Linking promotion strategies for RES-E and for demand-side conservation in a dynamic European electricity market: Lessons from the EU project OPTRES, FORRES and GREEN-X

The objective of this paper is to describe the derivation of least-cost strategies for an significant increase of electricity generation from renewables (RES-E) with minimal costs for European citizens and to investigate the role of accompanying demand-side conservation (DSC) activities. The analyses are conducted by using the model GREEN-X funded by the EC. It allows analyses for both, the EU as whole as well as for every single member state. Within the model the most important RES-E (e.g. biomass, wind-onshore and off-shore, geothermal, PV, solar thermal ...) technologies are described for every EU-15 country by means of dynamic cost-resource curves. Demand-side conservation measures are considered by aggregated cost-resource curves. To analyse various scenarios different policy schemes can be selected, (e.g. feed-in-tariffs, tendering systems, investment subsidies, tax incentives, quotas, tradable certificates) and modelled in a dynamic framework. The corresponding costs and benefits for companies and consumers are an output. The major result is that DSC plays an important role for increasing the share of RES-E. E.g. the same development of RES in a conservation scenario leads to 28% of RES-E by 2020 while in the BAU-scenario this share is only 20%. Moreover, a certain quota of RES - e.g. 20% - can be reached much cheaper if a certain share of money is invested in DSC. The core conclusion of this analysis is: On EU level it is of superior importance to introduce integrated policies - policies focusing on the promotion of RES and on energy conservation simultaneously - to reap the utmost benefits from public money invested.