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EXAMPLESOFBESTPRACTICEPOLICYINITIATIVES
AUGUST2016 2
Introduction 3
Carbon Tax 4 Iceland - Carbon Tax 5
Communities 6 Scotland - Community & renewable energy scheme (CARES) 6
Electricity 7
Finland - Feed in tariff 7 Northern Ireland - Renewable Obligation Certificate (ROCS) 7 Norway - Green Battery Strategy 8 Republic of Ireland - REFIT Scheme 8
Heat 9 Northern Ireland - Renewable Heat Incentive 9
Liquid Biofuels 10
Republic of Ireland - Biofuels Obligation 10
Research and Development 11 Finland - BEST (Sustainable Bioenergy Solutions for tomorrow) 11 Norway - Centres for Environment / friendly Energy Research 11 Scotland - SMART Scotland 12
WWW.GREBEPROJECT.EU
AUGUST2016 3
Introduction
GREBEisa€1.77m,3-year(2015-2018)transnationalprojecttosupporttherenewableenergysector.Itisco-fundedbytheEU’sNorthernPeriphery&Arctic(NPA)Programme.Itwillfocusonthechallengesofperipheraland arctic regions as places for doing business, and help develop renewable energy business opportunitiesprovidedbyextremeconditions.
Renewable Energy entrepreneursworking in theNPA area face challenges including a lack of criticalmass,dispersed settlements, poor accessibility, vulnerability to climate change effects and limited networkingopportunitiesarewellrecognisedbecauseoftheirperipherallocation.
GREBEwillequipSMEsandstart-upswiththeskillsandconfidencetoovercomethesechallengesanduseplacebasednaturalassetsforREtobestsustainableeffect.Therenewableenergysectorcontributestosustainableregionalandruraldevelopmentandhaspotentialforfuturegrowth.
ThekeyobjectiveofthisworkPackage:
• To identify and promote opportunities for policy to provide an effective supporting framework forsustainablerenewableenergybusiness(bothnewandemerging)
Throughoutthe“Summaryreportoftherelevantpolicyinitiativesandschemesineachofthepartnerregionsstudy”GREBEhasidentifiedshowcaseexamplesforthebestpracticepolicyinitiativesthatcanbeusedacrosstheNPAregion.TheGREBEProjectdevelopedasafollowuptoapreviousNorthernPeripheryProgramme(NPP)ProjectknownasBioPAD.TheBioPADprojectcarriedoutinitialworkregardingpolicyinitiativeanalysisacrossEuropeinsupportoftheRenewableEnergysectorandGREBEaimstofurtherdevelopandrefinethisworkandtakeittothenextlevel.
Thepolicy pagewithinBioPAD shows someexamples of this priorwork including a policy tour, policy gapsanalysis and policy recommendations in this area and can be found at: http://www.biopad.eu/what-is-biopad/policy/.
Whilethisprojectwasmainlyfocussedonbioenergy,thereisalotofinformationforHeat,Electricity,BioFuels,Transport, Low-carbon etc. in other European countries in the http://www.biopad.eu/wp-content/uploads/RASLRES-Policy-Toolkit.pdf.
Basedonfeedbackgatheredfromallpartnerregionstherewereatotalof67policyinitiativesinthe“Summaryreportoftherelevantpolicyinitiativesandschemesineachofthepartnerregionsstudythathelpcontributetowardssupportingtherenewableenergysector.TheGREBEreportwillshowcaseexamplesofbestpracticepolicyinitiativesunderthefollowingcategories.
• CarbonTaxAtaxonfossilfuels,especiallythoseusedbymotorvehicles,intendedtoreducetheemissionofcarbondioxide.
• CommunitiesSupportinglocalcommunitiesandhelpingtowardcreatingabetterenvironment
• ElectricityHelppromotethegenerationofelectricity
• HeatContributiontowardspromotingheatfromarenewablesource.
• LiquidBiofuels
EXAMPLESOFBESTPRACTICEPOLICYINITIATIVES
AUGUST2016 4
Themostwidelyusedliquidbiofuelsfortransportareethanolandbiodiesel.
• Research&DevelopmentResearchanddevelopment(R&D)referstotheinvestigativeactivitiesabusinessconductstoimproveexistingproductsandproceduresortoleadtothedevelopmentofnewproductsandprocedures.
