Nearly all countries worldwide now have renewable energy support policies in place. As of year-end 2015, renewable energy policies could be found in 146 countries, up slightly from the 145 countries reported in the Renewables 2015 Global Status Report (GSR 2015)i. Countries around the world continue to develop new policy measures for renewable energy that remove barriers, attract investment, drive deployment, foster innovation and encourage greater flexibility in energy infrastructure.1 (→See Table 4.)
In 2015, renewable energy technologies were highlighted as a means to mitigate emissions and to adapt to the impacts of climate change in the lead-up to the United Nations Framework Convention on Climate Change (UNFCCC) 21st Conference of the Parties (COP21) in Paris. Building on the goals of the Sustainable Energy for All (SE4All) initiative, the new Sustainable Development Goals adopted in 2015 include renewable energy and energy efficiency as important pillars of the global commitment to end poverty, protect the environment and ensure prosperity for all.2
Policy makers at the national and sub-national levels continued to grapple with themes that have shaped renewable energy policy discussions in recent years, including revising existing mechanisms to keep pace with changing market conditions, creating new policies that respond to the technical and non-technical challenges of higher renewable energy shares, and expanding renewable energy in the heating, cooling and transport sectors. Renewable energy for power generation continued to receive the majority of attention from policy makers in 2015.
Some notable regional policy trends – explored in more detail in this chapter – include:
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Africa: Several African countries increased their renewable energy targets in 2015; in many African countries, the targeted shares for renewables now rank among the highest in the world.
The majority of the 15 ECOWAS member countries completed their National Renewable Energy Action Plans.
South Africa garnered another impressive showing in the latest round of its renewable tendering programme and began using the same model to support biofuels.
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Asia and the Pacific: China and India both increased their renewable energy targets.
Indian states were particularly active in expanding policies to promote renewable power deployment through the adoption of new net metering policies and the use of tendering.
Multiple Pacific Island nations outlined ambitious visions for renewable energy deployment by introducing 100% renewable energy targets in 2015.
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Europe: The EU adopted a new regionally binding target, calling for a minimum of 27% renewable energy in final energy consumption by 2030.
Countries began to implement the EU policy shift from feed-in tariffs (FITs) to tendering mechanisms.
In response to sustainability concerns, the European Commission introduced regulations on the use of first-generation biofuels to meet the region’s 2020 renewable transport goals.
Support for renewable heat increased, including increased targets in France and new renewable heat incentive schemes in Eastern Europe.
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Asia and the Pacific: China and India both increased their renewable energy targets.
Indian states were particularly active in expanding policies to promote renewable power deployment through the adoption of new net metering policies and the use of tendering.
Multiple Pacific Island nations outlined ambitious visions for renewable energy deployment by introducing 100% renewable energy targets in 2015.
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Europe: The EU adopted a new regionally binding target, calling for a minimum of 27% renewable energy in final energy consumption by 2030.
Countries began to implement the EU policy shift from feed-in tariffs (FITs) to tendering mechanisms.
In response to sustainability concerns, the European Commission introduced regulations on the use of first-generation biofuels to meet the region’s 2020 renewable transport goals.
Support for renewable heat increased, including increased targets in France and new renewable heat incentive schemes in Eastern Europe.
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Latin America and Caribbean: Countries across the region continued to establish some of the world’s highest targeted shares for renewable energy deployment.
The region remains at the forefront of the use of competitive bidding for renewable energy project allocation, with many tenders attracting record-setting participation and low bid prices.
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Middle East: Renewable energy tendering expanded across the region, with new tenders taking place in Iraq, Jordan and the United Arab Emirates.
New support for renewable power projects was introduced through new net metering policies and new fiscal incentives.
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North America: The US federal investment and production tax credits were extended.
Many states expanded existing Renewable Portfolio Standards (RPS), including increased commitments from California and New York and the country’s first 100% RPS in Hawaii.
The roll-back of net metering incentives, which began in 2014, continued in 2015.
i All GSR estimates for the numbers of countries with policies and targets are based on the best information available to REN21 at the time. This chapter includes policy developments from calendar year 2015.
This chapter highlights various policy types – such as targets, mandates, incentives and enabling mechanisms – that were added or revised during 2015 in the power, heating and cooling, and transport sectors at the regional, national and sub-national levels; the final section focuses on local policy developments. Developments related to each type of policy mechanism are described independently, although a targeted mix of complementary policies often addresses these sectors jointly. Renewable energy policies often are one component of broader national clean energy strategies, which also may include mechanisms to promote energy efficiency. (→See Energy Efficiency chapter and Figure 38.)
