Feed-in Tariffs for Renewable Energy and WTO Rules

Transcription

1 Feed-in Tariffs for Renewable Energy and WTO Rules I C T S D R e n e w a b l e E n e r g y S u p p o r t M e a s u r e s a n d W T O R u l e s 2 0 A P R I L M a r i e W i l k e m w i l k i c t s d. c h

2 Feed-in Tariff Systems 3 key characteristics: 1. guaranteed electricity purchase price 2. guaranteed grid access 3. long-term contracts By early 2010 approx.: 50 countries incl. 18 developing countries A total of 75 FITs (including provincial level)

3 A Comparison of FITs What to Compare? Legal basis of FIT Responsibilities and authorities of acting entities Source of funding Contingencies (including local content requirements) Contract terms (contract partner, terms, implementation) Comparing: German FIT UK FIT Ontario FIT

4 German FIT The Government as Legislator Purchase obligation for : All electricity network operators All electricity from renewable energy sources Costs are divided between: Electricity supply undertakings Private upstream electricity network operators System is managed by the four network operators on the basis of supplier-operator contracts

5 UK FIT Small Scale Approach Purchase obligation: Small-scale renewable energy (under 5MW) Focuses on on-site use (production tariff v feed-in tariff) Complex accreditation and licensing system: Accreditation of installation companies (governmentally regulated) Accreditation of suppliers (through private companies or Ofgem depending on the sites size) Central FIT register: Managed by the Office of Gas and Electricity Markets (Ofgem) Administers the funding mechanism Costs are reallocated to consumers (shared among all suppliers)

6 The Ontario FIT A Story of Fragmentation Ontario Green Energy and Green Economy Act 2009 Three groups of actors: 1. Ontario Power Authority develops and implements FIT, including price setting and administering FIT contracts 2. Distribution companies, system operators executive contracts regarding access, transmission and distribution 3. Ontario Global Adjustment Mechanism price adjustment Local content requirements

7 The Subsidies Agreement Prohibited v actionable 3 characteristics of a subsidy: Financial contribution By a government Whereby a benefit is conferred 4 types of financial contributions : (i) a direct transfer of funds (ii) government revenue that is otherwise due is foregone or not collected (iii) a government provides goods or services [...] or purchases goods (iv) a government makes payments to a funding mechanism, or entrusts or directs a private body to carry out one or more of the type of functions illustrated in (i) to (iii) [...]

8 Is a FIT a Financial Contribution? 3 Alternatives: Purchase of goods v provision of services (iii) Payment to a funding mechanism (iv 1) Direction of a private entity (iv 2) Depends on the nature of the acting entity public body v private body Alternative (iv 2) only applies to: functions [...] which would normally be vested in the government [where the] practice, in no real sense, differs from practices normally followed by governments

9 Benefits and Adverse Effects Benefits: Purchase above market standards (higher and more stable prices, long-term contracts) Guaranteed provision of service (right to transmit) Adverse Effect No need to prove if contingent on local content (then prohibited) Otherwise to be shown on like-products Injury, nullification or impairment, serious prejudice

10 Exemptions Article XX GATT Applicable to agreements other than GATT? Pro: Single undertaking argument, lex specialis Con: SCMA the missing reference, former Article 8, reference to AoA but not GATT Applicable to FITs? FIT v local content FIT for the conservation of natural resources or necessary to protect the environment?

11 ICTSD Study M. Wilke, Feed-in Tariffs for Renewable Energy and WTO Rules, ICTSD Series on Trade and Sustainable Energy, Issue Paper No. 4