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Proceedings of the 2002 Global Wind Energy Conference, April 2 – 5, 2002, Paris.
WIND ENERGY STRATEGIES FOR CENTRAL AND EASTERN EUROPEAN COUNTRIES
IN A EUROPEAN UNION CONTEXT
S. N. Uddin, B. P. Ó Gallachóir & E. J. McKeogh
Sustainable Energy Research Group, Department of Civil & Environmental Engineering, University College Cork, Ireland
ABSTRACT: The increased use of renewable sources to meet growing energy requirements is widely recognised as essential
in the move towards sustainable energy development. Most developed countries in the world have already set minimum
targets renewable sources within the total energy mix. These targets are in many cases quite ambitious and require certain
policies and support mechanisms to ensure delivery. The European Commission has set a target of doubling the share of
renewable energy in energy consumption from around 6 percent in 1997 to 12 percent in the year of 2010. Several
developing countries in the world have also given clear indications of their intention to strengthen the contribution of
renewable sources of energy. In the current context of concerns regarding climate change, polices and measures for
greenhouse gas abatement are being developed and refined in many Central and Eastern European countries and renewable
sources of energy can play a significant role in these. Among the different renewable sources of energy options, wind energy
is the most promising one in the short term due to the cost competitiveness, size of the resource and recent technological
developments. This paper examines the wind energy strategies in EU Member States and analyses best practice in Member
States, based on their relevance to the Central and Eastern European countries.
1. Introduction
Energy is a key factor for social development and
economic growth. It provides basic needs and services to
all sectors of human activities. But the production and
utilization of energy causes environmental degradation at
all levels – local, regional, and global. The basic
elements of sustainable energy strategy are the most
efficient use of energy to create the necessary domestic,
commercial, and industrial energy services; generation of
primary energy from renewable energy sources; and the
security of supply. Renewable sources of energy are
indigenous, and can therefore contribute to reducing
dependency on energy imports and increase the security
of supply. Also deployment of renewable sources of
energy can be a key feature of economic and regional
development with the aim of achieving greater social and
economic cohesion within the community and at regional
levels and its potential to contribution towards a
sustainable development objective. Among different
advantages of using renewable sources of energy the
negative environmental impacts is the most important
one and it can also play an important role in integrating
the environmental concern into energy policy.
2. EU Concerns, Policy and Targets on Renewable
Energy
Europe’s future depends on a secure, affordable and
ecologically sustainable energy supply. The EU’s
dependence on energy imports is already 50 percent and
is expected to rise over the coming years if no action is
taken, reaching 70 percent by 2020 [8]. Renewable
sources of energy as indigenous sources of energy will
have an important role to play in reducing the level of
energy imports with positive implications for balance of
trade and security of supply. The potential for the
exploitation of renewable sources of energy is underused
in most of the EU member states.
The energy policy objectives of the EU were stated in the
1995 White Paper ‘An Energy Policy for the European
Union’ and were based on the three key energy policy
objectives of competitiveness, security of supply and
environmental protection. European Commission 1996
Green Paper on Renewable Energy outlined other policy
goals to which increased use of renewable energy
sources can help. These include regional development,
increased employment, social and economic cohesion,
increased competitiveness, as well as protection of the
environment and security of energy supply through the
diversification of energy sources. The basic features to
promote renewable energy in EU include energy security
concerns that emerged in the 1970s and encouraged
development of indigenous sources, environmental
concerns that arose in 1980s (acid rain) and 1990s
(climate change) are now also major motivations for
renewable energy promotion. Economic priorities such as
regional and agricultural development and the export
potential of renewable energy technology in emerging
markets are also often cited to support promotion of
renewable energy.
Renewable sources of energy is increasingly becoming a
vital component in total energy mix of the 21 st century,
and its successful penetration in the market is already
underway in many EU member states. Currently,
different renewable sources of energy are unevenly and
insufficiently exploited in the EU member states. EU
member states differ considerably in terms of the
contribution made by renewable energy to their energy
mix. Although many of them are abundantly available,
the real economic potential is considerable. The
European Commission has developed programmes and
legislation to encourage the penetration of renewable
energy sources in the EU, and increase trade in products,
equipment and services within and outside the EU.
In fact, among various renewable sources of energy,
wind energy in particular has achieved maturity in the
world energy market. Among the different wind energy
drivers, environmentally-driven in developed countries
and energy-driven in developing countries are the
significant ones. Technical maturity of wind energy has
allowed a number of developed and developing countries
to actively exploit this environmentally friendly energy
source. In addition, a number of proven support
mechanisms namely, feed-in tariffs (REFITS), renewable
portfolio standards (with green certificates) and bidding
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Proceedings of the 2002 Global Wind Energy Conference, April 2 – 5, 2002, Paris.
processes have substantial importance for wind energy
deployment in different EU member states depending on
the local condition. Indeed, the size of the commercial
turbines has increased continuously from 20-100 kW, to
the present size of 1500 kW and the reliability and
technical availability has increased up to 98-99 percent
for on-shore wind turbines.
