Government Policy Support Plays Important Role In Renewable Energy Development

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A new report from energy industry analysis specialists, GlobalData, investigating European renewable energy policy, highlights how important government policy structure and growth measures are for the renewable energy industry as a whole.

The new GlobalData report, the Europe Renewable Energy Policy Handbook 2015“presents an in-depth analysis of the renewable energy policies across the major countries in Europe.” The report covers the role of renewable energy market share and targets, as well as the importance of support provided by government policies.

The authors of the report first highlight the current pace of country’s adherence to the European Union’s directive on renewable energy, with targets set for each member state to bring the entire region’s renewable energy share to 20%. The following table shows the national binding targets for 2020 for the 10 countries focused on in the Handbook, as well as the country’s 2012 renewable energy share and the National Renewable Energy Action Plan (NREAP) targets that have been submitted by each country.


Interestingly, though many European Union member states believe that they will not only be able to achieve their targets, but also exceed them, GlobalData hints at the possibility that other countries “are expected to use the directive’s co-operation mechanisms and reach their 2020 target through developing renewable energy in another member state or a third-party country.”

The report also deals with the importance of “government policy structure and growth measures” such as “Feed-in Tariffs (FiT), quota obligations, capital grants, and subsidies.” These mechanisms “have been instrumental in promoting the growth of the renewable energy industry in Europe,” with FiTs emerging “as a particularly effective way of promoting the renewable industry.”

Government incentives played a dramatic role in the growth of the Italian solar PV market between 2007 and 2013, according to the authors of the report, with “the number of solar PV installations [starting] to grow from the time FiTs were first introduced.” Sadly, Italy’s FiT scheme has reached its funding limit, and is “currently not providing FiTs to newly installed solar PV farms.”

Similarly, GlobalData notes that the “suspension of incentives to [the] solar PV industry will continue to impact capacity additions in Spain,” after the country’s solar PV market grew from 4 MW in 2001 to an impressive 4.7 GW in 2014. Strong policy support from the Spanish Government helped grow the solar PV industry at a Compound Annual Growth Rate of over 300% during 2005 to 2008, adding a record number of installations in 2008. However, the country’s financial issues led to the Government suspending incentives in 2013, and this lack of incentive is looking to impact any growth in the near future.

Feed-in Tariffs continue to remain a major driver of the German renewable energy market, while the UK Government is currently hemming and hawing over the role of subsidies, FiTs, and other governmental mechanisms that can help grow the country’s renewable energy industry in such a way as to help them reach an emissions cut of 34% by 2020, and 80% by 2050, as well as a target share for renewables of 15% by 2020 in line with its EU obligations.

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Joshua S Hill

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