The new policy developments featured in this chapter are intended to provide a snapshot of 2015 developments and emerging trends in renewable energy policy. This chapter does not attempt to assess or analyse the effectiveness of specific policy mechanisms. Specific details on new policy adoptions and policy revisions are included in the policy reference tables and policy endnotes, beginning on pages 161 and 247, respectively.
Targets
Worldwide, targets for renewable energy continue to be a primary means for governments to express their commitment to renewable energy deployment. As of year-end 2015, renewable energy targets had been established in 173 countries at the national or state/provincial level. Targets also have been adopted at the regional level, incorporating joint commitments by several countries.
Setting ambitious, long-term renewable energy targets demonstrates political commitment and can catalyse change by providing an official mandate for action. Targets take many forms and have varying levels of specificity, and many are linked to broader development initiatives. To achieve their targets, policy makers often adopt mechanisms including regulatory measures, fiscal incentives and public financing options. Increasingly, in many countries, policy makers are tracking the success of adopted measures and, if necessary, are revising existing policies or instituting new measures to meet their goals. A number of targets adopted by developing nations have included explicit calls for international assistance to help achieve their stated goals.
Targets are adopted in a variety of ways, ranging from announcements by governments or heads of state to fully codified plans accompanied by quantifiable metrics and compliance mechanisms.3 The lines between target and regulatory policy mechanisms are often blurred, as in the case of RPS that establish mandatory shares, or “targets”, of renewable power that utilities must achieve by a specified date.
A number of regions have established targets for renewable energy deployment in recent years. Led by the EU, this trend has expanded to cover organisations in Africa (ECOWAS) and the Caribbean (CARICOM). Although no new regional commitments were established in 2015, the EU built on its 2020 targets by establishing a long-term objective of a minimum of 27% of final energy consumption by 2030; while binding at the regional level, the 2030 target lacks legally binding national mandates.4 In ECOWAS, almost all of the 15 member countries finalised their National Renewable Energy Action Plans that were mandated under the regional energy policy.5
Several countries around the world set economy-wide targets for renewable energy deployment in 2015. ( → See Reference Tables R15 and R16.) They include many in Africa (Djibouti, Ghana, Guinea, Liberia and Togo), Asia and the Pacific (China, Indonesia, Lao PDR, Thailand and Vanuatu), Europe (France and Portugal), the Middle East (Jordan, Lebanon and the United Arab Emirates) and South America (Brazil and Guyana).6 (Additional sector-specific renewable energy targets are discussed later in this chapter.) Also in 2015, 74 countries identified quantifiable renewable energy goals in their INDC submissionsi.7 ( →See Sidebar 4.) Many countries have also joined international renewable energy initiatives with global targets, including SE4All.
In addition to formal regional targets, the development of new sustainable energy centres for Small-Island Developing States (SIDS) as well as regional centres in the Caribbean (CCREEE), Southern Africa (SACREEE) and East Africa (EACREEE), spearheaded by UNIDO, is designed to further enhance regional collaboration on renewable energy as well as energy efficiency.
A number of sub-national governments also made new renewable energy commitments in 2015 both at the state/provincial and municipal levels. The Compact of States and Regions includes commitments to renewable energy from some of the world’s largest sub-national actors, including the US states of California and New York; the Canadian provinces of Ontario and Québec; Rio and São Paulo in Brazil, as well as territories in Australia and Europe.8
While targets are an important tool, they do not guarantee success. For example, the United Kingdom confirmed in November that it would miss the EU’s requirement of a 15% share of renewable energy in the country’s energy consumption by 2020, citing the lack of properly designed policy mechanisms (primarily in the transport and heat sectors) to meet its goal.9 Spain also is expected to miss its 2020 obligation.10
i INDCs are national post-2020 climate action commitments submitted to the UNFCCC in preparation for the Paris COP. They include a mix of new and existing renewable energy targets.
Power Generation
Policy makers continued to utilise deployment targets to outline their visions for power sector development, including the expansion of electricity access. In Africa, the Republic of the Congo, Eritrea, Gabon and Namibia established renewable power targets of 70% or greater, with lower goals set in Côte d’Ivoire, Djibouti, Liberia and Sudan.i Policy makers in Latin America also set some of the world’s highest renewable power share targets, led by Costa Rica (100% by 2030), Uruguay (95% by 2017), Belize (85% by 2027), Guatemala (80% by 2030) and Bolivia (79% by 2030). Lower shares were targeted in Brazil, Chile and Paraguay.11 Building on past commitments, a number of SIDS committed (through their INDC submissions) to the full transformation of their power sectors. For example, Papua New Guinea, Samoa and Vanuatu all committed to achieving 100% renewable electricity by 2030, and Cabo Verde committed to 100% by 2035.12
New goals for lower renewable shares as well as renewable capacity targets have been set around the world. ( → See Reference Tables R17–R19.)
