Regional overview lucas

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Regional overview lucas

  1. 1. Economical, Technological and Environmental Impact Assessment of National Regulations and Incentives for Renewable Energy and Energy Efficiency A project financed by the Ministry of Foreign Affairs of Denmark A regional Review Nigel LucasPage 1 RCREEE Regional Renewable Energy Conference Thursday, February 4, 2010, Kempinski Hotel, Amman, Jordan
  2. 2. Economical, Technological and Environmental Impact Assessment of National Regulations and Incentives for Renewable Energy and Energy Efficiency A project financed by the Ministry of Foreign Affairs of Denmark Aim of presentation • To review the importance of energy efficiency and renewable energy in the EU- Mediterranean partnership • To examine the policy content in EU and Mediterranean countries to determine to what extent it matches the needsPage 2 RCREEE Regional Renewable Energy Conference Thursday, February 4, 2010, Kempinski Hotel, Amman, Jordan
  3. 3. Economical, Technological and Environmental Impact Assessment of National Regulations and Incentives for Renewable Energy and Energy Efficiency A project financed by the Ministry of Foreign Affairs of Denmark Scope •Main drivers of the future for EU-MEDA partnership •The importance of energy •The key critical policy issues (case studies) •The policy offer from EU and the region •RecommendationsPage 3 RCREEE Regional Renewable Energy Conference Thursday, February 4, 2010, Kempinski Hotel, Amman, Jordan
  4. 4. Economical, Technological and Environmental Impact Assessment of National Regulations and Incentives for Renewable Energy and Energy Efficiency A project financed by the Ministry of Foreign Affairs of Denmark Drivers •There are many important drivers of the future on which we must take a view if we are to achieve some degree of foresight. The set includes: –Geopolitics and governance (including conflicts) –Cultural and religious changes –Education, science, research and development –Demographic change and movement of people –Macroeconomic growth –Access to resources (energy, water, clean environment) •The most important for us are the last fourPage 4 RCREEE Regional Renewable Energy Conference Thursday, February 4, 2010, Kempinski Hotel, Amman, Jordan
  5. 5. Economical, Technological and Environmental Impact Assessment of National Regulations and Incentives for Renewable Energy and Energy Efficiency A project financed by the Ministry of Foreign Affairs of Denmark Energy •Declining access to indigenous fossil-fuels •Increased imports and vulnerability •Inadequate attention to energy efficiency leading to inefficient and non-competitive capital stock •Large renewable resources at high cost •Increasing (but small) impact on climate change •Misallocation of resources from North to South •Poorly managed system – inefficient practices and poor price signalsPage 5 RCREEE Regional Renewable Energy Conference Thursday, February 4, 2010, Kempinski Hotel, Amman, Jordan
  6. 6. Economical, Technological and Environmental Impact Assessment of National Regulations and Incentives for Renewable Energy and Energy Efficiency A project financed by the Ministry of Foreign Affairs of Denmark Water •Ambiguity of rights/ownership •Low efficiency of use •Contradictions between politics and market •Contradiction between political and physical boundaries •Proximity to limits of exploitation (resource and quality) •Erosion of old cultural habits of conservation •Need for effective common management of basins and for regional, international managementPage 6 RCREEE Regional Renewable Energy Conference Thursday, February 4, 2010, Kempinski Hotel, Amman, Jordan
  7. 7. Economical, Technological and Environmental Impact Assessment of National Regulations and Incentives for Renewable Energy and Energy Efficiency A project financed by the Ministry of Foreign Affairs of Denmark Demography/MacroEconomy •Increasing numbers of people of working age – demands for education, jobs, resources – impact on migration •Unmet expectations and social unrest •Increase in the population above 65 – impacts on state finances •Insufficient economic growth and innovation •The attraction of non-democratic models of industrialisation •Increase in GDP largely offset by population increases – convergence not achieved •Divergence of urbanised littoral and impoverished hinterland – population pressure on resourcesPage 7 RCREEE Regional Renewable Energy Conference Thursday, February 4, 2010, Kempinski Hotel, Amman, Jordan
