RE-CRI

Commercial Readiness Index (CRI) assessment – using the method as a tool in renewable energy policy design

Technical development of emerging RETs on their journey from basic technology research to proven function is generally assessed by the Technology Readiness Levels (TRLs) index. However, beyond technical development, RETs also need to prove their commercial viability. Responding to this challenge, the Australian Renewable Energy Agency (ARENA) developed a novel framework to evaluate commercial readiness of RETs: the Commercial Readiness Index (CRI).

In a study commissioned by the IEA-RETD, the commercial maturity of renewable energy technologies (RETs) is assessed using the Commercial Readiness Index (CRI) framework to identify appropriate policy approaches for stimulating RET deployment. The resulting report, prepared by the Carbon Trust, explores the use of the CRI framework through case studies with the aim of illustrating the commercialisation journey of two RETs in two different contexts: solar photovoltaics (PV) in Germany and offshore wind in the UK. These case studies included detailed interviews with 20 experts from 15 organisations and an internal workshop with Carbon Trust’s technology commercialisation experts. The report draws conclusions and provides recommendations on three main aspects:

Advantages and limitations of the CRI and its potential applicability to support policy makers

The CRI is an effective tool for communicating the importance of market conditions beyond technical performance for RETs and illustrating the historical commercialisation journey of a technology. The indicators assessed through the CRI help to prompt policy makers to consider a range of barriers faced by RETs and it can be used to show which historical policies were effective, or not, at addressing these commercialisation barriers. However, the CRI as a stand-alone tool does not direct policy makers towards the policy options that could be implemented to address these barriers.

Effective policies to support the commercialisation of RETs

The CRI emphasises, in the two case studies, that the most significant policies for scaling both emerging RET markets were subsidies for electricity production that were not limited by a capacity cap. However, the CRI analysis does not indicate why these policies were successful nor can it generalise lessons from various contexts given the unique set of individual circumstances in each case.

Opportunities to refine the CRI to address some of its limitations

The study proposes some modifications to the CRI which build on the existing framework to make it more useful and applicable for policy makers looking to scale-up renewable energy technologies. Suggestions include the introduction of new indicators that would capture or provide a more comprehensive view of additional commercialisation barriers faced by RETs, the creation of a traffic light system that could show the priority areas requiring policy support, or yet indicators linked to possible policy interventions that could address specific technology commercialisation barriers.

Download the report for the detailed findings of the project.

REvLOCAL

Revitalisation of local economy by development of renewable energy: good practices and case studies

Renewable energy can contribute to the creation or revitalisation of local economies, by creating new jobs and services. But what is the exact nature of these benefits, how can they be realised, and what policies could support this? On behalf of the IEA RETD TCP, the Institute for European Environmental Policy (IEEP) explored good practices, by addressing the following topics:

  1. How to increase and/or maintain employment in the local economy induced by the development of renewable energy projects?
  2. What type of employment and new business can it create? What are the conditions to make it happen?
  3. How to divide policy roles between national and local governments to achieve successful revitalisation of the local economy?

Six in-depth case studies were carried out, namely:

  • Nord-Norge (Norway) –a cluster of renewable energy sources
  • Saint Dizier and Le Mené (France) –a biomass heater with district heating network and a renewable energy cluster, respectively
  • Santa-Cruz (USA) –solar PV installations
  • Bay of Fundy (Canada) –in-stream tidal turbines including research and pre-commercial activities
  • Furness Peninsula (the UK) –off-shore wind farms
  • Hamburg (Germany) –renewable energy cluster

REvLOCAL was launched at a workshop on the revitalisation of local economy by development of renewable energy, which was held on 1 September 2016 in Fukushima in Japan.  This region is in dire need of a revitalisation of the local economies, after the Great East Japan Earthquake in 2011, and the damage caused by the resulting tsunami and nuclear disaster at the Fukushima Daiichi Nuclear Power Plant. For more information visit the event page on the website.

The detailed case studies as well as the summary findings and the Japanese translation of the Executive Summary can be downloaded on this page.

