On November 23, the International Energy Agency (IEA) released a book analyzing government policies supporting renewable energy.
Deploying Renewables 2011, is an update of a 2008 analysis, and focuses on 56 countries worldwide. At the book launch, Maria van der Hoeven, IEA Executive Director, said that “without an urgent and radical change of policy direction, the world will lock itself into an insecure, inefficient and high-carbon energy system.”
“Renewables already play a central role in fostering sustainability and energy security, and their significance will only grow in the coming decades,” she continued. “Against this backdrop, Deploying Renewables 2011 provides a major review of renewable energy markets and policies at this critical juncture.”
Renewables: A Viable Option
IEA Executive Director Maria van der Hoeven Photo Credit: parool.nl
The IEA sees this increased deployment as evidence that renewables “can deliver the intended policy benefits of improved energy security, greenhouse gas reductions and other environmental benefits, as well as economic development opportunities.”
The report backs the view that renewables are a viable option on a global scale. According to the report, both cost reductions and market expansion have played a key role in making renewable energies “cost-competitive in an increasingly broad range of circumstances, providing investment opportunities without the need for specific economic support.”
Thus, these sources of energy “should no longer be considered only as high–cost, immature options, but potentially as a valuable component of any secure and sustainable energy economy, providing energy at a low cost with high price stability.”
Policy Recommendations
The report emphasized that appropriate policies vary during the different stages of renewable energy deployment – inception, take-off and consolidation.
“The critical barriers which can deter or slow down deployment change as the market for a technology develops. Policy makers need to adjust their priorities as deployment grows.”
Speaking specifically to PV solar energy, the report made the following recommendations for controlling the cost of policy support for PV expansion:
To manage the policy costs associated with the rapid development of the solar PV market and avoid “PV bubbles”, governments need to take the following actions:
- Ensure that PV development and deployment are an integral part of…the comprehensive overall energy strategy.
- Take an ambitious approach to tariff reductions…solar PV has demonstrated a very steep learning curve. Governments need to sustain pressure on the PV industry to deliver such learning, and they need to programme ambitious tariff degression schedules to accompany cost reductions.
- Spread the burden of financing the technology’s learning curve. The current concentration of PV deployment in a handful of countries needs to be overcome. Once more countries engage in financing the technology’s learning curve, each country will face less of a burden.
- Avoid retroactive policy measures. Changing the economics of operating projects should be avoided, because this will increase the policy risk perception of investors and may drive up costs in the long term.
Read the executive summary of Deploying Renewables 2011 here.
