the region had about 0.4 m2 installed solar collectors per inhabitant — one
of the highest densities of solar collectors per inhabitant in Europe. Similar initiatives are now
being implemented in other Austrian regions, supported through local or regional energy
plans.
Success factors:
• Political: National and regional support towards development of renewable energy
The Austrian national government’s energy policy places a strong emphasis on improving the
country’s security of energy supply and reducing the amount of energy imports. This,
combined with a commitment to environmental protection, has resulted in a long-standing
level of political support for renewable energy at the national level and has led to active
political support at the regional level. The government also links the benefits of supporting
renewable energy to associated socio-economic impacts of job creation and economic benefits
to the local economy.
• Financial: Loans and grants available through national and regional government
Financial support for installing solar collectors is available through support programmes both
at the national level (targeting companies) and at the regional level (targeting households).
This support includes grants to householders and low-interest loans on investments in
renewable energy. The high level of financial support available for installing solar collectors
has been one of the main reasons for the high uptake of these systems in the Upper Austrian
region. Other regions are now following the example of Upper Austria: for example, the town
of Feldkirch in western Austria subsidises the installation of solar hot-water collectors by 25 %,
while the Municipality of Graz provides EURO 35/m2 solar hot-water collectors installed.
• Fiscal: Energy taxes favour renewable energy schemes
An energy tax was introduced in 1996 on both small-scale and industrial users of gas and
electricity. Part of the revenue from this energy tax is recycled to support various
environmental protection measures, including support for renewable energy.
• Administration: Active local and regional support towards the installation of solar collectors
Many of the regional and local administrations have encouraged the installation of solar
collectors through active support measures, for example through installing collectors on their
own municipal buildings.
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Renewable energies: success stories
• Technological development: Support for indigenous solar collector manufacturers and installation
industries
Solar thermal benefited during the 1980s from the establishment of a network of groups
throughout the country which provide active support and advice to individuals wishing to
install solar water heaters themselves. This initiative encouraged the development of an
industry to provide commercial installations. Austria now has a network of companies
working in the field of solar collectors, as well as in other renewable energy technologies,
which in Upper Austria alone employs more than 1 000 people.
• Information, education and training: Positive dissemination and support for renewable energy use
through the regional energy agencies
Regional energy agencies provide expert advice, research and targeted initiatives aimed at
promoting national and regional energy policies. In Upper Austria, the agency provides
targeted support towards promoting the uptake of solar collectors through a wide-ranging
programme. Initiatives include:
— information and training for specialised installers
— marketing activities
— demonstration systems to show successful installations.
Member state/technology examples of successful penetration
5.3. Germany — Photovoltaics
Germany has the highest level of
photovoltaics installations in Europe,
and the third highest in the world, after
the United States and Japan.
In 1993:
In 1999:
3.0 GWh
35.0 GWh
Increase 1993–99: 32.0 GWh, 1 070 %
Many of Germany’s regions actively support photovoltaics (PV) as part of their efforts to
expand the use of renewable energy. Berlin, for instance, is sometimes referred to as the solar
capital because of the rapid increase in PV installations. More than 9 000 m2 of PV modules
have been installed in Berlin, with a total generating capacity of nearly 800 kW. These include
the presidential residence, the town hall, and many other ministries and public buildings.
The new Innovation Centre for Environmental Technology in Berlin-Adlershof was developed
by the Berlin Energy Agency, and financed through a partnership between the Energy
Agency, the local energy provider BTB and the owner of the building. They jointly invested in
a solution to cover the working expenses of the solar installation and to sell electricity into the
energy grid.
This and many of the other installations in Berlin provide excellent examples of successful PV
installations, and of ecological building management.
Success factors:
• Political: National and regional support towards the development of photovoltaics
German energy policy is closely linked with national policies to support climate protection.
Renewable energy plays an important part in this policy, and the government has actively
supported financial provision towards renewables, both at national and regional levels. Most
German regions also have energy policies, targets and support mechanisms designed to
encourage the development of renewable energy. PV especially has benefited from support
from regional governments. For example, Berlin’s energy policy was established in 1994 and
amongst other things seeks to increase support for the use of renewable energy and reduce
CO2 emissions by 25 % per person from 1990 levels by 2010.
• Legislative: Premium-set tariffs combined with an obligation to purchase provide a stable,
commercially favourable market to renewable electricity producers
The Electricity Feed-In Law supports renewable electricity, including PV, by providing a
guaranteed market and fixed price for the electricity produced from renewable energy
sources. From 1 April 2000 the tariffs for PV are even more advantageous: they have been
raised sixfold from EUR 0.08/kWh (DEM 0.16/kWh) to EUR 0.51/kWh (DEM 0.99/kWh).
This rate is proving very attractive: the German government had to limit applications for
receiving this new tariff in 2000 because the amount of money set aside for supporting it had
already been reached.
• Financial: Loans and grants available for photovoltaic schemes
An important stimulus to developing PV in Germany have been the PV roofs programmes.
The 1 000 PV roofs programme started in 1991 and provided subsidies for production costs of
PV units of 60 % in the new Länder and 50 % in the rest of Germany. The programme was
successfully completed in 1996/97. A follow-on 100 000 PV roofs programme started in 1999,
which provides EUR 560 million towards supporting individuals and small and medium-sized
companies to install grid-connected PV schemes. The recent increase in tariffs available to PV
installations and the corresponding rapid increase in the number of installations has meant
that the target date for achieving the 100 000 roofs programme has been brought forward by
one year to 2003.
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Renewable energies: success stories
The national European Recovery Programme (ERP) for Environment and Energy Savings
offers long-term loans with low interest rates for investment in the use of renewable energy.
The programme is administered by the federally owned Deutsche Ausgleichsbank (DtA),
Bonn. Loans may amount to 50 % of investment costs, and provide favourable interest rates
and loan arrangement. This programme provides grants for capital subsidies to households
for PV installations.
• Technological development: Germany has developed a successful domestic photovoltaics cells and
components manufacturing industry
High levels of federal support for research and development have helped to build a strong
and competitive domestic PV industry. Almost one third of the funding support provided
from the federal government towards energy research and technology is focused on
renewable energy. In 1996 expenditure was approximately EUR 100 million. The majority of
the funds are devoted to solar applications, particularly PV. This, combined with the
expanding domestic PV market, has made Germany a location of choice for new
manufacturing plants. More than half of Europe’s PV manufacturing capacity is now located
in Germany.
• Information, education and training: Local energy agency stimulates private and public interest in
photovoltaics
At the local community level, there is high environmental awareness among German citizens,
particularly of energy issues. In addition, energy agencies play an important role in
stimulating the demand for PV installations.
In Berlin, for example, the approach is to encourage links between private sector and public
organisations to build strong local partnerships to implement PV solutions. To achieve this,
the Berlin authorities supported the establishment of an energy agency, in conjunction with
developing support programmes. The Berlin Energy Agency is responsible for informally
coordinating active links between the Berlin Senate, Berlin businesses and energy utilities to
implement new PV projects on new public and private buildings.
Member state/technology examples of successful penetration
5.4. Germany — Solar thermal
Germany is leading the way on solar
thermal energy.
In 1993:
In 1999:
21.0 ktoe
75.4 ktoe
Increase 1993–99: 54.4 ktoe, 260 %
Many German municipalities have seen a rapid increase in the uptake of thermal solar
installations. Examples of some successful municipalities in south-west Germany include:
— Freiburg: more than 200 domestic installations (2 500 m2) achieved by 1996;
— Friedrichshafen: nearly 5 000 m2 of collectors installed to support solar-assisted small-scale
district heating and hot-water systems;
— Ulm: installation of a central hot-water system for 38 homes and a district heating system
(heat and hot water) for 86 residential units, in which heat from solar collectors is used
together with a combined heat and power plant fired by biomass and gas.
These examples illustrate the variety of innovative ways in which German municipalities are
promoting a greater use of solar energy for thermal energy requirements. Both small and
larger-scale installations (more than 500 m2) are being established, and interest in large-scale
solar heating opportunities is increasing, with most of these installations supplying heat to
residential buildings.
Success factors:
• Political: National and regional support towards increasing use of solar thermal installations
Political support from national and regional governments is translated into practical
implementation measures in the form of targets, grants, research support and other actions
aimed at increasing the level of renewable energy use. Many regions or municipalities have
targets for increasing their level of renewable energy use, which often place a strong emphasis
on renewable energy and energy savings, linked with climate protection objectives. Regions
also see solar hot-water systems as important components in implementing Local Agenda 21
(opportunities for carrying out climate protection initiatives at the local level) in their region.
• Financial: Federal government and private sector financial support to solar thermal installations
A wide range of federal, regional and private sector financial support is available for solar
installations. These include:
— Federal government support: The federal government’s Solarthermie 2000 demonstration
programme subsidised the construction of the long-term hot-water storage and the district
heating system in Friedrichshafen, contributing 53 % towards total costs.
— Regional support: In Friedrichshafen, 9 % of total costs came from regional support
measures.
— Energy utilities: The role of the local municipal energy company is also important. In
Freiburg, for example, the company provided financial support of EUR 230/m2 (partfinanced from EU funds). In Friedrichshafen, the owners and operators of the district
heating system have responsibility for overall risk and guarantees of the system.
Local people can also benefit from low interest rates provided by local or regional banks for
solar installations. A number of financial institutions in Germany have supported both
community- and non-community-based renewable energy projects with favourable financing
packages.
• Administration: Active support provided from municipalities for solar thermal installations
One important factor is the role played by both the municipality and the local energy utility in
encouraging the uptake of solar heating. The municipality collaborates closely with the utility
in establishing and implementing energy planning and municipal energy policy and targets.
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Renewable energies: success stories
• Technological development: Quality standards provided to guarantee results from solar collectors
GRS (Guaranteed Results from Solar collectors) is an initiative established by several
municipal utilities in 1993, coordinated by municipalities. Its purpose was to ensure that the
annual amount of heat supplied by a solar collector was guaranteed by the manufacturer, thus
allowing for precise cost–benefit calculations and ensuring that systems met customer needs.
Its application has helped to boost consumer confidence in the quality of the new types of
heating systems available in Germany, and in particular those produced by German
manufacturers.
• Information, education and training: Active promotion of the benefits of solar thermal installations
by municipalities, utilities and local energy agencies
Close collaboration between municipality and utility has led to a combined effort to both
disseminate and improve public relations in order to promote renewable energy uptake.
Specialist advice centres have been established through local energy agencies to provide
technical and practical support to local associations for solar installations, but also to support
demonstration schemes.
Public awareness of energy and environmental problems, and the opportunities for
renewable energy, is strong in Germany.
Member state/technology examples of successful penetration
5.5. Germany — Wind energy
Germany has established itself as the
world leader in wind power, with the help
of a feed-in law.
In 1993:
In 1999:
674.0 GWh
5 528.0 GWh
Increase 1993–99: 4 854.0 GWh, 720 %
Germany increased the number of turbines installed considerably during the 1990s. Many of
the projects established in Germany before the mid-1990s were small to medium-sized
installations, often with a high degree of participation from the local community. One
example is the Halde Nierchen wind farm in the state of Nordrhein-Westphalia. This wind
farm comprises nine 1-MW turbines. The wind farm was built in 1998, and all power
generated from it is sold to the local public utility EBV under the Electricity Feed-In Law.
Success factors:
• Political: National and regional support towards wind energy development
Federal support for renewable energy started more than 10 years ago with the 250 MW Wind
Programme. This was initiated in June 1989 as a 100 MW Wind Programme and was extended
in February 1991 to 250 MW. The programme’s aim was rapidly achieved, and by 1999
Germany had more than 4 000 MW installed capacity. Political support from government is
mainly through the feed-in law, grants and research support. Many German regions or
municipalities have targets for increasing their level of renewable energy utilisation, including
wind energy use.
• Legislative: Premium-set tariffs combined with an obligation to purchase provide a stable,
commercially favourable market for renewable electricity producers
The single most important factor for the rapid and successful implementation of wind energy
in Germany is its feed-in law. From 1991–2000, the Electricity Feed-In Law provided a
guaranteed market and fixed price for the electricity produced from renewable energy
sources. Wind energy schemes benefited considerably during the late 1990s from the
favourable tariffs available through these support measures, and the feed-in law and its
successor, the Renewable Energy Sources Act (2000), continue to be the principal mechanism
for achieving the rapid uptake of wind energy in Germany.
Under the feed-in law, operators of the grid were obliged to purchase electricity produced
from renewables within their respective supply areas, at agreed and fixed prices. For wind
power the price available in 1997 was DEM 0.1715/kWh (EUR 0.088/kWh). In order not to
overburden grid operators in areas where there were high rates of renewables generation with
having to purchase at premium prices, a limit of 5 % renewable electricity was set from 1998
that applied within each region. Above this mark, operators of the grid were exempted from
the obligations of purchase and refund.
As the amount of electricity from renewable sources expanded, a number of regions
exceeded the 5 % ceiling. There was also an uneven financial burden between grid operators
in regions close to the 5 % ceiling and regions with low levels of renewables generation. In
order to address these and a number of other issues the law was replaced by the Renewable
Energy Sources Act (2000). This continues to provide a guaranteed market and fixed
favourable tariffs for electricity generated from renewable sources. The 2000 Act abolished
the 5 % cap and introduced a system that allows transmission grid operators to share amongst
themselves the costs of compensation to renewable electricity producers.
• Fiscal: Tax exemptions are available to investment in renewable energy technologies
Private individuals can offset the costs of investment in a wind farm against tax. This makes
wind farms an attractive investment option, especially for smaller investors, and can lead to a
proportion of the capital costs for new wind farm developments being financed by the general
public.
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Renewable energies: success stories
• Financial: Subsidies and low-interest loans are available to wind energy projects
Many German regions provide financial support to renewable energy schemes, including
investment subsidy programmes, to implement their energy policies. Nordrhein-Westphalia,
for example, actively supports renewable energy, and in 1997 alone provided some EUR 10
million to financially support environmental energy projects, including some wind energy
projects.
A number of German financial institutions provide low-interest loans suitable for renewable
energy projects. For example, the European Recovery Programme (ERP) — Environment
and Energy Savings offers long-term loans with low interest rates for investments in the use of
renewable energy. The programme is administered by the federally owned Deutsche
Ausgleichsbank (DtA), Bonn. Loans may amount to 50 % of investment costs, and provide
favourable interest rates and loan arrangement. Loans to wind energy projects over the 1990–
97 period reached DEM 3.48 billion (EUR 1.78 billion) out of the DEM 4.18 billion (EUR
2.13 billion) disbursed to renewable energy projects.
The Halde Nierchen scheme received no grants but does benefit from a soft loan from the
Nordrhein-Westphalia regional government under its Rationelle Energie Nutzung (Rational
Use of Energy) programme.
• Administration: Planning guidance is being developed in some regions to identify areas for wind
developments
Public acceptance is becoming a problem in areas with a number of wind turbines. To help to
overcome local opposition to wind power developments, planning guidance is now being
developed in some regions to identify areas open to or barred from wind developments. In
addition, national land use directives are in preparation to indicate how much renewable
energy should be developed in each of the regions, particularly in regions (such as
Nordrhein-Westphalia) where there is a high level of wind energy developments.
The planning issues associated with the Nordrhein-Westphalia scheme were complex, largely
because the farm is on the border of two regions and so approval from both regions was
needed before the developers could go ahead, which took 3–4 years. There are no plans to
strengthen coordination within and between the Länder of measures to promote renewable
energies.
• Technological development: A strong and expanding German wind energy industry
Germany’s wind energy manufacturing industry is expanding to meet the increasing demand
for domestic installations, both through indigenous companies and through joint ventures,
especially with Danish companies. This expansion is made possible because manufacturers
are confident of a steady future market based around the continuation of the feed-in law in
the Renewable Energy Sources Act.
• Information, education and training: Active involvement of locals in wind energy projects
There is generally a high level of environmental awareness amongst German citizens and an
interest in wind energy as an alternative to other energy sources. Wind energy is of especial
interest to farmers, who see it as an opportunity to provide an alternative income stream
through land rentals or through electricity sales.
Many wind farms are part-financed by local community subscriptions. In the Halde Nierchen
scheme, the developer held public meetings in local communities to raise interest in the
scheme. Just over 30 % of the scheme subscribers are resident in the local area.
Member state/technology examples of successful penetration
5.6. Spain — Photovoltaics
Electricity from photovoltaics (PV) has
recently increased dramatically in Spain,
placing Spain among the leaders in PV
exploitation in Europe.
In 1993:
In 1999:
1.2 GWh
17.0 GWh
Increase 1993–99: 15.8 GWh, 1 330 %
Spain has high potential for photovoltaic (PV) energy. PV electricity has been expanding
rapidly in particular since 1998 when it received increased financial support through national
feed-in tariffs. Financial support by regional authorities is also encouraging PV development
in some of Spain’s 17 autonomous communities.
