Analysis and comparison of the support schemes for renewable energy sources in Poland, Sweden and in the United Kingdom : a critical appraisal of the current and proposed Polish renewable energy support scheme

Abstract

Poland, Sweden and the United Kingdom decided to implement the quota system as a support tool for renewable energy. Nevertheless the support regimes show fundamental differences. This could have different reasoning i.e. different potential, different economic situation, etc. Furthermore, the development of the political discussion on renewable energy took in all three countries different dimensions and tracks. The United Kingdom, disregarding earlier difficulties, got over the negative attitude to renewable energy and seems to have found its particular economic interest in its further development. In Sweden, the stabile support scheme and abandonment of non-economic barriers manages to secure stability, though the growth of new capacities remains limited. The relatively low incentive values secure new development of the cheapest technologies. The clear commitment in Sweden and the United Kingdom to certain renewable technologies, aiming a slow and smooth transfer to affordable and low-carbon electricity, makes both countries interesting for a potential investor. The Polish government seems to have a rather bearish attitude to renewable energy and shows no interest in any extraordinary support to it. Long lasting political discussions on the regulatory framework and indecisiveness in further reforms make Poland to a rather challenging market for new investments. Nevertheless, in the past years the Polish support scheme, from the economical perspective was, at least for some technologies, one of the most attractive in Europe. The thesis will exemplify a comprehensive study on the Polish, Swedish and British support schemes for renewable energy. It will be divided into a detailed introduction, analysis followed by a critical discussion on the Polish support system and comparable view on the proposed and existing systems. In the introductory part of the thesis the reasoning for the support of renewable energy sources as well as the main support schemes will be explained. In the main part of the thesis a detailed description of the functionality of the current and proposed Polish support scheme and a general description of the Swedish and British support systems will be given. The issue of quota calculation and quota obligation will be discussed. A description of the transfer mechanism for the tradable certificates and the penalty payments will be given. Moreover the trading of the green certificates will be described (fixed floor prices, maximum prices). The thesis also identifies the market based products, allowing certificates trading for all three markets. Moreover, a description of the current British development - Energy Market Reform - i.e. introduction of contracts for differences will be given. At this stage also the Swedish support scheme and current discussions on its amendment will be discussed. After a detailed presentation and analysis of the schemes, in the next part of the thesis common principles, differences, advantages and disadvantages will be identified. In addition the Polish proposal as of 27/07/2012 and April 2014 will be discussed in light of the systematic solutions in the UK and Sweden. In order to assess the principal feasibility of a quota support system for a perspective development of renewable energy; the Polish, Swedish and British support systems will be first of all introduced from a historical point of view. Nevertheless the thesis will also asses the future development perspectives and trends.