EU targets for renewable energy will be achieved
through actions at national, regional, and increasingly
local levels. EU legislation has played a significant role
on member states domestic energy policies. At the EU
level, the European Commission 1997 White Paper on
renewable energy sources set out the objectives of
increasing the share of renewable sources of energy to
12% of gross inland energy consumption by 2010 [16].
As a follow-up to the 1997 White Paper, in 1999
European Commission launched the Campaign for Take-
Off. The three key renewable energy sectors to be
prompted during the period 1999-2003 are solar energy
(photovoltaic and solar thermal), wind energy and
biomass (combined heat and power biomass installation,
dwellings heated by biomass, biogas installation and
biofuels) [9]. These correspond to those technologies and
market sectors where rapid uptake of renewable energy
use is more likely to occur over this short time interval.
In 2000, the European Wind Energy Association
(EWEA) increased its target for installed wind power
capacity in EU from 40 GW to 60 GW by the year 2010
[21]. The long-term goal of EU is a single electricity
market. The European parliament and the council passed
the Directive 2001/77/EC on September 2001 on the
‘Promotion of Electricity Produced from Renewable
Energy Sources in the Internal Electricity Market’. This
directive targets 22.1% share of electricity produced
from renewable sources of energy in total community
electricity consumption by 2010. The Directive specifies
indicative national targets to meet the 22.1%. If
renewable energy target are not met, provision for
mandatory targets and proposals for a community
framework. This directive is an important step for the
Country
Table 1: EU member states wind energy installed capacity, support mechanisms, and national targets
Installed
Capacity MW
end 2001
Support Mechanisms
EU RE Directive
Targets by 2010*
National targets
Germany 8100 Feed-in tariffs 10.3% 10-12% renewable energy by
2010 without large hydro
Spain 3175 Feed-in tariffs 17.5% 12% of power from wind
energy by 2010
Denmark 2417 Feed-in tariffs;
Green Certificate (planned)
Italy 560 Feed-in tariffs;
Green Certificate (planned)
Netherlands 483 Voluntary Green Certificate
Markets (plus tax rebate)
UK 477 Renewable Obligation
(With tradable certificates)
29% 20% renewable electricity by
2005 and 79% by 2030
14.9% 1000 MW wind energy by
2006, doubling share of
renewable electricity by
2010 without large hydro
12% 17% renewable electricity by
2020
10% 5% renewable electricity by
2003, 10% by 2010 than
maintained through to 2025
(with hydro)
Greece 273 Subsidies; Feed-in tariffs 14.5% No national targets
Sweden 264 Subsidies; Feed-in tariffs 15.7% Increase renewable
electricity with 1.5 TWh
until 2002 (6.8% without
large hydro)
Ireland 132 Competitive bidding scheme 11.7% 500 MW electricity from
renewable energy mainly
from wind in 2000-2005
Portugal 127 Subsidies; Feed-in tariffs 21.5% No specific targets
France 87 Feed-in tariffs (12
MW)
Austria 86 Feed-in tariffs; Green
Certificates (small hydro)
Finland 39 Subsidies; Tax subsidies; R&D
grants
8.9% New climate action plan
aims for 3 GW wind energy
by 2010
21.1% 5% excluding hydro and
waste by 2005
21.7% Renewable electricity of 8.35
TWh by 2010 of which 1.1
TWh from wind
Belgium 18 Feed-in tariffs; Bidding system 5.8% Renewable electricity 0.96%
in 2001, 3% in 2004, and 5%
in 2010
Luxembourg 10 Subsidies; Feed-in tariffs 5.7% Renewable electricity 5% in
2010
* (Contribution to electricity excluding large hydro)Sources: [6], [23]
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Proceedings of the 2002 Global Wind Energy Conference, April 2 – 5, 2002, Paris.
European wind energy sector, and for other renewable
energy sectors as well in making member states take the
additional policy measures and targets necessary to meet
the 1997 White Paper target.
3. EU MEMBER STATES & WIND ENERGY
There is no unique and policy or support measure in the
EU. Most Member States have developed a series of
policy measures and support mechanisms to promote
renewable energy utilization with the stated aim of
meeting different multiple objectives. The major and
common drivers for national renewable sources of energy
are oriented to environmental objectives and Kyoto
targets. However, industrial and economic development,
and employment creation objectives are also very much
behind the measures commitments in a number of EU
member states. To foster the greater utilization of
renewable sources of energy, investment and operating
supports are the two important market intervention
measures. Investment aids usually the form of capital
grants to reduce the capital costs for investors and
appropriate for the early introduction of markets in one
hand. Operating aid provides a direct incentive to
maximize the power output from a project on the other
hand. Price and quantity are the two market variables
where government intervention to provide operating
support can act actively. Table 1 gives the details of
support mechanisms in EU member states with installed
capacity of wind energy by the end of 2001 and their
national targets and EU Renewable Energy Directive
targets (excluding large hydro power).
