Developing Energy Project Proceeding E Book 4A Turky

1303 relocating a project should be associated to a corresponding increase or decrease in the price of the site, whereas sites lying over the same isoprofit should have similar prices. Of course such market will often be influenced by the multiple use of land, in which the implementation of a renewable energy project is just one of the possible uses explaining demand. Same isoprofit should have similar prices. Of course such market will often be influenced by the multiple use nature of land, in which the implementation of a renewable energy project is just one of the possible uses explaining demand. Technologies, especially wind energy, but also small-scale hydro power, energy from biomass, and solar thermal applications, are economically viable and competitive. The others, especially photovoltaic, depend only on increasing demand and thus production volume to achieve the economy of scale necessary for competitiveness with central generation. This should be seen against the rapidly improving fiscal and economic environment being created in the EU both by European legislation itself swinging into full implementation and the εember States‘ own programmes and support measures, which despite the short-term macro-economic background, are accelerating rapidly at the time of publication. In this context, the generation of energy from renewable sources is beginning to gather strength throughout the world, motivating leaders to implement policies aimed at increasing the number of projects according to this line of thinking. Source: Zulunga, Dyner; Incentives for renewable energy in reformed Latin-American electricity markets: the Colombian case; Journal of Cleaner Production; 2006 Although the reduction of poverty is perhaps the most important concern in the developing countries, there is significant environmental interest associated with the use of new energy sources which will help to reduce the environmental impacts that have been caused by traditional forms of energy based on the combustion of fossil fuels. From simulations carried out for the Colombia market, it is less efficient to promote renewable energies through fiscal policies such as income tax exemption, while other kinds of policies such as direct subsidies have a major effect as far as accelerating the process of technology diffusion. Therefore, it remains for the government to set the appropriate incentives in order to efficiently exploit renewable energy resources. Although in the process of Turkish market, renewable energy did not occupy a prominent place, there now seems to be a new international trend to develop these resources, which will begin to 1304 play a significant role, especially in meeting the increasing demands for energy in the development and integration process to the EU. 215 Biomass and hydropower generation have an industrial capacity and experience knowledge that lacks in the case of wind. 216 Well-developed countries like the United States, the United Kingdom, Germany, France and Japan are advancing in the application of special programs and in the introduction of specific laws to stimulate the use of these sources in the electricity generation. An important factor is obvious in the interest of these countries: the predominance of thermoelectric generation using fossils fuels and the negative environmental impact associated to this type of generation. Besides, the electrical sector in both the United Kingdom and the United States underwent a process of restructuring in an attempt to introduce a competitive market in some activities. Faced with this scenario, it became necessary to adopt specific measures to protect electricity generation using alternative energy sources. 217 A feed-in tariff involves the obligation on the part of a utility to purchase electricity generated by renewable energy producers in its service area at a tariff determined by public authorities and guaranteed for a specific period of time generally β0 years. A FiT‘s value represents the full price per kWh received by an independent producer of renewable energy, i.e. including a premium above or additional to the market price, but excluding tax rebates or other production subsidies paid by the government. Green pricing represents a market solution to various problems associated with regulatory valuation of the non market benefits of renewables. Under green pricing programs, utilities can encourage the development of renewable energy while simultaneously measuring customer support for renewables under semi-competitive conditions. Customers willing to pay a price premium for renewable energy can do so by adding some incremental amount of money to the irregular electricity bills. 218 Also with the acceptance of Kyoto protocol by developed countries tradable green certificate markets are established. These systems have different designs in different countries but a common feature is that they seek to replace direct public subsidies for renewable energy with incentive systems that use the market mechanism. More precisely, the objective is to create a market where various kinds of green electricity compete on equal terms to relieve the government of the burden of direct involvement in the electricity sector‘s investment decisions. 219

