The European Experience with Renewable Energy Support Schemes and Their Adoption: Potential Lessons for Other Countries

Abstract

In the EU since the late 1990s, two schemes for renewable electricity support have competed with each other: feed-in tariffs (FITs) and tradable green certificates (TGCs). After electricity liberalisation began in 1997, the European Commission at first sought harmonisation of support rules and challenged FIT for violating legal provisions; however, it accepted a compromise for the first renewable energy directive of 2001. Focused attention on the results of two schemes produced valuable insights and showed overall better results for FIT. When the Commission returned to support TGC (now called guarantees of origin) harmonisation for the second renewable energy directive adopted in 2009, a coalition of Parliament and Council, strengthened by evidence gained from experience, again replaced the Commission approach by a neutral position. The controversy, its arguments and the insights it produced should be helpful for other countries facing similar policy choices.