How Much Market Do Market-Based Instruments Create?: An Analysis for the Case of "White" Certificates

In the context of economic instruments for more energy efficiency and climate protection, tradable certificates have been investigated for renewable energy and for a number of emissions. In contrast, tradable energy efficiency - or "white" - certificates have only lately been considered as a market-based tool to foster energy efficiency as compared to standards and labelling, for example. Theoretically, there is little doubt about the advantages. In practice, however, somefundamental problems arise. Critical issues are the design of an efficient artificial market for "white" certificates, its compatibility with the European emissions trading system, the identification of a suitable target group for an energy efficiency obligation and the measurement of energy savings as compared to a reference use of energy. We use the theoretical framework of Transaction Cost Economics to elaborate these issues. We conclude that transaction costs and investment specificity will restrict markets for "white" certificates in practise. Long-term contracts rather than spot trade will be the prevailing form of governance for energy efficiency investments.Tradable certificates; Energy efficiency; Transaction cost

Financing renewable energy: Who is financing what and why it matters

Successful financing of innovation in renewable energy (RE) requires a better understanding of the relationship between different types of finance and their willingness to invest in RE. We study the ‘direction’ of innovation that financial actors create. Focusing on the deployment phase of innovation, we use Bloomberg New Energy Finance (BNEF) data to construct a global dataset of RE asset finance flows from 2004 to 2014. We analyze the asset portfolios of different RE technologies financed by different financial actors according to their size, skew and level of risk. We use entropy-based indices to measure skew, and construct a heuristic index of risk that varies with the technology, time, and country of investment to measure risk. We start by comparing the behavior of private and public types of finance and then disaggregate further along 11 different financial actors (e.g. private banks, public banks, and utilities) and 11 types of RE technologies that are invested in (e.g. different kinds of power generation from solar radiation, wind or biomass). Financial actors vary considerably in the composition of their investment portfolio, creating directions towards particular technologies. Public financial actors invest in portfolios with higher risk technologies, also creating a direction; they also increased their share in total investment dramatically over time. We use these preliminary results to formulate new research questions about how finance affects the directionality of innovation, and the implications for RE policies

A new integral management model and evaluation method to enhance sustainability of renewable energy projects for energy and sanitation services

Autonomous systems based on the use of renewable energy (RE) have proven suitable for providing energy and sanitation services to isolated communities. However, most of these projects fail due to managerial weaknesses. Designing an appropriate management model is a key issue for sustainability and it is especially complex when includes different RE technologies. This paper is aimed at developing a novel management model for RE projects to provide energy and sanitation services with any kind of technology. Moreover, a new method to evaluate the sustainability is proposed regarding technical, economic, social/ethical, environmental and institutional/organisational dimensions. The case study of Pucara (Peru) is presented, in which a RE project with six different technologies was implemented and the integral community management model was designed in 2011. The project sustainability was evaluated in 2013 and results showed that the management model has succeeded to strengthen sustainability, especially in the institutional/organisational aspects.The authors would like to thank the anonymous reviewers for their valuable comments, which have helped to enhance this paper. The authors are grateful for all the assistance and support provided by Practical Action-ITDG from Peru.Lillo Rodrigo, P.; Ferrer-Martí, L.; Fernández-Baldor, Á.; Ramírez, B. (2015). A new integral management model and evaluation method to enhance sustainability of renewable energy projects for energy and sanitation services. Energy for Sustainable Development. 29:1-12. doi:10.1016/j.esd.2015.08.003S1122

A Regulatory Approach to Foster Bulk Electricity Generation from Renewable Energies in South Africa

Regulations to promote the application of renewable energy in the electricity sector are crucial to achieve the government’s target of increasing the share of renewable energy to 10 TWh within 10 years. Feed-In tariffs provides the highest certainty to accomplish a significant growth of renewable energy since it provide high certainty to investors and are easy to implement. For the design of a Feed-In tariff for South Africa it is recommended that operators of the distribution grid (i.e. the regional electricity distributors) are obligated to purchase electricity from renewable energy sources at a fixed price. The price is set according to the generic generation costs. Remuneration levels differ according to different renewable energy technologies. Off-grid energy systems, solar water heating systems, and demand side management programmes should be considered to be promoted with regulation, too. Promotion of renewable energy can thus form an integral part of the National Electrification Fund