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Regulatory instruments to deliver the full potential of renewable energy sources of efficiently

: Auer, H.; Resch, G.; Haas, R.; Held, A.; Ragwitz, M.

European review of energy markets 3 (2009), Nr.2, S.91-124
ISSN: 1782-1029
Fraunhofer ISI ()
electricity; grid integration; promotion strategy; regulation; renewable energy

Increasing the share of renewable energy sources for electricity generation (RES-E) has a high priority in the energy strategies of the European Commission. Yet, from a pure monetary point-of-view most RES-E technologies are currently not cost-effective. Hence, if RES-E are considered to provide significant benefits for society regulatory interferences are justified. This paper analyses which regulatory issues are of major relevance with respect to the promotion and the grid integration of RES-E. Of core relevance are currently two major issues: implementation of proper regulatory financial support systems and implementation of a clear regulatory framework for cost allocation policies to integrate RES-E technically into electricity grids. The major conclusions of this analysis are: (i) with respect to the design of regulatory promotional strategies currently a well-designed (dynamic) feed-in tariff system ensures the fastest deployment of RES-E power plants at the lowest cost for electricity customers; (ii) with respect to grid integration of RES-E a (super-)shallow RES-E integration approach is clearly preferable to deep integration.