2 June 2014: Renewable energy policies need to remain dynamic and adaptable, according to a report published by the International Renewable Energy Agency (IRENA). The report, titled ‘Adapting Renewable Energy Policies to Dynamic Market Conditions,’ provides an overview of the challenges faced by policy makers as renewables increasingly become part of the energy mix, including responding to the falling costs of renewable energy generation, considering the cost implications of existing support schemes for renewables and upgrading grid infrastructure to cope with higher levels of variable power.

The report presents an analytical framework that locates innovative energy policies being implemented by various countries on a spectrum of suitability, based on countries’ levels of economic development. The report analyzes policies through various prisms, including: from the perspective of developed and developing countries; in view of government support directed at specific technologies, such as wind or solar power; and from the perspective of various asset owners, including utilities, independent power producers, households and industry users. Policies reviewed include: holding auctions for power contracts to support price discovery; designing flexible tax policies; and implementing demand response programmes and smart metering in more mature markets.

“Somewhat counterintuitively, capping support can in some cases strengthen, rather than diminish, investor confidence in renewables,” said Frank Wouters, IRENA’s Deputy Director-General at the report’s launch in Abu Dhabi, United Arab Emirates (UAE). Wouters recommended planning and upgrading grid connections and storage to integrate growing shares of variable renewables, such as solar and wind power.

Noting that there is no ‘one size fits all’ in renewable energy policies, the authors do not present conclusions, but rather aim to help policy makers assess the types of policies that are best suited to their circumstances.

IRENA launched the report at an event held in cooperation with the Renewable Energy Network for the 21st Century (REN21) and the Emirates Centre of Strategic Studies and Research. [Publication: Adapting Renewable Energy Policies to Dynamic Market Conditions] [IRENA Press Release] [IRENA Website]