The Photovoltaic Crisis and the Demand-side Generation in Spain

The RES-E promotion policy in Spain gave priority to the photovoltaic (henceforth, PV) ground-mounted installations. For years, the coupling of customer-side generation coupled with excess energy exports was never specifically considered. However, some months ago this option was suggested as a way to recover the Spain’s PV sector from the current moratorium on the RES-E policy. A decree draft on on-site generation was issued, its central point being the consideration of electricity exports as delayed consumption rights. But several barriers hinder its entry into force. Unfortunately, Spain could be losing an important opportunity for encouraging PV investments while retail grid parity is being reached. This working paper analyzes the different types of PV demand-side generation from the point of view of consumer-generators and evaluates the economic and technical features of the regulation proposed in Spain and to date still pending

Combining tariffs, investment subsidies and soft loans in a renewable electricity deployment policy

Policy combinations and interactions have received a considerable attention in the energy policy realm. The aim of our working paper is to provide insight on the costeffectiveness of combinations of deployment instruments for the same technology. A financial model is developed for this purpose, whereby feed-in tariffs (FITs) and premiums (FIPs) are combined with investment subsidies and soft loans. The results show that combinin deployment instruments is not a cost-containment strategy. However, combinations may lead to different inter-temporal distributions of the same amount of policy costs which can affect the social acceptability and political feasibility of renewable energy support

Analysing the impact of renewable energy regulation on retail electricity prices [WP]

Retail electricity prices have substantially increased in the last decade in the European Union (EU) as a result of different regulations, raising the concern of policy makers. The growth in the support costs for electricity from renewable energy sources (RES-E) has often been singled out as a main driver of these prices. The aim of this paper is to analyse the degree of influence of RES-E promotion costs on the evolution of the retail price of electricity in the EU Member States. The analysis is carried out for households as well as for industry, with the help of a panel data econometric model. Our results show that the impact of renewable energy promotion costs on the retail electricity prices is positive and statistically significant, although relatively small. Differences across consumer types can be observed. An increase of 1% in those costs induces an average increase of only 0.023% in industrial retail prices and 0.008% in the residential retail prices. This impact on retail prices is mediated by the type of support scheme being adopted, with price-based support instruments showing a greater effect than quantity-based ones

Analysing the impact of renewable energy regulation on retail electricity prices

Retail electricity prices have substantially increased in the last decade in the European Union (EU) as a result of different regulations, raising the concern of policy makers. The growth in the support costs for electricity from renewable energy sources (RES-E) has often been singled out as a main driver of the increase in these prices. The aim of this paper is to analyse the degree of influence of RES-E promotion costs on the evolution of the retail price of electricity in the EU Member States. The analysis is carried out for households as well as for industry, with the help of a panel data econometric model. Our results show that the impact of renewable energy promotion costs on retail electricity prices is positive and statistically significant, although relatively small. Differences across consumer types can be observed. An increase of 1% in those costs induces an average increase of only 0.023% in industrial retail prices and 0.008% in the residential retail prices. This impact on retail prices is mediated by the type of support scheme which is adopted, with price-based support instruments showing a greater effect than quantity-based ones

Combining tariffs, investment subsidies and soft loans in a renewable electricity deployment policy

Policy combinations and interactions have received a considerable attention in the climate and energy policy realm. However, virtually no attention has been paid to the analysis of the combination of different deployment instruments for the same renewable energy technology. This neglect is all the more striking given the existence in current policy practice of combinations of deployment instruments either across technologies or for the same technology, both in the EU and elsewhere. What renewable electricity support policies to use and, therefore, how to combine them in order to promote the deployment of renewable energy technologies cost-effectively is a main concern of governments. The aim of this paper is to provide insight on the cost-effectiveness of combinations of deployment instruments for the same technology. A financial model is developed for this purpose, whereby feed-in tariffs (FITs) are combined with investment subsidies and soft loans. The results show that the policy costs of combinations are the same as for the FITs-only option. Therefore, combining deployment instruments is not a cost-containment strategy. However, combinations may lead to different inter-temporal distributions of the same amount of policy costs and, thus, differently affect the social acceptability and political feasibility of renewable energy support.Peer Reviewe

Combinations of support instruments for renewable electricity in Europe: A review

