EUROSOLAR Info Paper, Status: June 2006

In the European Union fixed feed-in tariffs take off as an instrument to promote the development of Renewable Energies. Besides Germany, where a system for Renewable electricity feed-in, purchase and payment was already introduced in 1991, also Estonia (1998), Finland, France (2001), Greece, Latvia, Lithuania, Luxemburg, the Netherlands (2003), Austria (2003), Portugal (1988), Slovenia (2002), Spain (1994), the Czech Republic (2002), Hungary (2003) and Cyprus (2004) use feed-in tariffs to date.

Belgium, Denmark since 2003, Italy, Poland, Sweden and the United Kingdom use quota systems at present. Denmark, Finland and the United Kingdom combine different elements of the promotion schemes. In Finland for example, exemption from energy taxes is used alongside feed-in tariffs as the most important instrument for electricity from Renewable Energy Sources.

Targets for the European Union

The European Union set targets for the EU and its Member States by the directive 2001/77/EC to promote an increase in the contribution of Renewable Energy Sources to electricity production.

Percentage contributions of Renewable Energies in electricity consumption in 1997 and targets for 2010

In its May 2004 Communication on the state of development of Renewable Energy in the EU, the Commission concluded that the great majority of Member States will not achieve their national targets and that it seemed to be unlikely that the EU would meet the target of doubling the share of Renewable Energy in the overall energy consumption to 12% by 2010 without a fresh effort.

Electricity produced from Renewable Energy Sources in EU Member States

The use of large-scale hydropower plants (capacities above 10 MW) is established in Europe for more than hundred years, and their potential has been largely exploited. Therefore, and also because energy generation from these hydropower sources is so frequent in some countries (Finland, Austria, Slovenia or Spain) that one dry year has considerable effects on the share of energy generated from Renewable Sources, the following table has an extra column to illustrate the development of Renewable Energy generation, excluding hydropower above 10 MW.

F: Feed-in tariffs, Q: Quota systems, I: Fiscal incentives

At the forefront of increased Renewable Energy use thanks to feed-in tariffs

According to up-to-date studies, the costs for electricity generated from wind energy are lower in Germany than in the UK. This is most of all attributed to the ample security for investment as a result of the “EEG“ (Renewable Energy Sources Act). In its May 2004 Report, the EU commission confirmed that only Germany, Spain, Denmark and Finland were likely to achieve the national targets the Directive 2001/77/EC holds for them. The first three owe their success to their national feed-in models, while in Finland, feed-in tariffs and a tax relief for Renewable electricity coexist. According to the EU commission, none of the countries applying quota systems will achieve their national indicative targets without clearly more efficient political commitment to the development of RE. Against this background, in June 2005, EU energy commissioner Piebalgs clearly rejected the request of the German electricity industry to introduce a European quota regime.

Literature

- EUROSOLAR Info: “Five reasons for a feed-in model, five reasons against quota systems”, June 2005.

- Mechtild Rothe: Harmonisierung oder Vielfalt? Die Förderung Erneuerbarer Energien in Europa“, in: Solarzeitalter 2/2005.

- Reiche, Danyel (ed.): Handbook of Renewable Energies in the European Union. Case studies of the EU-15 States.
  Frankfurt/Main 2005.

- Renewable Energy Policy Fact Sheets (http://www.renewable-energy-policy.info/relec)

 Info Paper "The success of feed-in tariffs in Europe" (pdf)