REFIT and RPS: options for a harmonised Community framework

Abstract

Discussions of the two main support schemes for RES-E—renewable energy feed-in tariffs (REFIT) and renewable portfolio standards with tradable green certificates (RPS/TGC) usually take an either–or approach. This is fuelled in part by European Commission plans to propose a Community framework for harmonisation of support schemes by 2005, widely expected to permit only RPS/TGC schemes. But conditions have changed since 2001. In fact, the two systems serve different purposes and cannot be measured against a common efficiency standard. Based on evidence from Britain, Germany and the United States, the article argues that RPS schemes purport to develop a set percentage of RES-E consumption at least cost and thus restrict geographical distribution, limit technological diversity, contribute little to the early phases of RES-E technology development and often lead to a reliance on foreign equipment producers. REFIT schemes promote RES-E technology development and equipment industries even at early stages and across a broad technological and geographical spectrum. To use harmonisation to eliminate all but RPS systems is to ignore a key requirement of a rapid transition to renewable energy. The coexistence of state-of-the-art models of both schemes is likely to be more helpful.