OVERVIEW OF RENEWABLE ENERGY POLICIES and OPTIONS FOR SMALL ISLAND NATIONS

1

Motivation for Energy Policy Policy Instruments Policy Decisions Common Energy Policy Initiatives

2

Governments can enact a variety of incentives, regulations, and programs to encourage the production and use of renewable energy.

Motivations cited for these legislative initiatives include◦ energy security concerns◦ Energy efficiency and conservation◦ renewable market development and

investment◦ reduction in greenhouse gas emissions◦ Environmental Protection and sustainability

3

◦ Improve rural livelihood. proponents argue that rural, agriculture-

based energy production can enhance rural incomes, employment opportunities and encouraging greater value-added for agricultural commodities.

◦ Competitive Energy Prices◦ International commitments and

obligations

4

Income tax credits/provide tax exemptions production tax credit incentive payments accelerated depreciation on equipment grants, low interest loans, and loan

guarantees. Research and development. procurement preferences. user mandates / regulations. education and energy audits to enable it to

attain general energy policy objectives. Encourage private initiatives.

5

Interest in renewable energy was initially fueled by energy supply and security concerns and therefore policies but environmental considerations, including climate change and energy efficiency have also continued to drive policies in recent years.

Therefore country energy policies consider International commitments and obligations, policy actions and measures proposed seek to address these challenges.

6

Policy decisions may impact a number of objectives◦ sometimes involve tradeoffs between one

objective and another. Example: Investment in renewable energy sources

addresses environmental protection and security of supply but not necessarily competitive pricing.

7

Policy decisions can also complement each objective◦ For example, improvement in energy

efficiency will address all objectives of the energy policy.

Policy on renewable extensions◦ Reduce dependence on a particular source of

energy contributing towards security of supply◦ Introduce alternative energy solutions to

create a competitive market◦ reduce emissions and depletion of natural

resources thus reducing the impact on environment.

8

Where environmental responsibility is involved, there is a growing consensus on the need to ensure sustainable development, and the measures proposed would complement both concepts.

There is an inherent tradeoff in using a widely consumed agricultural product for a non- agricultural use (renewable energy).◦ Usually mandates address these issues.

9

Certain non-renewable energy is supported by several state financial and tax incentives, loan and grant programs for adopting renewable portfolio standards.◦ �renewable portfolio standards (RPSs)

requires that utilities must derive a certain percentage of their overall energy generation from renewable energy sources.◦ tax credit may be combined with a period

of accelerated depreciation schedule.10

Identification and regulation of air emissions from all significant sources, including on- and off-road vehicles, urban buses, marine engines, stationary equipment, recreational vehicles, and small engines used for lawn and garden equipment.◦ All of these sources are candidates for

bio-fuel use. Incentives for alternative-fuel motor fleet to

increase purchases and the use of alternative-fueled vehicles.

11

State grants are provided to ethanol and biodiesel producers who construct or expand their production capacity.

Awareness programmes to achieve energy efficiency objectives and benefits of renewables.

Energy audits and eco-labeling. Renewable energy research programs are

implemented in several ways through◦ grants and cooperative agreements with research

universities.◦ various forms of financial and technical and cost

sharing assistance given to industry partners.

12

The development of grid-connected, distributed generation, the government enact laws that establish the basic rules of net metering, setting the buy-back price of electricity equal to the retail selling price of electricity.◦ Photo-voltaic and small wind turbines,

thermal systems. The program helps residents and small

commercial establishments pay for the initial investment in renewable technology.

13

Policies to develop off-grid energy systems◦ Photovoltaic, wind turbines, mini-hydro

systems etc◦ Suitable for remote settlements and where

national grid extensions become unviable. Promote systems that to reduce workforce

mobility. Encourage car sharing and car pooling Giving priority to public transport in

congested areas and providing real time travel information to assist travelers in their transport decisions.

improve the climate for energy sector investment.

14

Encourage foreign investment. Obligate utilities to purchase renewable

electrical power from private producers, regardless of their size.◦ guarantees non-utility renewable producers of renewable electricity a sustainable price high enough to cover their long-term costs. ◦ Both of these factors combined to make renewable electric generating capacity a better investment.◦ fostering an environment of relative certainty for developers.

15

A system of cooperative ownership of wind turbines and other renewables, which gives farmers and landowners an interest in projects.

16

Move towards a more market-based system. Strategy is the development of market-based

instruments to encourage energy efficiency. Opening the energy market for competition. Develop an effective electricity sector◦ Electricity generation must be open to

competition.◦ Distribution separated from generation. ◦ Retailing◦ Encourages development of utility and non-

utility power suppliers.

17