Every country in Europe which supports the generation of renewable
electricity has a different system for doing so. This is a rundown
of how they work.
Austria
Support for renewables (mainly biomass) is based on grants or subsidised loans from national ministries, regional government and local authorities. A good infrastructure of regional energy agencies supports the planning and management of projects. There is no formal standard payment for the output from schemes.
Denmark
An agreement with the Danish government means that utilities have to pay 85% of the consumer price for the renewable electricity. In addition to this the government allows a refund of energ tax ( a direct payment from electricity companies to the generator), the carbon dioxide tax and the VAT payable on energy tax. This nearly doubles the standard payment. No competition is involved to qualify for these payments, but schemes must have planning approval and a source of finance in advance.
France
Under a new incentive programme, prospective renewable developers bid for power purchase contracts through competitive tenders. This is similar to the UK's NFFO, with the aim being to push down prices until renewables can compete in the open market. There will be no specific tariffs but an upper and lower limit. Wind is being given priority status in the French target for up to 500 MW of renewables by 2005.
Germany
The 1991 Elecricity Feed Law established a standard payment for renewable energy generators of 90% of the average retail price. Eligibility is not based on competition but the payments are still at the discretion of those administering the programme. Planning permission is required in advance. Some regional governments also make payments smaller companies can obtain cheaper loans through the Duetsche Ausgleichsbank.
Greece
Installation subsidies, tax credits and favorable depreciation rates for renewables have been backed up since 1994 by a system of direct payments to electricity producers for their output. Generators who produce electricity for their own consumption and sell the surplus to the grid are paid 70% of the consumer price; "independent power producers" are paid 90%. This new law also places an obligation on the state-owned Public Power Corporation to buy renewable energy from independent producers up to 50 MW limit.
Italy
A premium price is paid for renewable technologies by the national electricity board, ENEL, and raised directly from consumers' bills. Projects have to be approved by the Ministry of Industry, although the final contract is with ENEL.
Netherlands
Since early 1996 a new system of price support for renewables has been in operation, shifting the emphasis from capital grants to tax incentives. Under an agreement between wind developers and the Dutch Electricity Association, a standard price for wind energy projects up to 2 MW of 16.3 cents/kWh has been agreed. This adds an environmental credit of 5.4 cents plus arefund on ecotax of 3 cents to a basic " avoided cost" payment of 7.9 cents, doubling it in the process. VAT on " green" electricity is also reduced from 17.5% to 6%.
There is also a new tax break programme and encouragement for green investment funds. See the Netherlands Country survey in this issue (Oct. 1996 EWEA and BWEA "Wind Directions Magazine") for further details.
Spain
Through a government programme aimed at reducing CO2 emmisions, renewable energy projects of less than 100 MW recieve 12.37 Pesetas/kWh, which is 88% of the price paid by domestic consumers. Five year contracts are awarded. In the Galicia region, where there are plans for up to 5,600 MW of wind, licences have been linked to economic development by giving preference to companies which intend to generate the most local employment.
Sweden
An Skr 240 million investment support programme, offering up to 35%
towards the capital cost of turbines, was launched in 1991 and then
topped up in 1995. There is also now an environmental bonus paid to
wind energy producers of Skr .09/kWh.
Since electricity privatisation at the beginning of 1996, consumers
have the right to choose where they buy their power. This has
resulted in "green electricity" schemes with both consumers and small
businesses opting to have their supply from wind energy.
UK The Non-Fossil Fuel Obligation requires electricity companies
to buy a certain amount of renewable electricity.
Generators are paid a premium price by the companies, who are then
reimbursed from the fossil fuel levy, a payment added to all customers
' electricity bills.
Contracts under this system are awarded on a competitive basis within
the bands for each technology, including wind. Both the amount of
capacity awarded contracts and the method of deciding the eventual
price has changed with each successive round of bidding. But the
essence of the system is that the lowest priced electricity gets
the contract.
