Kenya Coconut Production Presentation by Dr. Lalith Perera
Renewable Energy Policy Overview
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2. Designed to target a specific market, scale, or project type (e.g. small residential, medium commercial, or large utility)
3. Adaptable in order to adjust to market conditions and stakeholder needs/desires.
4. Operating within a supportive policy and cultural structure that has a long-term interest in renewables (such as renewable portfolio standards).
5. Implemented in combination with other renewable-friendly policies (such as incentives to cover up-front costs, technology-specific pricing, renewable energy credits (RECs), etc.)
6. Effective reevaluation and management of trade-offs for stakeholders and local economies.Renewable Energy Certificates<br />Renewable Energy Certificates (RECs) are awarded to a producer of renewable energy and can be traded for a profit, much like carbon credits, to other parties who would like to make an environmental claim. Certificates are measured in increments of one Megawatt of renewable electricity produced, and can only be traded once to avoid double-counting. Non-renewable generators can purchase RECs to meet portfolio standard requirements, creating a new cost (arguably to account for externalities), disincentivizing them from choosing polluting sources for energy generation (EPA 2008). Especially in states or regions with renewable portfolio standards, RECs can be an effective policy approach to stimulating new renewable energy projects and generation, and getting utilities on board with legislation, as they benefit from the ability to purchase RECs to meet emissions or renewable mix standards (NREL 2009).<br />Examples and Lessons Learned<br />In formulating policy recommendations for the US it can be helpful to learn from examples from abroad and within the US that have been successful or unsuccessful alike. In 2001, the EU passed Directive 2001/77/EC, creating renewable mix targets of 21% and enabling a feed-in tariff system that laid the groundwork for member countries to increase the size and participation of their renewable industries (EEG 2008). Soon after in 2004, Germany and Spain formed the International Feed-In Cooperation, in order to exchange design ideas and experiences. Germany also incorporated lessons learned from 14 years of a FiT policy that saw little growth in solar or widespread renewable utilization. According to The Federal Ministry for the Environment (2009), by amending the price structures in 2004 to reflect technology-specific energy production costs (between $.37 and $.64) which decline at an annual rate of 8-10%, and setting an ambitious target of 30% of energy consumption from renewables by 2020, it saw an explosion of solar and renewable power growth, surging over 105% in 2008 and 2009 to 7.8 gigawatts, and creating approximately 140,000 new jobs in 5 years, despite the recession (FMftE, 2009). <br />Spain’s Royal Decree 661/2007 in 2007 created a FiT system with similar payouts as Germany (from $.35 to $.68), but with nearly double the sun exposure as Germany, investors were receiving windfall profits and a runaway industry bubble began. 2,661 megawatts of renewable energy (mostly solar) was installed in 2008, a 400% increase over the year before. To tackle fears of boom-and-bust cycles and a looming recession, Spain decided to cut tariffs by 25%, introduce a 500MW annual cap on its renewable program, and introduce a complicated permitting and application process to discourage inexperienced project managers. This resulted in the addition of only 5 megawatts of new renewable generation capacity in the first 8 months of 2009 (LABC 2009).<br />Closer to home Gainesville, Florida implemented a FiT policy that paid out $.26 or $.32 per kWh, depending on the installation type. Its 4 megawatt annual cap was reached in a week, and within 5 months had enough applications to fill its cap until 2016. Vermont also introduced a program in 2009 that paid a $.30 tariff and intended to offer a 12.13% rate of return to investors. The program fully subscribed its 50 megawatt cap on the first day. It is apparent from these examples that there is a heavy demand for renewables in the US, when the proper policies are in place (LABC 2009).