Renewable Energy Incentives Research Articles

KELAYAKAN FINANSIAL NEAR ZERO ENERGY BUILDING DENGAN PERATURAN KEMENTERIAN ENERGI DAN SUMBER DAYA MINERAL NO. 49 TAHUN 2018 MENGENAI INSENTIF ENERGI TERBARUKAN

Industri konstruksi dan bangunan bertanggung jawab atas lebih dari 35% konsumsi energi di dunia dan menghasilkan hampir 40% emisi gas rumah kaca seperti CO2. Emisi CO2 berasal dari konsumsi energi bangunan dimana lebih dari 65% yang masih bersumber dari bahan bakar fosil. Near Zero-Energy Building (nZEB) adalah sistem bangunan yang memiliki efisiensi energi tinggi dan dapat menghasilkan listrik secara mandiri dari sumber energi terbarukan, sehingga mengurangi biaya operasional dari tagihan listrik tahunan secara signifikan di dalam umur pakainya. Pembangunan berkonsep ini akan menambah biaya konstruksi awal untuk penerapan desain hemat energi dan sistem pembangkit energi terbarukan pada bangunan. Kelayakan finansial bangunan dengan desain seperti ini diukur dengan metode analisis Life Cycle Cost yang juga memperhitungkan biaya operasional sepanjang umur pakainya. Insentif energi terbarukan merupakan faktor penting dalam analisis kelayakan finansial karena insentif ini secara langsung mengurangi biaya operasional (biaya listrik tahunan) bangunan. Kementerian Energi dan Sumber Daya Mineral (ESDM) telah menerbitkan peraturan baru mengenai besaran insentif yang diberikan kepada pemilik bangunan yang memasang pembangkit listrik dari sumber terbarukan. Perlu ada kajian mengenai dampak finansial dari diterbitkannya peraturan baru ini terhadap nilai finansial nZEB sebagai sebuah sistem bangunan utuh yang terintegrasi dengan pembangkit energi dari sumber terbarukan, terutama bangunan pemukiman padat. Tujuan dari penelitian ini adalah membandingkan kelayakan finansial nZEB yang menggunakan peraturan tahun 2013, dengan Peraturan Kementerian ESDM no. 49 tahun 2018, pada bangunan pemukiman padat berkonsep desain nZEB. Penelitian ini menemukan nilai kelayakan finansial konsep desain nZEB di bawah peraturan insentif tahun 2013 lebih besar daripada di bawah peraturan tahun 2018.

Anaerobic digestion industries progress throughout the world

Anaerobic digestion is a process where microorganisms degrade organic matter in the absence of oxygen to produce biogas, mainly composed of methane and carbon dioxide. Recent years have seen a strong development of anaerobic digestion units worldwide, especially in USA, Europe and China. Countries like China, Germany, USA, Italy, UK and France are seen leading in the biogas sector in the world due to long establishment, intensive research and government incentives for renewable energy as well as waste management solution option. Asian countries have also shown their interests in the biogas technology. With more proper research and studies on-going, Asia will see the growth of biogas sector in the next few coming years. Even though African countries are in their primary phase to develop this biogas technology and there are still more hurdles to overcome, there have been interests, development and implementation work to apply this technology for its potential renewable energy production as well as its waste management solution.

