The Evolving Policy Landscape

The global policy landscape has largely driven the expansion of renewable energy technologies by attracting investment and creating markets that brought about economies of scale and supported technology advances. This in turn, led to decreasing costs, which ultimately fuel sustained growth. A handful of countries—particularly Germany, Denmark and Spain—led the way and created innovative policies that drove much of the change witnessed over the past decade. Today Germany's commitment to the "Energiewende"—the transition to a sustainable economy based on renewable energy and energy efficiency—as well as Denmark's commitment to 100% renewable energy by 2050, are inspiring many other countries around the globe to aim high for the coming decades.

Since 2004, the number of countries promoting renewable energy with direct policy support has tripled, from 45 to 137, and an ever-increasing number of developing and emerging countries is setting renewable energy targets and enacting support policies.28 Policy targets have become increasingly ambitious, while their focus has expanded to include heating, cooling, and transport, in addition to electricity.

In parallel, policy mechanisms have continued to evolve, including the use of policy instruments differentiated by technology, the evolution of feed-in policies towards premium payments, as well as the spreading of policy frameworks to promote renewable energy use for heating and cooling. Globally, renewable energy targets together with feed-in tariffs have had the biggest impact on renewable energy market introduction. Feed-in policies now exist on every continent, with Jordan, Nigeria, Rwanda, Uganda, the Palestinian Territories, Kazakhstan, and Ecuador beingamong the most recent countries to enact them.29

In many countries, particularly in Europe, variable renewables have achieved high shares of penetration in the electricity sector very rapidly. Existing power systems were not designed to cope with such a situation. In response, policy mechanisms that focus on market design are emerging to address needs relating to balancing and increased system flexibility, as well as financial compensation for these services. Policies are also starting to address the need for expanded and improved grid infrastructure, and increasingly they include new tools and technologies to support renewables, such as energy storage and smart grids.

While Europe has been the centre of most such changes to date, countries in other regions are moving quickly in this direction as their shares of renewable energy increase. Policies that encourage local value creation (such as capacity building) also have begun to emerge in many countries. Recently, as renewable energy shares continue to rise, regulations that focus on mandatory grid connection and priority dispatch are becoming increasingly important.

The past decade has witnessed profound change on the local level as well. Ten years ago, the majority of local governments did not consider the potential role for renewables in their energy supply. Over the past decade, many of them have become leaders in the advancement of renewable energy—particularly in combination with energy efficiency improvements—regularly exceeding efforts taken by state, provincial, and national governments. Hundreds of local governments worldwide have set renewable energy targets and enacted fiscal incentives or other policies to foster the deployment of renewables, driven by the desire to create local jobs, reduce energy costs, address pollution issues, and advance their sustainability goals.30 nternational organisations dedicated tosupportingsustainability measures in local governments, such as the Covenant of Mayors and ICLEI—Local Governments for Sustainability, have seen their memberships skyrocket and their influence spread around the globe.

Around the world, governments at the community, city, regional, island, and even country levels have begun to forge their own transition pathways towards a 100% renewable energy future. They are debunking myths about renewables and proving that 100% renewable energy—in close conjunction with energy efficiency and conservation—is technically feasible, economically advantageous, and socially desirable.31

While the picture in much of the world has grown increasingly bright, some countries—particularly in Europe—have reduced renewable energy support, sometimes retroactively, in the past few years. This is the case especially where electricity demand has declined in response to economic slowdown, and where an overcapacity of conventional power exists. To date, however, the European Union is on track to meet its member-agreed binding target to increase the share of renewables in final energy consumption to 20% by 2020.32 Reportedly, three EU Member States (Bulgaria, Estonia, and Sweden) already reached their 2020 targets in 2012.33 Discussions about setting 2030 EU climate and energy targets are ongoing.

28 REN21, Renewables 2005..., op. cit. note 4; REN21, Renewables 2013..., op. cit. note 3; see also the Policy Landscape section and related tables in this report.

29 REN21, Renewables 2013..., op. cit. note 3.

30 EU Covenant of Mayors, "Covenant in Figures," 2013, http://www.eumayors.eu/about/covenant-in-figures_en.html; CLEI-Local Governments for Sustainability, "Frequently Asked Questions," 2013, http://www.iclei.org/iclei-global/who-is-iclei/faq.html.

31 100% Renewables Web site, http://go100re.net/

32 European Commission, "The EU Climate and Energy Package," 6 January 2014, http://ec.europa.eu/clima/policies/package/ndex_en.htm.

33 Eurostat, "Renewable Energy in the EU28: Share of Renewables in Energy Consumption Up to 14% in 2012," press release (Brussels: 10 March 2014), http://epp.eurostat.ec.europa.eu/cache/ITY_PUBLIC/8-10032014-AP/EN/8-10032014-AP-EN. PDF