Success factors:
• Political: Support for renewable energy implementation at both national and regional level
The national Energy Saving and Efficiency Plan (PAEE), 1991–2000, aimed to increase the
overall use of renewables by 1.1 mtoe by the year 2000, including an increase in the
contribution of non-hydro renewables in electricity generation from 0.5 % in 1990 to 1.4 % in
2000. This support is endorsed and implemented at the regional level. PAEE provided funds
for energy projects at national level until 1999, when responsibility for distributing the funds
was transferred to each autonomous region. The Plan de Fomento de las Energías Renovables
(2000–10) sets out new targets and aims to double renewable energy to 12 % of gross inland
energy consumption by 2010.
Regional encouragement of PV energy has been particularly strong in the Canary Islands,
Andalucia and Castilla la Mancha regions.
• Legislative: Premium-set tariffs combined with an obligation to purchase provide a stable,
commercially favourable market for renewable electricity producers
A series of royal decrees during the 1990s provided support for electricity generation from
renewable energy sources, wastes and combined heat and power. The decrees guaranteed the
purchase of electricity from renewable sources at a premium fixed price. The 1994 decree
determined the fixed tariff for solar electricity at ESP 10.42/kWh (EUR 0.06/kWh). The 1998
decree drastically increased the fixed tariff for solar electricity to ESP 66/kWh (EUR 0.39/
kWh) for PV installations smaller than 5 kW, or ESP 36/kWh (EUR 0.22/kWh) for larger
installations. The 1998 legislation also provided guaranteed access to the electricity grid, with
agreed rates for connection.
• Financial: State and regional subsidies available
The PAEE has provided subsidies in the form of capital grants, initially up to ESP 800/Wp
(4.8 EURO/Wp) for grid-connected systems and up to ESP 1 600/Wp (EUR 9.6/Wp) for
non-grid-connected systems. Since 1996 PAEE has provided subsidies up to ESP 600/Wp
(EUR 3.6/Wp) and ESP 1 200/Wp (EUR 7.2/Wp) respectively. Since 1997 only certain
regions of Spain have been eligible for grants.
In addition to PAEE the autonomous regions have established support for investment and
financing of renewable energy projects. Programmes such as Prosol and Procasol provide
capital incentives for the provision of energy to isolated rural communities, hotels and leisure
centres in Andalucia and the Canary Islands. Technologies such as PV home systems are
eligible for support under these programmes.
For example in Andalucia, subsidies of EUR 11.9/Wp for non-grid-connected systems are
available and EUR 8.92/Wp for grid-connected installations.
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Renewable energies: success stories
• Administration: Local involvement in renewable energy planning combined with collaboration
among local, regional and national administrations
Responsibility for renewable energy sources belongs chiefly to the autonomous communities
(the regions). In particular, this allows each region to have authority over the various
administrative procedures including planning and environmental impact assessments, to
implement renewable energy projects.
Successful implementation of PV projects is mostly met where collaboration at all levels of
administration (local, regional and national) is achieved.
Member state/technology examples of successful penetration
5.7. Spain — Wind energy
Spain is rapidly becoming one of the
leaders in wind power exploitation in
Europe.
In 1993:
In 1999:
116 GWh
2 744 GWh
Increase 1993–99: 2 628 GWh, 2 266 %
Spain has high wind energy potential. Wind energy development is expanding considerably,
mostly due to financial support through national feed-in tariffs but also because of capital
subsidies, in particular at the beginning of a development. Expansion may, however, be held
back by lengthy procedures to obtain planning permission.
Navarre was one of the first regions to actively support wind developments, opening the way
for other Spanish regions. Spain now has successful wind energy developments in many
regions.
El Perdon wind farm is one of the projects developed in Navarre by Energia Hidroelectrica de
Navarre (EHN). The first phase, of six 500-kW wind turbines, came into operation in 1994 as
an initial demonstration. More turbines were installed in 1995–96, and total installed capacity
is now 20 MW. Based on its early successes, EHN is now a leading developer of wind energy
projects throughout Navarre and other regions.
Success factors:
• Political: Support for renewable energy implementation at both national and regional level
The national Energy Saving and Efficiency Plan (PAEE), 1991–2000, aimed to increase the
overall use of renewables by 1.1 mtoe by the year 2000, including an increase in the
contribution of non-hydro renewables in electricity generation from 0.5 % in 1990 to 1.4 % in
2000. This support is endorsed and implemented at the regional level. PAEE provided funds
for energy projects at national level until 1999, when responsibility for distributing the funds
was transferred to each autonomous region. Spain has already reached the 2000 renewables
target. The Plan de Fomento de las Energías Renovables (2000–10) sets a new target of 12 %
share of renewables in gross inland energy consumption by 2010.
The regional government of Navarre developed an energy plan in 1996 with the aim that by
2005 all electricity generated in Navarre will come from renewable energy sources, of which
about 50 % will be from wind energy.
• Legislative: Premium-set tariffs combined with an obligation to purchase provide a stable,
commercially favourable market for renewable electricity producers
The main driving force behind renewable energy comes from a series of royal decrees during
the 1990s on support for electricity generation from renewable energy sources, wastes and
combined heat and power. The decrees guaranteed the purchase of electricity from
renewable sources at a premium fixed price, at 80–90 % of the average electricity tariff from
conventional power sources. From 1999, wind electricity producers could receive either the
fixed tariff of ESP 10.42/kWh (EUR 0.06/kWh) or the average hourly market price of
electricity plus a bonus of ESP 4.79/kWh (EUR 0.03/kWh). The legislation also provides for
guaranteed access to the electricity grid, with agreed rates for connection.
• Financial: State and regional subsidies available
The PAEE provided subsidies in the form of capital grants, up to 30 % of eligible costs of the
project. In addition, each autonomous region has established relevant support for investment
and project financing. Because of the success of wind energy in Spain, support available
through the PAEE was reduced during the PAEE period (1991–2000), both for the systems
and regions eligible for capital subsidies, and for the subsidy provided per project.
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Renewable energies: success stories
• Technological and industrial development: A thriving wind manufacturing industry has been
established in the region
Decreasing costs of investment and operation, and the greater maturity of the technology,
have greatly helped the development of Spain’s wind energy industry.
Navarre is a highly industrialised region, and support for new wind energy developments was
seen to provide not only environmental benefits but also economic benefits through new
employment and general economic development. As a result of the high level of new wind
farm developments in Spain, especially Navarre, Gamesa Eolica is now the major
manufacturer of turbines in Spain and one of the world market leaders in the sector.
The installation of the first phase of the El Perdon wind farm led to the set-up of three
factories in Navarre — one for blades, another for towers and a third for turbine assembly.
The wind industry in Navarre now provides employment for over 1 000 people in the region.
EHN has expanded its operations to other regions of Spain, installing 211 MW new wind
capacity during 1999 (total capacity reaching 418 MW in that year). The aim for 2000 was to
install a further 480 MW, and to achieve 1 000 MW new capacity each year between 2001 and
2003.
• Administration: Local involvement in renewable energy planning
Responsibility for renewable energy sources belongs chiefly to the autonomous communities
(the regions). This allows each region to have authority over the various administrative
procedures, including planning and environmental impact assessments, when renewable
energy projects are implemented.
The Navarre regional government actively supported the development of procedures to
authorise wind farms in the region. It established the public–private company EHN to
develop the region’s renewable energy resources. EHN’s shareholders include the
government, the regional electricity supply company, local industry and the regional bank. In
June 1996, the government of Navarre approved EHN’s Wind Power Development Plan for
the region, with a target to install 575 MW by 2010.
• Information, education and training: Active promotion of the benefits of renewable energy by wind
energy developers
Wind energy developers, including EHN, actively carry out consultations with a very wide
range of interested parties before establishing new projects. Consultees vary widely and
include municipal councils, conservationists and mountaineering organisations. There are
also ongoing campaigns both by the private developers and by the municipalities to provide
information to the general public about the benefits of wind energy and the status of the
region’s energy plan, to ensure continued public awareness and support.
Member state/technology examples of successful penetration
5.8. Sweden — Biomass district heating
Forestry is one of the most important
natural resources in Sweden, which has a
long history of making use of this resource
for fuel.
In 1993:
In 1998:
365.9 ktoe
571.3 ktoe
Increase 1993–98: 205.4 ktoe, 56 %
District heating systems are widespread in Sweden, with over one third of the total domestic
heat market supplied from district heating. There are nearly 200 plants, and biomass is one of
the main fuel sources. Biomass as a fuel source for district heating plants has been increasing
steadily over the past two decades, particularly to replace electricity for heating. Biomass
resources now meet more than 50 % of the fuel supply to district heating networks.
Success factors:
• Political: Support for renewable energy use, especially biomass
The overall objective of Sweden’s energy policy is to secure the long- and short-term energy
supply on economically competitive terms, with an emphasis on sustainable development.
Sweden has a policy to prevent an increase in carbon dioxide emissions, and it has also made
commitments to phase out its nuclear generation capacity.
Long-term support for research and development into new and renewable energy
technologies, and a greater use of renewable energy, are two principal means of achieving
these aims. Biomass especially plays a vital role. Sweden has a policy objective to replace
electric domestic heating with combined heat and power or district heating systems, especially
making use of biomass for fuel.
• Fiscal: Tax system benefits biomass use
Biomass is exempted from the energy tax, the carbon dioxide tax and the sulphur oxides tax.
The increase in biomass district heating has been greatly helped by the introduction of
carbon and energy taxes as their application made other options, in particular coal-fired
district heating plants, more expensive.
• Technological development: Active development and promotion of biomass technologies
Swedish research and development actively supports technological developments in
renewable energy. Biomass research, development and demonstration receive total funding
of about SEK 400 million (EUR 35 million) per year from the government. Electricity
companies and other industries also provide funds. The main areas of support are
combustion and conversion technologies, demonstration of pre-competitive technologies,
fuel production, harvesting supply programmes and ash recycling.
• Administrative: Municipalities actively support the establishment of biomass district heating systems
Development of biomass district heating systems is primarily the responsibility of each
municipality. Most domestic district heating systems are owned and operated by
municipalities, or by private companies on their behalf. Biomass-fuelled district heating
provides economic and environmentally sustainable heating for domestic and industrial use,
whilst at the same time providing economic benefits through employment of the local
population and a disposal option for sawmill wastes. A number of municipalities have
recognised the socio-economic and environmental benefits from biomass district heating and
are proactively promoting biomass-fuelled systems.
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Renewable energies: success stories
6. Analysis of Member State/technology
examples of successful penetration
Photo: Volker Quaschning
The previous section, together with further examples provided in Annex 1, present a series of
Member State/technology combinations. They examine the influence that potential success
factors have had on the implementation of a technology in a Member State. The potential
impact that each factor has on successful penetration is assessed below, by drawing together
the results from Section 5 and Annex 1. Based on this analysis, the lessons learnt are shown in
Section 7. Each potential success factor (political, legislative, fiscal, financial, administrative,
technological development, and information, education and training) is discussed in turn
below.
6.1. Political
The examples shown in Section 5 and Annex 1, demonstrate that strong political support at
national, regional or local level is a consistent component in successful penetration of
renewable energy in each of the Member State/technology combinations studied.
National policies in support of renewable energy
Each of the examples was implemented in a Member State which demonstrated strong
support for the development either of renewable energies in general or of a particular
renewable energy. By the end of the 1990s, most governments had implemented energy plans
Analysis of Member State/technology examples of successful penetration
that supported the development of renewable energy and/or had identified national or
regional targets for increased renewable energy use and associated policies and measures to
support renewable energy uptake.
The main reasons for supporting the development of renewable energy lie in national energy
policies which aim to encourage diversity and security of supply, to reduce imports of fuels
and to reduce greenhouse gas emissions (in particular carbon dioxide). Renewable energy
can make an important contribution towards achieving these objectives. At the point of
generation, wind and solar sources provide energy without any associated carbon emissions,
while biomass energy is carbon-neutral, provided that the carbon released is recycled in the
form of new biomass growth.
Some Member States started to develop renewable energy support programmes earlier than
others, usually for country-specific reasons. For example, security of energy supply is given
high priority in Member States which have few indigenous fossil fuel resources and must rely
heavily on imports. Austria, for instance, has no indigenous fossil resources and has long
recognised that renewable energy can help to reduce its fossil imports. Austria’s longestablished and active political support towards increasing renewable energy use has
contributed towards improving the country’s security of supply, reducing its energy imports
and improving its balance of payments. The Austrian government recognises that this support
also improves domestic employment and stimulates indigenous jobs.
Denmark was also quick to identify the potential role that renewable energy could play in
employment and job creation. For more than 15 years, Denmark has provided active support
to the expansion of its renewable energy industry, through setting targets backed up by
practical support measures. The government saw renewable energy, and wind power in
particular, as an opportunity to contribute towards a more sustainable fuel mix for energy
production (especially by reducing coal use). It recognised that this support would stimulate
the development of an emerging industry, enabling Denmark to become a market leader in
wind energy. The Danish government therefore implemented a series of energy action plans
during the 1980s and 1990s, each becoming progressively more ambitious in terms of
renewable energy use, and in line with the government’s overall carbon dioxide emission
reduction targets.
Another factor acting in favour of increasing support for renewable energy is the political
attitude towards nuclear power, especially where there is a national desire to use less or none
of it. Sweden has committed itself to phasing out its nuclear capacity, but any replacement
with fossil capacity could conflict with the country’s international commitments to limit
greenhouse gas emissions. Renewable energy, combined with energy efficiency measures,
offers an environmentally acceptable alternative.
During the latter part of the 1990s, more and more Member States implemented specific
policies towards renewable energy as part of their national energy plans, and developed
action plans and targets for increasing their use of renewable energy. Many of these policies
and plans are now being expanded.
Denmark implemented a series of energy strategies throughout the 1990s which progressively
raised the targets for renewable energy use. Its 1996 strategy, Energy 21, set the target of 1 500
MW of wind turbines by 2005. This target was exceeded in 1999 and a new goal of providing
20 % of electricity consumption from renewable energy resources by 2003 was set. The
government’s longer term ambition is to generate 50% of the country’s electricity
requirements from renewable energy sources by the year 2030, a large part of which will come
from on and off-shore wind turbine installations.
Finland’s 1994 national biomass strategy aimed to increase biomass use by 25 % between 1992
and 2005. The more recent Action Plan provides a further stimulus with a target to increase
renewable energy use, including biomass, by 50 % between 1995 and 2010.
Ireland’s 1995 targets for electricity generation from renewable energy were increased in a
1999 White Paper to 500 MW by 2005.
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Renewable energies: success stories
The Netherlands’ 1997 White Paper set goals for renewable energy use which were
subsequently made more challenging in 1999; they were to meet 5 % of gross inland energy
consumption from renewable sources by 2010 and 10 % by 2020.
Spain’s 2000 renewables target has now been expanded to a 12 % share of renewables in gross
inland energy consumption by 2010.
Regional renewable energy policies
The case studies in this report highlight the important contribution made by regional energy
policies in encouraging renewable energy. For Member States with a high degree of regional
autonomy, such as Austria, Germany and Spain, many regional authorities have brought
forward plans that are more supportive of renewable energy than those implemented at
national level. For example:
— Upper Austria initiated an energy plan in 1994 that set clear targets for increasing the use
of renewable energy in the region. All Austrian regions now have similar policies.
— In Germany, many regions have established targets for increasing their level of renewable
energy use. Regional wind energy targets have been established in northern German Länder
such as Nordrhein-Westphalia, and these have helped give these regions the highest levels
of wind energy use in Europe.
— A similar approach was taken in Spain, where regional governments have taken the
initiative in stimulating renewable energy in their regions. Navarre is the one of the most
advanced regions in its support for renewable energy and especially for wind power. Other
regions are now also showing high levels of renewable energy use.
6.2. Legislative
6.2.1. Power purchase
A guaranteed market for power sales was consistently identified in the case studies as a success
factor. During the six year period (1993-1999) covered by this study, two principal legislative
options were available for power generators in the various Member State/technology
combinations studied - feed-in arrangements and competitive tendering.
Feed-in laws
One of the most effective support measures for encouraging increased renewables generation
is the feed-in law, which provides guaranteed power purchase agreements at fixed prices. The
most favourable rates and conditions, and consequently some of the greatest rates of
increased penetration, especially of wind energy, are to be found in Germany and Spain. In
both countries, utilities are obliged to purchase renewable electricity. The prices paid are
guaranteed and at a preferential rate.
Wind: The success of the feed-in law is clearly visible in the rapid increase in output from wind
in two Member States: output in Germany rose by over 700 % between 1993 and 1999 (from
674 to 5 528 GWh), and in Spain by 2 266 % over the same period (from 116 to 2 744 GWh).
