Assessing the performance of renewable electricity support instruments

Abstract

The performance of feed-in tariffs and tradable certificates is assessed on criteria of efficacy, efficiency, equity and institutional feasibility. In the early stage of transition to an energy system based entirely on renewable energy supplies, renewable electricity can only thrive if support takes into account the specific technical, economic and political problems which result from embedding this electricity in conventional power systems whose technology, organizational structure, environmental responsibility and general mission differ profoundly from the emerging, renewable-based system. Support schemes need to capture the diversity of power supplies, the variable nature of some renewable supplies, and their different attributes for the purposes of public policy. They must take into account the variety of generators – including small, decentralized generation – emerging in a renewable-based system, and the new relationships between generators and customers. Renewable energy policies need a clear point of reference: because the incumbent power systems are not sustainable they must adapt to the requirements of the renewable ones, not the other way round. Incumbent systems carry the responsibility of paying the transition, something that corresponds best with the polluter pays principle.