factors affecting the debate on renewables v. ccs and nuclear volkmar lauber, univ. of salzburg...
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Factors affecting the debate on renewables v. CCS and nuclear
Volkmar Lauber, Univ. of Salzburg„Pushing the Limits of Windpower“
Univ. of St. Andrews, 6 May 2009
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„Pushing the limits of windpower“ debate will be shaped by institutions, their impact and experience
with these
• Government institutions (central, local) and paradigms• Electricity incumbents and their relations to
government• Did legislation specific to RES-E sector produce and
mobilise new stakeholders?• Ecoomic results of support legislation? • How all this will affect deliberations and choices
COMPARISON WITH SITUATION IN GERMANY
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Overview
• Structure of government• Regulatory state paradigm v. political policies• Incumbents undisturbed by political goals?• Role of local utilities• Local political control over utilities?• Support policy and the mobilisation of new RES
entrepreneurs and other actors• Experiences with primary goals of support policy
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Structure of government
UK• Highly centralised (exc. Scotland)• No policy experiments at local level?Germany• Experiments at various levels in 1990s, incl.
development of the „cost covering feed in tariff“ (Federal law + local government + local utilities) which became model for EEG FIT
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Regulatory state paradigm v. political policies
UK• Economic activity should be driven by markets,
government assures market performance• Government must not impose qualitative goals, cannot
assure energy transition to renewable energy
Germany• Other variant of neoliberalism• RES-E not subject to Dept of Econ Aff, somewhat exempt
from primacy of short-term economic goals
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Incumbents undisturbed by political goals
UK RO mostly implemented by incumbentsRO relies mostly on positive inducement, there is no effective penalty
for not reaching the goals of the RO (the penalty mechanism actually increases the value of certificates)
Incumbents not as close to Econ Aff Min as in Germany?
GermanyBig utilities are similarly reluctant about RES-E but subject to political
regulation - purchasing obligation and FIT. They were only permitted to become active as RES-E generators under EEG 2000 in order to involve them in offshore wind – not very successfully so far.
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Role of local utilitiesUK• Not existent?Germany• good place for experimentation with renewables since
1980s, for „political“ reasons (i.e. other than short term economic rationality)
• Need political support for experimentation with RES (political mandate)
• collectively, economic and political weight (e.g. offshore)• Important in 1990s, several introduced „full cost feed in
tariff“ -> „Aachen model“ (-> EEG 2000), important for legitimacy of new FIT
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Local political control of local utilities
UK• not existent?Germany• Traditionally opposed to privileges for centralised
generation (since 1935)• Political support for RES-E by municipalities early
on, since 1980s• Several municipalities charged their local utilities to
support RES-E development (e.g. „Aachen model“)
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Did RES-E legislation produce new entrepreneurs and other stakeholders?
UK• Largely restricted to a few reluctant incumbents and
project developers and their personnelGermany• Tens of thousands of wind farm owners • Hundreds of thousands of solar PV owners• Several hundred thousands employed in RES-E
equipment industry• Several thousand new firms, many big exporters
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…new entrepreneurs etc.
• These groups have their own associations, their own media
• They have substantial access to wider media, influence on business associations (VDMA,…) labour unions (metalworkers, services), farmer associations, churches)
• They have access to political parties, government, important state institutions (BMU, KfW, dena=grid agency)
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Experience with support legislation
UK• Profitable for a few incumbents, developers• Economically highly inefficient:
-profits several times as high as in Germany -incumbents get windfall profits for non-innovative technology, neglect new tech., big price gap to „brown el.“
• No perspective of falling ROC prices any time soon• A new FIT at 15p for small wind not competitive either• Lagging development (two thirds target fulfilment)Germany• Windpower no longer expensive – net benefits• On windy days, reduces prices at power exchange
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How will wind/RES-E come out in conflict with CCS and new nuclear
UKGovernment structure and
paradigm problem for RES-EFew unambiguous RES-E
entrepreneurs, stakeholdersPoor experience with support
system for windpowerThis operates in favour of
privileging CCS and new nuclear
GermanyMore favourable situation for
RES-E hereMany RES-E entrepreneurs and
stakeholdersVery positive experience, is
starting to pay dividends RES-E has good cards in such
discussions though outcome is uncertain