The pace of new installations has accelerated quickly in both Member States in recent years,
corresponding to the implementation of feed-in legislation. Denmark also achieved a long
and sustained growth in wind power installation during the 1990s, again due to developers
being able to sell their power at a known and economically favourable rate.
These three Member States dominate the wind power market. The scheme is simple, and
provides guaranteed and known power prices, over a number of years. The arrangement
removes a large amount of the uncertainty and risk associated with the development of a
renewable energy scheme. Other Member States which have offered feed-in arrangements
have generally not achieved such high take-up rates. For example, when Italy introduced its
pricing system, it was very complex; when the arrangements were simplified more projects
were brought forward.
Biomass: The use of biomass in power stations (including biomass combined heat and power
stations) has also benefited from feed-in laws, particularly in Denmark, Germany and Spain.
The Danish purchase obligation system for biomass has been in operation since the early
Analysis of Member State/technology examples of successful penetration
1990s. However, despite a 189 % increase in generation output between 1993 and 1999,
growth was lower than anticipated, especially in later years. This was mainly because the price
available for renewable energy did not change for a number of years and producers no longer
considered it commercially viable. Reforms of the electricity industry currently being
implemented will alter this situation, through changes to feed-in tariffs and rules for
electricity from renewable energies. For instance, green certificates are currently in
preparation in Denmark. In Spain, interest in using biomass to generate power has increased
with the introduction of attractive feed-in tariffs for generators. In Germany, the feed-in law
was revised in 2000 to provide more attractive rates for biomass generators.
Attractive rates are important to obtain sufficient levels of interest and investment in new
biomass power plants, which need high levels of capital investment.
Photovoltaics: Successful photovoltaics (PV) implementation has also benefited from feed-in
laws. Germany and Spain are the only countries that showed both a high rate and level of
penetration over the 1993–99 period. Both countries provide generous feed-in tariffs for PV
electricity. Spain revised its tariff upwards in 1998, and this contributed to Spain’s increased
generation of PV electricity in 1999. In 2000, Germany also revised its PV feed-in tariff
upwards. PV technology is at pre-commercial stage for most applications, and cannot yet
compete commercially with other energy sources, even with other renewable energies. PV
therefore still requires considerable financial support. Germany and, to a lesser extent, Spain
have established, in addition to feed-in tariffs for PV electricity, generous funding support
schemes to stimulate the level of uptake of PV (see Section 6.4).
In the long term, and as levels of renewable energy increase, the rapid success of feed-in
arrangements is leading to concerns over how the costs of the support should be shared
among consumers. Germany may be one of the countries where these considerations will be
reached most quickly, because it has very high rates of uptake of renewable energy. Some
regions in Germany have seen wind capacity grow to represent more than 5 % of the region’s
total electricity capacity in less than five years. Since 1998, the German electricity market has
been opened to competition, and unregulated access was granted to electricity transmission
and distribution systems. Under the terms of the 1991 feed-in law, utilities were obliged to pay
the cost of the feed-in tariff, passing the extra charge on to the customer. This resulted in high
charges for electricity in areas where wind power schemes were common. After 1998, German
regulations limited the utilities’ purchase obligations for renewable electricity to 5 % of the
total electricity consumption within their supply area. When the local utility reached this
limit, the obligation no longer applied. The new 2000 German Renewable Law changed this
arrangement: it abolished the 5 % limit and introduced a system according to which the costs
of the support to renewable energy are distributed among all grid operators so that the costs
are borne equally.
Competitive tendering
A competitive tendering mechanism is the main alternative to the feed-in system. It provides a
guaranteed market through access to contracts and competitive prices for renewable energy.
Competitive tendering has been operated, through largely similar systems, in France, Ireland
and the UK. The UK did not meet either of the selection criteria for the successful
penetration of renewable electricity technologies. Ireland and France both showed rapid
rates of expansion of wind energy between 1993 and 1999, although the fact that both
countries started from very low initial penetration levels should be taken into consideration.
Ireland established the Alternative Energy Requirement (AER) as a support mechanism for a
range of renewable energy technologies, based on the system in place in the UK since 1990
called the Non-Fossil Fuel Obligation (NFFO (14). Both the AER and the NFFO are
competitive bidding systems whereby developers respond to calls for tender (‘tranches’) to
provide electricity from a range of renewable energy sources. If they are successful, they
(14) The NFFO is being replaced by a Renewables Obligation, the draft of which obliges suppliers to provide an
increasing proportion of their supplies from renewable sources (3 % by April 2003, rising to 10.4 % by April
2011). Suppliers will need to purchase new renewable energy capacity, and it is expected that this will
stimulate demand. Increased demand will also encourage premium prices to be paid for renewable
electricity.
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obtain a guaranteed power price, at the level of their bidding price, and a long-term (e.g. 15year) contract for power sales from their renewable energy project. Each type of renewable
energy project is grouped with other similar technologies, which ensures that there is
competition between applications.
France established the Eole system in 1996, which provided support for wind energy through
a competitive bidding mechanism, similar to the ones in Ireland and the UK. Its success has
been limited. Most of the wind energy developments have been small installations on the
island of Corsica or in French overseas departments. Project developers encountered a range
of barriers not directly associated with Eole, which have tended to slow down project
implementation. Since June 2001 France has replaced competitive tendering with a system
similar to the feed-in law to further promote wind energy.
6.2.2. Access to the grid
Straightforward access to the necessary grid infrastructure is also critical to success.
Renewable energy electricity generation faces problems of grid access that are different or
absent for larger generators. Renewable energy is generally small scale, decentralised, and
may be located in rural or remote locations where grid connections are limited or
unavailable. In addition, much renewable energy is intermittent (15) in nature, especially
wind, PV and hydro, and this can attract penalties under some grid access charging tariffs,
which favour generators that are able to provide continuous and consistent generation
output.
Member States that took the biggest steps to address problems of grid access achieved the
greatest levels of renewable electricity penetration during the 1990s, especially for smallerscale renewable energy projects. Denmark, Germany and Sweden all have policies that oblige
utilities to allow straightforward access to the grid for renewable energy producers. They also
have transparent and economically fair charging systems for grid access, so that developers
know the charges that they are likely to face, in advance.
Two barriers have been identified, in the cases examined in this study, which can limit the
ease with which a developer can get a new renewable energy project connected to the grid,
and the cost of achieving this.
Firstly, the grid itself may have limitations that make it difficult for a renewable energy project
to be connected. This is often the case where the grid does not have the capacity to accept
new power load, or where the proposed site for the renewable energy project is remote from a
convenient grid access point. This limitation to wind expansion was encountered in the
Portuguese wind energy case study, as well as in southern Italy, where large regions have
inadequate grids. Rectifying this requires grid extension/strengthening, which may be very
costly and could make the proposed project uneconomic if the developer has to bear these
costs.
The second barrier occurs when the independent developer is not given ready access to the
grid, at a reasonable price. This is the case in France where it has been a contributing factor
to wind energy levels being considerably lower than those in Germany and Spain. (This
problem has also been encountered in the UK, where grid access charges are not fixed or
transparent, and may vary considerably between different regions of the country or between
different utility companies.)
Access to electricity grids for renewable energy sources has not been treated equally among
Member States. This is one issue that the EU directive on renewable energy in the internal
electricity market (see Section 7), addresses. The directive requires Member States to take the
necessary measures to guarantee the transmission and distribution of electricity produced
from renewable resources and encourages such electricity to be given priority access to the
grid. Measures to achieve this include developing transparent and non-discriminatory systems
and costs for grid connection. The implementation of these requirements in all Member
(15) There is no power generated when the wind does not blow/when it is dark/when there is little or no water.
Analysis of Member State/technology examples of successful penetration
States should help renewable generation to penetrate much more successfully into the EU’s
electricity networks.
6.3. Fiscal
Fiscal measures may be implemented in the form of environmental taxes, which penalise the
use of fossil fuel (and hence benefit renewable energy use) or as a positive form of tax
incentive for environmentally beneficial investment, such as a tax exemption or reduction.
Both forms of fiscal support measure are increasingly being used by Member States to
encourage renewable energy and other environmentally beneficial activities, or for penalising
fossil generation or other environmentally damaging activities.
6.3.1. Environmental taxes
Denmark was one of the first countries to implement an environmental tax. Energy
consumers were charged a CO2 tax from 1992, with some of the revenue given to generators
of electricity from renewable sources.
Member States, including Austria, Denmark, Finland, Italy, the Netherlands and Sweden,
have now implemented various forms of environmental tax. They have introduced energy or
environmental taxes as part of their overall energy policy to more accurately reflect the total
costs (including costs to the environment) of generating heat or power from fossil or nonfossil sources. The types of environmental taxes implemented vary widely; they may be levied
on energy use (both heat and electricity), power or heat generation, CO2, or SO2.
In all cases, renewable energy generation for power and heat benefits through either
exemptions or refunds. In Sweden, the introduction of carbon dioxide and energy taxes from
which biomass is exempted helped the expansion of biomass district heating and biomass
combined heat and power plants, as the taxes made other options, in particular coal-fired
district heating and coal-fired combined heat and power plants, more expensive.
In some cases (including Austria and Italy), some or all of the revenues received from energy
taxes are recycled to benefit renewable energy, energy efficiency, or other environmental
projects.
6.3.2. Tax incentives for investment
Fiscal arrangements can also be used to encourage investment in renewable energy or energysaving projects.
Tax exemptions or reductions can encourage private individuals and companies to consider
investing in renewable energy projects as an attractive financial option. For example, in
Germany and Sweden, investment in wind schemes can be offset against tax for individuals,
while in Ireland, the Netherlands and Spain companies receive tax relief if they invest in
renewable energy projects. In Greece, the installation of solar thermal water-heating systems
has been stimulated by tax exemptions for households buying renewable energy appliances
such as solar water heaters. In the Netherlands, companies and firms which invest in energysaving projects (including renewable energy projects) can benefit from claiming accelerated
depreciation of investment in equipment for such projects.
6.3.3. Biofuels — benefiting from lowering of excise duty
Biofuels in France benefit from a special fiscal arrangement. In the 1992 mineral oils directive
(92/81 article 8.2(d), the European Community allowed Member States to lower excise duty
rates for technological purposes (for pilot plants) to develop fuels from renewable energy
resources. France, in particular, took advantage of this regulation to lower excise tax on
biofuels, making biofuels competitive with higher-taxed fossil fuels. For example, French aid
to biodiesel (a type of biofuel) was approximately EUR 120 million in 2000, with similar levels
of support in previous years.
The future of this type of support is nevertheless unclear following a recent European
Community legal ruling (September 2000) that these reduced rates were applied, in the case
of France, for economic and industrial rather than technological purposes, and should
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therefore not be granted according to article 8.2(d) of the mineral oils directive. However,
article 8.4 of the same directive allows Member States to grant derogations (to lower excise
duty rates) for other policy purposes too upon Council approval. France has now applied for
such a derogation. This tax exemption is being investigated by the European Commission in
order to examine the compatibility of France’s application for derogation under article 8.4
with Community state aid rules for environmental protection (OJC 37, 3.2.2001).
6.4. Financial
Financial support for the development of renewable energy schemes at the commercial or
near-commercial stage is found in almost all the Member State/technology combinations
studied. This kind of support is generally through grants or loans towards capital or
operational costs. It is clearly an important factor in influencing the successful
implementation of renewable energy technologies, both for power and for heat technologies.
Public sector funding
Wind: With the implementation of feed-in arrangements to provide guaranteed premium
prices for power purchase, there is progressively less requirement for developers to also
receive grants towards their installations. The guaranteed prices available through feed-in
support give investors sufficient confidence to invest in the market. In some regions in
Germany, however, support through the feed-in law has been enhanced by grants or lowinterest loans for wind energy (and other renewable energy) developments. The successful
and rapid expansion of Germany’s wind energy industry is mainly due to the availability of
feed-in support rather than as a result of subsidies. In Spain, because of the success of wind
energy, support available through the Energy Savings and Efficiency Plan (PAEE) has been
reduced.
The situation in the Member States which have had competitive tendering support
mechanisms is different. France has not provided additional funding to new wind energy
projects over and above the support provided through the Eole mechanism. The NFFO
system in the UK was also the primary source of support. In contrast, Ireland has provided a
range of fiscal and financial measures to support wind energy developments (and other
renewable energy technologies, including biomass). This additional support may have been a
contributory factor towards the more rapid penetration of wind energy in Ireland over the
period studied.
For Member States such as Sweden without either a feed-in or a tendering system, subsidies
are still the main mechanism for supporting wind energy schemes.
Biomass: Almost all the examples of biomass installations — either for power (including
combined heat and power) or for district heating — received a significant level of subsidy
from public funds. Austria, Denmark, Finland, France, Germany, Sweden (for biomass power
only) and Spain all provided a variety of grants towards the costs of biomass installations.
The high costs of developing new district heating grids, or of updating or extending existing
ones, can be a limitation to the use of biomass in district heating. For this reason, it is
common in Member States such as Austria for biomass district heating schemes to receive
considerable levels of financial support towards the heating grid. However, Sweden did not
use large subsidies to develop its district heating system. The introduction of carbon and
energy taxes, from which biomass is exempted, and considerable research and development
support, along with a number of other reasons, helped biomass district heating to expand in
Sweden.
Photovoltaics: PV is not yet an economically competitive technology, and requires
considerable levels of subsidy to be implemented. Only Germany and Spain showed both high
rates and levels of penetration over the six years 1993–99. This was due to the high levels of
grants available for PV installations, combined with the guaranteed and favourable purchase
price provided through feed-in arrangements. For 1999–2003, Germany has committed EUR
560 million towards its 100 000 roofs programme, thus providing an important stimulus to the
PV industry. This new programme, supported by the more favourable feed-in tariffs that have
Analysis of Member State/technology examples of successful penetration
become available for PV, have recently increased even further the already rapid rates of
installation of PV in Germany. Other Member States are also starting up similar programmes
(such as Italy’s 10 000 roofs programme). The costs of PV have dropped considerably over the
past 10 years, and it is anticipated that further cost reductions will occur as the market
expands.
Solar thermal: Three Member States (Austria, Germany and Greece) achieved significant
increases in exploitation of solar energy for heat. In all three, substantial subsidies are being
or have been provided to households or industry to install solar thermal. This support is still
required because the payback period for solar thermal installations is long. In Austria and
Germany, many of the subsidies for solar thermal installations are provided from regional
government funds, and are implemented at the local level. Solar thermal is often not
included in national energy policy targets because it is a heat technology and can most
successfully be implemented at the local level.
Structural Funds
Support for renewable energy has also been accessed from non-energy European Community
programmes, especially the Structural Funds. These funds provide support for project
development, training and other key measures designed to reduce unemployment and
stimulate economic activity, and are targeted towards the most disadvantaged regions of the
EU. In the cases examined Austria, Ireland, Portugal and Spain all made some use of
Structural Funds to support renewable energy developments. The current round of Structural
Funds (2000–06) is likely to give support to a much larger number of projects with a
renewable energy component.
Accessing the Structural Funds and other similar programmes can only be achieved if there is
support for renewable energy at national and regional levels, and a recognition of the
important role that renewable energy can play not only as an energy resource but also as a
contributor to economic and social cohesion. The case study of the Austrian district heating
scheme showed that it received generous grants from national and regional governments, as
well as from Structural Funds, in recognition of the potential benefits for local farmers of
having an additional market for their biomass.
Favourable loans
Low-interest loans for the development of renewable energy projects may be provided by
banks or other private sector financial institutions operating with ethical investment
principles. Some German and Dutch financing institutions in particular are able to offer lowinterest loans for environmental projects.
More often, however, favourable loans are provided through public sector funding sources.
These may be administered either at the national level or regionally. In Germany, a national
loan scheme to support PV installations is administered by regional state banks. In Austria,
low-interest loans and long-term credits are available from public banks to support biomass
installations, in particular district heating schemes. State financial institutions are often more
proactive in the development of renewable energy in their regions. In Germany, preferential
loans are provided through funds from regional or local sources. In the Navarre (Spain) wind
energy case study, the regional bank is a shareholder in the public–private company
established to develop the region’s wind energy resources.
