IPCC SAYS F-I-T IS BEST WAY TO NEW ENERGY

Feed-in Tariffs Best to Deal with Climate Change Says IPCC Working Group III Renewables; FITs Least Costly--Most Competitive Mechanism Says Climate Researchers
Paul Gipe, November 8, 2011 (Wind-Works)

"…Chapter 11 on Policy, Financing and Implementation [of the IPCC’s Special Report on Renewable Energy Sources and Climate Change Mitigation (SRREN), makes it clear that the overwhelming weight of academic studies conclude that feed-in tariffs--or fixed-price mechanisms--perform better at delivering renewable energy quickly and equitably than quota systems, such as Renewable Portfolio Standards in the US or the Renewable Obligation in Britain…"

[Page 5 of the IPCC study:] "Several studies have concluded that some feed-in tariffs have been effective and efficient at promoting RE electricity, mainly due to the combination of long-term fixed price or premium payments, network connections, and guaranteed purchase of all RE electricity generated. Quota policies can be effective and efficient if designed to reduce risk; for example, with long-term contracts."

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[Page 53 of the IPCC study:] "Although they have not succeeded in every country that has enacted them, price-driven policies have resulted in rapid renewable electric capacity growth and strong domestic industries in several countries--most notably Germany…and Spain…but more recently in China and other countries as well--and have spread rapidly across Europe and around the world…The success of FIT policies depends on the details…"

[Page 55 of the IPCC study:] "…feed-in mechanisms achieve larger [RE] deployment at lower cost. Central to this is the assurance of longterm price guarantees [that come with FITs]…. Uncertainty discourages investment and increases the cost of capital as the risks associated with the uncertain rewards require greater rewards."…[B]ecause FITs effectively reduce risk, venture capital and private equity investors perceive FITs to be the most effective policy to stimulate investment in RE technologies…A number of studies have concluded that FITs have consistently delivered new supply, from a variety of technologies, more effectively and at lower cost than alternative mechanisms, including quotas, although they have not succeeded in every country that has enacted them…"