Promoting Renewable Energy in Jordan by Employing Economic Incentives

Renewable energy is the way forward in the medium to long-term future in Jordan. Renewable energy (RE) in Jordan has a very modest share not exceeding 0.5% of total installed capacity. This paper compares between the economics of conventional power and that of renewable power. The renewable power considered includes photovoltaic (PV), wind, and concentrated solar power (CSP). Results showed that the levelized cost is 11, 14, 20, and 21 ?/kWh for wind, CCGT, CSP, and PV, respectively. The Internal Rate of Return values (IRR), were 16.35%, 11.17%, 8.85%, and 6.28% for CCGT, wind, CSP and PV, respectively. The major outcome showed Wind power is faring well in the economic comparison with conventional power while CSP and PV are still not economically justified. Testing of the potential of two economic incentives for renewable energy was performed. The first incentive being a price premium for power purchase, illustrated a decisive change of feasibility but still the same ranking. Introducing a price premium of 15% alone led to the ranking of CCGT, Wind, CSP, and PV in priority order with both Wind and CSP feasible while PV not yet feasible. The second incentive pertaining to adding an increase of 5% to CCGT cost to cover for pollution control results in the same ranking order as before but with only Wind feasible. Finally combining both incentives results in a different ranking with Wind power coming before CCGT, then followed by CSP and PV. Moreover, in this case all RE power sources become feasible.

THE EFFECTS OF RENEWABLE ENERGY SOURCES ON THE STRUCTURE OF THE TURKISH ELECTRICITY MARKET

The structure of the electrical power system in Turkey has undergone rapid change and transitioned into a free market. With this development, the tendency to employ renewable energy sources (RES) has increased. In this study, both the Turkish electricity market and the renewable energy incentive structure, and the effects of RES on the electrical market have been investigated. A 10 buses power system with both traditional and renewable generator units has been considered. In this system, five different scenarios have been constructed and simulated using the PowerWorld program. Marginal prices, voltage amplitudes, voltage angles of buses and the total costs have been examined using optimal power flow (OPF). In particular, for scenarios where there was a load increase and a transmission line was disconnected, significant changes were observed in electricity prices, the voltage amplitude and the voltage angle. With the increase of RES in the electricity market, a price increase was observed in the initial stage. However, as the volume of RES gets larger, the rate of increase was observed to slow down and almost reach its previous state. Generator electricity costs have decreased and profits have increased even though retail prices have increased. The generators with increased profits have been observed to use RES. Keywords: Turkish Electricity Market, Renewable Energy Sources, Bus Marginal Price, Voltage Amplitude, Voltage Angle. JEL Classifications: Q40, Q41, L94, C61 DOI: https://doi.org/10.32479/ijeep.8896

A Blockchain-Enabled Secure Power Trading Mechanism for Smart Grid Employing Wireless Networks

The rapid growth of renewable energy has increased the requirements of the smart grid for communication and processing capabilities. As an effective solution to collect and manage information, the wireless network can improve the efficiency of renewable energy management. But due to the wireless data transmission risk and centralized power trading, the smart grid employing wireless networks cannot guarantee the security of the electricity market and the high consumption of renewable energy. Recently, as an emerging data-sharing technology, the blockchain has attracted widespread attention and is considered to have the potential to solve above problems. In this paper, we propose a blockchain-enabled secure power trading mechanism for the smart grid employing wireless networks. The blockchain is introduced to record power data collected by the wireless network, and the smart contract can make reasonable trading decisions based on this. The dual-chain structure composed of local energy trading blockchain and renewable energy trading blockchain improves the efficiency of power trading and renewable energy consumption. To strengthen the stability of renewable energy producers and expand their scale, we also design a blockchain-enabled renewable energy incentive mechanism. Finally, the modified Southern California Edison 56 bus test feeder model validated our mechanism.

FINANCING SUSTAINABLE ENERGY PROJECTS IN AGRICULTURE

Agriculture remains the source of livelihood in Africa. However, this sector is plagued by high level of wastage in food chain. In Kenya it is estimated that close to 50% of Kenya’s agricultural produce, be it crop, fish or even livestock is lost in post-harvest maneuvers. This is largely due to poor post-harvest processing and storage. These are energy intensive which compound the situation. Energy challenge is multi-faceted ranging from technology to financing and accessibility. This paper looks at energy financing and analyses the various options available for the agricultural sector in Kenya. The paper further compares financing approach in the developed countries and the lessons learnt and opportunities. The results of this study show that project finance is the preferred model of financing among REP financiers, while REP developers mainly prefer corporate finance. Based on the cost of implementation, project finance is mostly only a viable option for financing large-scale REPs, which as the results of this study show, delivers minimal benefits for sustainable economic development. This is mainly because large SEPs are mostly gridconnected. It is recommended that in developing countries, public institutions and legal systems should consider having the stability, ability, and reliability over the medium to long term to put in place and enforce laws and private sector regulation in general, as well as supportive incentives for renewable energy in particular.