4. CENTRAL AND EASTERN EUROPEAN
COUNTRIES CONTEXT
Most of the Central and Eastern European Countries are
currently undergoing major political, economic, and
structural reforms. EU member governments signed the
‘Treaty of Nice’ in 2001 and it has changed the way of
operation of EU institutions in order to make possible
admission of new member states in future [19]. Czech
Republic, Hungary, and Poland are among the other
Central and Eastern European countries expected to join
the EU in future. Each of these countries has a unique
socio-economic context, causing variation in the
transition process across all countries in the region.
Former state-owned firms are being internally
restructured, shifting from public ownership with state
control to various types of private ownership. Climate
change policies are currently being developed and
refined in these countries with a clear role for wind
energy.
4.1. Czech Republic
Czech Republic is expecting full membership of EU by
2003-2005 [11]. The energy policy of Czech Republic
focuses to harmonise EU energy policy objectives. In
January 2000, the Czech Government adopted the new
energy policy document and it includes environmental
protection; adherence to the principles of sustainable
development; assurance of energy supply security; and
support for competitiveness of the energy-economy [20].
The new Energy Act and new Energy Economy Act are
also modelled on EU legislation. In the current policy
objectives, the government’s goal target for renewables
is a 5-6% share of primary energy by 2010 and 8-10%by
2020 if appropriate policy measures are taken to tackle
market barriers [13]. Since 1991, a specific program
aimed at developing renewable energy production has
been implemented and it include certain incentives for
wind energy as well such low VAT rate (5%instead of
22%) for small facilities of 0.075 MW wind energy
installation; direct investment subsidies (17% of total
investment costs) for 7 MW wind energy; and reduced
import duties on renewable energy equipment [13]. Since
2000, the country has participated in the EU ALTENER,
program. The overall potential of wind energy is small,
only a small market share has gained. By the end of
2001, total wind energy installed capacity was 12 MW
[23].
4.2. Hungary
Hungary is expecting accession to the EU by 2004, and
adoption of EU energy directives is therefore great
importance [2]. The Government is committed to
liberalizing the electricity and natural gas markets. The
1999 Energy Plan indicates a movement toward cleaner
technologies; including emissions controls for coal-fired
generation; and eventual replacement of some coal-fired
power plants with gas turbines. The basic features of
energy policy are to develop diverse energy supplies and
eliminate dependency on imports; improve
environmental protection; to increase energy efficiency
with better management of electricity consumption; and
to attract foreign capital for investment in capitalintensive
energy projects [2]. At present renewable
sources of energy represent only 2% of the total energy
market. The National Energy Action Plan of 1999
indicates the increase use of renewable sources of energy
is a priority area and introduces a number of actions to
assist its promotion [14]. Hungary’s first wind power
plant is a small facility and proving electricity for about
750 residents [2].
4.3. Poland
Poland is currently undergoing reforms necessary to meet
the EU membership criteria. The energy sector will be
open for competition by 2004 [12]. The key objectives of
1997 New Energy Act are security of energy supplies,
requiring diversification of sources, increased
competitiveness of Polish energy sources in domestic and
international markets, environmental protection,
improving energy efficiency, and reducing energy related
emissions [12]. The new Energy Law gives the
opportunity to foster energy saving innovative methods
and the investments in clean technologies are supported.
Renewable energy as one of the idea for clean energy can
be recognised as one options to achieve environmental
targets. In addition, the Energy Law also contains several
provisions, which may assist the present and/or future
development of renewable energy. The regulation of the
Ministry of Economy on obligation of buying electricity
and heat from non-conventional sources of energy,
including renewable sources of energy became effective
since 1999 [5]. The Parliament of the republic of Poland
adopted the resolution concerning the development and
utilization of energy from renewable energy sources on
July 8, 1999 and imposed on the government the
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Proceedings of the 2002 Global Wind Energy Conference, April 2 – 5, 2002, Paris.
development strategy for the development of renewable
energy in Poland, together with a program of short,
middle, and long-term activities ensuring suitable
increase of utilization of renewable sources of energy
[10]. On September 5, 2000, in respond to the
Resolution, the government adopted a document
‘Development Strategy for Renewable Energy Sector’
prepared in compliance with an obligation following the
resolution. The Strategy set up the quantitative goals for
the sector development: 7.5 percent contribution of
renewable sources of energy in 2010 and 14.5 percent in
2020. Wind power only began to develop in Poland at
the beginning of 1990s. In 1999, energy production from
wind energy was only 0.01 percent in Poland [10]. Only
14 wind firms with the total power over 3.5 MW had
been connected to the grid and placed in service. About
50 small independent wind turbines are in operation now.