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Table 7
Summary of the principal support mechanisms identified in the case studies for renewable energy power
developments (1993–99)
Member State
Legislative support
Fiscal initiatives
Financial support
Austria
Guaranteed prices
Energy taxes on gas and
electricity; revenue partly
recycled to support
renewable energy
Public grants, subsidies and
loans
Denmark
Purchase obligation +
premium guaranteed prices
Energy/carbon dioxide
taxes on fossil fuel; revenue
partly ‘recycled’ to support
renewable energy
Subsidies provided
historically for research,
development and
demonstration (R,D&D),
especially in wind
Subsidies (capital grants —
biomass)
Finland
Transmission costs are fixed;
grid access is open to all
producers
Energy/carbon dioxide
taxes on fossil fuel; revenue
partly ‘recycled’ to support
renewable energy
Subsidies on investments
and equipment (capital
grants)
France
Competitive tendering (Eole
2005)
–
Subsidies (capital grants —
biomass)
Germany
Purchase obligation +
premium guaranteed prices
Tax benefits for investing in
renewable energy
Subsidies and low-interest
loans for all renewable
energy projects provided by
local banks
Direct financial support: PV
roofs programme; subsidies
for biomass installations
Greece
Purchase obligation +
premium guaranteed prices
Tax benefits for investing in
renewable energy
Subsidies (capital grants —
solar thermal)
Ireland
Competitive tendering
(Alternative Energy
Requirement, AER)
Tax benefits for investing in
renewable energy
Subsidies (capital grants)
Italy
Purchase obligation +
premium guaranteed prices
Energy/carbon dioxide
taxes on fossil fuel; revenue
recycled to support
renewable energy
–
Netherlands
Purchase obligation
Energy/carbon dioxide
taxation favourable towards
renewable energy
Tax benefits for investing in
renewable energy
Government subsidies
Obligation for utilities to
invest in renewable energy
projects
Portugal
Purchase obligation +
premium guaranteed prices
–
Interest-free loans
Support for grid connection
Spain
Purchase obligation +
premium guaranteed prices
Tax benefits for investing in
renewable energy
Capital grants (biomass)
Sweden
Purchase obligation
Renewable energy pays
lower or no energy tax or
nitrous oxide levy
Tax benefits for investing in
renewable energy
Investment grants
6.5. Administrative
The role of the municipality/regional government
It is increasingly recognised that the successful replication of renewable energy projects can
only be achieved on a wide scale if there is active support at the level at which individual
projects are brought forward for approval. In most cases this is at local level.
Public acceptance of renewable energy, and an understanding of the benefits that can come
from it, is therefore vital if there is to be a sustained flow of projects accepted for
development. A strong commitment from regional or local government is one of the ways that
this can be achieved.
Most of the examples of projects or technologies studied in this report received a strong level
of support at the regional or local level, from the government or local councils. For example:
Analysis of Member State/technology examples of successful penetration
— Austrian district heating plants are supported by municipalities, including providing
assistance for planning issues and by acting as a consumer for the heat supplied.
— In Germany, some municipalities work with the utility to establish solar thermal
installations.
— Municipalities support the use of biodiesel in urban areas in France.
— In Sweden, a number of municipalities have recognised the socio-economic and
environmental benefits of biomass district heating and are proactively promoting biomassfuelled district heating plants.
This local or regional support is vital to successful implementation of many of the
technologies, especially the smaller ones such as small-scale wind, solar thermal or biomass
heating schemes. The municipality or the regional government has responsibility for
overcoming many barriers at local level in order to bring forward renewable energy
successfully. These actions include:
— implementing regional legislation in support of renewable energy (see Section 6.1);
— providing funding support for local renewable energy projects (see Section 6.4);
— identifying areas in the region where renewable energy developments are acceptable: wind
energy planning in particular benefits from clear guidance from local authorities on where
wind turbines are or are not permitted — in Germany, for example, some regional
authorities identify appropriate sites;
— ensuring that planners receive adequate information to reach balanced decisions about
new renewable energy proposals: local resource assessments help to identify the most
favourable sites for new developments — in Ireland, for example, a wind energy atlas was
developed to support regional planning for wind;
— ensuring that planning and development legislation and regulations do not discriminate
against renewable energy: this can be important in areas such as buildings regulations as
new PV panels need to be sited in a position to maximise solar energy collection.
Local support for and promotion of the project or the whole technology is important to
overcome these barriers. A number of the project examples used in the case studies had
encountered some level of local opposition prior to project implementation: opposition to
new wind energy developments in Germany and to a new biomass district heating system in
Austria. In the UK, planning and implementation of renewable energy during the 1990s was
led by the national government, with little opportunity for regional or local initiatives, and as
a result there was a strong level of local opposition to renewable energy developments. Local
and regional involvement in planning for renewable energy is now being encouraged to try to
overcome this opposition.
Recognising the socio-economic benefits from renewables
The socio-economic benefits of new renewable energy projects are increasingly becoming an
important component in decisions to implement new renewable energy strategies. Renewable
energy technologies provide local jobs, and keep investment in the local economy, especially
for biomass projects which provide an additional benefit in stimulating the local biomass fuel
industry.
Austria in particular has recognised the significant benefits that renewable energy
technologies can provide to a region’s economy. Many Austrian district heating schemes are
supported through Structural Funds, because they help to create employment. Farmers and
others in biomass-related employment, benefit considerably from biomass-fired heat or power
schemes, to which they can provide readily available fuel.
In Spain, the Navarre regional government supported the development of renewable energy
(especially wind) because of its benefits to the local economy. The region has gained not only
from inward investment and employment in the installation of wind turbines, but the regional
government has supported the establishment of Spanish wind turbine manufacturing
capacity, in collaboration with Danish turbine manufacturers. The result has been a very rapid
increase in Spanish manufacturing capability for wind turbines, both to service the domestic
market and increasingly for overseas markets.
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6.6. Technological development
Until the 1990s, renewable energy technologies were less technically advanced than
conventional energy technologies. Research and technological development has been carried
out to address this. Public sector funding programmes for research, development and
demonstration stimulate the development of new renewable energy technologies to make
them more competitive in the wider energy sector. These programmes support activities to
reduce capital and operating costs, improve efficiency and demonstrate long-term reliability.
Over the period examined, the European Community provided support towards the
development of renewable energy through a range of energy programmes such as Joule
(research and development), Thermie (demonstration) and Altener (a programme
specifically targeted at overcoming non-technical barriers and implementation of renewable
energy). The Thermie programme in particular provided support for a large number of
renewable energy demonstration projects during the 1990s. Examples included wind farms in
Ireland, biomass power plant in the UK, PV installations in Italy and the Netherlands, and
biomass combined heat and power in Italy.
Current European Community programmes provide support for renewable energy
development, particularly through the fifth framework programme for research and
development, and the Altener renewable energy programme. In addition, these and other
programmes support newer emerging renewable energy technologies such as wave power and
offshore wind power.
National energy research, development and demonstration programmes have also played a
vital role in the development of renewable energy technologies. Many of the examples
studied highlighted how important early and targeted support for research, development and
demonstration at the Member State level has been.
The extent to which each Member State is prepared to support technological developments is
often reflected in its subsequent indigenous industrial capabilities and expertise as the
following examples illustrate:
— The Finnish and Swedish biomass industries are among the most successful in the EU;
much of this can be attributed to the comprehensive research and development support
provided by the respective national governments, in collaboration with industry.
— Danish wind turbine manufacturing capability was developed with early support from the
government during the 1980s, and Denmark now leads the world in its technological
capabilities in this field. During the early stages of development, subsidies were high
enough to enable the industry to establish itself. Then subsidies were replaced by financial
support for generation output.
— Support for biomass technological development in German regions has helped to establish
a strong indigenous capability to service the emerging domestic market.
— Germany and the Netherlands have an indigenous PV cell manufacturing capability thanks
to government and industry research in this area.
6.7. Education, information and training
Education and information to the general public is a vital component of a successful
renewable energy deployment programme.
Some Member States already derive a high proportion of their energy from renewable
sources, especially from biomass resources. Austria, Finland, Portugal and Sweden have some
of the highest levels of use of biomass for energy in Europe. In such situations, new biomass
projects seldom encounter opposition. They are supported because the population is fully
aware of the local benefits — particularly through generating jobs for farmers and creating
alternative outlets for biomass wastes from sawmill operations.
Cooperative participation in a project is one way to engage the local population in a new
renewable energy development. A number of Member States, particularly Denmark, Germany
Analysis of Member State/technology examples of successful penetration
and Sweden, have a long history of cooperative ventures, particularly for farming. Smallerscale renewable energy projects can be developed and financed cooperatively, and in these
Member States this type of arrangement has been successful in bringing forward a large
number of new renewable energy projects, especially wind turbines.
However, in many situations there may be less awareness of renewable energy locally. In
addition, larger-scale projects are generally not suitable for cooperative involvement. In these
cases, developers need to work with the local community to provide information about the
nature of the new developments and their potential benefits. A number of the case studies
presented, such as wind energy in Spain, show a strong element of informing the local
community before the project was fully accepted.
Both national government and local communities play important roles in raising awareness of
renewable energy, through information dissemination activities, education and training at
school, in the workplace and to the general public. The overall objective is to raise awareness
and to ensure that the potential benefits of renewables are effectively communicated.
The role of energy agencies
A number of the technology/Member State combinations studied were projects that had
been brought forward with the support of the local or regional energy agency — for example,
in Upper Austria and in Berlin, Germany. Energy agencies play an important part in
promoting and raising awareness of renewable energy, and in transferring national objectives
to the regions. More and more of these agencies are being established throughout Europe,
most often with initial financial support from the European Commission, with the aim of
stimulating the expansion of renewable energy locally. They are seen as a means by which
national and in particular regional energy plans can be implemented at the local level. They
can work with the municipality to raise awareness and work alongside developers and utilities
to achieve real and visible results. Smaller-scale renewable energy technologies, especially
heat technologies such as solar thermal and biomass district heating but also PV, have
benefited greatly from the proactive involvement of energy agencies.
Environmental awareness
Citizens of most EU Member States are well informed about the benefits of environmental
protection, and the important role that renewable energy can play in a country’s energy
policy. Concern about nuclear power in particular is one of the main reasons why, for
example, Austrians, Danes, Germans and Swedes generally welcome renewable energy as an
environmentally acceptable alternative. In most countries the general public can perceive and
appreciate the positive environmental benefits from renewable energy, and can therefore
translate this enthusiasm into strong commitment and support.
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7. Lessons learned
Photo: Volker Quaschning
In light of the analysis carried out in the previous section, this section draws some conclusions
on success factors which may contribute to successful penetration of renewables in the
Member States.
Overall, no single factor is of overwhelming significance in the successful deployment of
renewable energy technologies. Instead, it is the cumulative benefits from a series of
supporting measures that determine the extent to which renewable energy is successfully
exploited in any one Member State. There are, however, certain essential components which
combine to help create an environment in which renewable energy exploitation can succeed.
7.1. Energy policies
All Member States now have or are working towards national energy policies that reflect their
commitment towards developing renewable energy. The cases examined highlight how vital
political support is in order to achieve high levels of penetration of renewable energy
technologies.
Lessons learned
At the national level, political support ensures that policies are implemented in favour of
renewable energy deployment. National policies, combined with targets for increased levels of
penetration, endorse support for establishing stable conditions for renewable energy
development. This support includes: frameworks for access to energy markets, grid access and
price support mechanisms, all of which are crucial for renewable energy deployment.
Funding for research and development programmes is also generally provided at the national
level.
In addition, the studies have highlighted how regional energy policies can contribute towards
encouraging renewable energy. For Member States with a high degree of regional autonomy,
such as Austria, Germany and Spain, many regional authorities have brought forward
legislation that is more supportive towards renewable energy than legislation implemented at
national level.
There is likely to be even more focus on the importance of integrating renewable energy into
regional policies, especially where targeted support programmes such as Structural Funds are
key components of regional development. Regional development strategies are increasingly
recognising the significance of renewable energy in sustainable development policies. These
include not only the role that renewable energy plays in environmental protection, but also its
contribution towards economic development, employment and inward investment,
particularly for rural or remote areas.
7.2. Legislation
For electricity from renewable sources, the feed-in law system, through both the
commercially favourable guaranteed feed-in tariffs and the provision of a long–term stable
pricing structure, has given a great impetus to renewable energy developments, in particular
wind energy. Three Member States (Denmark, Germany and Spain — all countries using this
system) contributed 80 % of new wind energy output in the EU-15 over the period 1993–99.
Biomass power generation has also benefited from feed-in tariffs, but not to the same extent
as wind. This may be because the tariffs available were less economically attractive than those
for wind. Biomass power increased significantly in some Member States (Finland and
Sweden) without the support of a feed-in mechanism. Successful biomass development
benefits from the availability of feed-in tariffs, but it is also closely linked with other success
factors, especially the availability of financial support. In those Member States that adopted
the feed-in mechanism, biomass use has expanded most when capital subsidies were provided
as well as feed-in tariffs.
The PV sector is not yet able to compete on a commercial basis against other renewable or
fossil energy sources and therefore needs to receive subsidies to stimulate its expansion.
Successful implementation of PV requires both a feed-in support for power output and a
capital subsidy in order to stimulate market expansion. Those Member States (Germany and
Spain) that have instigated this combination of support saw significant levels of PV
deployment.
The main alternative mechanism for support to renewable energy, the competitive tendering
process, has not been as successful as a single support mechanism in achieving rapid
deployment. Indeed overall levels of renewable energy use in countries where this system has
prevailed are significantly lower than levels in countries with the feed-in law system. The UK
was the first to develop a competitive tendering system, through its NFFO process, but despite
early expansion in renewable energy capacity during the mid-1990s, it did not continue to
show such rapid growth, which is why it did not pass any of the criteria for successful
penetration for any of the electricity technologies studied (16). Similar competitive tendering
systems have been in operation in Ireland (the AER) and France (Eole) (17). For both of
(16) NFFO supported electricity from wind, hydro and a range of biomass sources. PV was not included. The
NFFO is being replaced by a Renewables Obligation, by which suppliers are legally obliged to provide an
increasing proportion of their supplies from renewable sources.
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these countries, the case studies indicated that additional barriers, including grid access
(France) and infrastructure (Ireland), may have hindered a more rapid expansion in wind
energy deployment.
Long-term financial stability is crucial to attracting investor confidence in new installations.
Guaranteed tariffs, through feed-in arrangements, provide this degree of confidence, whereas
a competitive tendering system opens up uncertainties. Tendering processes generally have
uncertain timescales and tariffs, and developers are also unsure whether they will be
successful when they bid through the tendering system.
The newly adopted EU directive (18) on renewable energy and the internal electricity market
suggests that the feed-in mechanism and other national direct support measures may, if
necessary, be replaced by EU-wide support measures within the next decade. These may also
include the implementation of green certificates, as well as tax exemptions and other fiscal
measures. Some of these are in place or under development in a number of Member States.
Lessons learnt from the success of the feed-in approach to date, in particular the importance
of a guaranteed income and risk reduction to developers, could be useful to the design of any
such replacement measures.
Legislation providing fair access to the electricity grid for renewable projects is important to
ensure rapid uptake of renewable power technologies. Member States that took the biggest
steps to address any problems of grid access are the ones where renewable electricity achieved
greatest levels of penetration during the 1990s, especially for smaller-scale renewable energy
projects. Problems with grid access rights and with fair access charges can be a barrier to easy
connection to the grid and can jeopardise the economics of a project. In a few Member States
or in more remote regions, such as Portugal or southern Italy, the grid may require
strengthening before it can accept additional power load. This may be very costly or limit
developments, particularly the expansion of wind energy into more remote areas.
The issues relating to grid access are an important component of the EU directive on
renewable energy in the internal electricity market because of the differences between
Member States in terms of how they treat grid access for small power producers. The directive
requires Member States to take the necessary measures to guarantee the transmission and
distribution of electricity produced from renewable sources and encourages such electricity
to be given priority access to the grid.
7.3. Fiscal measures
Fiscal measures act in favour of renewable energy in two ways: as part of wider environmental
tax initiatives and/or as fiscal arrangements to encourage investment in renewable energy.
Environmental tax initiatives are inter alia implemented as part of Member States’
environmental policies, particularly to reduce greenhouse gas emissions. These taxes
recognise and reward the environmental benefits from renewable energy, and are
increasingly seen as a way of internalising the environmental costs and benefits of energy
systems. The case studies demonstrate that environmental taxation is becoming increasingly
common in many Member States (Austria, Denmark, Finland, Italy, the Netherlands,
Sweden). Taxes are mainly focused on the carbon dioxide or energy content of the fuel, but
also on emissions from pollutants (SO2, NOx). Renewable energy benefits either through
exemptions or refunds from the taxes, or by being subsidised from revenue raised from the
taxes. In Sweden, the introduction of carbon dioxide and energy taxes, from which biomass is
exempted, helped both biomass district heating and biomass combined heat and power
plants to expand, as the taxes made other options, in particular coal-fired district heating and
coal-fired combined heat and power plants, more expensive.
(17) Eole supported electricity from wind only. Since June 2001 Eole has been replaced by a system to support
wind similar to the feed-in law system.
(18) Directive of the European Parliament and of the Council on the promotion of electricity produced from
renewable energy sources in the internal electricity market (2001/77/EC).
Lessons learned
Many Member States also allow tax exemptions/reductions or tax incentives for individuals or
companies to invest in renewable energy projects. Again, this approach rewards investment in
clean technologies, and can also encourage a greater level of awareness of and investment in
renewable energy by business or the public.