Main recommendations

Policymakers should seek to stimulate the following local and regional RES deployment strategies:

  • Clear commitment of local political decision-makers towards ensuring the success of renewables projects is critical, helping to ensure a positive spirit of cooperation and facilitation
  • A clear local strategy for renewables depends on identifying potential economic advantages, and an urgent need for action. Where local areas face disadvantages such as old, declining industries, or isolation, renewable energy investment can therefore gain traction and support more quickly. Long-term national strategies for energy decarbonisation should identify not just geographical opportunities for renewables installation, but also the potential synergies with the economic needs of such disadvantaged areas
  • Cooperation among a wide range of key local stakeholders is important in helping to overcome bureaucratic delays and find creative solutions (and can be easier to generate where there is a sense of urgency about local economic conditions)
  • Approaches based on local ownership and control of RES projects may facilitate local acceptance and maximise local benefits
  • Regions and local areas need to identify and capitalise on their strengths, in terms both of the renewable resources available and the local economic context
  • Care needs to be taken to secure local support both for the overall strategy and for individual projects, on the basis of transparent and realistic assessments of impacts and benefits
  • A one-window approach to applications is a useful way of facilitating early deployment of projects. But in practice the degree of commitment shown by local political leaders seems to be the most important factor in ensuring that relevant local bureaucracies work together to make things happen
  • The strengths of the local skills pool need to be identified, together with the investments necessary to develop new skills relevant to renewables deployment
  • A supportive national or state-level policy framework, based on continuity and predictability, is important; while local commitment might be effective in the absence of supportive national policies, the two operating together create an enhanced, synergetic impact.

Further issues to be considered include the following:

  • Self-sufficiency and lower fuels bills can be an important driver of local attitudes and enthusiasm; but political commitments on these issues need to be managed carefully if they are not to hamper further development of renewables for export
  • The local economic benefits of renewable investment are not a ´zero-sum game´. Creating centres of expertise, and gaining early deployment experience, make the economics of renewables investment more attractive generally
  • People learn by seeing and doing, and demonstration by example can have a big impact. More attention should be paid to ensuring that the wider benefits of first-mover experience are shared promptly.

 

 

RE-P2G

Non-individual transport – Paving the way for renewable Power-to-Gas (RE-P2G)

Should power-to-gas technology be pursued as an option for decarbonising the non-individual transport sector and if so, how can policy makers economically promote its development?

The answer is yes – but in order to be environmentally sound, power-to-gas must be based on fully, or close to fully, renewable electricity. This is particularly true for power-to-SNG, which is at a disadvantage when compared to the hydrogen path from a CO2 footprint point of view.

Detailed modelling of various options reveals that compared to other non-individual transport options, captive fleets of long range light duty vehicles are the most promising market segment for early adoption of power-to-gas technology, due to lower total cost of ownership (TCO) difference to diesel, potential for high volumes being reached faster and synergies with fuel cell electric vehicles (FCEVs) for individual uses.

Whatever the market segment, renewable power-to-gas mobility will hardly compete with fossil options or with the cheapest renewable options (i.e. battery electric vehicles (BEVs) and biomethane) without significant policy support. Therefore, setting an ambitious and binding regulation in favour of renewable mobility is a prerequisite to the development of renewable power-to-gas in the transport sector. The regulation on renewable fuels in transport should at least include higher requirements in terms of share of renewable fuels at the distribution infrastructure level.

In parallel, an exemption of taxes on electricity consumed and on fuel produced should be granted to power-to-gas plants running on renewable electricity. Subsidies for hydrogen distribution infrastructure, Green Public Procurement and direct financial support to private fleet operators are other recommended policy measures for P2G deployment at larger scale.

The preliminary project results were presented at the P2G conference in Berlin in June 2016. The final report will be presented at the European Transport Conference in Barcelona on 5-7 October 2016.

