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Feed-in tariffs and a policy instrument for promoting renewable energies and green economies in developing countries

Feed-in tariffs and a policy instrument for promoting renewable energies and green economies in developing countries

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This report is intended as a resource for policy makers in developing countries to make informed policy decisions about the whether,when and how of FITs and to support nationally appropriate policy measures to scale up renewable energy. The report is also intended to improve the understanding of the potential benefits and challenges for developing countries to design FITs as well as the factors influencing their success, more in depth from the policy and legal foci, whilst also analysing the funding and capacity implications. Throughout the report, FITs are construed as interacting with national energy and non-energy policies in a dynamic manner.
This report is intended as a resource for policy makers in developing countries to make informed policy decisions about the whether,when and how of FITs and to support nationally appropriate policy measures to scale up renewable energy. The report is also intended to improve the understanding of the potential benefits and challenges for developing countries to design FITs as well as the factors influencing their success, more in depth from the policy and legal foci, whilst also analysing the funding and capacity implications. Throughout the report, FITs are construed as interacting with national energy and non-energy policies in a dynamic manner.

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Published by: United Nations Environment Programme on Aug 10, 2012
Copyright:Attribution Non-commercial

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Acknowledgements
 
Supervision and coordination:
Martina Otto, Head of Policy Unit, Djaheezah Subratty, Programme Officer, and Alexander Koch,Associate Programme Officer of the Energy Branch, UNEP Division of Technology, Industry andEconomics (DTIE); Cristina Zucca, Programme Officer and Haddy Guisse, Associate ProgrammeOfficer, MEAs Implementation Support Branch, UNEP Division of Environmental Law andConventions (DELC).
Lead Author
: Wilson Rickerson
Contributing Authors
: Chad Laurent, David Jacobs, Christina Dietrich and Christina Hanley
Reviewers and Review Workshop Participants
Asoka Abeygunawardana, Energy Forum / Advisor to Minister of Power and Energy, Sri LankaThembani Bukula, National Energy Regulator of South AfricaSushanta K. Chatterjee, Central Energy Regulatory Commission, IndiaToby D. Couture, E3 AnalyticsGabriela Elizondo-Azuela, World BankPete Maniego, National Renewable Energy Board, PhilippinesAnastas Mbawala, Energy and Water Utilities Regulatory Authority, TanzaniaMiguel Mendonça, MBM InvestigationsJuan Roberto Paredes, Inter-American Development BankOsvaldo Soliano Pereira, Central Energy Regulatory Commission and Universidade SalvadorRandy Ramadhar Singh, Ministry of Energy and Energy Affairs, Trinidad & TobagoMauricio Solano-Peralta, Trama TecnoAmbiental (TTA)Xavier Vallvé, Trama TecnoAmbiental (TTA)Lutz Weischer, World Resources Institute
Thanks to :
Mark Radka, Chief, Energy Branch, UNEP-DTIE and Arkadiy Levintanus, Chief,MEAs Implementation Support Branch, UNEP-DELC for their support ; Eric Usher, Energy Branch,and Derek Eaton, Benjamin Simmons and Moustapha Kamal Gueye of the Economics and TradeBranch, UNEP-DTIE for their inputs and comments.
Copyright @ United Nations Environment Programme, 2012
This technical paper may be reproduced in whole or in part and in any form for educational or non-profit purposeswithout special permission from the copyright holder, provided acknowledgement of the source is made. UNEPwould appreciate receiving a copy of any publication that uses this paper as a source. No use of this technical papermay be made for resale or for any other commercial purpose whatsoever without prior permission in writing fromthe United Nations Environment Programme.
Cover:
Photo Shutterstock ,
 Design
: courtesy of Expression Graphique
Disclaimer
The designations employed and the presentation of the material in this technical paper do not imply the expressionof any opinion whatsoever on the part of the United Nations Environment Programme concerning the legal status of any country, territory, city or area or of its authorities, or concerning the delimitation of its frontiers or boundaries.Moreover, the views expressed do not necessarily represent the decision or the stated policy of the United NationsEnvironment Programme, nor does citing or trade names or commercial processes constitute endorsement.
 
 
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Table of Contents
List of Figures ........................................................................................................ iiiList of Tables ......................................................................................................... ivList of Text Boxes .................................................................................................. ivList of Acronyms ................................................................................................... ivExecutive Summary ............................................................................................... v1. Introduction ........................................................................................................ 1
1.1. The overarching framework ........................................................................................ 11.2. Feed-in tariffs in developing countries ........................................................................ 31.3. Policy Considerations and Constraints ....................................................................... 61.4. Report structure ............................................................................................................ 9
2. Policy Instruments to Scale Up Renewables: FIT Policy Overview andMajor Design Elements ................................................................................... 10
2.1 Renewable energy policies .......................................................................................... 10
2.2.1 Rebates and grants ......................................................................................... 102.2.2 Tax credits ...................................................................................................... 112.2.3 Renewable Portfolio Standards and Quota Systems ...................................... 112.2.4 Competitive tenders and auctions ................................................................ 1222.2.5 Tradable Renewable Energy Credits ............................................................. 122.2.6 Net metering ................................................................................................... 132.2.7 Competing or combining policies? ................................................................ 13
 
2.2 General FIT requirements ......................................................................................... 15
3.
Law Drafters’ Guide: Design Options and Considerations for Adapting
Feed-in Tariffs to the Developing Country Context ..................................... 17
3.1 Methodology ................................................................................................................ 173.2 Developing FITs through Law & Regulation ........................................................... 183.3 Feed-
In Tariff Design Issues & Options and Law Drafter’s Guide
....................... 20
3.3.1 Integration with policy targets ....................................................................... 22

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