  8. 8. Economical, Technological and Environmental Impact Assessment of National Regulations and Incentives for Renewable Energy and Energy Efficiency A project financed by the Ministry of Foreign Affairs of Denmark Energy in EU Mediterranean partnership •Energy policy: Potential for EU to improve diversity of supply, reduce GHG emissions, meet renewable targets. For Med it offers new export market •Demography: Complementary demographics; job creation in renewable energy, impacts on migration •Water: desalination by renewable energy offers prospects to extend access •MacroEconomy and innovation: Med has potential to be a world leader in renewable energy technologies, water management, arid zone agriculture •Rural development: renewable energy can restrict urbanisation and reduce pressure on biomass resourcesPage 8 RCREEE Regional Renewable Energy Conference Thursday, February 4, 2010, Kempinski Hotel, Amman, Jordan
  9. 9. Economical, Technological and Environmental Impact Assessment of National Regulations and Incentives for Renewable Energy and Energy Efficiency A project financed by the Ministry of Foreign Affairs of Denmark The case studies •TOR for our study require: –Methodologies for evidence-based RE&EE policies and for theory based evaluation –Methodology for economic evaluation of energy policy instruments –Proposals for how the economic value GHG reductions can integrated into the economic-cost- benefit analysis •We have made such recommendations and integrated them into a range of case studiesPage 9 RCREEE Regional Renewable Energy Conference Thursday, February 4, 2010, Kempinski Hotel, Amman, Jordan
  10. 10. Economical, Technological and Environmental Impact Assessment of National Regulations and Incentives for Renewable Energy and Energy Efficiency A project financed by the Ministry of Foreign Affairs of Denmark The list of case studies Energy Efficiency •Efficiency Obligations on power companies (Egypt) •Energy Efficiency Fund (Jordan, Palestine) •Labelling (Syria) •Efficient lighting in the CDM (Lebanon, Yemen) •Energy Audits (Tunisia) Renewable Energy •Support instruments for wind with gas as alternative (Egypt, Libya) •Support instruments for wind with coal as alternative (Morocco) •Support instruments for wind with HFO as alternative (Jordan, Syria) •Landfill gas (Jordan) •Dedicated wind (Palestine) •Energy Solar Water Heating (Lebanon) •Concentrated Solar Power (Libya, Morocco, Tunisia) •PV for rural electrification (Yemen)Page 10 RCREEE Regional Renewable Energy Conference Thursday, February 4, 2010, Kempinski Hotel, Amman, Jordan
  11. 11. Economical, Technological and Environmental Impact Assessment of National Regulations and Incentives for Renewable Energy and Energy Efficiency A project financed by the Ministry of Foreign Affairs of Denmark Findings of the case studies •The case studies bring out the importance of: –Opportunity cost where there are subsidies –The negative impact of consumer subsidies on energy efficiency and many policies (labels, mandatory audits) –The financial benefits to the state of energy efficiency where there are subsidies –The need to lower risk perceptions for IPPs in developing renewable energy (FIT, concessions) –The unpredictable and probably under-estimated price of carbon (transaction costs in the CDM)Page 11 RCREEE Regional Renewable Energy Conference Thursday, February 4, 2010, Kempinski Hotel, Amman, Jordan
  12. 12. Economical, Technological and Environmental Impact Assessment of National Regulations and Incentives for Renewable Energy and Energy Efficiency A project financed by the Ministry of Foreign Affairs of Denmark The regional review •The TOR require: –Overall comparative synthesis report evaluating the status of RCREEE member state planning processes, regulations and incentives for RE&EE and their impact; including recommendations for follow-up RCREEE initiatives •For this purpose we have created a categorisation of policy instruments according to the market failures that they addressPage 12 RCREEE Regional Renewable Energy Conference Thursday, February 4, 2010, Kempinski Hotel, Amman, Jordan
  13. 13. Economical, Technological and Environmental Impact Assessment of National Regulations and Incentives for Renewable Energy and Energy Efficiency A project financed by the Ministry of Foreign Affairs of Denmark Market failures Public policy intervenes to correct market failures, in the case of energy efficiency and renewable energy the most common failures are: •distorted energy prices •external costs •poor access to technical information •agent-principal problems •budgetary constraints and excessive risk aversion •poor skills of investment appraisal.Page 13 RCREEE Regional Renewable Energy Conference Thursday, February 4, 2010, Kempinski Hotel, Amman, Jordan