7.4. Financial support
Financial support to renewable energy schemes is found in almost all the Member State/
technology combinations studied, and is clearly an important factor in influencing the
successful implementation of renewable energy technologies, for both power and heat.
Nevertheless, in the case of wind energy, when feed-in arrangements are implemented there
is progressively less requirement for developers to receive grants towards their installations.
The commercially favourable guaranteed prices available through feed-in support give
investors sufficient confidence to invest in the market without needing further financial
support.
Some national, regional and municipal governments have recognised the potential economic
and social benefits of providing support to renewable energy projects, as well as the related
environmental benefits. As a result, the EU Structural Funds and other, non-energy, EU
funds, are being accessed. For example, biomass district heating schemes have expanded
considerably in a number of regions in Austria by receiving targeted financial support
through, inter alia, the Structural Funds.
A number of the projects identified in the case studies were supported through banking
institutions. The perceived risks of investing in a renewable energy project are reduced if
successful examples of the technology already exist. Thus in Member States where renewable
energy technologies are well established, there are now financial institutions willing to
provide favourable loans towards renewable energy and other environmental projects,
because they are confident of their financial viability. The role of the regional government is
also important at the early stages of technology development. In these instances, the regional
government can create the necessary framework conditions to encourage initial investment
by banks in the technology.
7.5. Administration
Most of the successful Member State/technology combinations are backed by strong support
for renewable energy developments not only at national level but at the level of local or
regional administration. Renewable energy can be deployed successfully only if there is active
support and public acceptance for renewable energy at the level at which individual projects
are brought forward for approval, in most cases at the local or regional level. A strong
commitment from regional or local government is one of the ways that this can be achieved.
Renewable energy schemes can help to stimulate local investment, employment and social
cohesion, especially in rural or remote regions. Local authorities which recognise these
benefits are generally the ones which provide the most active support towards renewable
energy implementation.
7.6. Technological development
A number of Member States have provided strong and consistent support towards
technological development of renewables, often targeted towards a specific technology which
is most appropriate for their national circumstances (e.g. Denmark with wind, Finland with
biomass). They are now benefiting from this investment in the form of strong and expanding
domestic capabilities. For example, Danish companies are world leaders in wind turbine
manufacture, providing direct or indirect employment for up to 12 000 people in Denmark,
with over 70 % of domestic manufacturing for export (Danish Wind Turbine Manufacturers
Association).
There is still a need for further targeted funding for research and development. The
European Commission in particular plays an important role through its energy support
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Renewable energies: success stories
programmes, which assist research, development and demonstration of new technologies,
working with national research programmes.
7.7. Education, information and training
In some Member States citizens have a high level of environmental awareness and a desire to
reduce dependence on fossil or nuclear energy sources, and understand the role that
renewable energy can play. As the case studies emphasise, they are sometimes also well aware
of a specific renewable energy, because it is already used extensively (e.g biomass). However,
in some other Member States education and information campaigns are essential to generate
interest and informed debate amongst the general public.
The success of a renewable energy project, and its subsequent replication, ultimately resides
with its public acceptability at local level. At the local level, emphasising non-energy benefits is
an important component in the acceptability of renewable energy, especially its role in
providing an income stream and local jobs. Cooperative participation in a project can be a
successful way of involving the local population in a new renewable energy development.
Cooperative financing of renewable energy projects is common in a number of Member
States, particularly Denmark, Germany and Sweden. The role of the developer could also be
important to the public acceptance of a new renewable project and requires that developers
work with the local community to provide information about the nature of the new
developments and their potential benefits. In Spain, the example of wind energy included a
strong element of information dissemination to the local community before the project was
fully accepted.
Energy agencies
The role of regional energy agencies in implementing national and regional policies at the
local level is also important. Energy agencies can work with municipalities, utilities,
developers and the local population to stimulate interest in implementing renewable energy
technologies. A number of successful projects have been brought forward with the support of
energy agencies, especially smaller-scale projects such as solar water-heating systems targeted
at individual households, district heating systems and PV projects in new buildings. The
European Commission has recognised the significance of energy agencies and financially
supports their establishment. There are now agencies located in cities, regions and islands
that are successfully implementing renewable energy and energy efficiency projects.
References and bibliography
References and bibliography
AGORES. A global overview of renewable energy sources: Information about renewable
energy, including EU policy and national strategies and database of legislative support in EU
Member States (Eneriure). Available at http://www.agores.org
Biomass Congress 2000. Vision of the OPETs concerning European biomass promotion
policies. Co-ordinated by Sodean, Spain. Available at www.sodean.es
ECOTEC, 1999. The impact of renewables on employment and economic growth. ECOTEC Research
and Consulting Ltd. Altener contract 4.1030/E/97-009.
Energie Cites. Renewable energy in the European cities, Altener II City-RES Project, Good practice
case studies. Available at www.energie-cites.org
EurObserv’ER Eurobarometers. Available at www.systemes-solaires.com/
European Commission, 1997a. Energy for the future: Renewable sources of energy, White Paper for a
Community Strategy and Action Plan COM(97)599, 26.11.97.
European Commission, 1997b. EU policy on renewable energy: opportunities in a growing market.
Conference background paper.
European Commission, 1999a. European Union Energy Outlook 2020, Energy in Europe,
special issue November 1999.
European Commission 1999b. Energy for the future: Renewable sources of energy, Campaign for
take-off. Commission Services Paper, DG XVII, doc. SEC(99) 504, 9.4.99.
Eurostat. Statistical Office of the European Union. Renewable energy sources statistics in the
European Union, Data 1989-1998, 2001 Edition.
EVA, 1998. Feed in tariffs and regulation concerning renewable energy electricity generation
in European countries, Austria. Available at www.eva.ac.at/
Hassan, Garrad, and Lloyd, Germanischer, 1995. Study of offshore wind energy in the EC, EC
JOULE contract.
OECD/IEA, 1998. Renewable energy policy in IEA countries, Volume II Country reports.
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Annex 1: Other interesting Member
State/technology examples of
successful penetration
Denmark — Biomass power
Denmark has a good record of utilising its
biomass resources, especially for heating
purposes. More recently, biomass has
increasingly been used to generate power
as well.
In 1993:
In 1999:
167.0 GWh
483.0 GWh
Increase 1993–99: 316.0 GWh, 189 %
Community heating systems are common in Denmark, and biomass is often used as a fuel for
them. These systems may be heat only, but increasingly they are being converted or developed
to operate as combined heat and power (CHP) systems, with power exported to the grid.
The Masnedø CHP plant produces heat for Vordingborg’s district heating network and
electricity for eastern Denmark’s grid. The plant has a capacity of 8.3 MW of electricity and
20.8 MW of heat. It went into operation in 1996 as one of 10 small-scale CHP plants in eastern
Denmark which use indigenous fuels: straw, wood (wood chips), waste and natural gas. The
Masnedø CHP plant consumes 62,000 tonnes straw annually, together with natural gas. Wood
chips can replace part of the straw if needed.
Success factors:
• Political: Denmark has a national energy plan with targets for increased use of biomass
The Danish government has implemented a series of energy action plans, the most recent
being the current plan Energy 21, launched in 1996. This plan is consistent with the overall
national objective of a 20 % reduction in CO2 emissions from 1988 levels by 2005. The plan
proposes to increase the use of biomass for energy from 1 250 ktoe per year in 1995 to 2 000
ktoe per year by 2005. One of the main initiatives is to increase the use of biomass in power
production, partly through the conversion of biomass in heating-only plants to biomass in
CHP, and partly by the development of biomass CHP for smaller district heating plants.
• Legislative: Premium-set tariffs combined with an obligation to purchase provide a stable market to
renewable electricity producers
Electricity from biomass is sold to the local utility under a feed-in law, in operation since 1992,
which guarantees a commercially favourable fixed tariff and market for electricity generated
from renewable energy sources.
Utilities are obliged to purchase and distribute electricity produced from biomass sources.
The producer pays the cost of grid connection, whilst the transmission company pays for the
necessary reinforcement and extension of the network. Prices available vary depending on
the time of day and whether the producer is a private company or a utility, and are enhanced
through ‘reimbursements’ of CO2 tax (see below) and government subsidy. In 1998, the
average price, including the feed-in tariff, the CO2 tax reimbursement and the subsidy,
available for private company biomass energy projects was DKK 0.54/kWh (EUR 0.073/kWh).
Local power distribution companies are also obliged to provide grid connection for proposed
renewable energy projects.
The increase in CHP installations, although significant, has not been as rapid as was expected,
however, because prices have not been increased since the early 1990s. A number of the older
plants have experienced economic difficulties, and fewer new plants are coming on line than
had been anticipated because the prices are no longer attractive. Reforms of the electricity
Annex 1
industry currently being implemented will alter this situation, through changes to feed-in
tariffs and rules for electricity from renewable energy sources.
Under a 1993 Biomass Agreement, utilities are also required to use an increasing proportion
of straw and wood chips as fuel in their power installations. The Biomass Agreement was
amended in 1997 to allow utilities greater flexibility in the choice of biomass procured.
• Fiscal: Biomass power benefits from favourable taxation
One component of the beneficial tariffs available for renewable energy projects, including
biomass, is a subsidy through the CO2 tax. This is worth DKK 0.1/kWh (EUR 0.013/kWh).
Biomass power is, however, subject to SO2 tax (with some compensatory refunds, depending
on the size and type of the project).
• Financial: A wide range of subsidies and grants are available for the biomass sector
A range of economic incentives is available for the development of biomass projects. These
include a fund established in 1992 to support the conversion of district heating plants to
biomass-fired CHP plants, which provide 10–25 % of the costs of conversion. Other support is
given as subsidies towards the construction of renewable energy projects (up to 30 %),
towards demonstration projects and to support the dissemination of commercially available
technologies.
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Denmark — Wind energy
Denmark has led the way in exploiting
wind energy over the past 20 years, and
until the mid-1990s had the greatest use
of wind energy in Europe.
In 1993:
In 1999:
1 034.2 GWh
3 029.0 GWh
Increase 1993–99: 1 994.8 GWh, 193 %
Many of the wind power installations in Denmark have been developed through the
cooperative system, or by local farmers or groups of individuals wishing to develop their own
renewable energy power systems. Many of the original turbines are now being updated or
replaced with larger machines.
One example is the Avedøre wind energy cooperative, which was established in 1993. Twelve
turbines, each of 300-kW capacity, were developed, six of which are owned by the local utility
and the other six by a cooperative of citizens from Copenhagen. The wind energy cooperative
organised the project and offered Copenhagen citizens the opportunity to become
shareholders. The scheme has been successful and has been replicated across the country.
Success factors:
• Political: Long-established political support towards renewable energy development
Danish energy policy seeks to replace electricity produced from coal with that from CHP,
natural gas and renewable energy. Throughout the 1990s, a series of energy strategies has
progressively raised the targets for renewable energy use. The most recent (1996) strategy,
Energy 21, set a target of 1 500 MW of wind turbines by 2005. This target was exceeded in
1999. The government now intends to provide 50 % of Danish electricity consumption from
renewables by 2030. A large part of this will come from on and offshore wind power.
• Legislative: Premium-set tariffs combined with an obligation to purchase provide a stable,
commercially favourable market to renewable electricity producers
The feed-in law has been an important influence in the development of wind energy projects
in Denmark. Electricity from wind farms is sold to the local utility under a feed-in law, in
operation since 1992, which guarantees a commercially favourable fixed tariff and market for
electricity generated from renewable energy sources. The local utility is obliged to take all the
output from the plant. Prices available vary depending on whether the producer is a private
company or a utility, and are enhanced by ‘reimbursements’ of CO2 tax (see below) and
government subsidy. In 1998, private and decentralised electricity producers received an
incentive of DKK 0.17/kWh (EUR 0.022/kWh), and all renewable producers (including
utility companies) received an additional DKK 0.10/kWh (EUR 0.013/kWh) as an
internalisation of the external costs of fossil fuels (CO2 tax). A new pricing system was
introduced in the year 2000 with the Danish electricity reform and after a transition period of
5 to 10 years, all wind power producers will receive only the market price and green
certificates.
• Financial: Subsidies were available to establish a strong domestic wind energy market
The Danish government provided subsidies of up to 30 % towards wind turbine installation
costs, although these were discontinued in 1989. This early support helped to establish a
strong home market and associated indigenous industry.
Grants for replacement of old wind turbines are also available.
• Fiscal: Taxation is favourable towards renewable energy
A CO2 tax is levied on electricity production from fossil sources. Renewable energy receives
compensation from this, in order to internalise the external costs of fossil fuels (see above).
Annex 1
For cooperative operations, no income tax is payable on dividends up to DKK 3 000
(EUR 400).
• Administration: Positive municipal support combined with active involvement of local utility
The long history of using wind as an energy resource has created a favourable environment
within the administration for further wind developments. For example, the Avedøre wind
energy cooperative project benefited greatly from the positive attitude of the local
municipality and the joint development of the project with the local utility. These factors
contributed to the simplification of many planning, infrastructure and quality issues.
Since 1996, in order to enlarge the potential of suitable sites, municipalities have been
required to submit proposals for wind turbine capacity and to thus make wind turbine
development a regular feature of their planning.
• Technological development: Early government support helped establish a strong indigenous wind
energy manufacturing industry
During the late 1980s the Danish government provided financial support to development
projects in the emerging Danish wind energy industry which is now the strongest in Europe,
with successful domestic and worldwide export sales.
Domestic wind developments (such as the Avedøre scheme) benefit from this success by
having ready access to high-quality Danish turbines, components, sales and service.
Some subsidies are still available from research funds, including the programme for new
renewable energy technologies, which supports non-commercially sustainable renewable
energy technologies, including wind, and the energy research programme, which supports
the implementation of Danish energy policy.
• Information, education and training: High level of public awareness of environmental issues
combined with traditional Danish approach of forming cooperatives
The concept of cooperatives is well established in Denmark: dairy and other farming
cooperatives have been operating for over a century. It has therefore been relatively
straightforward to transfer the cooperative concept to the newly emerging wind industry. The
Danish Wind Turbine Manufacturers Association has been actively supporting uptake of wind
energy for nearly 20 years and offers a high level of support and education to prospective
developers, especially farmers and other individuals wishing to develop wind energy schemes.
In addition, there is a high level of environmental awareness among Danish citizens, who see
renewable energy as a safe and clean energy supply option. This supportive attitude has
helped to raise interest in the environmental benefits offered by renewable energy sources.
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Renewable energies: success stories
Finland — Biomass power
Finland is one of the leading European
countries in the use of renewable energy,
in particular through its extensive
biomass resources.
In 1993:
In 1999:
5 644.0 GWh
8 341.0 GWh
Increase 1993–99: 2 697.0 GWh , 47 %
Combined heat and power (CHP) is used extensively in Finland to provide both heat and
electricity for domestic and industrial purposes. CHP plants make use of a range of biomass
resources, burning wood waste and agricultural biomass, as well as peat and black liquor.
Much of the biomass resource is derived from Finland’s pulp and paper industries, which
account for about half the country’s industrial energy consumption. There is also a welldeveloped biomass supply industry. District heating systems are also common, with about half
the population connected to a district heating network. These are increasingly using biomass
as fuel, as well as coal and natural gas.
The Forssa biomass plant is the first CHP district heating plant in Finland fuelled entirely by
wood. The plant’s boiler is specially adapted for the use of solid biofuels and other biomass
fuels. The plant can generate up to 66 MW heat, and started operating in September 1996.
The plant produces all the heat and one third of the electrical power required by the city of
Forssa for almost the whole year.
Success factors:
• Political: Finland has an energy strategy that supports the development of renewable energy,
especially biomass
Finland’s national biomass strategy was launched in 1994 and aimed to increase biomass use
by 25 % (1.5 mtoe) by 2005 from the 1992 level. The Finnish energy strategy is to continue to
expand the use of wood and other renewable energy resources, both to help meet Finland’s
Kyoto targets and to contribute towards the security of Finnish energy supply. An action plan
for renewable energy sources was launched in 1999 and has the objective of increasing the use
of renewable energy, including biomass, by 50 % from the 1995 level, when renewable energy
contributed over 20 % of total primary energy demand, by 2010.
Energy planning is actively supported at regional and local levels, with regional strategies
updated regularly.
• Legislative: Transmission costs are fixed, and grid access is open to all producers
Liberalisation of the electricity market in Finland started in 1995, and included opening grid
access to all producers and consumers. The cost of transmission is fixed by law, ensuring
transparency and predictability to producers.
• Fiscal: Economic support measures act in favour of renewables compared with fossil fuels
Fiscal measures and research and development (R&D) are two central policy approaches used
to support market deployment and commercialisation of renewable energy in Finland.
In 1990 Finland introduced a CO2 tax on fossil fuels, which was replaced by a combined CO2
and energy tax in 1994, based on the carbon and energy content of the fuel. Renewable
energy was exempted from the tax.
