The International Energy Agency’s Implementing Agreement on Renewable Energy Technology Deployment (IEA-RETD) recommends six practical and realistic categories of policy options for the next five years, graphically represented by the six-pointed ACTION Star.
Ideally, all six actions will be included in the policy portfolio in order to facilitate a quick start by removing major barriers to deployment and attracting the required financing to renewable energy and associated infrastructure. Policy makers can choose to give priority to one or more particular actions as needed.
IEA-RETD and other studies analyzing experiences with policies for renewable energy reveal four overarching guidelines for getting on track:
• Combining renewable energy deployment with improvements in energy efficiency is essential to a cost-efficient transition.
• Maximizing benefits and thus support for renewable energy are key. Broad stakeholder participation in planning or ownership of projects can minimize opposition (reducing risks and costs), increase available funds for investment, and increase public and political support for renewable energy.
• Designing a robust financing framework that can withstand economic crises is critical for improving the attractiveness of investing in renewable energy and associated infrastructures within changing landscapes.
• Overcoming the inertia and acceptability issues will be a “game changer”
as there are powerful forces working against a transition toward an
energy supply based predominantly on renewable energy.
Policy makers can yield near-term results by applying six key lessons. These actions are not necessarily in order of priority. Ideally, a policy portfolio contains all six elements:
• Alliance building to lead the paradigm change
• Communicating and creating awareness on all levels
• Target setting at all levels of government
• Integrating renewables into institutional, economic, social, and technical decision-making processes, while integrating renewable policies with efficiency policies.
• Optimizing and applying proven policy instruments
• Neutralizing disadvantages and misconceptions
^ The transition to a sustainable energy system based primarily on renewable energy cannot be achieved solely from the top down. A collaborative effort is needed to overcome powerful forces working to maintain the status quo, as well as lock-in to existing infrastructure, technologies, and mindsets, all of which create inertia and slow the pace of change. Collaborative efforts among policy makers and stakeholders will also help to ensure that policies are designed and implemented effectively. Thus, new alliances are required, among policy makers, investors, environmental organizations, businesses, communities, households, countries, and regions.
The transition toward a truly sustainable energy system will have a major impact on human society. It will bring significant and broad-reaching benefits in the short term, and particularly in the long term, compared with the costs of continuing on the current energy path. Thus, it is imperative that action begins NOW. At the same time, the transition will not be an easy process. Political decisions are generally taken based on short-term needs, especially in times of economic crisis; there are powerful forces working to maintain the status quo; and lock-in to existing infrastructure, technologies, and mindsets create great inertia that slows the pace of change.
Large-scale deployment of renewable energy will demand a conscious effort by all stakeholders involved, and a large increase in the number and breadth of stakeholders—policy makers, businesses of all sorts and sizes, communities, and individuals. Given the global challenges faced, a collaborative effort is required. Hence, alliances need to be built among countries and within regions; between governments and the private sector, including energy companies and utilities; between businesses and non-governmental organizations (NGOs), and communities, and so on. Such alliances can underline the crucial role of renewable energy and energy efficiency in future energy systems, and can help to shape this future.
How can governments and businesses create effective alliances? What examples of successful models can be followed? Are there successful examples of engaging utilities and traditional energy companies in the renewable energy sector and changing mindset such that they see renewable energy as mainstream?
Examples of policies and strategies:
• Green alliances are already being formed, either as green industrial alliances, public-private cooperation in promotion of and communication on renewable energy, “green deals” between industry and government, cooperation between environmental NGOs and industry, or in other forms. The role and commitment of governments can be increased, for example, by reaching out beyond the most obvious stakeholder groups (such as the main energy producers, and primary industrial and service consumers).
• Assess the levels of support for renewable energy technologies among different stakeholder groups, and the drivers for opposing or supporting them.
• Find creative ways, through existing policies or innovative new ones, to address stakeholder concerns and to encourage broad (including local) ownership and investment strategies for renewable energy projects and related infrastructure.