Research on renewable energy incentive policy based on evolutionary game

In view of the current policy design, which is created to influence the growth of the renewable energy sector, the status quo of different subjects’ role orientation and behaviour mechanism is neglected. This paper constructs the evolutionary game model of the three parties in the renewable energy industry involved: government, enterprise and consumer. The results show that the initial stage of government incentive policies should increase subsidies to enterprises and increase price incentives for consumers. At the same time, enterprises must actively respond to the call of the state. With the further advancement of the policy, the government should reduce subsidies to enterprises appropriately, and urge enterprises to develop production technologies for renewable energy vigorously to reduce the operation of enterprises’ cost. The results can provide theoretical reference and realistic support for the government.

Power Market Equilibrium under the Joint FIP-RPS Renewable Energy Incentive Mechanism in China

In order to support the development of renewable energy, countries around the world have adopted certain renewable energy incentive mechanisms, including feed-in tariff (FIT) and renewable portfolio standard (RPS). Based on the official report concerning renewable energy consumption issued by the Chinese government in 2018, FIT is no longer an ideal renewable incentive mechanism for China. The increasing financial burden of renewable subsidies on the government has prompted a transition from FIT to a more market-based RPS mechanism. However, the abrupt transformation from FIT to RPS without any transitions might potentially cause problems, including a lack of incentives for market participants and a high market risk. Feed-in premium (FIP), which is a transformation based on FIT, can increase the flexibility of the mechanism and play an important role in the transitional period. However, to date, there has only been limited research work that has explored the effect of implementing FIP-RPS in the development of renewable energy in China. It is still not clear how this transition could be carried out smoothly. Therefore, this research was aimed to devise a joint FIP-RPS mechanism and further develop the optimal combination ratio of the two, so as to obtain a socially optimal mechanism design. The simulation results showed that, at different stages of renewable energy development, FIP and RPS should be implemented according to their distinct characteristics, and the joint FIP-RPS mechanism should be combined with different ratios. It could be indicated that the proposed joint FIP-RPS mechanism not only excels at promoting renewable energy, but is also capable of maintaining desirable market prices and social welfare in this transitional period, as compared to FIP and RPS implemented alone. In the future, a certain degree of FIP-RPS implementations to this type of energy transition would be one of the preferred methods that could be implemented to have a considerable influence on China’s national energy plan. This is because the combination of the two mechanisms not only reduces the financial burden of the government, but also plays an active role in the renewable energy market.

Decision-making method for evaluating solar desalination options: the case of Saudi Arabia

Purpose Solar as an energy source has a massive potential to reduce dependence on fossil fuels in Gulf Countries (GC). One attractive application of solar energy is solar-powered desalination, which is a viable method to produce fresh water. The most significant factor determining the potential deployment of this application is economics. Design/methodology/approach In this study, the classical economic analysis model has been modified to assess the penetration of solar technology to power desalination plants at different periods during the project lifetime. Furthermore, the environmental and financial values were combined to assess the incentive of powering desalination plants with solar energy in Saudi Arabia. Three systems of solar technologies accompanied with water desalination based on technical applicability were modeled and economically analyzed to understand the impact of various design and operation parameters. Findings This study shows that PV-RO is currently more competitive at both market and administrated prices in Saudi Arabia, followed by the MED-CSP system and finally CSP-RO system. CSP-RO system starts to generate positive surplus after 11 years, while the base case shows no positive surplus at all during the entire lifetime. Moreover, the same trend continues to hold with MED-CSP and PV-RO systems. The MED-CSP generates positive surplus after six years and PV-RO after five years only. On average, it takes eight years for a project running based on solar (CAPEX and OPEX) and desalination OPEX to generate positive cash surplus. Originality/value This paper discusses the debate about incentives for renewable energy in GC and the impact of coupling water production and solar generation. Given that there is no analytical framework built earlier, this paper provides an alternative methodology for policy analysis to understand the role of economies of scope to incentivize solar generation. In other words, the authors are investigating options to reduce the total cost of solar production as a result of increasing the number of different goods produced.