In 1997 this tax was replaced by taxation on electricity at the distribution level, with a refund
granted to electricity from renewable sources (EUR 0.042/kWh for biomass). The heat
production tax was retained.
Small-scale (less than 1 MW) biomass plants also benefit from a reduction of value-added
taxes payable on the plant.
Annex 1
• Financial: Subsidies are available on investments and equipment relating to renewable energy
production and use
Public funding is important to support the building of new renewable energy plants and is
made available through national, regional or local subsidies. National government subsidies
of up to 30 % of the investment costs are available to renewable energy technologies,
including biomass.
• Technological development: Extensive research and development capabilities have formed the basis
for the establishment of a strong Finnish biomass technology industry
The Finnish government provides a high level of subsidy and support to research and
development to develop an indigenous biomass technology industry. This has helped to
create a strong domestic market and a thriving export industry, in particular in combustion
technology, boilers and emissions control.
• Information, education and training: Active promotion of biomass energy through associations,
agencies, etc.
This includes the establishment of regional energy management agencies, working closely
with national energy information centres. Finnish associations produce information material
and innovative information dissemination schemes, especially in biomass (e.g. the Finnish
Bioenergy Association, the Wood Energy Association). These associations also work closely
with organisations in other Member States to make Finnish capabilities in biomass widely
known. For example, Finnish biomass organisations have formed close links with similar
organisations in Wales in the UK to transfer their know-how to encourage uptake of biomass
use there.
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France — Biofuels (biodiesel)
France is the largest producer of biofuels
in Europe, accounting for 40 % of the
total European production.
In 1993:
In 1999:
29.2 ktoe
279.3 ktoe
Increase 1993–99: 250.1 ktoe, 857 %
France is one of the few countries in the world to give a relatively high priority to the
development of biofuels, mainly to support the agricultural sector and for research purposes.
For example, there are four plants producing biodiesel, a biofuel, in France. Oil companies
can use this biodiesel as a substitute for normal fossil diesel, up to a level of 5 % for use in
private cars. In professional fleets (company cars, buses, etc.) it can replace up to 30 %.
Success factors:
• Political: The French government supports a biofuels production programme
The biofuel production programme is a financial scheme, operated at the national level, to
develop investments for biofuel production.
• Fiscal: Biofuels benefit from advantageous fiscal measures
In France, biofuels receive exemption from excise tax on petroleum products at the rate of
FRF 2.30/litre (EUR 0.35/litre) of biodiesel and FRF 3.29/litre (EUR 0.50/litre) of ethanol
in 2000. French fiscal aid to biodiesel, for example, was approximately EUR 120 million per
year (FRF 0.8 billion), supporting 337 000 tonnes of oil equivalent. The excise tax exemption
means that biofuels can compete cost effectively with fossil fuels.
• Technological development: French companies are world leaders in biodiesel production.
The European leader for production and marketing of biodiesel is the French company
Diester Industrie, with an annual turnover of EUR 200 million in 1997–98.
• Information, education, training: Biofuels are actively supported by local communities
There is an information network among the various communities with an interest in biofuels:
the oil companies (TOTALFINA, ELF) and vehicle manufacturers (PSA, Peugeot Citroen,
Renault), professional and trade associations (Sofiproteol, NOVAOL), and national nonprofit bodies (ADEME, the French Institute of Petroleum — IFT).
Over 30 local communities are working together as the association ‘Club des villes diester’ to
promote use of biodiesel.
Annex 1
France — Biomass district heating
The biomass wood fuel market in France
is one of the more successful examples of
exploitation of renewable energy sources
in the country over the past decade, with
biomass used mostly for heating
apartment blocks.
In 1993:
In 1998:
7.9 ktoe
16.9 ktoe
Increase 1993–98: 9.0 ktoe, 113 %
A number of examples of biomass heating applications can be seen in various regions around
France:
• Dole, in the Jura Mountains in eastern France, has a 3.2-MW biomass-fired boiler delivering
hot water and heating to 1 800 dwellings and various larger public and private buildings.
This supplies more than one third of the energy required by the area, and uses 12 000 tonnes
of wood residues annually.
• In Normandy, a 2-MW wood-fired boiler plant supplies heating to 470 houses, a college, a
school and a sports centre. The project involved the construction of a heating network,
which was developed by a heating company.
• In Bourgogne, a district heating system due for renovation was refurbished with an 8-MW
wood-fuelled boiler. This provides heat for up to 3 500 homes, and also provides a market
for waste wood from local sawmills.
Success factors:
• Political: Support for biomass energy through the biomass wood and local development plan
This plan was implemented between 1995 and 1998 by the French state agency for the
environment and energy conservation, ADEME. It covers both the development of the
biomass wood fuel supply sector and the installation of new automated-feed, wood-fired
boilers. The installation of 188 boiler houses in apartments and in the industrial and tertiary
sector had been achieved by 1999.
• Financial: Support provided towards the development of projects
Support for the development of district heating plants is available in the form of investment
subsidies from the local region, while an additional subsidy may be available through EU or
national funds.
• In the Dole system, about one third of the funding required was provided from ADEME with
further contributions from the regional authority and other regional economic
development funds.
• In Bourgogne, support was received from ADEME, the regional council and the EU.
• In Normandy, the heating company received financial support from the regional authority
together with an agreed contract to operate the plant over a 24-year period.
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France — Wind energy
Wind energy use in France expanded 10fold between 1993 and 1999, but the
level of penetration remained low.
In 1993:
In 1999:
3.5 GWh
36.0 GWh
Increase 1993–99: 32.5 GWh, 928 %
Most French wind energy developments are small installations in isolated or remote regions,
particularly islands such as Corsica, or in French overseas departments.
A smaller number of wind installations have been established on the mainland. One example
is the series of wind farms that has been developed around Dunkirk over the past 10 years. A
first wind turbine, part-funded by the European Community, was commissioned in 1991, and
this was followed in 1996 by a wind farm with nine turbines totalling 2.7 MW. Most recently, in
1999, near Dunkirk in Wideheim, a new development was started which comprises six 750-kW
turbines, totalling 4.5 MW.
In France, wind energy was supported during the period examined through the competitive
tendering system Eole, established in 1996. The process was implemented in stages: the first
stage to contract 15 MW, the next to contract 35 MW and finally to achieve a total capacity of
250–500 MW by 2005. Eole was a similar system to the Non-Fossil Fuel Obligation used in
England and Wales: requests for proposals were invited from developers for a certain amount
of capacity and successful tenders received a guaranteed market for 15 years at the bidding
price for their wind-generated electricity. Tariffs available for the first stage were FRF 0.38/
kWh (EUR 0.058/kWh), which fell by about 10 % in further bidding stages.
The progress of project implementation was, however, slow. Despite acceptance under the
Eole system, developers still encountered barriers to project implementation (see below).
Until recently there have been few fiscal or financial incentives in support of wind energy
developments outside the Eole system. The earliest wind turbine at Dunkirk received EU
funding support (50 %), but was developed prior to the Eole system. The Regional Council of
Nord-pas-de-Calais contributed a 53 % share in the subsequent wind farm constructed in
1996, while additional financing was received from ADEME (the French national energy
agency), Eléctricité de France (EdF) and EU Structural Funds.
Wind energy developments in France have been hampered by the difficulties encountered
when attempting to obtain connection to the grid. There are no guaranteed access rights for
small generators.
This case study illustrates how the lack of a guaranteed market through access to the grid and
the limited availability of financial support can restrict the more widespread uptake of
renewable energy technologies. The success of Dunkirk and Wideheim is mainly attributable
to the foresight and determination of the developers and the municipalities to achieve
successful wind farms. For example, the municipality of Dunkirk worked with the developer
to stimulate the establishment of the first wind turbine, with the mayor giving his full support
to the project. For the second wind project, the municipality of Dunkirk again played a vital
role, promoting the project, selecting and making available the site, participating in its
financing and encouraging the Regional Council also to participate.
One result of the first two wind power developments in Dunkirk is that the most recent wind
farm (1999) in Wideheim has French-constructed innovative turbines.
Since June 2001 France has replaced the Eole competitive tendering system with a feed-in
tariff system. Wind energy producers receive on average FRF 0.46/kWh (EUR 0.070/kWh)
depending on real wind speed on the site.
Annex 1
Germany — Biomass power
Germany has seen a steady increase in the
development of wood-fuelled combined
heat and power plants, especially in the
more forested southern regions of the
country such as Bavaria.
In 1993:
In 1999:
419.0 GWh
677.0 GWh
Increase 1993–99: 258.0 GWh, 61 %
After the success of the Electricity Feed-in Law in increasing renewable electricity from wind,
renewable energy promotion is now shifting towards the direct use of biomass and the use of
biomass for power and for heat production.
Bavaria is the largest of the German Länder, with about 35 % of its surface area forested, the
highest density in Germany. Wood is used for heat and increasingly for power production.
The use of wood for heating purposes is common in the region: almost one third of Bavarian
homes use wood as an energy source. There are nearly 100 biomass-fuelled district heating
systems installed, including 16 combined heat and power (CHP) plants. These plants
consume both wood and straw. Bavarian examples of CHP plants include the following:
• Since 1995, a biomass CHP plant has been operating near Sulzbach-Rosenberg. The plant
generates 4.2 MW electricity and 16.8 MW heat. Part of the steam produced is used in the
nearby steel works, and more steam is distributed for use in the city’s district heating
network, supplying nearly 1 000 homes. Fuel comes from a farmers’ association, which
provides a variety of biomass fuels, including straw, wood chips and wood residues.
• A CHP plant generating 15 MW electricity and 75 MW heat provides steam and electricity to
a chipboard manufacturing factory in Neumarkt. The plant burns waste wood (sawdust and
chippings) and forestry wastes.
• A biomass-fired CHP plant generating 12 MW electricity and 35 MW heat has been
established in Altenstadt; it supplies power to the grid and heat to the neighbouring district
heating network.
Success factors:
• Political: National and in particular regional government support towards increasing use of biomass
German energy policy is closely linked with national policies to support climate protection.
Renewable energy plays an important part in this policy, and the government has actively
supported financial provision towards renewables, both at national and regional level. Most
German regions also have energy policies, targets and support mechanisms designed to
encourage the development of renewable energy. For example, the Bavarian government
aims to increase the share of renewable energy use to 13 %, up from the present level of 9 %
of gross inland energy consumption. Of this, the biomass contribution is expected to provide
between 3 and 5 %.
• Legislative: Premium-set tariffs combined with an obligation to purchase provide a stable market for
renewable electricity producers
Through the Electricity Feed-In Law there is a guaranteed market and fixed price for the
electricity produced from renewable energy sources, including biomass. More recently,
biomass power has been one of the main beneficiaries of the revised feed-in law, which was
implemented in April 2000 and provides more economically attractive tariffs for biomass
power.
• Financial: Some grants available for biomass installations
Grants for investment in biomass power are limited and include capital subsidies from the
federal government and low-interest loans from a public bank, the Deutche Ausgleichbank.
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Renewable energies: success stories
• Technological development: Strong indigenous industry capabilities in biomass
Research and development (R&D) support has resulted in the establishment of a strong
indigenous capability that benefits from a vibrant domestic market.
Since the 1970s, a considerable amount of R&D has been carried out into biomass harvesting,
fuel processing and combustion equipment. R&D support has gone to technological
developments in wood pelleting systems and new small-scale biomass gasification or CHP
biomass utilisation systems. The use of alternative biomass fuels such as straw and other
agricultural residues has also been encouraged.
There is a requirement to guarantee good performance levels and expertise to obtain state
investment subsidies; this ensures that the overall quality of installations is high.
• Information, education, training: Promotion of opportunities from renewable energy use through
specialist municipal advice centres
Specialist municipal advice centres provide information on the use of renewable energies,
such as biomass. In Bavaria the regional centre for research into agricultural engineering
provides an information resource centre to technical and general public to promote the
opportunities from biomass use.
Annex 1
Greece — Solar thermal
Greece has the highest per capita use of
solar thermal technologies in the EU.
In 1993:
In 1999:
92.5 ktoe
124.4 ktoe
Increase 1993–99: 31.9 ktoe, 34 %
Solar collectors have been widely installed throughout Greece since the 1980s. There are a
number of factors that make solar thermal technologies attractive for providing an increasing
proportion of Greece’s energy needs, including the country’s favourable climate. There is no
district heating tradition in Greece, so typical water-heating systems in households are
electricity based, and electricity prices are relatively high compared to the Greek household
disposable income.
The island of Crete is one area of Greece that has carried out extensive studies and activities
to develop its indigenous renewable energy resources. There has been a high take-up of solar
thermal collectors among the population, both for domestic dwellings and in the hotel and
tourism sector. To date, about 20 % of Crete households have solar collectors. These are
mostly produced and installed by local companies, and supply cost-effective and reliable hot
water.
Success factors:
• Political: Support policies for renewable energy use
Various policies and legislation to support uptake of renewable energy, including solar
thermal technologies, have been implemented since 1990. The Operational Programme for
Energy, which ran from 1994 to 1999, provided a total of EUR 140 million of public, EU and
private funds for renewable energy development.
Crete benefited from this programme through targeted support for renewable energy
technology development. Crete adopted an energy policy in 1994 that placed a high
importance on the use of renewable energy, and the implementation plan was finalised by the
regional energy agency in 1999.
Greece’s new Operational Programme for Energy, which began in 2000, supports tax
exemptions, loans and third-party financing for renewable energy and energy efficiency in
the building sector.
• Financial: Grants and loans available
In the early stages of their development, in the late 1970s and early 1980s, the use of solar
water-heating systems was stimulated through subsidies. From 1990, Law 1892 provided
subsidies up to 45 %–55 % (depending on location) for the promotion of various investments
including in renewable energies. Hotels which invested in solar water heaters benefited
considerably from this law.
• Fiscal: Tax exemptions to individuals for buying renewable appliances
Since 1995 Law 2364 has provided tax exemptions to households buying renewable
appliances, such as solar water heaters; 75 % of the purchase value of a renewable appliance is
deducted from a person’s taxable income.
• Technological development: Strong domestic manufacturing industry
The financial support given in the late 1970s and early 1980s to promote the use of solar water
heaters created an opportunity, and a market, for the emergence and establishment of a local
industry which developed over the 1980s and reached maturity in the early 1990s. Local
industry was an important driving force in solar thermal expansion in Greece.
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Renewable energies: success stories
Ireland — Wind energy
Ireland’s exploitation of its wind resource
has seen a 12-fold increase in wind
energy generation in the six years since
1993 but from a low starting point.
In 1993:
In 1999:
15.1 GWh
187.0 GWh
Increase 1993–99: 171.9 GWh, 1 138 %
Ireland has few indigenous energy resources and therefore relies heavily on imported fuels.
Wind exploitation offers a good opportunity for reducing fuel imports and making a
significant contribution towards the country’s electricity supply. Indeed, most of future
renewable energy development in Ireland is expected to come from wind energy. However,
some Irish developers are encountering a number of problems in obtaining planning
permission for new wind farm developments. The Irish Renewable Energy Information Office
provides an advice service to ensure that developers and planners receive adequate
information and support to reach balanced decisions on renewable energy projects.
Kilronan wind farm is one example of a wind energy development in Ireland. It was
developed by the Irish company Kilronan Wind Farm Limited. The excellent wind resource
in the region (County Roscommon), together with existing access roads and power lines to
the nearby local coal mines, made Kilronan the ideal location for a wind farm. It was built in
1997 and comprises 10 turbines, each of 0.5 MW. In 1998, the wind farm generated 14 GWh
of electricity.
Success factors:
• Political: National Sustainable Development Strategy provides a framework for renewable energy
development
Irish energy policy focuses on increasing its use of indigenous energy sources. Renewable
energy can contribute towards this policy, and can also provide opportunities for rural
development. In 1995 the government set a target of increasing electricity generated from
renewable sources by 55 MW, from 235 MW to 290 MW. The target was achieved and
extended through the 1999 White Paper on sustainable energy. This increased the target for
electricity generation from renewable energy to 500 MW in the period 2000–05.
• Legislative: The Alternative Energy Requirement (AER) provides support for renewable energy
generation, through a competitive tendering mechanism
The main support mechanism for renewable energy is the Alternative Energy Requirement
(AER). This is comparable to the NFFO system in operation in the UK. It is a competitive
bidding system for different renewable energy technologies. Successful developers obtain a
15-year guaranteed purchase of their power, at the project’s bid price. Four AER bidding
rounds have been held since 1994. Since this date, almost all new wind capacity has been
achieved through AER contracts. By 1999, 10 wind farms with AER contracts were connected
to the grid, totalling 63 MW, with up to 137 MW further new capacity planned.
• Fiscal: Some fiscal support to renewables
Limited fiscal support is available through tax relief for corporations making investments in
renewable energy projects.
