Renewable Energy Sources & Efficiency Regulatory Framework
The Serbian Wind Energy Association discusses the importance of changing consumer and investor behavior to promote energy efficiency and renewable generation. Emphasizing the role of markets in influencing decision-making and the need for more than just pricing signals to attract renewable investment.
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Presentation Transcript
RENEWABLE ENERGY SOURCES & ENERGY EFFICIENCY REGULATORY FRAMEFORTHE SUCCESSFUL SECTOR POLICY Serbian Wind Energy Association (SEWEA), Belgrade, 5 December 2011
INCREASEIN ENERGY EFFICIENCYAND RENEWABLE GENERATION = CHANGING BEHAVIOR Changing behavior of consumers -- so that they consume less heat and electricity by investing in energy-saving (e.g. appliances, home insulation, thermostats and timers) Changing behavior of investors -- so that they decide to build renewable generation instead of thermal generation, and so they decide to invest in Serbia instead of in another country Serbian Wind Energy Association (SEWEA), Belgrade, 5 December 2011
MARKETISTHE EASIEST MECHANISMTO CHANGE BEHAVIOR Markets allocate resources very efficiently if price signals are accurate and well understood by market participants Price signals must be stable, and believable, and projected far into the future to justify new investment by consumers and generators Government should influence prices so that they reflect social objectives and reflect externalities currently not in electricity prices (energy security, CO2 emissions, renewable targets) Electricity prices which are too low do not reflect externalities and send incorrect price signals to consumers and investors Serbian Wind Energy Association (SEWEA), Belgrade, 5 December 2011
TO ATTRACT RENEWABLE INVESTMENT, MORETHAN JUST PRICING SIGNALSARE REQUIRED A generator facing a market with a guaranteed price for renewable energy can calculate the rate of return he will earn, against which the risk must be measured Government can reduce risks for renewable generation (guaranteed long term power off-take after expiration of incentive tariff, changes of law protection, removal of transmission and balancing risks, payment in Euros rather than local currency, and importantly inflation risk), and by doing so reducing the electricity price necessary to attract investment The 'package' consisting of power price plus risk-mitigating measures must be competitive with other countries, or investments will flow to other countries Serbian Wind Energy Association (SEWEA), Belgrade, 5 December 2011
