Liberalisation "threatens" renewable energy

Open electricity markets could put national renewable energy targets at risk, warns IEA

Moves to liberalise power markets in EU and other member countries of the International Energy Agency (IEA) could damage the prospects for renewable electricity, the IEA has warned in a new report. Assessing the status of renewable energy policies in IEA countries, the agency concludes that the changing regulatory framework is making renewable electricity's future "uncertain". If the overall effect of reforms is negative, it says, then "some IEA countries will not reach their stated targets for increasing renewable electricity generation". The agency's downbeat assessment contradicts statements made by EU energy commissioner Christos Papoutsis that electricity liberalisation should provide new opportunities for renewables (ENDS Daily 9 October 1997). Behind the IEA's warning is an assessment that the key constraint facing renewable electricity is its relatively high price, which could become more exposed as liberalisation leads to increased competition. The agency urges extra financial and other support for renewable energies in order to accelerate their introduction. Some countries are already responding to the challenge, it notes. Competitive bidding systems, such as that developed by the UK, are becoming more common and have been adopted by France and Ireland. "Green pricing," whereby consumers voluntarily pay extra for renewable electricity, is also becoming more popular, especially in Scandinavian countries (ENDS Daily 5 May).

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