The Global Energy and Climate Policy course offers an introduction to the theoretical and practical understanding of how energy and climate change policies are designed, shaped, advocated and implemented. As energy markets go truly global, domestic energy policies are becoming more and more entangled with wider issues of international governance. Concurrently, the urgent need to mitigate and adapt to climate change and transition to a low-carbon future is adding a further layer of complexity. The course is aimed broadly at people interested in learning more about interconnected issues in energy and climate policy globally. It assumes a level of interest but no necessary previous knowledge. However, the course also offers sufficient up to date research and new critical perspectives to be of interest to people with expertise in or academic familiarity with the topic as well. The main aim of the course is to provide this wide-ranging introduction in a self-contained, but in-depth form, alongside the important practical skills necessary to understand and discuss energy and climate policy, and lay the groundwork for greater engagement in the future – either through academic study, in the public, private or not-for-profit sectors.
Policy interventions to upscale renewables
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En provenance du cours de University of London
Global Energy and Climate Policy
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Up-scaling renewable energy: policy incentives
This week discusses the growing role of renewable energy sources such as wind and solar. It introduces the range of fiscal and other policy tools that governments’ use to promote an increase in the production and consumption of renewable energy.
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Harald HeubaumDr
Centre for International Studies and Diplomacy (CISD)
[SOUND]
Looking at the sort of the range of things
that you mentioned earlier in terms of the renewable solutions and
selectification of transportation of transport solar storage etc.
Where do you see the main sort policy leave us?
The main policy tools to enable and up scaling of renewable energy.
What do you think are the key things that need to happen
to create this environment in which renewables can grow more?
>> Well I think that the scientists and the entrepreneurs have done their job.
We do have the technology today and the problem really is
the momentum of the existing system and it does need government intervention, I mean
government is the collectively, this is a collective problem of climate change, and
so it does need some government intervention to insist in
the transition from a fossil fuel economy to a renewable economy.
>> In terms of the kinds of government intervention, that you think
are key or the most important ones, where can government be most effective?
>> Well if you look at historically where governments have been effective
in pollution control,
because this is a pollution control issue at the end of the day.
So there is just, what they call regulatory forcing just interdiction.
You can have mandates for
a certain percentage of electric vehicles for each manufacturer's fleet,
there's a whole series of regulatory, carbon taxation, is very
praxis of carbon until to level the plain field with renewables.
The renewables are becoming more and more competitive even without even
without carbon taxation.
I think that each country is different, each sector is different but
there are a large number of regulatory tools that governments
can use to assist in this transition.
>> Well I think there's incredible range of tools available to policy makers.
They range from demanding value has a specific percentage of renewable power.
We have tax breaks.
We have payments differential between the levelized cost of electricity and
the solar generated electricity.
These tools have been used in a number of places in the global north and
we have seen massive drops in the cost of renewable power.
We've seen huge increases in amounts of renewable power generated on a given day.
Sometimes up to 60, 70% of a nation's needs.
Obviously the intimacy can be some what of a challenge, but
I think that with renewables the art is to find the right mix
of generation technologies in the right place.
Where these is a huge opportunity however is in the global south.
One of the things in the global north is we've developed this incredibly
centralized system of electricity generation, transmission and distribution.
It's a very rigid system and
introducing renewables onto that obviously can cause some problems.
In the global south,
you have areas where people have no access to electricity at all.
You can actually build from scratch to completely distribute energy system
which provides people without access to power, that access that they need.
Without still mining through the fossil fuel reserves that we do have.
>> The key policy levers you need are to level that playing field for renewables.
There's a lot of indirect subsidies still being channeled into fossil fuel
production, distribution, and use.
Policy needs to deal with that somehow.
On top of that, there are other things like,
if you don't have carbon pricing in the system somehow, then you're always going
to have this effect of it possible being cheaper or easier to use fossil fuels.
Because the effects of a pollution in climate change are not paid by the people
running the plant or necessarily by the people buying the electricity.
So you need to have carbon pricing to make the global impact felt
on a local scale on a person producing the fossil fuels.
So I guess I would deal with subsides, you need to deal with carbon pricing,
you need to have clear transparency and
a long sight on what the tariffs would be for renewable energy investments.
Finance needs to know where its return is going to come from and
how that's going to work for a long time in the future renewable energy.
Projects investment is a lot of upfront cost.
And then you've gotta feed through, effectively very cheap power for
25 years on a PV plant, longer on hydro.
