Delusion of how Europe out of subsidies to renewable energy pricing?

Polaris solar PV net news: changing shock waves continue fermentation, cut its forecast of China’s electricity prices will be honoured. For this there is no price advantage for renewable energy, seemed like a bolt from the blue. Recently, the United Kingdom Government announced further reductions in renewable energy subsidies, which also makes the ROC trillion solar subsidies dispute volume is growing.

Never clean energy transition to clean energy, is an era in the progress of civilization, that is undeniable. But in this wonderful and long time, big subsidies are a panacea? Such a systemic blood transfusion can go far? There are no ready source of international experiences for reference? In this issue, South of excerpts for all the European countries renewable energy pricing policies and characteristics analysis of article, author, political dry from the State grid Energy Research Institute, take a look at the European renewable energy pricing policy looks like.

European renewable energy power price policy and analysis:

A basic situation, European renewable energy development

Development of renewable energy has become the European countries to enhance the core competitiveness, security of energy supply, an important strategy to address climate change. European renewable energy to wind power and solar power. By the end of 2013, the European renewable energy installed capacity total installed capacity of 33%.

About 120 million kW of installed capacity of wind power to meet electricity demand of about 8%, Germany is the biggest country in the European wind power capacity, followed by Spain, and France, and Italy;

PV installed capacity exceeds 80 million-kilowatt, able to meet the electricity demand of about 3% of Europe, Germany is Europe’s largest PV market in the world, followed by Italy, and Spain, and France.

In December 2008, the EU issued a “20-20-20” strategy. According to the national action programmes submitted by the Member States in 2010 and 2020 the EU wind power installed capacity will exceed 200 million-kilowatt, solar power generating capacity will be more than 90 million-kilowatt. Recently, the EU proposed by 2050 the greenhouse gas emissions in 1990, on the basis of the Grand goal of reducing 80%-95%, and publish the roadmap 2050 EU energy, therefore the development of renewable sources of energy will continue to be the EU energy strategy.

Second, European renewable energy price policies and features

European countries due to the different political traditions, policy frameworks, renewable energy price policy therefore there is no complete unified model, but from the application perspective, the Government mandated power grid enterprises in a certain price within a certain period to buy renewable electricity within the network coverage of fixed price policy (FeedinTariff) is the most widely used, the most common and most successful pricing model.

Currently, 20 of the 28 Member States of the European Union country’s fixed price policies, in addition, the United Kingdom, and Italy and Malta also adopted the policy of specific types of renewable power. Fixed price policy originated in Germany, the original form is directly specified that the renewable electricity price, including Germany, and France, and Ireland, and Greece 11 EU Member States is to adopt this way of Government pricing. Referring to Germany and other European countries on the basis of experience, also on wind power, solar power and other renewable energy development and benchmark price policy.

In order to encourage the participation of renewable energy market competition, some national renewable electricity market mechanisms on-grid prices linked to the market price and, for renewable energy power generation enterprises to provide the possibility of another price mechanism. In other words, renewable power and other conventional power supply bidding, the Government based on its closing price, certain subsidy unit of electricity, renewable energy final price for “market-closing price + Government subsidies.” Electricity market price is constant motion, Government subsidies are also regularly adjusted, but the pricing directly with the Government under the price level will be kept at a basic level, countries are Denmark and the Netherlands. In order to avoid the wild swings in the market and the impact of power generation enterprise earnings would normally require price upper and lower limits.

Market-linked pricing is the trend of European renewable energy tariff policy. In Germany, and Spain, the Czech Republic, Slovenia and other 4 EU Member States, two fixed price methods co-exist. Spain renewable energy power generation enterprises in Government pricing and pegged to choose between, each choice once a year. Starting from 2012, Germany also allows renewable energy businesses each month to make a choice. As of February 2012, Germany has nearly 60% of wind power installed capacity market-linked ways.

Studies have shown that European renewable fixed price mechanism has gone through the evolution process from rough to refined. Overall, the European renewable fixed price mechanism was with the development of renewable energy, according to new developments and constantly adjust and improve, countries also learn from each other and draw lessons from, so Governments have common features, also maintain a certain country-specific characteristics. Renewable fixed price mechanism including pricing mechanisms and adjustment mechanisms in two aspects.

(A) pricing mechanism mainly take into account the real cost of power generation projects, application status, capacity and resources, new technologies and so on, focusing on equitable principles

Renewable energy price levels are closely related to local resources. In General, the resources to poorer areas, electricity price increases. In Germany, virtually no two blower price is the same.

Germany based on actual wind turbine electricity generation and see the ratio of wind turbine capacity to identify the age limit for the fan to enjoy high initial price, the ratio of smaller, enjoy a high initial price longer. France provides the fixed price period of wind power for 15 years, 5 years after electricity prices depends on 10 years before the average equipment utilization hours, wind turbine efficiency, the higher the previous 10 years, 5 years after the price lower. France in PV on-grid price policy enacted in 2010, light-poor Northern region price is 1.2 times in southern light better.

To power generation projects in different capacity range of price differences. Photovoltaic power generation, a single larger the installed capacity of the project, lower the unit cost of electricity, which is also reflected in the price level.

Germany building PV on-grid price is divided into 5, electricity price from € 13.5-19.5 euro cents/kWh (equivalent to 1.12-1.61 Yuan/kWh).

Italy conventional PV on-grid price according to the installed capacity is divided into 6, electricity price in 17.1 cents-27.4 cents/kWh (equivalent to 1.42-2.27 Yuan/kWh).

