Policies for Storing Renewable Energy – a scoping study of policy considerations for energy storage (RE-STORAGE)
Energy storage is currently en vogue in the energy world, and sometimes presented as a silver bullet in meeting the challenges on the path to a low carbon energy system. Storage technologies could indeed help address the structural changes our energy system is facing and smooth the transition. They can contribute to balancing mismatches between supply and demand, and can support the deployment of renew-ables. However, deployment of storage aimed at facilitating renewables integration has, thus far, been limited.
This study identifies and discusses in detail four policy-relevant issues relating to renewables and storage that could affect the transition to a largely renewable energy system:
1. An effective energy system transition requires system approaches
2. The legacy system drives current market frameworks
3. Uncertainty around the performance of storage technologies affects adoption
4. System operators have a privileged position in storage deployment
As things stand, many storage technologies are immature and cannot compete on cost in current markets, but can provide valuable services that are currently poorly rewarded. Mechanisms to allow these technol-ogies to compete fairly, by valuing the services they do provide, would enable them to come down the cost curve and ultimately be fully cost-competitive.
While deployment and use of storage can inevitably support deployment of renewables, supporting it in a way that is fair, transparent, cost-effective and coherent with much larger energy system considerations is a complex and lengthy undertaking, with implications that ripple throughout that system.
This study provides recommendations for how stakeholders can engage around energy storage to ensure that decisions and policies regarding the energy system transition are informed by a clear and consistent systems perspective, and that barriers to the deployment of storage are reduced or eliminated.
Towards advanced biofuels – options for integrating 1st and 2nd generation biofuel production (RES-T-BIOPLANT)
The integration of advanced (2nd generation / 2G) biofuel plants with conventional (1st generation / 1G) biofuel plants can lead to significant synergies and cost savings, especially for bioethanol plants. For biodiesel, conversion of fossil refineries to advanced biofuel production is another promising option as well.
These are the results of a scoping study commissioned by the IEA Implementing Agreement for Renewable Energy Technology Deployment (IEA-RETD) “Towards advanced biofuels – options for integrating conventional and advanced biofuel production sites (RES-T-BIOPLANT)”. The aim of this study was two-fold:
- Getting a better understanding of the scale of the opportunity for adapting existing sites to produce advanced biofuels; and,
- Analysing the potential role of government policy to incentivise site conversion.
Advanced (2nd generation / 2G) biofuel plants can be implemented as stand-alone units or integrated with conventional (1st generation / 1G) biofuel plants. Integration strategies can refer to: co-location (installing a separate 2G entity adjacent to an existing 1G facility), retrofitting (altering the existing 1G production line for producing 2G biofuels alongside 1G biofuels) or repurposing (adjusting the production process of an existing (mothballed) facility to produce 2G biofuels). There are cases where significant synergies between 2G and 1G plants exist, while in other cases, integration options are very limited. The variety of conceptual and design studies identify cost-savings from co-location for all 2G conversion pathways in the order of 5-10%.
The sequence of implementation of policy instruments is crucial. A market start-up will only happen if stable support to technology development and technology commercialization is given (by way of economic incentives) for a reasonable timeframe reflecting investment lifetimes. Blending mandates would cause more harm than benefits if they were applied in an immature market where biofuel prices have not yet reached stability and fossil fuel prices remain low.
Further analytical studies on the economic feasibility and other benefits of specific co-location and retrofitting strategies for 1G bioethanol sites as well as a specific mix of policy instruments are recommended.
Driving renewable energy for transport – next generation policies
Renewable energy sources in transport (RES-T) are crucial for avoiding climate change. As transport is currently almost fully dependent on conventional fuels, the transition to RES-T is an important aspect in the broader climate policy. What policy instruments deliver the job? The IEA-RETD report “Driving renewable energy for transport – next generation policies (RES-T-NEXT)”, carried out by CE Delft and Stratas Advisors, evaluates in detail 17 renewable policy instruments for the three pathways of electric, hydrogen and biofuels, under consideration of three dimensions: the vehicle fleet, energy infrastructure and energy carriers.
The study finds that most policy instruments increase the share of alternative powertrains, but few (also) directly target the share of renewable energy consumption. The most effective instruments for increasing the share of Alternative Fuel Vehicles (AFVs) are:
- Zero Emission Vehicle (ZEV) mandates (obliging OEMs to meet a minimum share of ZEVs in their sales);
- Financial incentives in vehicle registration taxes (VRT) and in company car taxation
- CO2 regulations of road vehicles, particularly when CO2 targets are sufficiently ambitious.
For effectively increasing the share of renewable energy in transport, there are fewer instruments available. Most effective are Fuel regulations and renewable energy mandates.
Regarding the pathways, the study concludes that Battery-electric is the most promising pathway for urban transport. Battery-electric technology has already been commercialised; it now requires policy instruments which generate volume. Hydrogen may provide a feasible alternative or complementing pathway for urban road transport; however, hydrogen technology is not yet fully commercialised and requires policies which primarily promote pilots, first market uptake and further product development. The role of biofuels in (urban) transport firstly depends on the availability of available and sustainable feedstock.
Opportunities for the Use of Renewable Energy in Road Transport in different regions (Europe, North America, China)
RETRANS2 – Project Report Final RETRANS2 – Annex FinalThe RETRANS2 REGIONS project is a follow-up of the previous RETD RETRANS project. The overall objective was to understand the barriers and opportunities in different regions (Europe, North America and China) regarding the co-evolution of the road transport and renewable electricity sector. These depend among others on the specific vehicle markets, driving patterns, economic background, grid situation, renewable capacity etc. Policy recommendations for the different regions were developed. Please click here for the executive summary in slides and here in word.
Opportunities for the Use of Renewable Energy in Road Transport
The transport sector is one of the major emitters of greenhouse gases (and other pollutants). According to the IEA there is a need for a four-fold reduction of the carbon intensity of transport. Hence, the transport sector needs a transformation – a revolution in technology, infrastructure, transport concepts and political framework in order to achieve the goal of at least 50% CO2 emission reduction by 2050.
The report “Opportunities for the Use of Renewable Energy in Road Transport ” provides an overview of the technological options and a policy framework needed for the transformation of the road transport sector in order to meet the challenges of reduction of GHG emissions and independence of oil through large-scale deployment of sustainable and effective renewable energy (RE) technologies.
Electric and plug-in hybrid vehicles are close to the market. As such they offer an opportunity for a structural transition to using renewable energy widely in road transport at an earlier stage than other technologies (e.g. hydrogen or advanced biofuels).
On 2 September 2010 RETD and BMU co-hosted the presentation of the RETRANS project at the BMU Visitors Center in Berlin. The fruitful discussion among the participants from ministries, parties, consultants and research institutes will be used to define the follow-up project.
On 28 January 2010 RETD hosted a workshop on its project RETRANS at the IEA headquarters in Paris. The project focuses on the co-evolution of the transport sector (electric vehicles) and the energy sector (renewable electricity).
For further information, please contact IEA_RETD@ecofys.com