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Trading in renewable energy credits

Current market support systems for clean energy technologies in Europe are not politically sustainable and should be replaced by a system of "renewable electricity credits." So argues a new book published by the Royal Institute for International Affairs in London which backs a strategy outlined in the European Commission's Green Paper on renewables (Windpower Monthly, June 1997). Such credits are "the most appropriate instrument for long term support because of the incentive it gives for least cost applications," argue Michael Grubb and Roberto Vigotti, the authors of "Renewable Energy Strategies for Europe Volume II: Electricity Systems and Primary Electricity Sources." The expected liberalisation of electricity markets in the European Union could allow renewable energy sources to supply between a quarter and a half of European electricity within three decades, according to the book. But simultaneous liberalisation of the gas markets means that gas "could eclipse all other sources, including renewables," warn Grubb and Vigotti. Appropriate policies are needed to make this happen. "Liberalisation is necessary, but not sufficient for the large scale development of renewable electricity sources. Support systems will be needed to turn research and development to mature commercial industries, and to reflect environmental and other external costs in the electricity industry," state the authors. "In the emerging liberalised electricity systems renewables are more likely to be paid their true value as dispersed, clean energy sources and they will be able to develop into major commercial industries." They suggest energy companies should turn towards integrated development of offshore wind, wave and tidal stream energy based partly on existing infrastructure.

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