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07 February 2012

Answers to the Renewable Energy Consultation

In Computing circles there is this old concept of Deadline Oriented programming. Just a metaphore for those moments when one has to make things work in very creative ways to meet that dreaded day of delivery. In my Faculty years I used such programming paradigm in a few occasions.

These days such practices are imposed by the vicissitudes of the daily routine. Today closes the Consultation on Renewable Energy and up to this evening I hadn't written a single sentence. A deadline oriented answer was in order, with the main topics laid down in telegraphic manner. Below the fold is the “source code”.

A.1. Is there a role for new targets for renewable energy sources post-2020 assuming that any targets must be consistent with climate mitigation and energy efficiency policies and targets as is currently the case with the 20/20/20 targets in the Europe 2020 strategy?

Yes, a combination of EU and sectoral level targets is appropriate

A.1.1. Please explain the reasons for your answer (such as the scope and contribution from GHG targets/ETS, the need to address other environmental, security of supply or technological development benefits)

The ratio of world fossil fuel extraction per capita will not only continue to decline after 2020, its decline rate shall accelerate. The gap left by the decline in world oil production cannot be covered by other fossil fuels to provide for much longer the same fossil energy per capita the world has enjoyed in recent years. Having exhausted the larger part of its fossil reserves, Europe remains one of the most vulnerable regions in the world to this decline. Having the proper energy policies, promoting alternative indigenous sources, can spare us the economic disruptions that force a disordered and painful demand destruction like the one we live today in several states of the Union.

A.2. Are other policy elements necessary to promote renewable energy post-2020, such as:

Enhanced focus on R&D to bring down the costs of renewables technologies

Facilitation policies (faster and easier permitting, improved access to the grid and further grid investments, availability of more sites for renewables, etc)

Abolition of support mechanism or subsidies to other energy sources

Better financing possibilities

Other: Legal bindings that guarantee stable fixed-in tariffs long term, in horizons of at least 20 years.

B.1. Do you consider that financial support will continue to be necessary to support renewables post 2020 given their expected greater penetration?


B.2. If renewable energy sources require support post-2020, how do you think this can best be achieved with a view to achieving a cost-effective deployment?

Open up national support schemes to cross-border projects

Making support schemes more market-oriented - Feed-in tariffs must be totally transparent, ideally a simple function of EROEI and project lifetime. Considering the uncertainty around EROEI calculations (especially for new technologies), the feed-in tariff should at least be a clear contract that anticipates revenues in time during the first years of operation and on a second phase bounds the producer to low price production up to the end of the expected system life-time.

B.3. Do you think it would be useful to develop common approaches as regards Member States' financial support for renewables?

Yes, with EU-wide benchmark values for support level per technology

B.4. Should the structure of financial support be gradually aligned EU-wide?

Yes - A single feed-in tariff should exist for each technology EU-wide. A convergence period of some years could be employed for a smooth transition. EU-wide tariffs are vital to guarantee high EROEI, i.e. avoiding investors applying for solar power projects in Scotland instead of Spain because of different financial support.

B.5. With regard to questions B.3. and B.4. please specify if you see a difference between the different sectors (electricity, heating and cooling, transport).

No, they should be totally harmonized

B.6. How do you see the relation between support schemes for renewable energy and the requirements of the internal electricity market for the period after 2020 against the background of a rising share of renewables?

Member States need to open their support schemes to renewable generation from other Member States. This should be achieved by the harmonization of support schemes.

B.7. Do national support schemes and differences between such schemes distort competition?

Yes, all support schemes distort competition to a similar extent. But actually this is what we want: distorting the market in favour of internal energy sources, insulating our economy from external scarcity.

I skipped the C section because I do not know the subject in enough detail.

D.1. Do you consider that any of the following national rules and framework conditions will still create obstacles to renewable energy production after 2020?

Balancing rules and Curtailment regime - regular curtailments have an obvious impact on the project pay-back time horizon; the same effect comes out of balancing rules. It can be an unbearable source of uncertainty for an energy project and avoid investment altogether. They can also impose an unjustifiable EROEI reduction.

D.2. Which renewables-specific grid related rules do you consider necessary and proportionate in a post-2020 perspective?