By the end of 2001, total wind energy installed capacity
was 16 MW [23].
5. INITIAL RECOMMENDATIONS
Major factors influencing the renewable energy
deployment are political, legislative, financial, fiscal,
technological development, and information
dissemination. Most of the EU member states are one
step ahead in designing and implementing the policy and
appropriate measures for the development and greater
utilization of renewable sources of energy. Among them,
several support mechanism and schemes have been
examined so far for different renewable sources of
energy. These different national schemes have individual
characteristics depending on the type of sources covered
(renewable and non-renewable as wastes), length of
validity, and different national contexts. Among the
several support mechanisms, experience shows that the
greatest development in Europe occurs in the countries
that operate feed-in tariffs systems. The three countries in
EU Germany, Spain and Denmark that account for the
great majority of wind energy development applied this
system. So far, countries with great wind energy
potential such as UK have not yet achieved their targets
for renewable electricity by implementing auction-based
schemes. Green certificates trading schemes, in various
forms are being introduced in a number of EU member
states but are still untested in Europe.
The Central and Easter European countries are at the
initial stage of addressing the greater utilization of
renewable sources of energy and to comply with EU
targets. Initially, policy objectives towards the greater
penetration of renewable sources of energy, specifically
for wind energy would be appropriate for Central and
Eastern European countries. Regarding the support
mechanism, the feed-in tariffs recommended for Central
and Eastern European countries context and shift towards
mechanisms more compatible with liberalised electricity
markets, which closely progress with tradable green
certificates.
6. REFERENCES
[1] An Energy Overview of the Czech Republic
http://www.fe.doe.gov/international/czekover.html
(10/12/2001)
[2] An Energy Overview of the Republic of Hungary
http://www.fe.doe.gov/international/hungover.html
(10/12/2001)
[3] An Energy Overview of the Republic of Poland,
http://www.fe.doe.gov/international/plndover.html
(10/12/2001)
[4] BTM Consult, A Towering Performance - Latest
BTM Report on the Wind Industry, Renewable Energy
World, Review Issue, pp. 69-87 (2001-2002)
[5] D. Chwieduk, New Opportunities for Renewable
Energy in Poland (undated)
[6] E. Metreau, Country Report 2000, Green Electricity
and the Electricity Market Liberalization in EU member
states, Green Energy Company and SERG/UCC
(unpublished, 2001)
[7] Eastern Europe,
http://www.eia.doe.gov/emeu/pgem/ch4c.html
(12/12/2001)
[8] European Commission, Energy for the Future:
Renewable Sources of Energy, White Paper for a
Community Strategy and Action Plan, COM (97) 599
final (26/11/1997)
[9] European Environment Agency, Renewable Energies:
Success Stories, Copenhagen, (2001)
[10] G. Wisniewski, Development Strategy of
Renewable Energy Sector, 7 th Polish-Danish Workshop
on Biomass for Energy, December 7-10, 2000,
Starbienino, Poland
[11] http://www.eia.doe.gov/emeu/cabs/czech2.html
(10/12/2001)
[12] http://www.eia.doe.gov/emeu/cabs/poland2.html
(10/12/2001)
[13] International Energy Agency, Energy Policies of
IEA Countries: Czech Republic 2001 Review, Paris,
(2001)
[14] K. Pankasz, Successful Example for Promoting
Renewable at Local Level in Hungary, (undated)
[15] M. Voogt and et al., Development of Long-Term
Energy Scenarios for the Czech Republic, (undated)
[16] Official Journal of the European Commission,
Directive 2001/77/EC of the European Parliament and of
the Council, on the Promotion of Electricity Produced
from Renewable Energy Sources in the Internal
Electricity Market, (September 27, 2001)
[17] Poland: Environmental Issues,
http://www.eia.doe.gov/emeu/cabs/polenv.html
(10/12/2001)
[18] R. Redlinger, Review of International Renewable
Energy Polices, UNCCEE/RISO, Denmark (1998)
[19] Regional Indicators: European Union (EU),
http://www.eia.doe.gov/emeu/cabs/euro.html
(12/12/2001)
[20] SEVn, The Energy Efficiency Centre, Energy and
Economic Bulletin for the Czech Republic, (March 2001)
[21] V. Pollard, Wind in Europe - Developments in the
Policy Frameworks for Wind Energy, Renewable Energy
World, Review Issue, pp. 89-101 (2001-2002)
[22] Wind Directions, Magazine of the European Wind
Energy Association, (July 2001)
[23] Wind Power Monthly, page no 50, Volume 18, No.
1, (January 2002)
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