Learning from experience? The development of the Renewables Obligation in England and Wales 2002-2010
The UK has enviable renewable resources, both onshore (wind) and offshore (wind, wave and tidal) (The Offshore Valuation Group, 2010). The government has had policy mechanisms in place since 1990 to encourage these resources to be developed. The current mechanism, the Renewables Obligation (RO), was specifically designed to emphasise competition and therefore to fit in with the UK's overall strategic approach to energy policy. However, as yet, it has not delivered the capacity that it was designed to do, and as a result the UK faces a difficult challenge in attempting to meet European-wide renewable energy targets for 2020, as well as longer term decarbonisation targets. This paper explores some of the major reasons why the RO has performed so poorly to date and considers the prospects for improvement up to 2020. It concludes that the strategic emphasis on competition in the support mechanisms has played a key role in limiting renewables development, but that the mechanism has changed significantly since it was introduced. However, these changes, together with proposals for electricity market reform, still do not address important elements of risk in comparison with a standard Feed In Tariff.
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- Foxon, T. J. & Gross, R. & Chase, A. & Howes, J. & Arnall, A. & Anderson, D., 2005. "UK innovation systems for new and renewable energy technologies: drivers, barriers and systems failures," Energy Policy, Elsevier, vol. 33(16), pages 2123-2137, November.
- Helm, Dieter, 2004. "Energy, the State, and the Market: British Energy Policy since 1979," OUP Catalogue, Oxford University Press, number 9780199270743.
- Mitchell, Catherine & Connor, Peter, 2004. "Renewable energy policy in the UK 1990-2003," Energy Policy, Elsevier, vol. 32(17), pages 1935-1947, November.
- Mitchell, C. & Bauknecht, D. & Connor, P.M., 2006. "Effectiveness through risk reduction: a comparison of the renewable obligation in England and Wales and the feed-in system in Germany," Energy Policy, Elsevier, vol. 34(3), pages 297-305, February.
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