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Factors affecting the debate on renewables v. CCS and nuclear

Comprehensive comparison of renewable energy policies in UK and Germany, exploring impact of government structures, support legislation, and stakeholder mobilization. Analyze factors influencing debate between renewables, CCS, and nuclear energy.

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Factors affecting the debate on renewables v. CCS and nuclear

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  1. Factorsaffectingthedebate on renewables v. CCS andnuclear Volkmar Lauber, Univ. of Salzburg „Pushingthe Limits of Windpower“ Univ. of St. Andrews, 6 May 2009

  2. „Pushingthelimitsof windpower“ debate will beshapedbyinstitutions, theirimpactandexperiencewiththese • Governmentinstitutions (central, local) andparadigms • Electricityincumbentsandtheirrelationstogovernment • Didlegislationspecificto RES-E sectorproduceandmobilisenewstakeholders? • Ecoomicresultsofsupportlegislation? • How all this will affectdeliberationsandchoices COMPARISON WITH SITUATION IN GERMANY

  3. Overview • Structureofgovernment • Regulatorystateparadigm v. politicalpolicies • Incumbentsundisturbedbypoliticalgoals? • Roleoflocal utilities • Localpoliticalcontrolover utilities? • Support policyandthemobilisationofnew RES entrepreneursandotheractors • Experienceswithprimarygoalsofsupportpolicy

  4. Structureofgovernment UK • Highlycentralised (exc. Scotland) • Nopolicyexperimentsatlocallevel? Germany • Experiments atvariouslevels in 1990s, incl. developmentofthe „costcoveringfeed in tariff“ (Federal law + localgovernment + local utilities) whichbecame model for EEG FIT

  5. Regulatorystateparadigmv. politicalpolicies UK • Economicactivityshouldbedrivenbymarkets, governmentassuresmarketperformance • Government must not impose qualitative goals, cannotassureenergytransitiontorenewableenergy Germany • Other variant ofneoliberalism • RES-E not subjecttoDeptofEcon Aff, somewhatexemptfromprimacyofshort-termeconomicgoals

  6. Incumbentsundisturbedbypoliticalgoals UK RO mostlyimplementedbyincumbents RO reliesmostly on positive inducement, thereisnoeffectivepenaltyfor not reachingthegoalsofthe RO (thepenaltymechanismactuallyincreasesthevalueofcertificates) Incumbents not asclosetoEcon Aff Min as in Germany? Germany Big utilities aresimilarlyreluctantabout RES-E but subjecttopoliticalregulation - purchasingobligationand FIT. Theywereonlypermittedtobecomeactiveas RES-E generatorsunder EEG 2000 in order toinvolvethem in offshore wind – not verysuccessfully so far.

  7. Role of local utilities UK • Not existent? Germany • goodplaceforexperimentationwithrenewablessince 1980s, for „political“ reasons (i.e. otherthanshorttermeconomicrationality) • Need politicalsupportforexperimentationwith RES (politicalmandate) • collectively, economicandpoliticalweight (e.g. offshore) • Important in 1990s, severalintroduced „fullcostfeed in tariff“ -> „Aachen model“ (-> EEG 2000), importantforlegitimacyofnew FIT

  8. Localpoliticalcontroloflocal utilities UK • not existent? Germany • Traditionallyopposedtoprivilegesforcentralisedgeneration (since 1935) • Political supportfor RES-E bymunicipalitiesearly on, since 1980s • Severalmunicipalitieschargedtheirlocal utilities tosupport RES-E development (e.g. „Aachen model“)

  9. Did RES-E legislationproducenewentrepreneursandotherstakeholders? UK • Largelyrestrictedto a fewreluctantincumbentsandprojectdevelopersandtheirpersonnel Germany • Tensofthousandsof wind farmowners • Hundredsofthousandsof solar PV owners • Severalhundredthousandsemployed in RES-E equipmentindustry • Severalthousandnewfirms, manybigexporters

  10. …newentrepreneurs etc. • These groupshavetheirownassociations, theirownmedia • Theyhave substantial accessto wider media, influence on businessassociations (VDMA,…) labourunions (metalworkers, services), farmerassociations, churches) • Theyhaveaccesstopoliticalparties, government, importantstateinstitutions (BMU, KfW, dena=gridagency)

  11. Experience withsupportlegislation UK • Profitable for a fewincumbents, developers • Economicallyhighlyinefficient: -profits severaltimesashighas in Germany -incumbentsgetwindfallprofitsfor non-innovative technology, neglectnewtech., bigpricegapto „brownel.“ • Noperspectiveoffalling ROC pricesany time soon • A new FIT at 15p forsmall wind not competitiveeither • Laggingdevelopment (twothirdstargetfulfilment) Germany • Windpower nolonger expensive – netbenefits • On windydays, reducespricesat power exchange

  12. How will wind/RES-E come out in conflictwith CCS andnewnuclear UK Germany More favourablesituationfor RES-E here Many RES-E entrepreneursandstakeholders Very positive experience, isstartingtopaydividends RES-E hasgoodcards in such discussionsthoughoutcomeisuncertain Governmentstructureandparadigmproblemfor RES-E Fewunambiguous RES-E entrepreneurs, stakeholders Poor experiencewithsupportsystemfor windpower Thisoperates in favourofprivileging CCS andnewnuclear

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