It is important for decision makers across societies to recognize the potential, opportunities, and benefits of renewable energy and to have the knowledge, workforce, and skills to realize them. This requires continuous consultation among stakeholders about their experiences and interests, as well as multidirectional communication about issues and benefits of renewable energy. The broader public (including policy makers) needs to understand the full economic and social costs of the current energy system (including external costs) and the renewables potential to provide a growing share of energy supply. Misconceptions need to be corrected with accurate information. Policy makers on all levels need to understand what is required to attract investment and to advance renewables. Policies and regulations need to be widely known, transparent, and easily accessible to relevant actors. Renewable resource potential needs to be measured and information made accessible. Further, a skilled workforce is required.
Examples of policies/strategies:
• Partner with the private sector to gain understanding of renewable energy technologies (and related infrastructure needs) and challenges to the industry in order to develop relevant or innovative support policies.
• Work with media (radio, television, newspapers) on public service announcements regarding potential of renewables, existing policies, and policy changes (where relevant), and make information easily accessible through the internet.
• Use the building permitting process to target relevant decision makers and educate them about renewable energy policies and systems.
• Establish training programs for skilled workers across the supply chain, and also in related fields (architects, plumbers, city planners, etc.) at regional and local levels.
Чц Target Setting at All Levels of Government
Ambitious and realistic long-term and interim targets, preferably binding, at different levels of government provide the desired predictability to the energy market. Such targets need to be grounded on clear general goals, and need to be advanced by specific renewable support policies that promote not only the deployment of renewable technologies but also the development of needed infrastructures. This will create a stable and favorable investment climate for renewable energy technologies. Countries like Germany, Denmark, and China are proving the effectiveness of ambitious targets in combination with strong support policies, as are many local governments.
Deployment can be ensured by targets at the local, national, and international levels, as well as targets by sector (i. e., power, transportation, heating, and cooling).
Examples of policies/strategies:
• Explore the opportunities for target setting among groups of countries at similar levels of economic development, such as the G20 or OECD framework.
• Explore the opportunities for regional target setting, for example, for South America or North Africa.
• Encourage businesses to set internal targets or partner with others to establish broader targets and share purchasing, and so forth.
Since the 1980s, many countries have worked to integrate the environment into various areas of policy making and infrastructures; the same should be done with renewable energy, taking advantage of synergies with energy efficiency. By integrating renewables into building and construction codes or policies to support, for example, innovation, finance, urban planning, and broader economic development, renewable energy will achieve a higher status that will, in turn, help to reduce regulatory inconsistencies and barriers to their deployment. The same applies to the technical integration of renewable energy technologies into grid systems and other infrastructure.
Renewable energy manufacture and deployment have the potential to create new jobs and economic growth, providing a strong business case for their acceleration. However, in order to bring this about, governments face the challenge of developing a consistent set of policies along every segment of the technology value chain: from research to technology innovation, to manufacturing, to domestic deployment, to infrastructures and to export markets.
One of the most significant conclusions of RETD work is that renewable energy should be considered part of the whole institutional, economic, and infrastructure system, instead of a separate area of policy. By incorporating renewables into other or broader areas of policy, regulatory inconsistencies and barriers to renewables can be reduced, enabling progress to occur in a more efficient, effective, and sustainable manner. Broad public participation is also important to ensure that stakeholders at all levels have a voice in the process, thereby minimizing opposition and maximizing support for renewable energy.
Such an integrative approach is important for attracting the massive financial flows and the strong, broad public support that will be required for a significant scale-up in renewable energy manufacture and deployment.
While integrating renewables into systems and infrastructure, quality standards and certification criteria are also required in order to prevent
low-quality technologies, installations, or unsustainable production (e. g., of biofuels), and to develop consumer confidence.
Examples of policies and strategies:
• Improve the organization and regulation of energy markets and infrastructures in order to enable system optimizations and an increased uptake of renewable energy (e. g., related to smart grids, the emergence of “prosumers” (consumers that are also becoming producers). The more mature and cost-effective renewable energy technologies should be treated as mainstream technologies, rather than as niche technologies that are marginal in the energy system.
• Enact regulations that require renewable energy technologies (and energy efficiency improvements) as a component in new and existing buildings.
• Use the model of energy service companies for the integration of renewable energy in the renovation of public buildings.