4. The reduction of carbon emissions in EU

Environmental issues are increasingly driving energy investments in Europe. EU wants to reduce greenhouse gas emissions by 20 by 2020. EU also wants 10 of its cars and trucks to run on bio fuel, and to ensure that 20 of its power comes from renewable energy sources such as solar and wind power and hydroelectricity. Renewable energy sources currently account for less than 7 of EU energy use. Carbon transactions are defined as purchase contracts whereby one party pays to counter party in return for GHG emissions reductions or for the right to release a given 215 Zulunga, Dyner; Incentives for renewable energy in reformed Latin-American electricity markets: the Colombian case; Journal of Cleaner Production; 2006. 216 Dutra, Szkolo; Incentive policies for promoting wind power production in Brazil: Scenarios for the Alternative Energy Sources Incentive Program PROINFA under the New Brazilian electric power sector regulation;Renewable Energy;2007. 217 Cavaliero, Da Silva; Electricity generation: regulatory mechanisms to incentive renewable alternative energy sources in Brazil ;Ênergy Policy;β005. 218 Green Pricing: Encouraging the Development of Renewables in a Deregulated Environment; Renewable Energy Annual; p.6; 1995. 219 Amundsen, Nese; Integrated Tradable Green Certificate Markets: Functioning and Compatibility; Institute for Research and Administration Bergen; p.2; 2005 1305 amount of GHG emissions that the buyer can use to meet its compliance objectives vis- à-vis climate change mitigation. Carbon transactions can be grouped into two main categories. Allowance-based transactions, in which the buyer purchases emission allowances created and allocated by regulators under cap-and-trade regimes, such as Assigned Amount Units AAUs under the Kyoto Protocol, or EUAs under the EU ETS. Such schemes combine environmental performance and flexibility, through trading, in order for mandated participants to meet compliance requirements at the lowest possible cost. Project-based transactions, in which the buyer purchases emission credits from a project that can verifiably demonstrate GHG emission reductions compared with what would have happened otherwise. The most notable examples of such activities are under the CDM and the JI mechanisms of the Kyoto Protocol, generating CERs and ERUs respectively. Carbon cap-and-trade regimes allow, for the most part, for the import of credits from project- based transactions for compliance purposes. This helps to achieve the environmental target cost effectively through access to mitigation potentials from additional sectors and additional countries. Mandatory wholesale mechanisms are the other key driver in the U.S. A variation of this, PURPA, led to much of the early wind energy development in the U.S. Other countries, such as Spain and Germany, have also used variations of this mechanism. A weakness of the PURPAfeed- in tariff approach is that it doesn‘t guarantee any particular long-term growth. Dr. Engelhard RWE Rheinbraun criticised that the caps are only given and only introduced for energy intensive installations, this means that only 13 of Greenhouse gases GHG of the EU are covered and that the cap in trade is introduced for CO2 not for all six Kyoto gases.Dr. Engelhard reckons with unavoidable distortions in competition and disadvantages for the European industries. Dr. Engelhard expects a transfer of energy intensive production to countries without regulations, this means to Eastern Europe, developing countries or to the United States. Combining technical assistance with financing, EBRD aims to help local authorities overcome common obstacles to financing energy efficiency: - Increasing awareness and prioritization of energy efficiency gains - Allocation of resources for energy audits and project preparation - Tendering procedures - Management of larger-scale programs that may need additional dedicated resources. Investment barriers addressed through credit for municipal EE investments and introduction of the sale of receivables as a means of EE financing. The renewable sector in Europe has long benefited from environmental concern over fossil-fuel fired plants, and has been further encouraged by European-wide and single-nation commitments to achieving 22 of electrical output from renewable sources by 2010, in order to meet Kyoto Treaty objectives. Renewable Energy Vision in Europe suggests: • A very high rate of deployment of renewable energy projects is needed • Additional form of financial support is required • Cannot rely on market alone • Regulatory encouragement • Supporting research and development Sustainable Energy Fund SEF, a private, non-profit, financial organization, offers commercial loans for new or retrofit energy-related projects to established commercial, industrial, municipal,