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E F F I C I E N C Y – O U R F O C U S . 1
Oliver Frank
Auctions and diesel substitution as samples for
competitive market integration of renewable
energies. November 18th, 2014, Geneva
2 E F F I C I E N C Y – O U R F O C U S .
Agenda.
1. dena at a glance
2. Status of RE integration
3. Fields of action: Important drivers for RES development
4. Auctions are gaining importance.
5. Substituting diesel? - Pricing matters
6. Conclusions and questions
5 E F F I C I E N C Y – O U R F O C U S .
2. dena´s 2014 Study on status and perspectives for renewable energies worldwide.
High market share in at least 3
technologies (A-Market)
Growth market in at least 3
technologies (B-Market)
High market share in 2 technologies
(A-Market)
Growth market in 2 technologies
(B-Market)
High market share in 1 technology
(A-Market)
Growth market in 1 technology
(B-Market)
Cumulative overview of
different market status for
wind energy (on- and
offshore), solar energy (PV,
solar thermal, CSP),
geothermal (electricity and
heat generation) excluding
results for bioenergy and
hydropower and other
technologies..
Status of RE integration within
the 56 UNECE partly differs
considerably.
6 E F F I C I E N C Y – O U R F O C U S .
3. Social 2. Economic
3. Fields of action: Important drivers for RES development. 1. Political / Regulatory
4. Technical
Security of
supply
Fossil
resources
Future demand
Import quota
Access to energy
Targets
Share of RES
Tech-nology target
Emission reduction
Efficiency
Promotion
Fixed tariff / premium
Net-metering/-
billing
Quota obligation
PPA
Tender
Auction
Taxes / other
incentives
Invest-ment
security
Market access
Priority purchase
Full
Limited
Restricted
Energy prices
Electricity
Liquid fuels
Gaseous fuels
Solid fuels
Economy and value
New industries
Labour market
Competi-tiveness
Social
Costs
Accept-ance
Know-ledge
Aware-ness
Potential
Theoretic.
Technical
Economic
R & D
Integration
Grid integration
Decent-ralised
production
Storage
Smart Metering
Demand
7 E F F I C I E N C Y – O U R F O C U S .
4.1 Auctions are gaining importance.
Today more than 20 countries have realized auctions for renewable energies.
Outlook: Guidelines of the European Commission present auctioning as standard procedure for allocating support for bigger plants starting in 2017
90´s 2000 2007 2014 2009
Brazil: technology specific auctions (biomass + small hydro). Since 2009: Auctioning of new wind projects (PPAs for 20 years)
Particularly in Latin America: Awarding new capacities in state organized auctions of long lasting PPAs as a new form of long-term planning in electricity markets.
Unbundling: Auctions are used more often to bring IPPs into the electricity markets
Since 2009: Auctioning is also used in some European technology-markets (e.g. Denmark Offshore-Wind, France (PV and Offshore-Wind)
8 E F F I C I E N C Y – O U R F O C U S .
4.2 States using auctioning models for renewable energies.
Auctions
Planned
Brazil
Uruguay
Argentina
Peru
USA
Guatemala Panama
South Africa
Canada
Australia
Russia
India
China
Uganda
Germany
United Kingdom
Poland
France Italy
Jamaica
Jordan Cyprus
Netherlands
Denmark
Sourc
e:
dena´s 2
014 S
tudy o
n S
tatu
s a
nd P
ers
pectives for
Renew
able
Energ
ies W
orld
wid
e.
World
map: P
resenta
tio
nLoad.
9 E F F I C I E N C Y – O U R F O C U S .
4.3 Auctions: Key drivers.
NEW MARKETS: PROMOTE OFTEN IN A
DIFFERENT WAY
Auctions are used in new markets awarding
projects with high capacities. Especially energy
markets with a strong state influence tend to
make use of this form.
ESTABLISHED MARKETS: INFLUENCE
THROUGH GOVERNANCE RISING UP
Economical and technical interdependencies
and interactions led to an increase of
measures controlling the expansion of new
capacities. Experiences from new growing
markets are becoming paradigms.
TECHNOLOGY DEVELOPMENT:
DECREASING GENERATION COSTS
Steadily decreasing generation costs make it
challenging for policy makers to define
appropriate tariffs for the promotion of
renewable energies and to avoid over
promotion.
TECHNOLOGY SPECIFIC PROMOTION
–„NO ONE FIT(S) ALL
Special promotion schemes for certain
technology or fields of application are getting
more important. Governments tend to combine
different schemes and instruments according
to technology, plant size or technical relevance
for the energy system.
Particularly auctions are reaching more importance as competitive procedures for the promotion of new RE-capacities on international level.
Sourc
e:
dena´s 2
014 S
tudy o
n S
tatu
s a
nd P
ers
pectives for
Renew
able
Energ
ies W
orld
wid
e.
World
map: P
resenta
tio
nLoad.
10 E F F I C I E N C Y – O U R F O C U S .
4.4 Evaluation: pros and cons in discussion. Policy:
Cost efficiency: Pricing for promotional tariffs in
competition
Regulation of further expansion (e.g. amount,
technologies)
(where applicable) penalty fees if projects are not
completed
Businesses:
High level of transparency
In case of award through PPAs: Project realization to
given terms
Financing easier because PPAs are often seen less risky
Policy:
Administrative efforts by assessing offers or companies
for pre-selection
Appealing of allocation possible
Risk of non-realization of power projects or risk of low
quality of components / plants
Absence of longer lasting perspective for RE-
development / „stop and go“
Capacity factors of RE-technologies might not be
considered in an appropriate manner
Loss of social or financial models facilitating broad
project participation from society
Businesses:
Risk of non-consideration
High pricing pressure, partly also among different
technologies
long lasting procedure / high complexity
Risk of „sunk costs“ if not considered
Proof of liquidity / fees for participation
Tends to result in giving preference to bigger market
actors
Establishment of national value chains depends on
frequency of auctioning
11 E F F I C I E N C Y – O U R F O C U S .
5. Example: Substituting diesel? - Pricing matters: Regional differences for diesel prices in US cent / liter.
Sourc
e:
dena´s 2
014 S
tudy o
n S
tatu
s a
nd P
ers
pectives for
Renew
able
Energ
ies W
orld
wid
e.
Data
: G
IZ 2
012,
World
Bank.
12 E F F I C I E N C Y – O U R F O C U S .
6. Conclusion and questions. Conclusions:
Status of RE integration within UNECE region: Existing differences between
member states.
Auctions will also play an important role for the further development of RE in
UNECE-member states.
Pricing for energy (such as fuel or electricity) is crucial for new business-models
based on increasing cost effectiveness of RE.
Question:
What is “best practice”?
How can different initial positions of member states be considered in an
appropriate manner?
Which additional dimensions and key drivers should be considered?
(…)
13 E F F I C I E N C Y – O U R F O C U S .
Your Contact.
Oliver Frank
Head of Renewable Energies Division
Deutsche Energie-Agentur GmbH (dena)
German Energy Agency
Chausseestrasse 128 a, 10115 Berlin, Germany
Tel: +49(0)30 72 61 65-680
Fax: +49(0)30 72 61 65-699
E-mail: [email protected]
Internet: www.dena.de
E F F I C I E N C Y – O U R F O C U S . 14
Efficiency – our focus.
Thank you.
www.dena.de b2b.dena.de