Itisdifficulttoanalyseandcomparethesuccessorimpactofpolicyacrossdifferentnations.Whileapolicymaybeasuccessbasedonlocalconditionsitmaynotbewhencomparedtoanotherregion.ForexampleFinlandcreatedapolicytoplant100,000Haoftrees. InIcelandapolicywasput inplacetoplant1,000Haoftrees.50,000HaoftreeswereplantedinFinlandand2,000HawereplantedinIceland.SowhileFinlandfellshortoftheirpolicytargetandIcelandexceededthetargetset,whenconsideringthetotalareacoveredincomparisontherearedifferentmeasurementsofsuccess.
Forthisreasonithasbeendecidedthatseveralaspectsofprojectmustbeassessedandanalysedinconsideringwhether a policy has been successful and for this reason the following four titles have been selected asrepresentativeofawiderangeoffactorsthathelpshowtheimpactofapolicy.
• Strategy• Purpose• Uniquefeatures• Fundingtechnique
WWW.GREBEPROJECT.EU
AUGUST2016 5
Carbon Tax
Carbontaxisataxonfossilfuels,especiallythoseusedbymotorvehicles,intendedtoreducetheemissionofcarbondioxide.PolicyinitiativesarerequiredtoencouragetheuptakeofCarbonTaxschemesasreducingtheamountofCarbonusedwillrequirea largebehaviouralchange.Thischangewillbedifficulttoencourageaspeoplearesetintheirwaysandrequireanincentivetomakethechanges.
AnexampleofbestpracticeofapolicyinitiativeforcarbontaxisinplaceinIceland.
Iceland - Carbon Tax
Strategy–Acarbontaxisataxbasedongreenhousegasemissions(GHG)generatedfromburningfuels.Purpose - It puts a price on each tonneofGHGemitted, sending a price signal thatwill, over time, elicit apowerfulmarketresponseacrosstheentireeconomy,resultinginreducedemissions.Uniquefeature–Acarbontaxisafeeintendedtomakeusersoffossilfuelspayfortheclimatedamagetheirfueluse imposesby releasing carbondioxide into theatmosphereandalso tomotivate switches to cleanerenergy.Placingataxoncarbongivesconsumersandproducersamonetary incentivetoreducetheircarbondioxideemissionswhileadjustingpricesoffossilfuelstoreflectthedamagestoourplanetandsocietycausedbyreleasingCO2intotheatmosphere.Fundingtechnique–N/A
EXAMPLESOFBESTPRACTICEPOLICYINITIATIVES
AUGUST2016 6
Communities
Policyinitiativesforrenewableenergyareaimedatsupportinglocalcommunitiesandhelpingtowardcreatinga better environment.While prices for renewable energy or heating infrastructure can be prohibitive on aprivatelevel,thecreationofcommunityledschemeshelptooffsetthiscost.Schemesmayalsobringprofittothecommunitythroughenergythatcanbesoldbacktothegrid.
AnexampleofbestpracticeofapolicyinitiativefordevelopmentofcommunityenergyisinplaceinScotland.
Scotland - Community & renewable energy scheme (CARES)
Strategy-TheCARESloanfundwasannouncedbytheScottishGovernmenton15thFebruary2011.Theschemeaimstoprovideloanstowardsthehighrisk,pre-planningconsentstagesofrenewableenergyprojectswhichhavesignificantcommunityengagementandbenefits.TheschemeismanagedonbehalfofScottishMinistersbylocalenergyScotland.
Purpose - To support the development of locally-owned renewable energy projects which provide widercommunitybenefits?
Uniquefeature-Anyrenewableenergyproject,upto5MW,requiringfinancialoutlaypriortoplanningconsentis,inprinciple,eligible
• Loansofupto£150,000
• Coverupto90%ofagreedcosts
• Securitynotrequired
• Fixedinterestrateat10%
• Localadviceandsupportavailable
• Competitiveprocess
• Financeprovidedinstagesaccordingtoagreeddrawdownschedule
Fundingtechnique-Loanfinancewillbeavailabletocoverthepre-planningconsent(highrisk)stageofprojectdevelopment,ahighriskcostwhichiswidelyseenasabarriertocommunitygroupsandsmallerbusinesseswhowouldotherwisewishtodevelopaproject.
