Kathy Araujo, PhD Candidate MIT - EWEC 2010, Warsaw, Poland

Comparative Policy Frameworks

A Study of Wind Power Advance

in Brazil, China, Germany, India, Spain and the US

Kathy Araujo, PhD CandidateMIT - EWEC 2010, Warsaw, Poland

Photo: Courtesy of the Spanish Wind Energy Association

Wind Potential Worldwide

Source: NREL

Estimate: 40x the current power consumption or more than 5 times global use of all energy forms (Lu et al, 2009)

Overview

Study Phase 1: 1995-2007CountriesQuestions/Areas ConsideredResearch ApproachData and PoliciesFindings

Study Phase 2: 2008-2009 Updates (ongoing)

Questions

6 Country Study

50% Industrialized and 50% Industrializing Countries

Selected from 3 regions – Asia, Europe and the Americas

All Hold High Wind Potential with Wind Development Evident

Countries Selected

Areas considered

(1) Policy frameworks that have been more/less effective in spurring greater integration of wind power

(2) Key factors that explain differing levels of wind power development

(3) The relevance of industrialization level

(4) The role of natural resource endowments or geography

Research Approach

Hypothesis: Countries with Robust Wind Policies

(i.e. grid access guarantees, performance standards and adaptation)

+

Stable Policy Horizon of at least 10 Years = Greatest % of Wind in Power Generation

Data Analysis and Historical Document Review Field Research: Interviews

Source: BP (2009), based on gross output.

Electric Generation by Country (Twh)

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

Brazil

China

Germany

India

Spain

US

Stages 1 & 2

Installed Wind Capacity (MW)

0 5,000 10,000 15,000 20,000 25,000 30,000 35,000

Germany

Spain

US

Brazil

China

India 2009

2008

2007

2006

2005

2004

2003

2002

2001

2000

1999

1998

1997

1996

1995

Source: UN, 2008; GWEC 2006, 2007, 2008; Wind Power Monthly, 2010; IDAE, 2009;

Wind-Related Characteristics Non-Annex 1 Countries Annex 1 Countries

Brazil China India Germany Spain US

Total Installed Capacity 634 20,000 10,742 25,030 17,940 32,919(2009)

Factor Increase inTotal Installed Capacity 211 524 52 22 598 19 1995-2009 (growth by a factor of x)

% of Global Installed Cap <1 14 7 17 12 23(2009)

Source: Wind Power Monthly, 2010; IEA, GWEC and UN, 2009; AEE, 2009; Dutra, 2001;

Wind, % of Total <1 to <1 <1 to 1 <1 to 2 <1 to 9 <1 to 12 <1 to <2 Electricity (GWh)1995 and 2008

Wind-Related Characteristics Non-Annex 1 Countries Annex 1 Countries

Brazil China India Germany Spain US

Total Installed Capacity 634 20,000 10,742 25,030 17,940 32,919 (2009)

Factor Increase inTotal Installed Capacity 211 524 52 22 598 19 1995-2009 (growth by a factor of x)

% of Global Installed Cap <1 14 7 17 12 23 (2009)

Source: Wind Power Monthly, 2010;

Wind, % of Total <1 to <1 <1 to 1 <1 to 2** <1 to 9 <1 to<12 <1 to <1 Electricity (GWh)1995 and 2009

National Wind Policy Instruments

1995-2007

*Sub-national policy

Wind Manufacturing Sector

Spanish Companies Yes Yes

German … Yes Yes

Indian … Yes Yes

Brazil … Negligible No

China … Yes Emergent

United States … Yes Yes

Native Company Engagement

Domestic Market International

Findings

– Brazil, Germany, Spain and the US have relied upon production-based policies with FIT or PTC instruments. In contrast, India and China have been more investment-based, relying on tendering auctions or investment instruments like rapid depreciation and VAT reductions as their wind-related policy instruments.

– The US and India appear to have fewer national wind/RET policies, leaving policy space for states/regions or for market dynamics to operate. Like the US and India, Brazil’s policy path is currently less robust than in German, Spain and China. The choice of policy instruments seems to blur the distinction between industrialized and industrializing countries.

– Although considered a strong policy instrument, the presence of an FIT absent adaption to conditions or a more comprehensive policy package can result in limited scale-up.

– The need for grid investment was a common and at times a pressing theme in every country.

– Germany and Spain share not only policy frameworks and EU mechanisms, but a need to diversify.

Findings

Stage 1 Conclusions:

(1) Key factors that explain differing levels of wind power development - Interplay of generation costs, environmental stewardship, availability of rival fuels and fuel price levels/volatility factor prominently

(2) Policy frameworks that have been more/less effective in spurring greater integration of wind power - Top-down market-based and regulatory policies including advanced feed-in tariffs, targets and carbon trading

(3) The relevance of industrialization level - Levels of industrialization appear to be related to country-level installed capacities and the share of the global market that each country represents, but not the rate of wind power development

(4) The role of natural resource endowments or geography - The existence of an abundance of a rival fuel source leaves wind

power to be considered more marginally

Updates

India - currently is adopting a national FIT

China - adopted regional FITs

Brazil - shifted to wind power auctions

US - extended its FIT for 3 years

- additionally, a key governmental decision on an offshore wind project is imminent

Additional

Questions –

Thank you!