So you need that transparency on tariff.
Those, for me, are the three key points.
And then maybe deregulation so that you can have disputed energy solutions,
you can stop large utilities and monopolies on how energy is
distributed and possibly even address the way
they pay for by profit so they're not paying to produce more power but just pays
at some other level and how efficiently they solar power or something like that.
>> It's interesting to note that the supply chain and the underlying economics
of renewable technology are doing a lot of the work for policy makers by dramatically
falling order of magnitude over the course of the last numbers of years.
I think that what policy makers need to do is find a way to
embed renewable technology in the existing grid.
It's by no means straight forward, there needs to be much
broader investments in transformation and distributions technology.
Something which in some cases is very,
very difficult to push through areas of outstanding natural beauties,
certain neighbourhoods, nobody really likes powerline in their back ordinance.
One of the more intrusive aspects of the energy system
you could argue but I think you need that kind of inter connection because
the issues of intermittency are unlikely to go away in the short term.
What government can do in a way some of the software solutions,
if we consider the grid is the hardware then the software is the policy solution
that sits within it.
Capacity markets developing certain payments to keep back up on the system and
available to address intermittency from the environmental standpoint
decided the next I think I would come to be associated with such a system
because it's the most inefficient oldest plants that are the ones that are getting
these additional payments to stay on the system.
So, as opposed to a more efficient, perhaps you could argue gas-based system.
So, for me, capacity payments perhaps have a role to play, but
they're not a winner in and of themselves.
There needs to be this mix of software and hardware, and
government has to play a role in, essentially, supporting both.
Battery technology is the big bet that everybody is kind of placing right now.
And we're expecting battery technology cost to decline
on a similar path to what solar PV panels have done, over the next ten years.
And that will create some extremely interesting opportunities.
I mean you get utilities square battery storage or the residential level.
Then consumers and network operators can make some very very different types of
traces but above all governments need to be more consistent, far more consistent in
what they have in racing with technology cost establishing the that's outdated.
Because the technology cause of decline so rapidly is poorly designed policy so
there needs to be the structure in this ability to give the investor a certain
amount of confidence but I didn't needs to be able to move in a way which is
sufficiently reflective of the underlying technology cost.
>> Technology is like concentrated solar which concentrates the sun and
make steam or molten salt which you can store.
But you can only do this on a large scale.
This is very interesting for industrial applications.
And there's a role for that to play, there's a role for wind,
there's a role for a lot of different technologies, it's not a single technology
that wins the race, wind is becoming very very cheap now and
in areas where they have a very high wind soars, and very high capacity factors.
It really can replace fossil fuels.
I think also we need to adapt our use of energy to when it's available.
Everyone's saying, renewables are no good because they're intermittent.
Well, if you have a very large grid of renewables,
it's less intermittent because of the portfolio effect.
The wind mind be blowing here, if it's not blowing there.
And then if you have a global grid.
There is a project to build a global grid.
The sun is always shining somewhere on the planet.
But we can also adapt our use of energy and run
our washing machines during the day when there's lots of solar power for example.
And there was demand response.
And you can have tier pricing where industries pay a higher price
when there's less electricity available.
So there are solutions to the intermittency of renewables.
Then you have technological solutions and also market structuring solutions.
>> Again policy tools are very context specific.
So why is Jonathan very well.
They introduced one of the first
renewable energy targets in the world.
They are looking for 15% renewable energy by 2030.
Which is very ambitious given the scale of consumption on the rising demand on China.
So what they did is
they supported industries too, they supported research and development,
they gave positive tax incentives and loans.
They didn't use these type of
feeding tariffs that were used primarily in Europe.
But the consequence has been a huge increase in
the production and establishment of wind and solar in China.
>> The role of regulatory authorities in energy markets is going to
be absolutely critical in driving the low carbon energy transition.
The pressure on companies in the short term is acute to say the least.
The whole transformation of the utility business model in Europe where you have
loss making thermal assets very very strongly supported renewables.
These type of strategic re-orientations of business practice and
new business models I think we're only seen the start of it.
And there's going to be further developments in
one energy company actually is.
The technology sector is moving quite aggressively into energy
production enhance the technology to also help downstream in a way which
utilities are not going to be able to keep up with the way in which those,
the Googles and so forth of this world have become wedded to our every choice and
herein lies the problem, because they're probably going to have to be
in order to deliver the kind of returns which they've enjoyed in the past.
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