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Market forces cannot drive wind market alone, says IEA

Clean energy technologies, such as wind power, could be the "pillars of a sustainable energy system," but only if they can "perform at a level and at a cost that society deems acceptable," suggests a recent report from the International Energy Agency (IEA). But although the private sector is expected to drive forward development, "market forces alone will not guarantee success," it warns. "Deployment policy and programs are critical for the rapid development of cleaner, more sustainable energy technologies and markets. Government has a key role to play in sending clear signals to the market about the public good outcome it wishes to achieve." The report, Creating Markets for Energy Technologies, highlights 22 government support programs (representing a total investment of more than EUR 20 billion) which have been successful in creating and encouraging growth in clean energy technology markets. These include Germany's 250 MW wind program, which kicked off in 1989 and which the report describes as a "highly successful" example for others to follow. Governments that have yet to establish support programs are encouraged to do so, but investment should be directed to niche markets in a bid to improve technology cost and performance, the report says. Moreover, barriers to market development that are based on instances of market failure should be removed. "In the end, it is the combined effect of technology potential and customer acceptance that makes an impact on the market and, hence, on energy systems. Developing a deeper understanding of both, including how they are influenced by the actions of government, is an essential ingredient of effective deployment policy," the report adds.

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