• Financial: Capital grants are available for projects and for regional evaluations of wind
energy resources
Winning bidders to the AER can apply for a capital grant, supported through EU Structural
Funds. A number of projects have also received support from the EU Thermie programme
for demonstration projects.
Through the Business Expansion Scheme companies can access cheaper finance than is
typically available from commercial banks.
Annex 1
• Technological development
There is little indigenous manufacturing of renewable energy equipment, and the
opportunities for developing such an industry are limited to newer long-term technologies
such as wave power, and in-site assessment activities. Investigations of Irish wind resources are
actively supported, such as through the development of the Irish wind atlas by University
College Dublin, RISOE (a Danish/United Nations Environmental Programme research
institute) and others. Financial support has also been provided towards implementation of
renewable energy feasibility studies.
• Information, education and training: Government support for information on renewable energy
The Renewable Energy Information Office (REIO) of the Irish Energy Centre was set up in
1995 to promote the use of renewable energy resources and to provide independent advice
and information on financial, social, environmental and technical issues relating to
renewable energy development. It also provides advice to the public on all aspects of
renewable energy. REIO has played a leading role in identifying and addressing issues such as
financing and planning, which are crucial to the successful development and deployment of
renewable energy technologies. The Office is also charged with the task of disseminating the
results of successful applications of renewable energy technologies. By providing ready,
centralised access to such information, REIO helps reduce the cost to developers of assessing
new technologies and deployment strategies. This in turn stimulates replication of successful
projects which then increases market confidence. In particular the government aims to
encourage smaller-scale developments of renewables in projects that can achieve local
benefits. Kilronan, for example, is a local scheme helping to revitalise an old coal-mining
area.
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Renewable energies: success stories
Italy — Wind energy
Italy’s exploitation of its wind resource
has been slow to take off, but its level of
penetration is now rapidly expanding,
especially in southern regions.
In 1993:
In 1999:
4.4 GWh
403.0 GWh
Increase 1993–99: 398.6 GWh, 9 059 %
Because of its location, in the closed Mediterranean, Italy’s wind resources are not as great as
those in some other parts of Europe. Nevertheless, there is still potential, especially in the
Apennines Mountains above about 1 000 m, and in other locations in southern Italy.
Since the latter half of the 1990s, the Italian Vento Power Corporation (IVPC) has been active
in developing a series of wind energy projects in southern Italy. IVPC linked with foreign
trading partners, already involved in other wind projects around Europe, to obtain financial
support for its venture. The company has now constructed wind farms at five sites, with
further expansion expected. Total installed capacity is now almost 400 MW.
One of the most difficult and expensive aspects of establishing wind energy schemes in Italy
can be arranging grid connections. In some regions, the existing grid infrastructure is poor
(as is the case in southern Italy), and it is expensive to upgrade the grid sufficiently for it to be
able to accept power from the new wind farm. In such cases, developers like IVPC often have
to contribute substantially towards the connection costs of the grid operator.
In addition, obtaining permission to construct can be very lengthy — up to two years —
because of the large number of permits that may be needed and a lack of clarity over the
conditions that the project needs to meet.
Success factors:
• Political: Enhanced political support for renewable energy is boosting opportunities for wind energy
developments
Italian energy policy aims to reduce energy import dependency and to reduce greenhouse gas
emissions. Italy has implemented a series of national energy plans since the 1980s. The
National Energy Plan (1988) focused on objectives and targets to 2000, including
implementation of policies on energy savings, renewable energy and environmental
protection. However, only limited uptake of renewable energy was achieved under these
policies. New legislation in 1998–99 included aims for developing renewable energy sources
to 2010 (from 11.7 mtoe in 1997 to 20.3 mtoe in 2010), based around a White Paper on
renewable energy sources. The accompanying national energy programme requires regions
to make regional energy plans, including policies to increase energy efficiency and to develop
renewable energy, such as wind power. Nationally, new aims for wind energy uptake are
identified as 700 MW by 2002, doubling to 1 400 MW by 2006.
• Legislative: Premium-set tariffs combined with an obligation to purchase provide a stable,
commercially favourable market for renewable electricity producers
A tariff system was established in 1992. The grid operator is obliged to purchase all electricity
from renewable sources, at an agreed premium rate for the first eight years of electricity
production, and at guaranteed minimum rates for the remainder of the project’s life.
The IVPC wind farms typically have a 15-year contract with the grid operator, which provides a
premium payment for electricity output during the first eight years at ITL 202.4/kWh (EUR
0.105/kWh), after which the rate drops by about half.
Early tariff structures were complex and provided different rates for different energy sources
and different times of day. Since 1992 these tariff structures have been progressively revised
and simplified. In general, feed-in tariffs consist of a supplement towards the avoided costs
and the higher investment costs of renewable generation compared with power from
conventional sources, and apply for the first eight years.
Annex 1
• Fiscal: Some support available to renewable energy projects
Investment in wind energy (as well as in photovoltaics power) benefits from a 10 % discount
on value added tax. Investment in poorer southern regions in Italy benefits from 10-year
corporation tax breaks.
Funds for the financial support of renewable energy are now collected via a new carbon
dioxide tax, approved in 1998. Over EUR 1.6 million were expected to be available in the first
year.
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Renewable energies: success stories
Netherlands — Photovoltaics
Use of photovoltaics in the Netherlands
has expanded steadily since 1993,
mainly in small-scale and off-grid
applications. A large number of gridconnected projects have also been
established, and more are being developed
to meet new and more ambitious national
targets for PV use.
In 1993:
In 1999:
0.7 GWh
6.0 GWh
Increase 1993–99: 5.3 GWh, 757 %
Dutch businesses have been market leaders in the photovoltaics (PV) industry since the late
1980s and in particular have developed a thriving export industry. A small number of PV
installations were developed in the Netherlands during the early 1990s. The Barendrecht
project is an early example of a grid-connected PV installation. It was conceived in 1993 and
became operational in 1996. It consists of 12 grid-connected, roof-integrated PV systems in
newly built houses, with a project life in excess of 20 years. Both stand-alone and gridconnected systems have since been developed: by the end of 1998 there was an installed
capacity of 5 MW of PV installations and manufacturing production of 100 000 m2 of PV
panels.
Success factors:
• Political: More ambitious national targets have recently been established for renewable energy use
The main driving force for encouraging renewable energy uptake in the Netherlands has
been the 1997 White Paper on renewable energy. This set a target for penetration of
renewable energy, subsueqently updated to 5 % of the country’s gross inland energy
consumption by 2010 and 10 % by 2020.
These targets and associated initiatives were not available at the time the Barendrecht project
was initiated, and represent an ambitious increase compared with the levels of use of
renewable energy at the time (only about 1 % in the early 1990s). Nevertheless, the
Barendrecht and other earlier PV installations benefited from a range of measures that
benefited renewable energy developments.
• Legislative: Electricity supply companies are obliged to purchase power from independent power
producers
Energy policy in the Netherlands during the 1990s has built on the foundations laid by the
1989 Electricity Act, which obliged electricity supply companies to purchase and distribute
electricity produced by independent power producers, such as renewable power producers.
Individual householders at Barendrecht can therefore sell power surplus to their domestic
requirements to the utility. The utility buys at around NLG 0.23/kWh (EUR 0.13/kWh),
which is equivalent to the price the owner would pay for conventional electricity provided
from the utility. Prices are negotiated per project, however, and recent developments have
now led to an average price of NLG 0.16/kWh (EUR 0.07/kWh) across the country.
Some distribution companies also accept net metering: a household’s meter is allowed to run
backwards as compensation for feeding the surplus electricity into the grid.
• Fiscal: Tax structure is favourable towards renewable energy
A regulatory energy tax (also applicable to electricity) has been in operation since 1995. This
is levied on households and small and medium-sized industry; in 1999 the rate was about EUR
0.026/kWh (electricity) and EUR 0.019/m3 (gas). Renewable energy is exempted from the
tax.
Annex 1
Companies and firms which invest in energy-saving projects (including renewable energy)
can be exempted from taxation, and can benefit from claiming accelerated depreciation of
investment in energy conservation equipment including PV systems. Individuals benefit from
income tax exemption for investments in ‘green’ funds.
• Financial: Subsidies are available for renewable energy schemes, both from public and private
sources (including utilities)
Subsidies are available both from NOVEM (the Netherlands’ energy and environment
agency) and from local authorities to support energy-efficient technologies, including
renewable energies. In addition, utilities are obliged to invest in energy conservation or
renewable energy schemes, with the result that many utilities own and operate renewable
energy projects such as PV installations.
At Barendrecht, the local municipality and a private property developer initiated the project.
The owners of the scheme are the homeowners themselves, although financing was provided
in partnership with other local and national players, and from the utility. The owner of the
house is obliged to keep the PV system for 10 years, and a contract is signed between the
owner, the municipality and the utility. The system is guaranteed for 10 years after the
completion date.
The Netherlands also has a number of domestic banks (e.g. Triodos) which are supportive of
environmental and community initiatives, including renewable energy schemes, and are
willing to invest small amounts of finance towards these kinds of projects at favourable rates.
• Administration: Municipal authorities are responsible for implementing spatial planning, including
location of renewable energy systems
The planning process addresses the removal of any barriers to maximising solar energy
production in residential buildings.
• Technological development: Strong market development programme under way
During the 1990s NOVEM had a strong research and demonstration support programme,
assisting government research organisations and industry to develop an indigenous PV
industry. Fundamental and applied research is carried out by universities and research
centres, to improve cell efficiency, to investigate new market applications (both on- and offgrid), and to develop guarantees ensuring that Dutch PV products are high quality and
operate to a good performance level. There is also an indigenous PV cell manufacturing
capability, which by the end of 1998 was producing more than 100 000 m2 of PV panels.
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Renewable energies: success stories
Portugal — Wind energy
Wind energy has been slow to develop, but
is starting to show promise.
1993:
1999:
11.0 GWh
123.0 GWh
Increase 1993–99: 112.0 GWh, 1 018 %
Enernova is a subsidiary of Electricidade de Portugal (EDP) which was established to explore
the wind energy potential in Portugal, and to develop the technology in the country. It was
the main driving force behind implementation of wind energy schemes during the mid-1990s.
A number of wind projects were established on Portuguese islands such as Madeira in the
early part of the 1990s, but the first mainland wind scheme was built in 1996. This consisted of
17 600-kW machines, totalling 10.2 MW. A second project was built soon afterwards, with a
total 10-MW electrical capacity, and further schemes have followed.
The country does not have large areas with strong and predictable wind resources, but despite
this a number of suitable sites have been identified through a detailed evaluation of wind
resources and the subsequent development of a wind atlas of Portugal. This, combined with
the increasing availability of finance for wind developments and an improvement in tariffs
paid to renewable electricity producers, has led to a surge in new projects recently. However,
one of the limitations to development of wind energy in Portugal is the quality of the grid
infrastructure, which can result in complex and expensive connections.
Success factors:
• Political: National energy programme established in support of renewable energy development
The Portuguese Energy Programme was established in 1994 with the aim of reducing
dependence on energy imports, providing reliable energy supply at a reasonable cost,
encouraging energy efficiency and increasing the use of renewable energies. Regional energy
plans have followed, promoting renewable energy and energy-efficiency initiatives.
• Legislative: Premium-set tariffs combined with an obligation to purchase provide a stable,
commercially favourable market for renewable electricity producers
Since 1988 independent producers using renewable energy sources or combined heat and
power have had guaranteed access to the grid at regulated prices (Decree 189/88 on
independent power production). This provided a guaranteed feed-in tariff for electricity
generation from renewable energy for eight years. Despite this, few wind projects came
forward until financial support and tariff levels for new renewable electricity were improved
in 1995 when Decree 313/95 was introduced.
Since 1999, a new feed-in law (Decree 168/99) has been implemented that provides more
favourable tariffs for renewable energy, by taking account of the environmental benefits of
using indigenous, non-fossil sources compared with fossil fuels, and ensuring guaranteed
purchase of power from renewable generators.
• Financial: Generation incentives for independent power producers
The Portuguese Energy Programme in 1994 introduced financial incentives for independent
electricity producers. These differ depending on the nature of the project, its size and its
geographical location. Grants were available of up to 60 % of eligible costs for demonstration
projects, or up to 50 % for dissemination (commercialisation) projects. Zero-interest loans
were also available for up to 40 % of project costs for commercial projects. After 1997, this
loan level was raised to 60 % of project costs. The Programme was funded by the European
Community (Structural Funds), the Portuguese government and private investors.
More recently the government has provided finance towards grid connection costs.
Annex 1
• Information, education and training: Regional evaluations of wind energy resources are available
A great deal of work was carried out during the early 1990s to develop a wind atlas of Portugal.
The Portuguese government makes information on subsidies for renewable energy projects
and how to apply for them available to the public.
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Renewable energies: success stories
Spain — Biomass power
Biomass is an important renewable
energy resource in Spain, and its use is
continuing to expand rapidly, especially
for power generation projects.
1993:
1999:
485.0 GWh
917.0 GWh
Increase 1993–99: 432.0 GWh, 89 %
Spain possesses large amounts of readily exploitable biomass resources. The household sector
and various industrial sectors (pulp and paper, timber, etc.) are currently the biggest users of
biomass, for thermal purposes. However, the use of biomass in power generation (including
combined heat and power) is expanding rapidly. Much of this expansion is due to a
combination of factors: the existence of a guaranteed market for the electricity produced at
favourable rates, the availability of capital subsidies and the high level of interest shown in
developing large and medium-sized biomass heat or power plants, using a variety of biomass
sources as fuels.
One of the leading developers of biomass projects is ENDESA, part of a major Spanish utility.
Projects include two combined heat and power plants, each generating 16 MW of electricity,
fuelled by olive oil residues.
Other biomass residues used in Spain as fuel include grape/wine residues, rice husks, wood
wastes and wood residues. There is also an interest in developing energy crops such as poplars
or eucalyptus to fuel biomass plants, and pilot plants are being established to demonstrate the
use of these fuels for energy recovery.
Success factors:
• Political: Strong support for renewable energy implementation at both national and regional level
Spain actively supports the development of renewable energy, particularly for its
environmental benefits and its contribution to security of supply. The national Energy Saving
and Efficiency Plan (PAEE), 1991–2000, aimed to increase the overall use of renewables by 1.1
mtoe by the year 2000, including an increase in the contribution of non-hydro renewables in
electricity generation from 0.5 % in 1990 to 1.4 % in 2000. The Plan de Fomento de las
Energías Renovables (2000–10) set a new target of a 12 % share for renewables in gross inland
energy consumption by 2010. Biomass, and increasingly power from biomass, will be key in
meeting this target.
Each of the Spanish autonomous regions has a regional energy plan, focusing on developing
environmentally and economically sustainable energy provision, and containing objectives
and targets for the promotion and implementation of renewable energy sources.
• Legislative: Premium-set tariffs combined with an obligation to purchase provide a stable,
commercially favourable market for renewable electricity producers
The main driving force for support to renewable energy comes from a series of royal decrees
during the 1990s on support for electricity generation from renewable energy sources, wastes
and combined heat and power. The decrees guarantee the purchase of electricity from
renewable sources at a premium fixed price, at 80–90 % of the average electricity tariff from
conventional power sources. From 1999, electricity producers (including biomass) can
receive either the fixed tariff of up to ESP 10.24/kWh (EUR 0.06/kWh) or can receive the
average hourly market price of electricity plus a bonus of up to ESP 4.61/kWh (EUR 0.03/
kWh). The legislation also provides for guaranteed access to the electricity grid, with agreed
rates for connection.
• Financial: State and regional subsidies available
The PAEE provided limited (20 %) subsidies in the form of capital grants. However, the
uptake of biomass projects was slower than anticipated and so capital subsidies for biomass
projects were strengthened from 1996 to reach up to 30 % of eligible costs, with a further
Annex 1
10 % for projects developed by small and medium-sized enterprises. Each autonomous region
can provide separate additional support for investment and project financing.
• Administration: Local involvement in renewable energy planning
Responsibility for renewable energy sources belongs chiefly to the autonomous communities
(the regions). This allows each region to have authority over the various administrative
procedures and over planning provisions to implement renewable energy projects. These
responsibilities are closely linked with environmental obligations, and in particular with the
requirements to provide environmental impact assessments for new projects.
Successful implementation of biomass projects is mostly met where collaboration at all levels
of administration (local, regional and national) is achieved.
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Renewable energies: success stories
Sweden — Biomass power
Sweden has a long history of producing
energy from its forestry resources, and
biomass-based electricity, including
combined heat and power, is increasing
steadily.
Penetration:
In 1993:
2 113.0 GWh
In 1999:
3 011.0 GWh
Increase 1993–99: 898.0 GWh, 42 %
Sweden is a world leader in the production and conversion to power of solid biomass. Most of
the biomass power comes from combined heat and power (CHP) plants. In Sweden there are
vast areas of forest, the fiscal system favours renewable energies and a great deal of financial
and research support has been provided to biomass for a number of years. All these greatly
helped biomass energy to develop as an important source of fuel for power plants. Biomass as
a fuel source for CHP increased steadily during the 1990s, and particularly in recent years,
and biomass power now meets about 2.5 % of Sweden’s electricity needs.