United Kingdom building PV on-grid price is divided into 7, tariff-21.0 8.9 pence pence/kWh (equivalent to 0.89 Yuan-2.09 Yuan/kWh).

Pioneered the application of new technologies in power generation projects for additional price incentives. Grid-friendly technology use can increase in the generation of renewable power of predictability, control and dispatch, but will also increase the cost of investments in power generation projects, application of this new technology needs the support price policy, to encourage the grid-friendly technology and other new technologies. Germany put into operation by 2015, wind farms can provide system services to give additional price incentives of 0.48 euro cents/kWh. Italy on the use of new technologies of architectural PV integration project, concentrating photovoltaic power generation project price is generally higher than conventional photovoltaic projects.

(B) adjustment mechanism to reflect changes in the cost of electricity, are related to changes in the market, their consistent planning, cost control, the goal is to create incentives to exit the path to achieve its balanced and orderly development of renewable

Electricity price for regular assessment of the level and lower. Under such factors as technological advances and economies of scale, renewable energy costs rapidly decline. In order to make the price level commensurate with its power generation costs, avoid excessive incentives, create a fair market environment, some European countries have established a tariff assessment and reduction mechanism on a regular basis.

Germany onshore wind power price 1.5% percentage, offshore wind 5% percentage. France wind power price percentage 2%. Italy from January 2012 to December, according to the type and size of the plant, cut electricity prices every six months. Spain and the Netherlands wind power price yearly government subsidy on the basis of technological progress and its power cost adjustment at a time.

According to the plan targets adjusted price. As a new industry, renewable energy development than government planning and industry expectations, regular price adjustment mechanism can no longer meet the needs of rapidly changing renewable energy market. Therefore, some European countries according to the plan targets adjusted price.

Germany determine annual added PV installed target is 2.5 million-3.5 million-kilowatt, if Shang annual added scale over this a target value, is to raised decline rate, over planning capacity more more, decline rate raised range more big, instead cut decline rate (due to cut range insufficient to inhibit overheating of investment enthusiasm, Germany 2010, and 2011, and 2012 actual added PV capacity are over 7 million-kilowatt, far Super Government target). Spain provisions when photovoltaic capacity planning-capacity 85%, after the cut on-grid project price. Portugal in renewable energy installed capacity reaches a certain volume will be lowered price.

In addition, some European countries number of hours to be able to get subsidies made special provisions. Spain access to electricity price subsidies for wind power, photovoltaic power generation hours restrictions. For generating the number of hours in excess of the prescribed number of hours wind farm, the excess will not enjoy government price subsidies. Within three years starting from December 2010 each year are subsidised as a PV number 1753 to 1250. Starting from July 1, 2012, Germany 10-kilowatt and the power of small PV power station 80%, and 1 MW and PV 90% electricity to get price subsidies (10% or 20% in the remaining electricity production or for personal use, or in accordance with the market price for sale).

In addition to the fixed price mechanism, European Member States also set up a pricing mechanism based on renewable energy quota system. Sweden and the United Kingdom, and Belgium, and Italy, and Poland, and Romania and 6 countries to establish a quota system based on tradable green certificates, the core of the policy requirement for renewable electricity to account for a certain percentage of the total electricity consumption. Set quota targets at the same time, also established a green certificate market. A power generation business unit generating capacity available green certificates, and certificate trading. Sweden green certificate costs about 300-400 Sweden krona/MWh (about 0.25-0.35 Yuan/kWh), renewable electricity price under the quota system is made up of sales of electricity market price and certificates of the green certificates market prices.

In the early development of renewable, franchise bidding in some European countries, renewable energy electricity price according to the tender price. Offer minimum access to project management, the Government guarantees in accordance with the bid price to buy the electricity of renewable energy power generation projects. It is in many European Member States used in the initial incentive policies for renewable energy development, but have gradually been replaced by other forms of incentive policies are now not included in the mainstream European policy. France, and Denmark and some other countries on the role of offshore wind power with a demonstration project in the concession policy.

Third, the suggestions for China

In 2009, China developed a wind of new price mechanism, greatly promoted the development of wind power, solar photovoltaic power generation in 2011 benchmark price commenced subsequently developed a distributed PV electricity price subsidies. With Germany, and Spain and other European countries, renewable energy generation price mechanism in China is still in the rough stages, still needs to be further improved and perfected, there are two main aspects of the recommendations.

(A) tariff needs to correspond with the cost

Renewable energy generation projects in resources, capacity, application of new technologies, such as different direct causes of cost differences objectively price reflect differences in these areas. Respectively to the four wind resources area of our country to develop a wind of new price, but PV on-grid price has not reflected solar energy resource differences between regions of different capacity project is taking “one size fits all” approach. Suggested further resources, the installed capacity of photovoltaic grid-connected power price mechanism.

(B) the flexible adjustment of the tariff mechanism should be established

With the expansion of technology and development, renewable energy costs rapidly downward trend, from a lower social cost, encourage power companies to reducing cost and increasing efficiency, avoiding the ups and downs of the industry point of view, the Government should gradually reduce price subsidies, subsidies completely exit. New benchmark of China’s wind power price three years, price levels without any adjustments, wind project costs dropped significantly during this period, in the case not considered abandoned wind power factor, wind power costs have been significantly reduced, which in recent years were caused by explosive growth in wind power, and had to dissolve hard problems. Photovoltaic cells and rapid decline in component costs, but PV on-grid price policy made no mention of a mechanism of adjustment. Recommended that the relevant departments of the European experience, according to the changes in costs and the national planning objectives formulated wind, PV on-grid price for flexible adjustment mechanism.

Original title: delusion of how Europe out of subsidies to renewable energy pricing?

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