State- and provincial-level policy makers also established new commitments to renewable power in 2015. Notably, Hawaii announced its intention to become the first US state to run entirely on renewable power, setting an RPS mandate for 100% renewables by 2045.13 Other state/provincial targets can be found in Australia, Belgium, China, Kosovo, New Zealand, the United Arab Emirates and the United Kingdom. The state of Lower Austria in Austria achieved its goal of generating 100% of the area’s power from renewable sources in November 2015.14
As of year-end 2015, feed-in policies (feed-in tariffs and feed-in premiums; see Glossary) remained the most widely adopted form of renewable power support, in place in 75 countries at the national level and in 35 states/provinces/territories. In 2015, with no new countries adding new feed-in policies for the first time since 2000, the rate of new adoption continues to remain far below that of the peak in the mid-2000s. (→See Figures 38 and 39, and Reference Table R20.)
Globally, feed-in policies are in the midst of a transitional period, with policy makers making significant changes to rates and design to keep pace with changing market conditions brought on by technological innovation, increasing deployment, falling prices and shifting public opinion. Some countries with mature renewable energy markets, for example, have targeted their FITs to specific technologies (e.g., smaller-scale generators or solar PV), while phasing in competitive bidding to support larger-scale projects. At the same time, countries with less-mature renewable energy markets have continued to explore the use of feed-in policies to broadly incentivise project development.
In Europe – the birthplace of the modern feed-in policy – significant changes were made to a number of national FIT frameworks in 2015. Some changes have been instituted in response to European Commission (EC) State Aid guidelines that require a shift to renewable tenders for many projects by 2017ii. For example, in response to EC recommendations and public opinion, Germany removed FITs for solar PV projects of 0.5–10 MW in size in favour of new tender schemes.15 France and Poland also have used tendering to allocate large-scale renewable energy projects over 250 kW and 500 kW, respectively.16
While FIT rates were reduced in some countries, including the United Kingdom and Ukraine, small-scale solar PV systems saw an increase in support in other countries, including France, Malta and Poland.17 FIT schemes were also expanded: for example, both France and Ukraine extended support to cover bio-power, with the programme in Ukraine also covering geothermal power.18
Feed-in rate review and revision occurred in many of Asia’s largest economies, continuing a trend of the last few years. New rates were introduced in Malaysia and Pakistan, whereas policy makers in China, Japan, the Philippines and Thailand made revisions to solar PV and wind FIT rates, both positive and negative. For example, the Philippines doubled the capacity cap for wind power projects under the FIT while lowering rates.19
In the Middle East and North Africa (MENA) region, Algeria implemented the FIT policy adopted in 2014, offering preferential tariffs for solar PV and wind projects of 1 MW and over.20 In sub-Saharan Africa, Ghana instituted a temporary cap on its FIT that limits utility-scale solar PV until the country can assess the impact of initial projects that are pending construction and connection.21 Changes also were made in Tanzania, which revised tariff rates during 2015, moving from payments based on seasonally adjusted utility avoided costs to technology-differentiated tariffs that are adjusted based on the US Consumer Price Index.22
No new FIT policies were added in Latin America during 2015, and few changes were made to the region’s existing policies during the year. Ecuador eliminated FIT support to all technologies, while regulators in Costa Rica proposed new FIT rates for solar PV systems.23
i Some targets include large-scale hydropower and some do not. See Reference Table R17 for additional details.
ii The guidelines include certain exemptions to the tendering requirement, including for small-scale projects (capacity ranges set by technology) and technologies in early stages of development.
