Renewable energy target setting

Renewable Energy Target Setting

Leonardo Energy Webinar September 29 2015

About the Authors

Ghislaine Kieffer Toby D. Couture

Founder and Director of E3 Analytics, an independent renewable energy consultancy based in Berlin, Germany. He works on a wide range of topics in renewable energy, including policy, strategy, new business models, as well as economic and financial analysis. He has advised government policymakers and senior decision makers in over forty countries around the world. www.e3analytics.eu

Joined IRENA in November 2011, where she is currently working in the Policy Unit on a range of policy and regional analyses. Prior to this, she was managing the Latin America Programme at the International Energy Agency (IEA), and previously worked as an operations analyst at the World Bank. Her work focuses on the interplay between energy and sustainability, both from the perspective of global agenda-setting and country-specific policy-making. www.irena.org

The foundations of targets

• Means or end?

• Management by Objectives

• New Public Management

• Global economic/development policy

• SMART and motivating

Targets can represent and/or support overall goals and a hierarchy of objectives by providing a sense of purpose and direction

for a particular sector.

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Targets in the global renewable energy landscape – 2005

In 2005, 43 countries had renewable energy targets – mostly OECD countries

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Targets in the global renewable energy landscape – 2015

Today, 164 countries have at least one type of renewable energy target – including 131 targets in emerging and developing countries

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Evolution of global RE targets by sector – 2005-2015

While renewable electricity targets are the most widespread type, heating/cooling and transport sector targets have increased

significantly over the last decade 6

What are “renewable energy targets”?

The great diversity of renewable energy targets calls for definition and context

Renewable energy targets are numerical goals established by governments to achieve a specific amount of renewable energy production or consumption.

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In Focus: Renewable electricity targets

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In Focus: Progress toward RE targets

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Key functions of RE targets throughout the policy-making cycle

1. RE targets in the policy formulation stage

• Develop the information base by gathering key data

• Complement/validate information through consultation

• Reveal gaps in knowledge

• Increase the transparency of policy making

• Stimulate debate, raises awareness and acceptance

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Consultation enhances transparency& feasibility of targets: South Africa’s IRP

11 Source: Modise, 2013.

Before consultation process After consultation process

Key functions of RE targets throughout the policy-making cycle

2. RE targets in the policy implementation stage

• Improve planning

• Provide clear direction of policy to stakeholders

• Signal political commitment

• Encourage alignment of public policies

• Motivate stakeholders to take action

• Anchor strategic priorities and scenarios

• Foster accountability 12

Targets indicate policy direction and potential market size: India

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Source: CEEW, 2014 Note: CAGR - Compound annual growth rate

India scales up its solar targets from 22 GW to 100 GW

Key functions of RE targets throughout the policy-making cycle

3. RE targets in the policy evaluation stage

• Supply concrete milestones for evaluation and adjustments

• Show deficiencies in current operations

• Provide opportunities to take action to correct deviations

• Expose data needs and discrepancies

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Monitoring renewable energy targets in EU Member States

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Share of renewables in gross final energy consumption in 2005, 2012 and 2020 target

Source: IEA, 2014

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Monitoring renewable energy targets at the EU level

Source: Fraunhofer ISI based on Eurostat and NREAPs.

Designing RE targets

The design of RE targets varies widely: Technology-neutral vs. technology-specific

Total final energy consumption (TFEC) vs. Total primary energy supply (TPES)

Share of energy demand (%) or a fixed amount (e.g. ‘x’ GWh, PJs)

By Sector: Electricity, Heating, Transport

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Designing RE targets

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Designing RE targets

Targets also differ widely in their overall structure: Long-term vs. Short-term

Mandatory vs. Aspirational

In order to translate into measurable change, RE targets need to be backed by specific policies and measures

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Key findings

Governments increasingly recognise the benefits of a portfolio approach to renewable energy deployment – technology-specific targets are now predominant

When determining the metrics for RE targets, simple distinctions such as TPES vs. TFEC, or output (GWh) vs. percentages (%) matter and can have important implications for monitoring, reporting, and enforcement

The time horizon of targets increasingly combines a long-term vision (e.g. 2030, 2050) anchored in short-term milestones to track progress (2017, 2018, etc.)

Making targets mandatory matters – the track record of binding RE targets is quite strong, while that of aspirational targets is comparatively weak. The majority of targets to date are non-binding

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Effective targets are connected to high-level national priorities, are backed by strong political commitment, and are binding in character

Stakeholder engagement strengthens the credibility and feasibility of targets

Making targets mandatory matters

Who is obligated and how also matter

Striking the right balance between ambition and realism is key

Targets alone are not enough: to be effective, they need to be backed by specific policies and measures

Key lessons for setting effective RE targets

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Aspirational targets are unlikely to trigger meaningful change

To be effective, targets have to be credible, and binding

Who is obligated, and the legal basis of that obligation, matters (e.g. is it utilities, large final emitters, resource industries, and is the obligation legally enforceable?)

Targets are fundamentally about shaping investor/stakeholder expectations Targets need to be backed by specific policies and measures

Potential insights for climate targets

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Questions?

Download the full report here:

http://www.irena.org/DocumentDownloads/Publications/IRENA_RE_Target_Setting_2015.pdf