Does a combined strategy outperform independent policies? Impact of incentive policies on renewable power generation

Incentives for renewable energy based on feed-in-tariffs (FITs) and the renewable portfolio standard (RPS) have succeeded in reducing greenhouse gas (GHG) emissions from the power generation sector. Although numerous countries have adopted a strategy combining both approaches, few studies compare its performance with either the individual FITs or RPS approach. To evaluate the effects of these three policy instruments, this study takes market transactions into account, such as net transfers to the renewable and non-renewable sectors, RPS allocation, and renewable certificate/credit (RECs) exchange. It proposes central planning, bi-level regulation, and regulation under screening as the three market structure scenarios to construct its cases and includes social welfare in the incentive performance index. Further, this study extends to cases of asymmetric information by means of optimal control to reflect market reality for comparison. The numerical examples and counterfactual analyses reach the following conclusions. First, a combined incentive policy performs best when renewable power is in its early stage of development. Second, an integrated incentive policy may neutralize the drastic volatility of FITs or the RPS. Third, the RPS is a favorable approach when the levelized cost of renewable energy is lower than that of non-renewable, while FITs do well when the costs of renewable and non-renewable energy differ slightly. The key policy implication is that along with the reduction in renewable energy generation costs, an RPS and RECs exchange mechanism or combined strategy might be adopted for social welfare benefits, the benefit of the power plants or the TSOs, respectively.

The merit order effect of wind and river type hydroelectricity generation on Turkish electricity prices

The environmental concerns and dependency on gas imports push Turkish policy makers to find ways of increasing the share of renewable sources in electricity generation. Providing incentives for renewable energy in the form of feed-in-tariffs is one of the measures to achieve this goal. Basing on the data of Turkish electricity market operator, we quantified the magnitude of the price effects of wind and river type hydro generations on hourly average of day-ahead prices. We find that wind and river type hydro plants reduced the spot electricity prices during the period of 2012–2017, and despite these resources get the same incentives, their impacts on the spot prices and price volatility are different: this can be useful for a more comprehensive cost benefit analysis aimed at differentiating incentive schemes. The paper also discusses possible underlying reasons of these different impacts such as high seasonality of hydro generation and volatility of wind generation. Finally, we show that, assuming more than 75% of the price reductions were reflected into the consumer prices in Turkey, the net impact of wind and river type hydro generation on final consumer prices would be negative. This finding contributes to the discussions on renewable energy incentive mechanisms.

Adoption of sea water air conditioning (SWAC) in the Caribbean: Individual vs regional effects

Seawater air conditioning (SWAC) is a sustainable alternative for the Caribbean's energy challenges. Despite their vast potential, current sustainability plans and renewable energy incentives in the Caribbean exclude ocean technologies, and thus, the adoption of SWAC remains limited. A multidimensional scaling analysis was performed to classify the potential market for SWAC into three clusters, and to measure similarities among the Caribbean islands. Such similarities were used to complement a system dynamics model to include the effect of cross-country word-of-mouth on SWAC adoption rates. With the improved model, this study simulated policy incentives to SWAC promotion in five countries and compared the effectiveness of country-level versus regional-level incentives. Results suggest that, by 2030, renewable air conditioning use in the Caribbean could reach 36% if the countries adopt individual policies. This percentage could increase up to 60% if they adopt a regional policy. Results suggest that the regional policies are the most effective to impulse the adoption of SWAC, which in turn contributes to attaining sustainable energy targets. Financing institutions should distribute investment among the interested countries and allocate a higher percentage in the smallest states such as Barbados or Curacao, instead of supporting only big countries such as Jamaica.