  14. 14. Economical, Technological and Environmental Impact Assessment of National Regulations and Incentives for Renewable Energy and Energy Efficiency A project financed by the Ministry of Foreign Affairs of Denmark Correction and compensation Policy instruments are intended to correct or compensate for market failures. Correcting measures try to correct the perception of costs in the market, so that the decisions of the market participants lead to a result that is close to the economic optimum. Compensating measures accept that there is a market failure that cannot be corrected. Therefore, the government introduces measures to change (or regulate) decision making. Corrective measures least disturb the working of market processes so all the advantages of the competitive system are maintained.Page 14 RCREEE Regional Renewable Energy Conference Thursday, February 4, 2010, Kempinski Hotel, Amman, Jordan
  15. 15. Economical, Technological and Environmental Impact Assessment of National Regulations and Incentives for Renewable Energy and Energy Efficiency A project financed by the Ministry of Foreign Affairs of Denmark Taxonomy for EE The taxonomic structure for energy efficiency used in the project is: •Corrective Measures Taxonomy is the practice and –Price Reform science of classification. –Institutional and legal reform –Labelling –Dissemination of information –Research, development and demonstration –Financial incentives –Support for energy service companies (ESCOs) •Compensating Measures –Standards –Mandatory measures (e.g. compulsory audits and management obligations) –Corporate agreements –Efficiency obligations –Transport and spatial planningPage 15 RCREEE Regional Renewable Energy Conference Thursday, February 4, 2010, Kempinski Hotel, Amman, Jordan
  16. 16. Economical, Technological and Environmental Impact Assessment of National Regulations and Incentives for Renewable Energy and Energy Efficiency A project financed by the Ministry of Foreign Affairs of Denmark Taxonomy for RE The taxonomic structure for renewable energy used in the project is: •Corrective Measures –Targets and strategy –Legal reform –Institutional reform –Financial incentives (Capital support) –Feed-in tariffs (Operating support) –CDM Finance –Information –Industrial policy •Compensating methods –Standards and /or labels –ObligationsPage 16 RCREEE Regional Renewable Energy Conference Thursday, February 4, 2010, Kempinski Hotel, Amman, Jordan
  17. 17. Economical, Technological and Environmental Impact Assessment of National Regulations and Incentives for Renewable Energy and Energy Efficiency A project financed by the Ministry of Foreign Affairs of Denmark The Regional Review •For each of these policy instruments we have assessed the status as we see it in tables by instrument and country •Final summary tables compare the status of each instrument across the regionPage 17 RCREEE Regional Renewable Energy Conference Thursday, February 4, 2010, Kempinski Hotel, Amman, Jordan
  18. 18. Economical, Technological and Environmental Impact Assessment of National Regulations and Incentives for Renewable Energy and Energy Efficiency A project financed by the Ministry of Foreign Affairs of Denmark Conclusions (EE) - 1 All countries have made some effort to implement energy efficiency projects. Most of the instruments in the taxonomy have been tried or are intended somewhere. –The most popular instruments are strategy, agency and audits. –Most countries have a strategy, but qualitative; numerical targets are often vague –Three countries have functioning energy efficiency agencies. Most of the rest have some centralised inter-Ministerial group for decisions –Mandatory audits have been in operation for many years in Tunisia; they are stipulated now in Syria. Other countries have voluntary audits of varying degrees of successPage 18 RCREEE Regional Renewable Energy Conference Thursday, February 4, 2010, Kempinski Hotel, Amman, Jordan
  19. 19. Economical, Technological and Environmental Impact Assessment of National Regulations and Incentives for Renewable Energy and Energy Efficiency A project financed by the Ministry of Foreign Affairs of Denmark Conclusions (EE) - 2 •Relatively few countries have an energy efficiency law and this absence limits the possible scope of policy. •Labelling and standards are being developed in most countries, but slowly and often along different paths. Access to testing facilities is often an obstacle . •Only two countries have systematic fiscal incentives. This is surprising as where prices are subsidised the state also benefits from incentives to efficiency. •The practice of evidence-based policy is uneven; acquisition of documented experience is costly Generally, the importance of the sector is recognised, but its priority in the legislative and administrative agendas is only moderatePage 19 RCREEE Regional Renewable Energy Conference Thursday, February 4, 2010, Kempinski Hotel, Amman, Jordan