<br />Conclusion and Implications for US Policy<br />US policy has made attempts to encourage renewable energy in the past, but often critics assert that regulations (such as the US Energy Policy Act of 2005, US Energy Independence and Security Act of 2007, and American Recovery and Reinvestment Act of 2009) have diverted relatively small amounts of resources and policy assistance towards renewables while offering large subsidies to fossil fuel industries (Revkin 2010). Based on the lessons learned from our previous analysis and examples, we can make recommendations to the various actors in the US policy community to make informed decisions about how to implement effective policies, as well as assess the appropriacy of responsibilities of each policy actor (DOE 2009). These recommendations are summarized in the following policy community map (figure 3). However, as can be seen from examples of citizen blockage of projects (Drash 2010) or non-participation, economic considerations and engaging stakeholders and civil society in general is absolutely essential for the successful implementation of any policy.<br /> <br />Figure 3 Source: Author et al. (2010)<br />Works Cited<br />American Council on Renewable Energy. (2009). An Overview of the U.S. Renewable Energy Field in 2009. Retrieved May 10, 2010 from: http://www.acore.org/files/re_overview2009.pdf<br />Center for Sustainable Systems, University of Michigan. 2009. “U.S. Renewable Energy Factsheet.” Pub No. CSS03-12. Retrieved on May 9, 2010 from: http://css.snre.umich.edu/css_doc/CSS03-12.pdf<br />Clement, David . Lehman, Matthew. Hamrin, Jan. Wiser,Ryan. (2005) Center for Resource Solutions. International Tax Incentives for Renewable Energy: Lessons for Public Policy Retrieved May 10, 2010 from: http://www.resource-solutions.org/lib/librarypdfs/IntPolicy-Renewable_Tax_Incentives.pdf<br />Drash, Wayne. (2010). Nation’s First Offshore Windfarm Approved for Nantucket Sound. CNN April 28, 2010 8:13 p.m. EDT. Retrieved on May 10, 2010 from: http://www.cnn.com/2010/TECH/04/28/cape.cod.wind.farm/index.html<br />Environmental Protection Agency. (2008). Renewable Energy Certificates. Retrieved May 9, 2010 from: http://www.epa.gov/grnpower/documents/gpp_basics-recs.pdf<br />Environmental Law Institute. (2009). U.S. Tax Breaks Subsidize Foreign Oil Production. Washington, DC. Retrieved May 10, 2010 from: http://www.eli.org/pressdetail.cfm?ID=205<br />Federal Ministry for the Environment, Nature Conservation and Nuclear Safety. Retrieved on May 10, 2010 from: http://www.bmu.de/english/renewable_energy/general_information/doc/4306.php<br />Klein, Arne Pfluger, Benjamin Held, Anne Ragwitz, Mario Resch, Gustav Faber, Thomas. (2008). Evaluation of different feed-in tariff design options – Best practice paper for the International Feed-In Cooperation. Energy Economics Group. Retrieved May 9, 2010 from: http://www.feed-in-cooperation.org/wDefault_7/content/research/research.php<br />Lorenz, Peter. Pinner, Dickon. Seitz, Thomas. (2008). The Economics of Solar Power. McKinsey & Company. Retrieved May 9, 2010 from: http://www.mckinsey.com/clientservice/ccsi/pdf/economics_of_solar.pdf<br />Los Angeles Business Council. (2009). Designing an Effective Feed-In Tariff for Greater Los Angeles. UCLA Luskin Center, School of Public Affairs. Retrieved May 9, 2010 from: http://labusinesscouncil.org/online_documents/2010/Designing-an-Effective-Feed-in-Tariff-for-Greater-Los-Angeles-040110.pdf<br />National Renewable Energy Laboratory. (2002). The Effects of Net Metering on the Use of Small-Scale Wind Systems in the United States. Retrieved May 10, 2010 from: http://www.nrel.gov/docs/fy03osti/32471.pdf<br />Revkin, Andrew C. (2010). America’s Energy Crossroads. New York Times, May 5, 2010, Retrieved May 10, 2010 from: http://dotearth.blogs.nytimes.com/2010/05/05/americas-energy-crossroads/?hp<br />Runci, Paul. (2005). Renewable Energy Policy in Germany: An Overview and Assessment. Pacific Northwest National Laboratory Technical Lab Report PNWD-3526. Retrieved May 10, 2010 from: http://www.globalchange.umd.edu/energytrends/germany/1/<br />The Solar Foundation. (2010). US Dept. of Energy. Retrieved May 10, 2010 from: http://www.thesolarfoundation.org/sites/thesolarfoundation.org/files/Hemmeline_3-3-10_Solar%20Foundation%20webinar.pdf<br />US Dept. of Energy (2009) Solar Powering Your Community, A Guide For Local Governments. Retrieved May 10, 2010 from: http://www.solaramericacities.energy.gov/resources<br />