Promoting renewable energy technologies : an analysis and evaluation of national support measures for electricity production from renewable energy technologies with a special focus on Poland

Abstract

My thesis represents the final document for the Masters of Science Program "Renewable Energy in Central and Eastern Europe". The objective was to carry out a thorough analysis and evaluation of support measures available to stimulate the deployment of electricity production from renewable energy sources and to dedicate a thorough research of the matter to Poland's renewable energy policy. I chose Poland's energy policy as subject-matter because of my professional three-years work experience (2006-2009) at the Austrian Trade Commission in Warsaw. The core question addressed is which policy measures are generally available to support electricity production from renewables and, in particular, which measures have been implemented in Poland. What are their key elements? How well are they working? Further issues addressed were the main barriers to the deployment of technologies for generation of electricity from renewable sources in Poland and effectiveness and efficiency of the current support scheme. Finally, I looked at the experience of a Western European country and the possible implications for Poland's trajectories. The method of approach was to first generate a general framework of reference by providing the reader with an overview of the rational of renewable energy policy, possible policy design and performance. Subsequently, an analysis of the status quo of Poland's power sector was conducted and the significance of renewables in the country's energy policy was researched. Thirdly, I used statistical approaches to analyze efficiency and effectiveness of national policy measures with the help of specific indicators. Finally, I set Poland's support scheme for renewable electricity in relation to policy tools and developments in the country I am currently living and working in, the United Kingdom. The main results of the analyses are as follows: Renewables have traditionally accounted for a small share in Poland's primary energy production and consumption due to the importance and availability of coal for energy production. Renewable energy sources can and will play an ever more significant role in Poland's future energy mix, but a number of obstacles remain. Poland has a large natural endowment favorable for renewable energy. The highest potential for electricity production from RES in Poland lies in biomass and wind power. The main support mechanisms for renewables are a quota system and a green certificate scheme. Onshore wind power capacity has shown the most dynamic growth amongst renewable energy sources in Poland over the last few years. Poland's policy for promoting onshore wind has a relatively low effectiveness. Calculations show that wind power investment is currently not feasible without the option of selling renewable energy certificates. In terms of policy efficiency, the results seem to indicate that wind power is over-incentivized. Support mechanisms should regularly be evaluated, adapted and improved to reduce existing barriers and remove efficiencies. Poland's policies are a few steps behind the British regulations, which should make it attractive for Polish policy makers to observe the latest developments in the United Kingdom and their possible implications for their country. British experiences can offer valuable conclusions and could even prevent a duplication of research efforts. It can be concluded that Poland has to remove significant obstacles that hold back expansion to make full use of its potential for electricity production from renewable sources. As the analysis of policy efficiency and effectiveness have shown, there is great potential for policy adaptation and improvement, including the elimination of administrative burdens and the reduction of technical and financial risks of obtaining access to the grid. Moreover, the green certificate system should be reviewed and - if necessary - adapted on a regular basis to guarantee a smooth development of the market. Observing the experiences of other countries should prove beneficiary as it allows for a steeper learning curve. The case of the United Kingdom for example demonstrates the possibilities of introducing complementary measures to green certificates, which stimulate the development of small-scale technologies. complementary measures to green certificates, which stimulate the development of small-scale technologies.