Joint support scheme as solution to the post 2020 problem - The tradable green certificates of Sweden and Norway

Transcription

1 Joint support scheme as solution to the post 2020 problem - The tradable green certificates of Sweden and Norway Lise-Lotte Pade Lise Skovsgaard Henrik Klinge Jacobsen Technical University of Denmark 37 th IAEE International Conference June 15-18, 2014 New York City, USA

2 Agenda Research question The 2020 targets and the flexibility mechanisms Cost sharing and the 2020-problem The tradable green certificate scheme of Norway and Sweden Preliminary findings Further work to do...

3 Research question How is the Swedish-Norwegian tradable green certificate scheme designed to take cost sharing and risk sharing related to the post 2020 problem into account? Can the Norwegian-Swedish tradable green certificate scheme be generalised for the entire EU?

4 The 2020 targets Overall EU target:... at least a 20 % share of energy from renewable sources in the Community s gross final consumption of energy in EU member states (+ Norway and Iceland) individual targets Based on... level of already developed RES income

5 The cooperation mechanisms Individual potentials not (directly) taken into account Individual target compliance more expensive than joint target compliance

6 The cooperation mechanisms Joint target compliance increases efficiency Statistical transfer ex-post transfer of virtual RES certificates does not induce additional RES development Joint projects filling the gaps MS lacking low-cost RES potential develop projects in another MS with surplus low-cost RES potential project-to-project basis special support framework several projects a certain technology or a certain area Joint support scheme broad cooperation of MS on a national level the MS agree on a common support scheme fully or partially coordination of national support schemes

7 Cost sharing The precondition for engaging in cooperation is that both countries benefit from it Direct costs and benefits: developing and installing renewable energy technology costs levelised production costs support costs or subsidy payment Indirect benefits and costs employment effects technological development environmental effects electricity capacity regulation costs Benefits to the country where RES is developed but costs to the country paying for developing RES in another country or vice versa

8 Cost sharing the two country case Net benefits country A (major share of RES developed): net subsidy income - the difference between: the part of the total subsidy payment that goes to RES development in country A the share of the total subsidy payment country A contributes with net levelised RES-E production costs the difference between: the total levelised RES-E production costs for country A under the joint support scheme is the total levelised production costs for country A under individual target compliance the indirect effects as a result of cooperation (~0) Net benefits country B: net levelised RES-E production costs net subsidy payment the indirect effects as a result of cooperation (~0)

9 Cost sharing Country A engage in cooperation when... net subsidy income > net levelised RES-E production costs Income from coop. Additional costs from cooperation Country B engage in cooperation when... net levelised RES-E production costs > net subsidy payment Savings from cooperation Additional costs from cooperation

10 Cost sharing and the Post 2020 Problem Uncertainties regarding the targets for 2030 (and beyond...) no national targets have been defined national CO2 targets are expected to be defined can to a certain extent be transferred to indirect RES targets we ASSUME that national CO2 emission reduction targets result in an indirect RES target for each country Three possible cases: 1.New RES target takes the RES developed under cooperation into account 2.The new RES target does not take the RES developed under cooperation into account a.the new RES target is higher than the level of RES achieved under cooperation b.the new RES target is lower than the level of RES achieved under cooperation

11 1. Cooperation-RES included - Stricter RES target in country A

12 2.a. Cooperation-RES not included 2030 target exceeds RES developed under cooperation

13 2.b. Cooperation-RES not included 2030 target lower than RES developed under cooperation

14 TGC in Sweden and Norway

15 The incentives of Norway and Sweden Norway and Sweden takes the same share of costs for the additional development Norway no a priori target expectation that a larger share of the RES is developed in Norway indirect effects Sweden expectation that RES will be developed in Norway for lower costs relative to a situation without cooperation

16 Preliminary findings Norway and Sweden divide the obligations such that each country has half of the obligations Total support payment is divided in half Quota system continues until 2035 risk and costs are shared evenly The extent the Swedish-Norwegian set-up is expected to be able to be spread to the rest of EU seems limited Norway and Sweden are on many parameters very similar Integrated electricity markets Similar shares of renewables Comparable potentials for renewable energy Not translatable for the entire EU

17 Further work to do... The extent to which the two countries live up to the anticipated incentives to engage in cooperation depends on the expected development in the two countries. Expected RES developments in Norway and Sweden

18 Thank you for your attention! Lise-Lotte Pade Lise Skovsgaard Henrik Klinge Jacobsen Technical University of Denmark res4less.eu

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