 

RE-ValuePolicies

 

Policy Instruments to Support RE Industrial Value Chain Development

 

Renewable energy technologies provide more than just energy. They can – with the right policy environment – create jobs and contribute to economic growth. The RE-ValuePolicies report gives insight in the key factors in renewable energy (RE) value creation. It presents a wide set of policy instruments for value creation which can be used to complement the currently used set of RE policies, in order to enable countries to maximise the economic benefits of the further development of the RE industry.

What are the policy instruments that optimally support the renewable energy industrial value chain and capture its value?

The report was prepared by a consortium of the Gesellschaft für Wirtschaftliche Strukturforschung (GWS), the German Development Policy Institut (DIE) and the Fraunhofer Institute for Systems and Innovation Research (ISI), all Germany.

On 2 May 2013 a project workshop has been organised in Bonn, Germany. For more information about the workshop please check this page.

RE-InnovationChain

 

Best Practice Innovation Policy for Emerging Renewable Energy Technologies

 

Each step of the technology innovation chain, from basic research to deployment of mature technologies, requires a different set of policy incentives. The RE-InnovationChain study looks into best practice innovation policy for emerging renewable energy technologies.

The report presents international best practice for strategic innovation policy delivery, synthesising proven methods from around the world. It also makes new recommendations to improve the delivery of on-going policy tools, focusing on reducing risk for private sector investment earlier along the innovation chain, and pursuing an increasingly international innovation policy. By following these principles, governments that can unlock renewable energy technology deployment at lowest cost and also seed technology driven economic growth and exports.

The project led by the Carbon Trust and supported by Element Energy, involved extensive input through workshops and interviews with leading international policymakers and industry experts.

On 13 September 2013 a workshop has been organised, for more information click here. A second workshop was held on 13 March 2014.

RE-ASSUME

A Decision Maker’s Guide to Evaluating Energy Scenarios, Modelling, and Assumptions

The desire for a “crystal ball” to peer into the future has perhaps never been stronger among energy and environmental planners. While the future has always been uncertain, the interconnectedness of modern economic and energy systems serves to enhance the ripple effect of our energy actions. Energy scenarios are used to inform both public and private sector decisions. Multilateral, regional, national and sub-national governments commission energy scenarios that are used to help steer hundreds of billions of dollars of investment each year and ultimately impact the quality of life for billions of people. Yet there remain clear misunderstandings in the process of commissioning and digesting information found in energy scenarios.

This IEA-RETD project attempts to better equip both those who commission energy scenarios and those who directly use information in scenarios to make decisions. It highlights crucial assumptions and methodological issues of energy scenarios that need to be critically considered when deriving conclusions for policy makers.

(See also a related blog written for IEA-RETD by Rolf de Vos and David de Jager: World Energy Outlook hides the real potential of renewables.)

RE-COST

Are renewable energy technologies (RET) really less competitive than non-RET? Given the recent uptake of RET, is there still a business case for non-RET? The RE-COST study provides tools and insights to policy makers and other actors in the electricity sector to enable them to better assess the impact of policies and regulations on the attractiveness of investments in a variety of sources of electricity generation.
It compares different electricity generation technologies – both RET and non-RET – using fresh data from new and projected generation plants in a number of developed countries, providing recommendations to key actors in the energy sector, and to dispel misperceptions about costs and business cases of RE vs. non-RET.

  • Focus on seven countries: Canada (Alberta, Ontario, Québec), France, Germany, Japan, Norway, Swe-den and Spain.
  • Technologies analysed: On-shore and off-shore wind, large solar PV, hydro, gas and coal
  • Custom-built simulation model, designed to test the influence of a number of factors in the business case of RET and non-RET generation.
  • Data from more than 120 new plants, 90 interviews and 1200 simulation runs

EMPLOY

Step-by-step guidelines for calculating employment effects of renewable energy investments

Rational

The importance of renewable energy in energy systems is increasing at an impressive rate, and the expectation is that this tendency will continue in the longer term. As a consequence, there is a strong need for reliable insight into the employment benefits from renewable energy. The current knowledge on the economic impacts of large-scale deployment of renewable energy technologies is more or less derived on an ad hoc basis and consists of a variety of different methodologies with different objectives. This is why the International Energy Agency’s Implementing Agreement on Renewable Energy Technology Deployment (IEA-RETD) aims to facilitate a more structural approach, contributing to reliable and consistent insights into employment effects from deployment of renewable energy technologies. Against this background, the EMPLOY project, to which IRENA contributed, was initiated to develop a set of methodological guidelines for estimating the employment impacts of renewable energy use in a coherent, uniform and systematic way.

