Energy Tariff Policies for Renewable Energy Development: Comparison between Selected European Countries and Sri Lanka

Abstract

This article is written within the European Project “THREE-Lanka” which has the aim of modernizing the higher education related to Renewable Energy (RE) in Sri Lanka. The paper presents the outcomes of analysing various incentive schemes to stimulate RE development. In Europe, there was substantial growth in RE installation through generous incentives in the first years. Then, to regulate this growth, in recent years, the auction system has been introduced to improve the competition among companies that install RE plants. In Sri Lanka, on the other hand, the main energy tariff policies focus on the spread of PhotoVoltaics (PV) through contributions based on the electricity fed into the grid. This paper provides an updated view of the evolution of the energy tariff policies in the relevant European countries with respect to Sri Lanka, covering some recent policy developments. Within the Sri Lankan framework, four case studies involving residential, commercial, and industrial users are outlined to suggest better mechanisms (in the case of not adequate current incentive tariff) for supporting the deployment of grid-connected PV systems in a wide power range. Such knowledge transfer in the THREE-Lanka project will demonstrate the enormous potential RE capacity in a developing country, still depending on fossil fuels but willing to follow the path towards sustainability.