Priority or guaranteed access - it is essential that a renewable energy project can deliver every single kWh of energy it can produce, otherwise both the financial and energy returns on investment get negatively impacted.

D.3. With regard to system integration of wind and solar power, what measures do you consider most important to increase the flexibility reserve of the system:

Increase flexible back-up capacity (capacity payments …)

Increased availability of storage

Enable renewable generators to offer balancing services to TSOs

E.1. In which of the following ways could renewable energy be made responsive to market signals?

Producers of renewable energy should continue to be treated separately (no exposure to conventional market)

E.2. How can it be ensured that market arrangements reward flexibility?

Favourable regulatory treatment of storage operators

Develop demand response to market signals - Energy consumers must be made aware that prices vary with the time and that they can make a profit by either changing consumption to off peak hours or by storing energy. Like renewable energy producers, energy consumers must start thinking in advance.

E.3. In how far do you think today's market design needs to be adapted to provide an appropriate framework for renewables

Electricity markets should evolve into energy services markets, earning revenues from more than just electricity

F.1. What do you consider to be the main barriers against a stronger uptake of renewable energy in the heating and cooling market beyond 2020?

Costs/lack of financial support

Lack of awareness

F.2. What pathways do you consider to be the most promising for further increasing the share of renewable energy in heating and cooling beyond 2020?



Solar thermal

F.3. How do you see the interaction of promoting further use of renewable energy in heating and cooling and enhancing energy efficiency in this sector?

This is a very important point. A good part of the traditional systems with which renewable systems compete run on electricity. Renewable electricity generation systems tend to have near zero marginal generation costs, thus an increase in the amount of renewable electricity reduces prices and increases the competitiveness of traditional acclimatization systems. Left to the market in these conditions, renewable acclimatization may never come to take a relevant place. At some point, policies to phase out traditional systems must be put in place, such as special taxes on new AC units.

G.1. What do you consider to be the main barriers against a stronger uptake of renewable energy in transport?

Lack of infrastructure

Limits of availability of sustainably produced biofuels

Other - the higher volumetric density of fossil fuel based energy vectors

G.2. What sectors of transport do you consider to be the most promising for further increasing the share of renewable energy?

Rail - being grid connected it avoids the many issues of on board energy storage.

Water - highly efficient and capable of taking advantage of renewable energies on board.

H.1. Do you think that additional sustainability criteria are necessary in the post 2020 period?

Yes, additional criteria should be introduced to promote only the best performing biomass. Any agricultural crop dedicated to energy production should be phased out. In first place for the additional demand of fossil based inputs they demand; secondly for at our latitudes agro-fuels have very low EROEI; and finally because expensive fossil fuels impose enough strain an Agriculture on their own. Only waste or agricultural/forestry by-products should ever by used as energy sources.

These issues do not concern other technologies not based in agriculture, like bio-diesels produced by algae.

I also skipped section I.

J.1. For a first set of renewable technologies, namely wind, solar, bio-energy, the SET Plan aims at a cost-competitive market roll out of renewable energy by 2020. It also aims at enabling integration of renewable energy into the electricity grid and smart cities and communities. In your view, what would be the remaining key challenges of these technologies to be addressed by research and innovation in view of the 2050 objectives?

System integration

J.2. Which additional measures and/or instruments should be developed to address these technologies and their remaining challenges and to ensure that the EU innovation fabric is geared to supporting the significant deployment up to 2050?

As stated in sections A and B the most important factor will be a stable legal framework where feend-in tarifs are effectively guaranteed and bound investors long term. No large scale deployment shall happen without this.

J.3. In your point of view, which technologies other than those covered by the current industrial initiatives should be given priority in the post-2020 perspective? Please justify with reference to the criteria mentioned above, i.e. large-scale availability and willingness of industry to engage in public private partnerships?

Without knowing industry willingness to engage in PPP I'd point out two that have high scalability :

Hot-dry rock: a multi-decade investment capable of scale up to the same size of the Nuclear park today.

Wave-power: also highly-scalable, although it overlaps Wind power in power over time. Nevertheless a way to produce energy near-shore with minimal visual impact.

J.5. Do you consider that assistance in technology development should be linked to a certain result to be achieved by a certain deadline?

Certainly. We cannot wait 50 years for a technology to mature, has it has been hapening with Hydrogen as an energy vector.