Success factors:
• Political: Support for renewable energy use, especially biomass
The overall objective of Sweden’s energy policy is to secure the long- and short-term energy
supply on economically competitive terms, with an emphasis on sustainable development.
Sweden has a policy to prevent an increase in CO2 emissions, and it has also made
commitments to phase out its nuclear generation capacity.
Long-term support for research and development into new and renewable energy
technologies, and a greater use of renewable energy are the two principal means of achieving
these aims. Biomass especially plays a vital role. Sweden has a policy objective to replace
electric domestic heating with CHP or district heating systems, especially making use of
biomass for fuel.
• Legislative: Electricity supply companies are obliged to purchase power from small-scale power
producers
The liberalisation of the Swedish electricity market provides straightforward access for small
independent generators to be connected to the grid. Swedish utilities were obliged to
purchase electricity generated from small generators, at agreed prices. Since the last quarter
of 1998, biomass power has been sold at the market price plus a temporary support of SEK
0.09/kWh (EUR 0.009/kWh) provided by the state. Small generators can also obtain
discounts from grid-use costs.
• Financial: Subsidies available to renewable energy schemes
Investment grants are available for biomass-fired combined heat and power plants up to 25 %
of total investment, which translates to a maximum of SEK 3 000/kWh (EUR 330/kWh) of
electricity capacity installed. Since 1998 there has also been a technology procurement
programme for renewable energy production, and biomass power projects can benefit from
it. Since the last quarter of 1998, biomass power has also benefited from a temporary price
support as noted in the legislative section.
• Fiscal: Energy tax systems benefit biomass use
Biomass is exempted from the energy tax, the carbon dioxide tax and the sulphur oxides tax.
The carbon dioxide and energy taxes have helped to change the economics of new power
generation and have made coal-fired CHP plants more expensive than any other option. A
number of public coal-fired CHP plants have changed to fire biomass due to the introduction
of the carbon dioxide and energy taxes.
Small generators are exempt from a nitrous oxide levy, which applies to generators over 25
GWh/year. The exemption applies to small generation from all fuels, not only biomass.
Annex 1
• Technological development: Active development and promotion of biomass technologies
Swedish research and development actively supports technological developments in
renewable energy. Biomass research, development and demonstration receive total funding
of about SEK 400 million (EUR 36 million) per year from the government. Electricity
companies and other industries also provide funds. The main areas of support are
combustion and conversion technologies, demonstration of pre-competitive technologies,
fuel production, harvesting supply programmes and ashes recycling.
• Information, education and training: Long history of use of biomass as fuel, benefits to key local
economic actors from biomass projects
Biomass use is well established and accepted in Sweden. Farmers and forest companies are
supportive of new biomass projects because of the additional income the project will generate
for them. Wood users such as sawmills also benefit because they have an additional market for
their wood wastes. These actors, in particular the farmers’ cooperatives, have helped to gain
increasing public acceptance of biomass projects. Most important, there is a high level of
environmental awareness in Sweden, particularly in renewable energies as an alternative to
other energy sources, and this has often been the main force behind developing renewable
energy schemes, such as biomass.
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90
Renewable energies: success stories
Sweden — Wind energy
Sweden’s use of renewable energy has
focused on its hydro-power and biomass
resources, but it has now started to
expand its use of wind.
In 1993:
In 1999:
51.7 GWh
371.0 GWh
Increase 1993–99: 319.3 GWh, 618 %
The Swedish potential for wind power is large. However, some of this is in coastal areas where
wind energy development competes with other interests over land use. The size of
installations has expanded considerably, and by 1999 there were 486 turbines with a total
installed capacity of 220 MW.
Cooperative wind power development in Sweden has been successful. One example is an
early wind power scheme (Holmbod) developed by the Vindkompaniet Swedish wind power
cooperative in Gotland. This scheme comprises one 500-kW turbine connected to the grid. By
the end of 1998, Vindkompaniet had installed over 80 turbines, in a variety of wind farms.
Due to the success of companies such as Vindkompaniet, more than 10 % of the domestic
electrical consumption in the region of Gotland is now provided by wind power.
Many of these early wind power schemes have a high level of community involvement, often
being cooperatively owned by citizens living nearby. However, as the market for cooperative
schemes is reaching saturation point in the windiest districts of the country, there may be
fewer opportunities for further replication of the cooperative scheme involving neighbouring
inhabitants. The developer is now receiving more interest from farmers and utilities than
from communities, but there is also interest in cooperatives owned by citizens living across the
country and not in the proximity of the project.
Success factors:
• Political: Support for renewable energy
Swedish energy policy aims to secure the country’s long and short-term energy supply on
economically competitive terms, with an emphasis on sustainable development. In particular,
the policy during the 1990s concentrated on restructuring the energy system. There were two
main areas of focus. The first was to provide support for long-term research and development
into new and renewable energy technologies. The second area consisted of shorter-term
initiatives to address the replacement of electricity from nuclear energy when nuclear plants
are closed, through support for renewable energy, energy efficiency and district heating.
• Legislative: Electricity supply companies are obliged to purchase power from independent power
producers
The liberalisation of the Swedish electricity market provides straightforward access for small
independent generators to be connected to the grid. All Swedish regional distribution
utilities were obliged to purchase electricity from small generators, at agreed prices. Small
generators such as the Holmbod scheme in Gotland can obtain discounts or exemptions from
grid-use costs, although they have to pay an agreed one-off connection charge and annual
grid connection fees. Since the last quarter of 1998, wind power has been sold at the market
price plus a temporary support of SEK 0.09/kWh (EUR 0.009/kWh) provided by the state.
• Fiscal: Tax structure is favourable towards renewable energy
Electricity production from small-scale renewable energy projects is favoured by lower or nonenergy taxation (Act 1994:1776). For smaller and cooperative schemes, Swedish citizens are
eligible for an income tax allowance of up to 15 % on new investments in renewable energy
schemes. Furthermore, for cooperative operations, no income tax is payable on the share
dividends up to the cost of the shareholder’s normal electricity costs. This encourages
investment in renewable energy schemes.
Annex 1
• Financial: Subsidies available to renewable energy schemes
Investment grants were available for wind power schemes up to 35 % for wind turbines with a
capacity bigger than 60 kW. (Holmbod wind farm received a grant of 35 % of the project’s
development costs.) Since July 1997 investment grants have been revised downwards: up to
15 % for wind turbines bigger than 200 kW.
Wind energy schemes benefit from an ‘environmental bonus’ equal to the excise tax on
electricity. The environmental bonus has been on average a little over EUR 0.01/kWh of
electricity generated. Since the last quarter of 1998, wind power schemes have also benefited
from a temporary price support, as noted in the legislative section.
• Administration: Planning support for new wind energy developments
Some regional planning authorities designate areas as ‘suitable for wind energy production’.
For Holmbod, planning was proposed and implemented at the local level by the local council.
The regional planning authority instigated a detailed study of wind energy in the region. This
study was used by the developer to identify a suitable site in the area. No problems were
experienced in obtaining planning permission for the installation of the Holmbod turbine in
Gotland.
• Information, education and training: Active local interest in wind energy developments
There is a high level of consciousness about environmental issues in Sweden and this has
often been the main motive for developing renewable energy schemes. The entrepreneurial
spirit found among many of the population and Sweden’s cooperative tradition have helped
to create a favourable environment for developing renewable energy. By 1998, Swedish
citizens had invested about EUR 20 million in wind. Many of these investments are in
cooperatives: there are about 50 already. Farmers are becoming increasingly aware of the
financial opportunities, through land rentals or electricity sales, of investing in wind energy.
Vindkompaniet involved the local population in discussions at an early stage of the Holmbod
project development.
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Renewable energies: success stories
Annex 2: Study contributors
Aarniala, Marjatta
TEKES
Åfeldt, Sten
STEM (Sweden)
Baguenier, Henri
European Small Hydro Association
Beirao, Diogo
CCE (Portugal)
Bertarelli , Lara
IT Power (biofuels study)
Bosseboeuf, Didier
ADEME (France)
Broom, Lis
ECOTEC Research and Consulting Ltd.
Cameron, Murray
European PV Association
Chalmers, Ewan
Irish Energy Centre
Da Costa, Ferreira
PROET (Portugal)
Daugaard, Nils
ECD (Denmark)
Dubuisson, Xavier
Institut Wallon (Belgium)
Egger, Christianne
ESV (Austria)
Fock, Martin
Centre for Biomass Technology (Denmark)
Fraga, Juan
EUFORES
Garzon, Dina
SODEAN (Spain)
Grulois, Christophe
ERBE (Belgium)
Gutiérrez, Cristina
European Forum for Renewable Energy Sources (Spain)
Hackstock, Roger
EVA (Austria)
Hämmerle, Kurt
Energieinstitut Vorarlberg
Hemmelskamp, Jens
European Commission — Joint Research Centre — Institute of Prospective
Technological Studies
Jakelius, Stephan
STEM (Sweden)
Kellett, Paul
Irish Energy Centre
Kuebler, Knut
European Commission, Energy and Transport Directorate General
Lemming, J
Danish Energy Agency (Denmark)
Lorenzoni, Arturo
Bocconi University (Italy)
Mandrup, Klaus
Danish Energy Agency (Denmark)
Nurmi, Markku
Ministry of Environment (Finland)
Oliveira, Pedro
AMES — Agência Municipal de Energia de Sintra (Portugal)
O’Regan, Fionna
Irish Energy Centre
Rakos, Christian
EVA (Austria)
Roubanis, Nikos
Eurostat
Sanchez, Manuel
European Commission, Research Directorate General
Simader, Gunter
EVA (Austria)
Swens, Job
NOVEM (Netherlands)
Thorson, Ola
STEM (Sweden)
Ullerich, Dirk
European Commission, Energy and Transport Directorate General
Vainio, Matti
European Commission, Environment Directorate General
Volpi, Guilio
World Wide Fund, European Policy Office
Wagner, Andreas
German Wind Energy Association
Yordi, Beatriz
European Commission, Energy and Transport Directorate General
Zervos, Arthuros
European Renewable Energy Council
Annex 3
Annex 3: Study reviewers
Åfeldt, Sten
Swedish National Energy Administration (Sweden)
Bosch, Peter
European Environment Agency
Carritt, Tony
European Environment Agency
Egger, Christianne
Energy Agency, Upper Austria (Austria)
Fontana, Michele
European Environment Agency
Froste, Hedvig
Swedish Environment Protection Agency (Sweden)
Garzon, Dina
Sodean (Spain)
Geissler, Michael
Berlin Energy Agency (Germany)
Horrocks, Peter
European Commission, Environment Directorate General
Huntington, Jeff
European Environment Agency
Jol, Andre
Air Emissions Inventories Project Manager, European Environment Agency
Larsen, Jens H.
Copenhagen Environment and Energy Office (Denmark)
Person, Susann
Swedish National Energy Administration (Sweden)
Rosenstock, Mayfred
European Commission, Environment Directorate General
Sanchez, Manuel
European Commission, Directorate General Research
Säynätkari, Tapani
Finnish Environment Institute (Finland)
Singer, Stephan
Climate and Energy Unit Head, World Wide Fund
Smith, Ian
European Environment Agency
Stanners, David
European Environment Agency
Vos, Hans
European Environment Agency
Zapfel, Peter
European Commission, Environment Directorate General
Zervos, Arthuros
European Renewable Energy Council
93
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Renewable energies: success stories
Annex 4: Offshore wind
The market penetration of offshore wind energy has not been evaluated in this study because
the technology is only at an early stage of implementation and there are few truly offshore
plants in operation. Nevertheless, it is estimated that there is an exploitable potential for
offshore wind of more than 3 000 TWh/year (Hassan and Lloyd, 1995) and there is an
increasing level of activity in many Member States to exploit this resource.
Belgium, Denmark, Germany, Ireland, the Netherlands, Spain, Sweden and the UK are all at
different stages in the exploitation of their offshore wind resources. Blyth wind farm in the
UK and Middlegrunden near Copenhagen in Denmark were constructed during 2000.
Are there lessons to be learnt from previous experiences of renewable energy developments
onshore — and in particular from the case studies evaluated in the present study — that
could be relevant to the offshore situation?
Political: This emerging technology is still more expensive than most established land-based
renewable energy technologies, and requires some form of financial subsidy to bridge the
stage between early demonstration turbines to full-scale commercialisation. Offshore wind
farms are considerably larger (wind farms of up to 100 MW are envisaged) than most of their
onshore equivalents. The level of commitment from national governments to support
offshore wind energy development would therefore need to be strong and over a long period,
in order to provide a stable and encouraging environment for long-term investment from the
private sector.
Legislative: By and large, the success of onshore wind generation has been driven by the longterm stability and economic viability provided to the onshore generators by output support
mechanisms, in particular feed-in tariffs. However, the move towards an EU-wide
liberalisation of electricity markets makes the establishment of new feed-in or competitive
tendering arrangements for offshore wind more complex than during the 1990s. Competitive
electricity markets, and cross-border trading in electricity, are not compatible with national
feed-in arrangements in the long term. New power purchase guarantees and output support
mechanisms may therefore have to be established to ensure long-term stability and economic
viability for offshore wind. This could be a useful guiding principle in the establishment of
any new arrangements.
Financial: The extensive experience gained from the development of onshore wind
developments has increased the level of confidence of developers as they expand into the new
offshore market. This confidence is also seen in banking and financial institutions, which are
willing to invest in this emerging technology without significant levels of capital subsidy as
long as there are appropriate revenue forecasts available (through power purchase
arrangements).
Fiscal: As a non-fossil source of energy, electricity from offshore wind is eligible for
exemptions or rebates from energy or carbon taxes. As more and more Member States
implement environmental taxes, this will continue to improve the competitiveness of
renewable energy in comparison with fossil energy sources.
Administrative: Offshore wind installations open up new aspects of planning permits.
Offshore turbines interact with conservation, fishing, tourism and shipping interests. The
siting of the turbines would therefore have to be carefully considered. Active support from
local administrations will be important in this respect.
Technological development: Offshore wind turbines draw on technological capabilities from
both the onshore wind industry and the offshore installations industry (particularly from the
oil and gas industry). Much research and technological development is being carried out by
Annex 4
turbine developers, especially through a step-by-step approach to installations, with
considerable monitoring and evaluation taking place at all stages. Government financial
support often focuses on feasibility studies and other non-technical support. This partnership
approach between government and industry helps to ensure that the systems and approaches
being taken to develop this new technology are robust and will ultimately be technically and
financially successful.
Information, education and training: Public support for offshore wind developments is
critical if this technology is to be widely accepted. Most offshore developers have carried out
extensive public consultations and information campaigns to raise awareness and obtain
public support. The Copenhagen wind farm, for example, ensured public support not only
through consultation but also by enabling local people to purchase shares in the project
through a cooperative.
Offshore wind is projected to make an important contribution towards EU policy and targets
for renewable energy deployment in the next 5–10 years. Its progress is benefiting from the
experiences gained in overcoming barriers and in identifying potential success factors for
deploying renewable energy technologies (especially wind energy) on shore during the 1990s.
95
Glossary
Glossary
CHP
CO2
Eurostat
GW
GWh
ktoe
kWh
kWp
m3
mtoe
MW
MWp
NOx
PV
R&D
RD&D
SO2
VAT
Wp
Combined heat and power
Carbon dioxide
Statistical Office of the European Communities
Gigawatt — a unit of electrical power, equal to 1 000 000 000 Watts
Gigawatt hour — 1 GW operating for 1 hour
Thousand tonnes of oil equivalent
Kilowatt hours
Kilowatt peak
Cubic metre
Million tonnes of oil equivalent
Megawatt — a unit of electrical power, equal to 1 000 000 Watts
MW at peak power (photovoltaics functioning in optimal sunlight)
Nitrous oxides
Photovoltaics
Research and development
Research, development and demonstration
Sulphur dioxide
Value added tax
Watts at peak power (photovoltaics functioning in optimal sunlight)
Final energy consumption
Energy consumption by final user — i.e. which is not being
used for transformation into other forms of energy.
Gross inland energy consumption A measure of the energy inputs to the economy, calculated
by adding total domestic energy production plus energy
imports minus energy exports, plus net withdrawals from
existing stocks.
Gross electricity consumption
Domestic electricity production, plus imports, minus
exports
Electricity generation
Electricity production, i.e. total amount of electricity
produced. Note that at present there are only minimal
amounts of electricity from renewable sources which are
imported or exported. As a result, the terms gross
electricity consumption and electricity generation can be
considered to be equivalent for electricity from renewable
sources.
96
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