European Union’s Directive to Support the Growth of Renewable Energy Sources in the Member States
The EU directive on renewable energy has set a target for each member state to increase its renewable energy share to 20% of gross final energy consumption by 2020. The member countries can choose a mix of renewables to achieve the overall target.
It lists the share of renewables in the gross final consumption of energy for each country, as of 2011. In addition, it provides national binding targets for 2020 for each country, as established under EU Directive 28/2009/EC. The table also lists National Renewable Energy Action Plan (NREAP) targets, as submitted by the EU member countries. NREAP provides a detailed path of how each EU member state expects to achieve its legally binding 2020 renewable energy targets. Many of the member states expect to exceed their targets, while others are expected to use the Directive's co-operation mechanisms to reach their 2020 target through the development of renewable energy in another member state or a third-party country.
European Renewable Energy Technologies Developed with the Support of Government Policies
Government policy structure and growth measures for renewables play an important role in renewable energy development. Renewable support schemes such as Feed-in Tariffs (FiT), quota obligations, capital grants, and subsidies have been instrumental in promoting the growth of the renewable energy industry in various European countries.
Additionally, governments in certain countries provide sector-specific support schemes such as premium tariffs and technology-specific funds, in order to promote key renewable technologies.
Of the various support mechanisms in Europe, FiTs have emerged as a particularly effective way of promoting the renewable industry. The technologies that have benefited most from these tariffs are wind and solar power. FiTs are being used to promote renewable energy in countries such as Germany, France, Italy, the UK, Spain, Austria, the Netherlands and Turkey,
The governments of some European countries are utilizing both quota obligations and FiTs to develop the renewable energy sector. Italy and the UK are two such countries.
Other than FiTs and quota obligations, other measures such as premium tariffs, tax incentives, investment support, net metering, and green certificates are also being used by various European countries to drive the growth of the renewable industry. On January 1, 2012, Norway and Sweden become the first countries in the world to establish a common green certificate program. The system will lead to 26.4 Terawatt hours (TWh) of renewable electricity generation from new renewable energy projects by 2020. The two countries will each provide financing for 13.2 TWh of renewable electricity generation.
Government Incentives Supported Drastic Growth in Italy Solar PV Market
Policy support from the Italian government has been a major driver of the country’s solar PV market, and has resulted in rapid growth in the number of solar PV installations. The government has taken the lead in ensuring that incentives are properly formulated to keep costs low, while regulatory processes have been made simpler and less bureaucratic. Italy has had high electricity prices and this has resulted in a smaller premium being paid for solar PV. The introduction of Conta Energia (premium tariffs) programs for solar PV has brought rapid growth to the Italian PV market. The number of solar PV installations in Italy started to grow from the time FiTs were first introduced. However, the program has reached its funding limit and is currently not providing FiTs to newly installed solar PV farms.
Suspension of Incentives to Solar PV industry will Impact the Future Capacity Additions
The Solar PV power market in Spain has grown from 4 MW of cumulative installed capacity in 2001 to 4.7 GW by the year end 2013. The strong policy support from the government in terms of feed-in-tariffs (FITs) has enabled the growth of the solar PV market in the country. The Spanish solar PV market has grown at a dramatic pace with the cumulative installed capacity escalating at a CAGR of over 300% during the period 2005-2008. The Spanish solar PV market added record number of installations in 2008. The remarkable growth observed by the Spanish solar PV Market in the year 2008 resulted in higher government spending for incentives awarded to the solar PV power producers. The increase in fiscal deficit due to incentives made the government in Spain to suspend the tariffs for solar PV in 2013. The impact of debt crisis and lack of supportive incentives for PV is expected to affect the growth of the PV installations during 2014–2025.
Feed-in Tariff is a major Driver of German Renewable Energy Market
Policy support from the German government has been a major driver of the country’s solar Photovoltaic (PV) market, and has resulted in rapid growth in the number of solar PV installations there. The key driving factor for increases in installations is the Renewable Energy Act (Erneuerbare-Energien-Gesetz, EEG), which was amended in 2004, 2009, 2010, 2012 and 2013. In addition to the EEG, the growth of the German PV market can be attributed to the high level of capital subsidies provided by the German government.
UK focusing on Renewable Energy Sources to Reduce Carbon Emissions
The UK has recognized the importance of developing the renewable sector in order to reduce carbon emissions and respond to the problem of depleting fossil fuel reserves. The UK aims to cut its emissions by 34% by 2020 and 80% by 2050 compared with 1990 levels. Additionally, as part of its EU obligations, it has a target share of 15% of renewables in the gross final consumption of energy in 2020. In order to achieve these targets, the government has started promoting renewables through a significant amount of financial support in the form of subsidies, active R&D, government-sponsored loans, and tax allowances.
At regional level, governments have announced separate targets for the development of renewable energy. The Scottish government has announced that 100% of its power supply will be produced from renewable energy sources by 2020. In Northern Ireland, targets have been set for the procurement of 40% of power supply and 10% of heat from renewable sources by 2020. The Welsh government estimates that twice the amount of power consumed in Wales can be procured from renewable sources by 2025.
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