1. © OECD/IEA - 2008 Opportunities and Challenges in Deploying Renewables into the Mainstream demosEUROPA and Danish Embassy Joint Seminar Warsaw, 19 November 2008 Pieter Boot Director, Sustainable Energy Policy and Technology International Energy Agency

2. © OECD/IEA - 2008 Global Power Generation Mix Scenarios 46.5% Renewables [Source: ETP 2008] Renewables would have to play a particularly significant role in the power sector, increasing from 18% today to nearly 50% by 2050. Non-hydro renewables show the highest growth rate.

3. © OECD/IEA - 2008 Average Annual Power Generation Capacity Additions, 2010 – 2050 An Energy Revolution [Source: ETP 2008]

4. © OECD/IEA - 2008 Deploying Renewables: Principles for Effective Policies Launched on 29 September in Berlin Contact samantha.olz@iea.org@iea.org Download Executive Summary at http://www.iea.org/Textbase/nps um/DeployRenew2008SUM.pdf

5. © OECD/IEA - 2008 Achieved (by 2005) and Additional realisable mid-term potential (by 2020) for RES-E Achieved (2005) and additional realisable mid-term (up to 2020) potential for RES-Electricity by country (OECD+BRICS) – in absolute terms (TWh)

6. © OECD/IEA - 2008 Effectiveness & Efficiency Wind On-shore 2005 (OECD & BRICS) Source: IEA & Fh-ISI, 2008 Long-term predictable incentives (FIT or FIP) + Appropriate framework Higher risk (TGC) + Non-economic barriers

7. © OECD/IEA - 2008 Effectiveness & Efficiency Solid biomass elec. 2005 (OECD+BRICS) Source: IEA & Fh-ISI, 2008 TGC FIT/FIP

8. © OECD/IEA - 2008 Main Lessons Learnt and Conclusions

9. © OECD/IEA - 2008 Effective policies only in a limited set of countries  Sometimes depending on specific technology Perceived risk, more than profit, is key to policy effectiveness & efficiency Price support can not be adequately addressed in isolation; non-economic barriers must be addressed concurrently  Grid barriers  Administrative barriers  Social acceptance issues  Other barriers (e.g. training, information, financial, etc.) Effective systems have, in practice, frequently been the most cost efficient  Technology-specific support is key for both effectiveness and cost-efficiency Main Lessons Learnt (1)

10. © OECD/IEA - 2008 Main Lessons Learnt (2) ‘Feed-In Tariff vs. Quota Obligation System/ Tradable Green Certificate’ debate misleading  Both systems show success and failures depending on specific country and technology Precise design criteria and fine-tuning are key Signs of convergence:  Feed-In Tariff: Premium tariff option, time digression  Quota System/Tradable Green Certificate: Technology banding

11. © OECD/IEA - 2008 1. Remove non-economic barriers to improve market functioning 2. Establish predictable support framework - to attract investments 3. Set up transitional incentives decreasing over time – to foster and monitor technological innovation and move towards market competitiveness 4. Ensure specific support in function of technology maturity to exploit potential of large RET range 5. With increasing mass-scale RET penetration impact on overall energy system must be taken into account Continuity Certainty Key Principles for Effective Renewable Energy Policies

12. © OECD/IEA - 2008 Fostering RE’s transition towards mass market integration Niche marketsMass market Low cost-gap (e.g. wind onshore) High cost-gap (e.g. PV) Mature tech (e.g. hydro) Prototype & demo stage (e.g. 2 nd gen biofuels) Time Market Deployment Development 1. Development RD&D financing, capital cost support, investment tax credits, rebates, loan guarantees 2. Stable, low-risk, sheltered FIT, FIP, Tenders 3. Shared/imposed market risk, guaranteed minimum but declining support FIP, TGC (technology banding) 4. Technology-neutral competition TGC, Carbon trading (e.g. EU ETS)

13. © OECD/IEA - 2008 1. Realise urgency to implement effective policies to exploit major potential of RETs in terms of energy security and climate change mitigation 2. Remove and overcome non-economic barriers first 3. Exploit substantial potential for improvement of policy effectiveness and efficiency: learn from good practice 4. Focus on rigorous and coherent implementation of key policy design principles with regard to long-term cost efficiency and national circumstances 5. Create level playing field by pricing in GHG emissions and other externalities & removing subsidies for conventional energy 6. Allow a combination framework of incentive schemes in function of technology maturity level Urgent action for Energy Technology Revolution Recommendations