WWW.GREBEPROJECT.EU
AUGUST2016 7
Electricity
Initiatives are created with the aim of helping to promote the generation of renewable electricity. Theinstallation of renewable energy systems on an individual’s property can require a large initial investment.Providing financial incentives is one way in which the risk involved can be negated to encourage privateinvestment.
ExamplesofbestpracticeofpolicyinitiativesfortheelectricitysectorisinplaceinFinland,NorthernIreland,NorwayandintheRepublicofIreland.
Finland - Feed in tariff
Strategy–Thefeed-intariffschemeforelectricityhasbeendesignedtoincreasetheuseofrenewableenergysourcesinelectricityproduction.TheEUhassetarequirementforFinlandtoachieveanincreaseinrenewableenergieswherebytheywillaccountfor38%offinalconsumptionbytheendof2020.Feed-intariffisgrantedbyTheEnergyAuthority.
Purpose-ThesinglebiggestreasonfortheboomingoftheFinnishwindpoweristhefeed-in-tariffsystemthatwasimplementedinspring2011.
Uniquefeature-Afeed-intariffisavailablefor
-Newwindpowerplants
-Newbiogaspowerplants(gasproducedbydigestion)
-Newwood-fuelledpowerplantswhichalsoproduceheatforutilization
-Timberchippowerplants
Funding technique - The targetprice is EUR83.50/MWh.However,windpowerplants receivean increasedtargetpriceofEUR105.30/MWh.
Northern Ireland - Renewable Obligation Certificate (ROCS)
Strategy–Providesincentivesforlarge-scalerenewableelectricitygenerationbymakingUKsupplierssourceaproportionoftheirelectricityfromeligiblerenewablesources.Theaimistoincreasetheamountofelectricitysuppliedbyelectricitysuppliersfromrenewablesources.
Purpose - Renewable Obligation Certificates (ROC’s) are green certificates given to generators that useaccreditedrenewablesystemstocreateelectricity
Uniquefeature–Theserenewableobligationcertificatescanbetraded.IfsuppliersofelectricitydonotpresentthecorrectamountofROCstheyaremadetopaytheequivalentamountintoabuyoutfund.Thisencouragesthemtosourcemoreoftheirelectricityfromrenewablesources,insteadofbeingfinedfornotmeetingtheirobligation.
EXAMPLESOFBESTPRACTICEPOLICYINITIATIVES
AUGUST2016 8
Fundingtechnique–ThenumberofROCsissuedtoeachgeneratordependsuponthetypeoftechnologyituses(eachtypefallsundera'bandinglevel')andtheamountofelectricityitgenerates.
ThedefaultpositionisthatoneROCisissuedperMWhgenerated.However,sometechnologiesreceivemoreROCsandothersreceivefewer.Forexample,offshorewindreceivestwoROCsperMWhwhileonshorewindreceives0.9ROCperMWh.
Norway - Green Battery Strategy
Strategy–Norwayishopingtobecomethe“greenbatterycapitalofEurope”byusingitshydropowerplantstoprovideinstantextraelectricityifproductionfromwindandsolarpowersourcesinothercountriesfade.
Purpose-Norwayhas937hydropowerplants,whichprovide96%ofitselectricity,makingitthesixthlargesthydropowerproducer in theworlddespitehavingapopulationofonly fivemillion. Europealreadyhas400millionpeoplein24countriesconnectedtoasinglegrid,withpowersurplusesfromonecountrybeingexportedtoneighboursorimportedasnationalneedschange.
Uniquefeature-Withoutbuildinganynewpowerstations,engineersbelievetheycouldusetheexistingnetworktoinstantlyboostEuropeansuppliesandavoidothercountrieshavingtoswitchonfossilfuelplantstomakeupshortfalls
Fundingtechnique-ThecustomerswhoalreadyexistinNorwaywillhavetopaythebillfornewlinesconnectingNorwaytoothercounties.
Republic of Ireland - REFIT Scheme
Strategy – TheRenewable Energy Feed in Tariff (REFIT) schemes/supports are funded by the Public ServiceObligation(PSO)whichispaidforbyallelectricityconsumers.
Purpose - The REFIT schemes have been designed to incentivise the development of renewable electricitygeneration inordertoensureIrelandmeets itsgoalof40%ofelectricitycomingfromrenewablesourcesby2020.