Punctuating the equilibrium: A lens to understand energy and environmental policy changes

Punctuating the equilibrium: A lens to understand energy and environmental policy changes

Do renewable energy incentive policies improve the performance of energy firms? Evidence from OECD countries

AbstractNatural capital inventory approach to sustainability accounting advocates accountability system that keeps stock of natural capital intact. Substituting exhaustible energy resources with renewable energies (RE) is a particular example of the ‘substitutability’ condition for sustainability and a key principle of the natural capital theory. This paper investigates the effects ofREincentive policies, as facilitators of ‘substitutability’, on the financial performance of 420 energy firms inOECDcountries over 4 years (2013, 2014, 2015 and 2016). Findings reported using fixed effects panel‐data modelling reveal that mostREincentive policies deployed inOECDcountries stimulate improved accounting‐based measures of financial performance. In addition, some incentive policies that are long‐term in nature appear value relevant. Overall, the paper documents that substitutingREfor fossil fuels, incentivised throughREpolicies, stimulates improved financial performance of energy companies inOECDcountries. The significance of these results is evident in the empirical support they lend to the effectiveness ofREincentive policies, progress of global energy transition and the natural capital inventory theory. Furthermore, the results could be of benefit to policymakers, energy firms and investors.

Optimal Design for a Campus Microgrid Considering ESS Discharging Incentive and Financial Feasibility

For the purpose of increasing renewable energy penetration, Korean government and power utility have launched various incentive programs for renewable energy technologies. This paper proposes an optimal design for a campus microgrid at Seoul National University, South Korea, with the design objective is to maximize the project financial feasibility. The optimal design is obtained based on a techno-economic analysis which incorporates real market conditions. Significantly, this study considers various renewable energy incentives, particularly the incentive for energy storage systems (ESS) to discharge their energy during on-peak hours on weekdays, provided by Korea Electric Power Corporation. The major contribution of this study is to evaluate the impact of financial incentives on the optimal design, and their effectiveness in promoting higher renewable energy penetration. The results show that the optimal design produces a notable amount of energy savings with the help of incentives. Especially, the ESS incentive enhances the project financial feasibility with noticeably higher benefits. Furthermore, the results indicate that the ESS incentive determines the optimal microgrid design, with superior impact on ESS capacity and performance of economic dispatch strategies. Therefore, renewable energy incentives must be incorporated in the techno-economic analysis of a microgrid to archive an effective design.

From a breeze to the four winds: A panel analysis of the international diffusion of renewable energy incentive policies (2005–2015)

How do renewable energy policies (REPs) diffuse internationally? Are there differences between developed and developing countries? Which actors are diffusing these REPs? Also, what predominates when considering REP diffusion, national or international factors? The goal of this paper is to analyze the main vectors and actors that influence renewable energy policy adoption and identify differences between developed and developing countries. We access those questions by a mixed method analysis: quali and quantitatively. First, we discuss qualitatively the main external, intermediate and internal actors behind international wind energy policies diffusion. Then, we estimate a Poisson regression model using data for 194 countries, 102 of which are developing countries, from 2005 to 2015 testing the role of policy diffusion mechanisms on renewable energy policy diffusion. Among the main results, we found strong evidence of socialization and learning on international policy diffusion to developing countries, while domestic factors play a major role, especially with regard to market liberalization in developed countries. We also show some of the key actors related to REPs and we note that the causal mechanisms that lead to the adoption of REPs may differ among countries according to their level of economic development.

