Sistemas de costeo

Policy Overview

A feed-in tariff (FIT) is a policy mechanism, in which eligible renewable electricity producers are paid a fixed cost-based price for the renewable electricity they produce [36]. In other words, a federal or provincial government regulates the tariff rate of renewable electricity. The objective of FIT is to create generation-based, price-driven incentives. These usually take the form of either a fixed amount of money paid for

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renewable generation, or an additional premium on top of the market price paid to renewable electricity producers. In addition, most FIT policies set a guaranteed duration (typically 10-30 years) of the specified tariffs in order to create stronger incentives for long-term investments.

FIT policies began to attract attention in Europe in the late 1980s especially in Denmark, Germany, Italy, and, in the 1990s, in Spain. As of 2011, FIT policies have been enacted in over 50 countries¹⁸. Most notably, Spain, Germany, and Denmark achieved a large growth in wind power, which now accounts for 9%, 5%, and 20% of electricity in those countries, respectively [24]. The case of Germany is reviewed later in this section.

Case Study: Germany

The German FIT policy is considered to be one of the most successful, along with those of Spain, Portugal, and Denmark [23]. The current FIT system in Germany was established in several steps [36]. It was initially introduced to Germany in 1991 by the Electricity Feed-in Act. The act was replaced by the Renewable Energy Act in 2000, which uncoupled the tariff level from the retail price of electricity. Instead, it bound the tariff level to the cost of generation. This results in different tariff levels for different technologies (e.g., wind, solar, biomass, etc.), as well as for different locations, depending on cost. Moreover, the Act extended purchase guarantees for a period of 20 years. As shown in Figure 6-4, the tariff levels have been relatively high compared to other European nations, but they are reduced every year to encourage more efficient production of renewable energy.

Renewable electricity generation, particularly wind, has shown significant growth since the introduction of the FIT policy, as shown in Figure 6-5. In the first quarter of 2011, 19.2% of Germany's electricity was produced by renewable sources^{1 9}. With

1 8REN21 Global Status Report, 2010. Available on-line at http: //www. ren2l. net/

REN2Activities/Publications/GlobalStatusReport/tabid/5434/Default. aspx Retrieved on January 15,2012.

1 9Development of Renewable Energy Sources in Germany 2010. Federal Ministry for the Environ-mental, Nature Conservation and Nuclear Safety. Available on-line at http: //www. bmu. de/f iles/

english/pdf/application/pdf/ee-indeutschlandgraf _taben.pdf Retrieved on January 15,

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2006 2007

Figure 6-4: Comparison of FIT levels for on-shore wind generation by nations. Source:

Haas et al. [36].

the successful FIT policy, Germany reduced emissions of greenhouse gases -21.3 % by the end of 2007, compared with 1990 levels^{2 0}. The country set an ambitious goal to increase the proportion of gross electricity consumption attributable to renewables to at least 30 percent by the year 2020, and to 50 percent by 205021.

Pros and Cons of Feed-in Tariff

A remarkable advantage of FIT over RPS is that it reduces uncertainty in investment conditions. Under an RPS policy, investment in renewable generation facilities must be financed by selling RECs, whose price is uncertain because it is determined by a market. In contrast, with a FIT policy the price of renewable electricity is guar-anteed by a government for a long period (typically for several decades). Moreover, in many countries the tariff rate is determined based on the cost for generation of each renewable technology. The price certainty with long-term contracts encourages

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2 0Renewable Energy Sources in Figures. June 2009. Federal Ministry for the Environmental, Nature Conservation and Nuclear Safety. Available on-line at http://www.bmu.de/files/english/

renewable-energy/downloads/application/pdf /broschuere-ee-zahlenen. pdf. Retrieved on January 15, 2012.

. ²¹Renewable Energy Sources in Figures. June 2009. Federal Ministry for the Environmental, Nature Conservation and Nuclear Safety. Available on-line at http: //www. bmu. de/f iles/english/

renewable- energy/downloads/application/pdf/broschuere- ee-zahlenen. pdf. Retrieved on January 15, 2012.

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1 2002 2003 2004 2005 2006 2007

Figure 6-5: Renewable energy generation in Germany from 1990 to 2007. Data is based on International Energy Agency 2008. The graph is taken from [36].

investors to finance renewable energy.

A major criticism of FIT is that a too generous tariff rate results in market ineffi-ciency. On the other hand, RPS can theoretically achieve a specified target penetra-tion of renewable energy with minimum cost. This claim is based on an assumppenetra-tion that there is a multiplicity of buyers and sellers in a perfectly competitive REC mar-ket, where no single buyer or seller has enough market share to have a significant influence on prices [24]. In practice, markets are rarely perfectly competitive.

It appears that FIT policies have been quite successful in Europe. For example, Denmark, Germany, and Spain, which have operated FIT systems for two decades, have achieved much larger growth in wind generation than other European countries that do not employ FIT or were late to introduce it, as shown in Figure 6-6. Toke [24] assesses the effectiveness of the RPS policy in the U.K.²² and conclude that it does not deliver renewable energy any more cheaply than a feed-in tariff. Haas et al.

concludes [36] that "sufficiently generous FITs - set above the generation cost level -are quite effective in attracting investment in renewables."

However, it would not be appropriate to compare RPS and FIT with a single criterion, as the objectives of the two policies are different. While the focus of RPS is cost-efficiency, FIT puts more focus on rapid growth of renewable penetration. In

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JIn the U.K., RPS is called renewable obligation (RO) 131

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Figure 6-6: Comparison of wind power deployment by the policy options employed from 1990 to 2001. Source: Haas et al. [35]. The graph is created by [36].

terms of constrained optimization, RPS aims at minimizing cost with a lower bound on renewable penetration, while FIT seeks to maximize renewable penetration with an upper bound on cost, specified by the tariff rate. Hence, comparison of the two policy options reflect differences in philosophical viewpoints, as is the case in many other policy discussions.