Objectives

The objectives of the EMPLOY-EID project were to:

  • Provide guidelines based on a thorough review of best practices, which are able to contribute to a consistent, reliable framework in which to measure employment effects from renewable energy deployment and which can be replicated from one country to another;
  • Identify data sources and/or inputs required in the application of such guidelines;
  • Provide better understanding of key parameters and mechanisms that determine contribution of renewable energy employment;
  • Assess availability of sources for employment benefit data for all RETD member countries as well as other relevant countries;
  • Provide concrete gross employment benefit data to countries where data is available through application of the guidelines and best practices;
  • Document the economic effects of renewable energy deployment through a publishable brochure of the main project results, presentations, the guidelines and background report.

The EMPLOY project aimed to help achieve the IEA-RETD’s objective to “empower policy makers and energy market actors through the provision of information, tools and resources” by underlining the economic and industrial impacts of renewable energy technology deployment and providing reliable methodological approaches for employment – similar to those available for the incumbent energy technologies.

Outcome

EMPLOY guidelines: the EMPLOY project resulted in a comprehensive set of methodological guidelines for estimating the employment impacts of renewable energy deployment in a coherent, uniform and systematic way. Guidelines were prepared for four different methodological approaches. In the introduction section of the guidelines policy makers are guided in their choice for the most suited approach, depending on the policy questions to be answered, the data availability and budget.

Annex with country calculations: the guidelines were tested for the IEA-RETD member state countries and Tunisia. The results of these calculations are included in the annex to the guidelines.

Report with overview of approaches to assess employment effects: the EMPLOY guidelines are based on a broad review of the approaches to assess employment impacts of renewable energy deployment. The report on employment impact assessment studies presents an overview of the existing gross and net approaches being used to analyse the employment impacts of renewable energy. The report provides insight into the basics of the used methods, the methodological issues, advantages and disadvantages of various methods, data requirements and procedures to collect the data.

Feedback

Future users of the EMPLOY guidelines are kindly requested to share their experiences with us. A feedback form can be downloaded from this website, which can be returned to iea_retd@ecofys.com. Otherwise the Operating Agent can also be contacted for sharing feedback through iea_retd@ecofys.com.

Downloads

The EMPLOY guidelines, the annex with country calculations and a feedback form for future users of the EMPLOY guidelines, the Task 1 report with an overview of assessment approaches, a PowerPoint presentation and a policy brief can be downloaded.

REMOTE

Renewable Energies for Remote Areas and Islands

Remote areas around the world are at the forefront of the transition towards a more sustainable energy future. IEA-RETD has commissioned a study with the overall objective to provide policy perspectives for making remote areas and islands largely independent from fossil fuel imports or costly transmission infrastructures. The project gives national, regional and local policy makers and initiatives a better grasp of the technical, economic and energy issues facing remote areas, and provides a menu of policy options and case studies available to accelerate renewable energy development in these regions. The intention is to inspire and to trigger action to deploy renewables and thus contribute to more sustainable energy systems in remote areas.

IEA-RETD was represented at the IRENA “Renewables and Islands Global Summit” on Malta on September 6, 2012. More information can be found here.

Costs of Inaction

Presentation Costs of InactionRETD initiated this project to advance the understanding of the “Costs of Inaction”, i.e. the costs of climate change adaptation, damages and fossil fuel dependence. A quantitative estimate was developed as well as a better understanding of the knowledge gaps and research needs. The project also included some conceptual work on how to better integrate the analyses of mitigation, adaptation, damages and fossil fuel dependence in energy scenario modelling.