SolarView: Georgia Solar Adoption in Context

The local-national gap is a problem currently plaguing the adoption of emerging technologies targeted at resolving energy transition issues that are characterized by disparities in the adoption of innovations and policies on a local level in response to national policy implementation. These disparities reflect a complex system of technical, economic, social, political, and ecological factors linked to the perceptions held by communities and how they see energy development and national/global policy goals. This dataset is an attempt to bridge the local-national gap regarding solar PV adoption in the State of Georgia (U.S.) by aggregating variables from seven different publicly-available sources. The objective of this activity was to design a resource that would help researchers interested in the context underlying solar adoption on the local scale of governance (e.g., the county level). The SolarView database includes information necessary for informing policy-making activities such as solar installation information, a historical county zip code directory, county-level census data, housing value indexes, renewable energy incentive totals, PV rooftop suitability percentages, and utility rates. As this is a database from multiple sources, incomplete data entries are noted.

Country-level analysis of household fuel transitions

Abstract Solid fuel combustion remains a dominant energy source for household heating and cooking in less developed countries. As a result, almost three billion people are exposed to household air pollution, causing four million premature deaths annually, primarily among poor women and children. We analyze data from Demographic and Health Surveys in 69 countries to identify determinants of transition from solid to cleaner fuel. Estimates from a population-averaged linear model show that population density and size, rural population share, income inequality, and charcoal production are positively associated with countries’ solid fuel use, while GDP per capita, electricity and natural gas production have the opposite effect. Economic development, measured as GDP per capita, has the strongest link to solid fuel use: a standard deviation increase in per capita GDP above its mean reduces solid fuel use from 70% to 57% of households. Electricity production is another strong predictor: solid fuel use drops by 11% when electricity production increases by one standard deviation above the mean. In addition, in a fixed-effects linear model, population size has a positive association with solid fuel use, while increases in GDP per capita and the number of governments’ renewable energy incentives are associated with lower dependence on solid fuels.

Analyzing the Impact of Renewable Energy Incentives and Parameter Uncertainties on Financial Feasibility of a Campus Microgrid

The popularity of microgrids is increasing considerably because of their environmental and technical advantages. However, the major challenge in microgrid integration is its financial feasibility due to high capital costs. To address this obstacle, renewable energy incentive programs, which are the motivation of this study, have been proposed in many countries. This paper provides a comprehensive evaluation of the technical and financial feasibility of a campus microgrid based on a techno-economic analysis using the Microgrid Decision Support Tool, which was implemented to support decision-making in the context of microgrid project investment. A method for microgrid design aiming to maximize system profitability is presented. The optimal microgrid configuration is selected depending on financial indices of the project, which directly address the returns on an investment. Most importantly, this analysis captures all the benefits of financial incentives for microgrid projects in California, U.S., which presents a key difference between the California market and other markets. The impact of incentives and uncertain financial parameters on the project investment is verified by sensitivity analysis. The outcomes show that the optimal configuration generates significant electricity savings, and the incentives strongly determine the financial feasibility and the optimal design of a microgrid.

Real-time renewable energy incentive system for electric vehicles using prioritization and cryptocurrency

Significant increase in the installation and penetration of Renewable Energy Resources (RES) has raised intermittency and variability issues in the electric power grid. Solutions based on fast-response energy storage can be costly, especially when dealing with higher renewable energy penetration rate. The rising popularity of electric vehicles (EVs) also brings challenges to the system planning, dispatching and operation. Due to the random dynamic nature of electric vehicle charging and routing, electric vehicle load can be challenging to the power distribution operators and utilities. The bright side is that the load of EV charging is shiftable and can be leveraged to reduce the variability of renewable energy by consuming it locally. In this paper, we proposed a real-time system that incorporates the concepts of prioritization and cryptocurrency, named SMERCOIN, to incentivize electric vehicle users to collectively charge with a renewable energy-friendly schedule. The system implements a ranking scheme by giving charging priority to users with a better renewable energy usage history. By incorporating a blockchain-based cryptocurrency component, the system can incentivize user with monetary and non-monetary means in a flat-rate system. The effectiveness of the system mechanism has been verified by both numerical simulations and experiments. The system experiment has been implemented on campus of the University of California, Los Angeles (UCLA) for 15 months and the results show that the usage of solar energy has increased significantly.