The aim of this paper is to review the combinations of RES-E support instruments in the European Union (EU), using different sources of data. It is shown that combinations are indeed a widespread phenomenon in the EU Member States. Not much attention has been paid to the combinations of primary instruments with other secondary instruments for the same renewable energy technology. It is found that the most frequent mixes of instruments are between feed-in laws (feed-in tariffs, and increasingly feed-in premiums), on the one hand, and investment subsidies, soft loans and tax incentives on the other. In a broad sense, the policy mix between primary and secondary instruments has experienced some changes over the last decade, mostly related to changes in the primary instruments themselves. Exclusion (i.e., ineligibility to apply for an instrument when the RES-E generator is already being financially supported by another instrument) and explicit coordination of support under primary and secondary instruments do not seem to be common elements in these policy combinations.Peer Reviewe

Designing auctions for concentrating solar power

Received 9 June 2018, Revised 23 October 2018, Accepted 30 October 2018, Available online 7 December 2018.As a relatively high-cost gap technology, concentrating solar power (CSP) still needs to be supported if it is to contribute significantly to the energy transition. Within this context, auctions have emerged worldwide as a relevant instrument for the promotion of renewable energy in general, given their alleged advantages in terms of cost-effectiveness and lower support costs, and they could also be used to support CSP. In turn, it is well known that the success of any auction depends on the choice of its design elements. The aim of this paper is to identify the most appropriate design elements to promote CSP through auctions. An empirical analysis of CSP auctions in five countries is carried out in order to draw some lessons on the pros and cons of different design elements which should be considered specifically in auctions for CSP deployment. Our results show that, depending on the policy goals of the government, some design elements may make more sense than others. If effectiveness in deployment is the main goal, then valuation of dispatchability, strict prequalification requirements, site specific auctions, coordination between the auction and administrative procedures, long enough lead times and construction times are particularly recommendable. If minimization of support costs is the government's priority then price-only auctions, low prequalification requirements, absence of local content requirements, on-site auctions, long deadlines, long PPA duration, provision of resource measurements and multiple rounds would be preferable. Finally, if local economic development is a main goal, then local content rules may make sense, as long as there is a minimum manufacturing capacity in the country. Trade-offs between policy goals are unavoidable when choosing design elements in CSP auctions and should be taken into account and, if possible, mitigated.Peer Reviewe

Prosumers’ Behavior under a Regulation That Encourages Strict Self-Sufficiency. The Case of Spanish Photovoltaic Micro-Generation

The reduction of equipment costs encourages the diffusion of photovoltaic micro-generation, however, proper regulatory measures should be implemented to facilitate self-production dissemination and to promote the emergence of new electricity markets which integrate prosumers. The specific form of these markets will depend on the level of prosumers’ self-sufficiency and the type of grid to which they will be connected. Unfortunately, Spain has been an example of resistance to micro-generation deployment. However, some things have started to change recently, albeit only to a certain extent. This article explains the key elements of the latest regulation of photovoltaic microgeneration in Spain and, through a stylized model, describes the economic behavior of prosumers in such a regulatory framework. It is concluded that this regulation only encourages prosumer plants which are strictly focused on self-sufficiency because it discourages exports and limits capacities and this regulation discourages the smart renewal of the distribution grid because it prevents prosumers from participating in the electricity market. It is recommended that the aforementioned regulatory limits be removed and pilot experiences for the market participation of prosumers be promoted by creating the appropriate technical and regulatory conditions, for example, at the municipal level.Peer reviewe

The Economics and Policy of Concentrating Solar Power Generation

This book provides an up-to-date analysis of state-of-the-art concentrating solar power (CSP) generation. It focuses on the economic analysis of CSP generation technologies as well as the policies that have been and are being used around the globe to support it. The book describes the industrial sectors whose products make up the solar field, including the traditional manufacturers of turbines and generators.The authors provide the main theoretical tools needed to comprehend the costs of CSP technologies compared to other competing technologies (both conventional and renewable) and discuss the conceptual rationale behind creating public support for these technologies and the costs of various promotional techniques. Further, the book examines the concepts from different disciplinary traditions in economics (including environmental, innovation, industrial and public), which are then combined and integrated for an analysis of the costs and policies of CSP electricity.Addressing the main findings and the challenges for future CSP, the book is a valuable resource for researchers and practitioners. It is also of use to industrial engineers, as it identifies the features of the sector’s supply chain value, rooted in and supported by an industrial economics approach.Peer reviewe