Uniquefeature-REFITisdesignedtoprovidepricecertaintytorenewableelectricitygenerators.Ithasbeeninoperationforwindandhydropowersince2006.Itoperatesonaslidingscale,actingtoensureaguaranteedpriceforeachunitofelectricityexportedtothegridbypayingthedifferencebetweenthewholesalepriceforelectricityandtheREFITprice
Fundingtechnique–Thesupportpriceunderthegovernment’sRenewableEnergyFeed inTariff (REFIT)willrangefrom8.5centperkilowatthourto15centperkilowatthourdependingonthetechnologydeployed.ThetechnologiessupportedincludeAnaerobicDigestionCombinedHeatandPower,BiomassCombinedHeatandPowerandBiomassCombustion, includingprovision for30%co-firingofbiomass in thethreepeatpoweredstations.
WWW.GREBEPROJECT.EU
AUGUST2016 9
Heat
Policyinitiativesandschemesprovideacontributiontowardspromotingheatfromarenewablesource.Initialcostsforrenewableenergyinstallationscanbeoffputting,andpoliciesinitiativesinthisareacanhelppromotetherenewableheat.
Anexampleofbestpracticeofapolicyinitiativefordevelopmentoftherenewableheatsectoris inplaceinNorthernIreland.
Northern Ireland - Renewable Heat Incentive
Strategy - Financial incentive toencourage theuptakeanduseof renewableheat suchasbiomass systems,ground/airsourceheatpumps,geothermalandbiogasbelow200kWth.
Purpose–Businessesmustmeettheeligibilitycriteriawhenapplyingforaccreditation.Theremustbeatleast1nondomesticusefortheheatbeingproducedandtheinstallationmustmeetotherrequirements;beingnewattimeofinstallationandtheheatbeingproducedmustbemeteredcorrectlyetc.
Uniquefeature-DepartmentofEnterprise,TradeandInvestmentsetthepolicyandtariffrates,withpaymentsbeingguaranteedfor20years.OfgemadministertheschemeonbehalfofDETI.
Fundingtechnique-WhentheRHIcommencedaboilerrangingfrom20–199kWwouldreceive6.4pperkWheat generated. Therewas no upper usage cap. The tariff changed on the 4th of November 2015with theintroductionofa capwhere the first1314peakhours (1314xboiler kWh)arepaidat theTier1 tariff.AnyadditionalheatispaidattheTier2tariffuptoamaximumof400,000kWh.
UnfortunatelytheRenewableHeatIncentivehasbeendiscontinuedduetoarangeoffinancialmismanagementissues.
EXAMPLESOFBESTPRACTICEPOLICYINITIATIVES
AUGUST2016 10
Liquid Biofuels
Themostwidelyusedliquidbiofuelsfortransportareethanolandbiodiesel.Biofuelshavebeenselectedasapolicyinitiativeareaduetoseveralfactors–theyarecleanerthanfossilfuelsandcanbedevelopedfromlocalcropsreducingdependenceonimportedfuelsandincreasingenergysecurity.
AnexampleofbestpracticeofapolicyinitiativefordevelopmentofliquidbiofuelsisinplaceintheRepublicofIreland.
Republic of Ireland - Biofuels Obligation
Strategy–Ireland’stargetfortheshareofitsgrossfinalconsumptionofenergytocomefromrenewablesources,by2020,is16%.
Purpose-TheBOSSchemeplacesanobligationonsuppliersofmineraloiltoensurethat6.383%(byvolume)ofthemotor fuels (generallyGasolineandMotorDiesel) theyplaceonthemarket in Ireland isproducedfromrenewablesources,e.g.EthanolandBiodiesel.
Uniquefeature-Thismeansthatattheendofeachyearanobligatedroadtransportfuelsuppliermustholdsixbiofuelobligationcertificatesforevery94litresofpetroleumbasedfuelithasplacedonthemarket.Certificatesare issued forbiofuels thathavebeendemonstrated tohavecompliedwith thesustainabilitycriteriaof theDirective.
