Factors affecting the debate on
renewables v. CCS and nuclear
Volkmar Lauber, Univ. of Salzburg
„Pushing the Limits of Windpower“
Univ. of St. Andrews, 6 May 2009
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„Pushing the limits of windpower“
debate will be shaped by institutions,
their impact and experience with these
• Government institutions (central, local) and paradigms
• Electricity incumbents and their relations to government
• Did legislation specific to RES-E sector produce and
mobilise new stakeholders?
• Ecoomic results of support legislation?
• How all this will affect deliberations and choices
COMPARISON WITH SITUATION IN GERMANY
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Overview
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Structure of government
Regulatory state paradigm v. political policies
Incumbents undisturbed by political goals?
Role of local utilities
Local political control over utilities?
Support policy and the mobilisation of new RES
entrepreneurs and other actors
• Experiences with primary goals of support policy
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Structure of government
UK
• Highly centralised (exc. Scotland)
• No policy experiments at local level?
Germany
• Experiments at various levels in 1990s, incl.
development of the „cost covering feed in
tariff“ (Federal law + local government + local
utilities) which became model for EEG FIT
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Regulatory state paradigm
v. political policies
UK
• Economic activity should be driven by markets,
government assures market performance
• Government must not impose qualitative goals, cannot
assure energy transition to renewable energy
Germany
• Other variant of neoliberalism
• RES-E not subject to Dept of Econ Aff, somewhat
exempt from primacy of short-term economic goals
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Incumbents undisturbed
by political goals
UK
RO mostly implemented by incumbents
RO relies mostly on positive inducement, there is no effective
penalty for not reaching the goals of the RO (the penalty
mechanism actually increases the value of certificates)
Incumbents not as close to Econ Aff Min as in Germany?
Germany
Big utilities are similarly reluctant about RES-E but subject to
political regulation - purchasing obligation and FIT. They
were only permitted to become active as RES-E generators
under EEG 2000 in order to involve them in offshore wind –
not very successfully so far.
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Role of local utilities
UK
• Not existent?
Germany
• good place for experimentation with renewables since
1980s, for „political“ reasons (i.e. other than short
term economic rationality)
• Need political support for experimentation with RES
(political mandate)
• collectively, economic and political weight (e.g.
offshore)
• Important in 1990s, several introduced „full cost feed
in tariff“ -> „Aachen model“ (-> EEG 2000), important
for legitimacy of new FIT
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Local political control of local utilities
UK
• not existent?
Germany
• Traditionally opposed to privileges for centralised
generation (since 1935)
• Political support for RES-E by municipalities early
on, since 1980s
• Several municipalities charged their local utilities
to support RES-E development (e.g. „Aachen
model“)
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Did RES-E legislation produce new
entrepreneurs and other stakeholders?
UK
• Largely restricted to a few reluctant incumbents and
project developers and their personnel
Germany
• Tens of thousands of wind farm owners
• Hundreds of thousands of solar PV owners
• Several hundred thousands employed in RES-E
equipment industry
• Several thousand new firms, many big exporters
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…new entrepreneurs etc.
• These groups have their own associations,
their own media
• They have substantial access to wider media,
influence on business associations (VDMA,…)
labour unions (metalworkers, services), farmer
associations, churches)
• They have access to political parties,
government, important state institutions
(BMU, KfW, dena=grid agency)
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Experience with support legislation
UK
• Profitable for a few incumbents, developers
• Economically highly inefficient:
-profits several times as high as in Germany
-incumbents get windfall profits for non-innovative
technology, neglect new tech., big price gap to „brown el.“
• No perspective of falling ROC prices any time soon
• A new FIT at 15p for small wind not competitive either
• Lagging development (two thirds target fulfilment)
Germany
• Windpower no longer expensive – net benefits
• On windy days, reduces prices at power exchange
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How will wind/RES-E come out in
conflict with CCS and new nuclear
UK
Government structure and
paradigm problem for RES-E
Few unambiguous RES-E
entrepreneurs, stakeholders
Poor experience with support
system for windpower
This operates in favour of
privileging CCS and new
nuclear
Germany
More favourable situation for
RES-E here
Many RES-E entrepreneurs and
stakeholders
Very positive experience, is
starting to pay dividends
RES-E has good cards in such
discussions though
outcome is uncertain
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