  20. 20. Economical, Technological and Environmental Impact Assessment of National Regulations and Incentives for Renewable Energy and Energy Efficiency A project financed by the Ministry of Foreign Affairs of Denmark Opportunities for RCREEE •Policy-making –Develop evidence for policy making as a common good (source of first resort) –Structuring, compilation and processing of evidence –Development of indicators for the region •Benchmarking of policy –Annual benchmarking within the RCREEE member states •A common policy for standards and labels –Towards a common label in the long-term –Strengthening regulatory compliance –Sharing assetsPage 20 RCREEE Regional Renewable Energy Conference Thursday, February 4, 2010, Kempinski Hotel, Amman, Jordan
  21. 21. Economical, Technological and Environmental Impact Assessment of National Regulations and Incentives for Renewable Energy and Energy Efficiency A project financed by the Ministry of Foreign Affairs of Denmark Conclusions (RE) - 1 •Most countries have strategies (often very ambitious) and wind atlases (information), sometimes also solar •Financial and legal commitments to the strategies are often not present •For essence of the problem is cost and risk. •IPPs factor in high risk premiums; countries should work to reduce them •FITs are a possibility, but there are none in the region; concessions are more comfortable for countries. The Moroccan and Tunisian schemes are interesting options, but limited in application.Page 21 RCREEE Regional Renewable Energy Conference Thursday, February 4, 2010, Kempinski Hotel, Amman, Jordan
  22. 22. Economical, Technological and Environmental Impact Assessment of National Regulations and Incentives for Renewable Energy and Energy Efficiency A project financed by the Ministry of Foreign Affairs of Denmark Conclusions (RE) - 2 •Costs (except perhaps for some very favourable wind sites and prices for CERs) are generally higher than alternatives. Inadequate values are attributed to the “renewable value”. •The implicit renewable value in EU schemes is very high; the same advantages in environmental and industrial policy can be obtained operating in the Mediterranean at a lower cost. •Needs revised EU policy on renewables and a strong debate on fairness in the industrial sidePage 22 RCREEE Regional Renewable Energy Conference Thursday, February 4, 2010, Kempinski Hotel, Amman, Jordan
  23. 23. Economical, Technological and Environmental Impact Assessment of National Regulations and Incentives for Renewable Energy and Energy Efficiency A project financed by the Ministry of Foreign Affairs of Denmark Opportunities for RCREEE - 1 •RCREEE has a great opportunity to be a useful interlocutor to stimulate cooperation between the EU and the Mediterranean on renewable energy •It can contribute to the creation of an open, transparent, non-discriminatory, efficient system of financial transfers to the RCREEE countries to compensate the higher costs of renewable energy, especially in solar •This system has to function both with and without physical flows of electricity. It also has to be coherent with whatever may arise from international negotiations on climate changePage 23 RCREEE Regional Renewable Energy Conference Thursday, February 4, 2010, Kempinski Hotel, Amman, Jordan
  24. 24. Economical, Technological and Environmental Impact Assessment of National Regulations and Incentives for Renewable Energy and Energy Efficiency A project financed by the Ministry of Foreign Affairs of Denmark Opportunities for RCREEE - 2 •RCREEE can similarly help define a “fair” industrial policy, taking also into account the wider demographic issues and their relevance for employment. It can organise some common reflection on how to maximise local content in large-scale renewable developments. In particular: –What are the industrial needs? –What are the unit operations required? –What investment in fixed capital and human resources would be necessary? –What political tools are available to maximise local content?Page 24 RCREEE Regional Renewable Energy Conference Thursday, February 4, 2010, Kempinski Hotel, Amman, Jordan
  25. 25. Economical, Technological and Environmental Impact Assessment of National Regulations and Incentives for Renewable Energy and Energy Efficiency A project financed by the Ministry of Foreign Affairs of Denmark Title of the pagePage 25 RCREEE Regional Renewable Energy Conference Thursday, February 4, 2010, Kempinski Hotel, Amman, Jordan

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