Fundingtechnique–N/A
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AUGUST2016 11
Research and Development
Researchanddevelopment(R&D)referstotheinvestigativeactivitiesabusinessconductstoimproveexistingproductsandproceduresortoleadtothedevelopmentofnewproductsandprocedures.R&Dcanbebeneficialinmanywaysincludingdrivingtechnologicaladvancesandbringingdownpricesandalsohelpingtochangetheoutlookonrelianceforfossilfuels.
Finland, Norway and Scotland provide examples of best practice of policy initiatives for research anddevelopment.
Finland - BEST (Sustainable Bioenergy Solutions for tomorrow)
Strategy–TheresearchprogramjoinsthestrengthsofthedifferentplayerswithintheFinnishbioenergyfieldtoanswertothecriticalresearchanddevelopmentneedsoftomorrow.
Purpose-Basedontheseglobaldrivers,BESTaimsat:
1. Radicallyimprovingthevalue/costratio,reliabilityandflexibilityofsupplyingdifferentbio-basedrawmaterials
2. Enablingtheincreasedavailabilityofbiomassrawmaterialsinasustainableway3. Creatingdifferentlocalenergyconceptsandnewconceptualdesignsforprocessintegration4. Boostingtheabilitytotailorbioenergysolutionstomeetthespecificrequirementsofeachmarket5. Creatingwaystosystematicallyassessthedevelopmentofthebusinessenvironmentanddeveloping
abilitiesforadoptingbothproactiveandreactivestrategies6. Activelydisseminatingtheresultsandtakingpartintheinternationalbioenergydiscussion
Uniquefeature-SustainableBioenergySolutionsforTomorrow(BEST)isaresearchprogramlaunchedinearly2013.Theprogrampartnerscurrentlyconsistof21companiesand13universitiesorresearchinstitutes.
Fundingtechnique-Theplanneddurationisfouryears(2013-2016)withanannualbudgetofroughly4MEUR.TheprogramiscoordinatedjointlybyCLEENLtd.
Norway - Centres for Environment / friendly Energy Research
Strategy-Thiswillconductlong-termresearchatahighinternationalstandard,withtheaimoftacklingenergy-relatedchallenges.
Purpose-TheobjectiveoftheschemeforCentresforEnvironment-friendlyEnergyResearch(FME)istoestablishtime-limitedresearchcentreswhichconductconcentrated,focusedandlong-termresearchofhighinternationalcalibreinordertosolvespecificchallengesinthefield.
Uniquefeature-Encourageenterprisestoinnovatebyplacingstrongeremphasisonlong-termresearchandbymakingitattractiveforenterprisesthatworkontheinternationalarenatoestablishR&DactivitiesinNorway.
- Facilitateactivealliancesbetweeninnovativeenterprisesandprominentresearchgroups.- Promotethedevelopmentofresearchgroupsthatareonthecuttingedgeofinternationalresearch
andarepartofstronginternationalnetworks.
EXAMPLESOFBESTPRACTICEPOLICYINITIATIVES
AUGUST2016 12
- Stimulate researcher training in fields of importance to the user partners and encourage thetransferofresearch-basedknowledgeandtechnology.
Fundingtechnique-ThetotalbudgetallocationfromtheResearchCouncilforthe11centresofFME-schemewillamounttoabout1200MNOKoverthelifespanofeightyears.
Scotland - SMART Scotland
Strategy - Provides grants too Small toMedium Enterprises (SMEs) based in Scotland. The grant helps youundertaketechnicalfeasibilitystudiesandresearchanddevelopment(R&D)projectsthathaveacommercialendpoint.
Purpose-SCOTLANDResearchandDevelopmentGrant(R&Dgrant)ofupto35%oftheeligibleprojectcosts,uptoamaximumgrantof£600,000,maybeavailabletohelpyoudevelopapre-productionprototypeofanewproductorprocess
Uniquefeature-seekstoachieveitsobjectivesbyprovidinggrantsonadiscretionarybasisfor,technicalandcommercialfeasibilitystudiesandresearchanddevelopment(R&D)projects.
Fundingtechnique-Supportsupto70%oftheeligiblecostsforasmallSMEandupto60%oftheeligiblecostsforamediumSME.Studiesmustlastbetween6and18months,andthemaximumgrantis£100,000.Onethirdofthegrantispaidupfrontwhentheprojectstarts.Theremainderispaidquarterlyinarrearsagainstclaimssubmitted.