Political Framework Conditions - Wind Energy

Inadequate or non-existent framework conditions often form crucial barriers impeding the exploitation of available wind energy potential. Despite macroeconomic benefits which can arise when the supply situation and environmental factors are taken into account, it can happen that a large number of investment projects are not translated into reality. In most cases accompanying government measures supporting the development of wind energy do not exist.

Strategies and support mechanisms for wind energy

Types of Instruments

There are different types of instruments available to support renewable energy projects and these range from direct to indirect policy instruments. Direct policy measures aim to stimulate the installation of renewable technologies immediately, such as the REFIT, whereas indirect instruments focus on improving long-term framework conditions. Besides regulatory instruments, there are other approaches for promoting and supporting renewable energy, primarily aimed at removing the barriers which limit investments in renewable energy such as lack of information, lack of skills, limited research and development, inadequate regulatory structures, and limited incentive programmes. The different types of strategies and supporting mechanisms are detailed below.

Incentives

Renewable energy incentive programmes assist in establishing a competitive self-sustaining
renewable energy supply while increasing the quantity of renewable energy generated countrywide.
There are a range of incentives that can be used such as:

• direct subsidies from the government in the form of capital grants;
• fiscal incentives such as tax rebates for project developers and consumers or tax exemptions for the importation of renewable energy technology/equipment;
• investment incentives which encourage the participation of national and international financiers;
• incentives that promote public-private partnerships to increase the use of renewable energy technologies; and
• power production incentives
  

Institutional Support

Clear, long-term legislation and policies that support renewable energy have a critical role to play in building investor confidence, and in ensuring the sustainable growth of the renewable energy sector. A renewable energy bill for instance, would be designed to complement a broader suite of initiatives such as existing government programmes and other new laws that might be put in place
such a green procurement law (which could include renewable energy use as one of the criteria).

Other forms of institutional support can come in the form of infrastructure and planning regulations such as building codes which could treat renewable energy projects as “privileged” or “special” projects where local authorities are required to designate specific priority or preferential zones for renewable energy utilisation.

Information Portals

There is often a lack of clarity by both developers and also key institutions as to how to get projects moving, especially with regard to the many legal and regulatory requirements at both a local andnational level. In order to encourage, support and facilitate the development of renewable energy projects, in many countries institutions have been established at both local and regional levels to
provide a variety of functions, from providing basic information to developers, through to actively engaging and assisting developers in submitting projects to the relevant authorities, or even processing applications.
In some cases, these institutions or one-stop-shops have been incorporated into existing organisations; in others dedicated organisations have been established. The form of these agencies differs by location. In most instances they are national energy agencies nested within government ministries, in others they are located within local economic development agencies.
In the Mediterranean a number of countries have formed a regional body, called the Mediterranean Renewable Energy Centre (MEREC) which is geared not only towards investors but aims to develop regional competencies through the dissemination of information, training of staff, and technology transfers. In the United States a more general national body oversees developments
within the field but, on a lower level individual states run one-stop shops or independent agencies which among other activities market local investment opportunities in renewable energies.

Industry Development

Industry development is an important aspect for both regional and national growth. It is important for provincial governments to do what they can to help promote a successful industry covering everything from actual raw materials to developing and financing projects to consulting and other ancillary services associated with a thriving regional renewable energy market. A proactive
approach to renewable industry development will not only create jobs and revenues, but it will also help in long-term development of the region and importantly assist in energy security and independence.
Incorporating industry development is an integral component to a successful regulatory action plan to help foster the growth of the renewable energy market and help the region achieve its goals of clean energy capacity. There are many aspects to industry development beyond actions such as tax incentives/relief and relaxing licensing requirements to attract businesses. As part of a
comprehensive industry development plan it is important to assist and incentivise the establishment of industry or trade associations. Industry associations or trade groups can help bring a unanimous voice to renewable energy related businesses in the region, which can help policymakers identify pros and cons of regulatory legislation and identify what steps need to be taken in the future to help reform or develop the market. In addition, trade associations can help with shaping public opinion to assist in the market growth.
Also, of importance to stimulate the industry is research and development. The Western Cape could help support research and development through numerous ways. The Western Cape Province could support local university and institutes through research grants and channelling public funding to secure intellectual property (IP) rights. The Western Cape could also encourage the South African government to provide national funding towards renewable technology research and development. The Western Cape Government could help develop or actively participate in both provincial and national level research advisory committees. In addition, the provincial government through one of its departments could identify important research needs specific to the Western Cape.
One of the most direct supporting mechanisms for renewable energy industry development in the Western Cape is training and capacity building. Capacity building could be done through trade associations, workshops, training programmes, or partner with international and non-governmental organisations that assist countries with these types of activities.

Project financier and developer matchmaking

An additional support mechanism to help facilitate the development of renewable energy projects is a platform where developers and financiers could be made aware of each other. Situations in the market do arise when financing institutions or agencies are looking to invest in renewable energy project developers that have identified project opportunities and successfully completed a number
of prerequisites, e.g. site location, REFIT approval, and/or EIA. Likewise, there are also project developers who have identified renewable energy project opportunities and require some level of structured finance. A platform where financiers and developers could exchange information about their needs and opportunities could prove to be invaluable in facilitating the development of renewable energy projects and the market. In addition, such a platform could host information regarding international organisations, NGOs and/or charities that are looking to finance clean energy projects or particular steps, such as EIAs, stakeholder consultations, feasibility study, etc. A platform such as this could be hosted by the renewable energy project one-stop shop. A project developer and financier forum could be hosted on the website that will be developed for the one-stop shop. It could have the contact details of all those developers that have identified renewable energy opportunities, as well as a list of local, national and international companies, NGOs and organisations that are willing to fund projects that fall under the REFIT guidelines for South Africa.

References

Portal:Wind