In North America, feed-in policies continued to exist only at the state and provincial levels. No new states/provinces/territories added feed-in policies in 2015, but two revised existing programmes. In Canada, Nova Scotia closed the Community Feed-in Tariff (COMFIT) programme to all new applicants after reaching a projected 125 MW of projects by year-end 2015, and Ontario introduced new rates for its MicroFIT programme – which supports projects 10 kW or less in size – targeting 240 MW of new projects in 2016.24
The use of competitive bidding, also referred to as tendering or auctioning, has gained momentum in recent years. In 2015, the number of countries utilising tendering mechanisms increased to 64, up from 60 in 2014. Many of the world’s developing and emerging countries attracted record bids in terms of both low price and high volume. All BRICS countriesi continued their interest in tendering: Brazil held several auctions throughout the year, with solar PV and wind power accounting for the majority of project allocations, followed by biomass and small-scale hydropowerii; the Russian Federation approved 365 MW of solar PV, wind and hydropower projects; China issued a 1 GW solar PV tender; India’s new national offshore wind energy policy, introduced in 2015, includes tenders to take place in later years; and South Africa saw the first allocations under its small project window, while continuing to receive high levels of engagement under its Renewable Energy Independent Power Producer Procurement Programme (REIPPPP)iii.25 ( → See Reference Tables R22.)
i The five BRICS countries are Brazil, the Russian Federation, India, China and South Africa.
ii Brazil’s auction rules require bidders to secure guaranteed grid access prior to participating.
iii The REIPPPP programme has approved a total of 6,327 MW of new renewable energy capacity from 92 individual projects since its creation in 2011 and is now being used as a model to allocate contracts for IPPs utilising all forms of energy sources in South Africa. The programme uses weighted development criteria such as local job creation, local content, local ownership and development, etc. during bid evaluation to maximise the national development potential of selected renewable energy projects.
POLICY LANDSCAPE
Figure 38. Number of Renewable Energy Policies and Number of Countries with Policies, by Type, 2012–2015
Latin America, an early adopter of renewable energy tenders, remained one of the most active regions in 2015. Argentina began preparing tenders to be launched in 2016, while Peru held its fourth round of auctions, offering 1,300 GWh of biomass, wind and solar PV power, and also awarded a power purchase agreement (PPA) to supply electricity to rural households through 150,000 solar home systems.26 Mexico and El Salvador announced plans to hold their first and second renewable energy auctions, respectively.27
In the MENA region, both Iraq and Jordan held their first tenders, and Morocco awarded 850 MW of new wind projects.28 Turkey held multiple auctions that attracted bids totalling nearly 15 times the capacity offered.29 In Europe, tenders were held in countries including France, Germany and Spain.30
Although auction mechanisms have been used primarily at the national level, their adoption is expanding among sub-national jurisdictions as well. Several Indian states employed tenders in 2015 to support solar power deployment. Notable examples include Andhra Pradesh, Karnataka, Rajasthan, Telangana (which held two solar tenders for 400 MW) and Jharkhand (which announced plans to allocate 1,200 MW of small- and large-scale solar contracts).31 In addition, the Emirate of Dubai in the UAE awarded a contract for a 200 MW solar PV park and opened its third solar PV tender (800 MW).32 The Australian Capital Territory launched its second utility-scale wind power auction in 2015.33
Net metering / net billing policies were in force in 52 countries as of year-end 2015. Net metering / net billing has been utilised to support the deployment of small-scale, distributed renewable energy systems by enabling generators to receive credit or payments for excess on-site generation. In many cases, net metering policies have been adopted in conjunction with other policy mechanisms – such as FITs or auctions – that support larger-scale projects.
Although the pace of new adoption of net metering policies had slowed in recent years, this trend reversed in 2015, with four new policies announced at the national level and five added at the state/provincial level. Colombia, Ghana, Nepal and Pakistan all adopted net metering/net billing for plants no larger than 1 MW, and Brazil expanded its net metering cap from 1 MW to 5 MW.34 In India, Himachal Pradesh and Rajasthan adopted solar PV net metering, bringing to 21 the number of Indian states with announced (although not necessarily operational) net metering policies. In North America, South Carolina became the 44th US statei to establish net metering, while Newfoundland and Labrador became the 4th Canadian province to do so.35 In addition, the Emirate of Dubai established a rooftop solar PV net metering programme in 2015.36
Revisions to net metering policies have focused increasingly on technical standards for grid connection, as well as on the introduction of taxes or fees on self-generators participating in net metering programmes or generating their own power. As the amount of distributed renewable electricity operating under net metering has increased, policy makers in some countries have come under pressure from private citizens or electric utilities citing electric rates or revenue concerns. In response, some policy makers have revised downward the net metering payments and/or have levied new taxes or fees on renewable generators.
Notable examples introduced in 2015 include Spain’s surcharge on many solar PV systems and on self-consumption of the electricity generated on the premises.37 Generators pay grid fees plus separate capacity and generation taxes, with a second tax established for systems larger than 10 kW.38 In the United States, Nevada revised tariffs on new and existing systems after reaching its net metering cap, and Hawaii closed its net metering programme to new applicants and introduced additional tariffs for connecting systems to the electric grid.39 Other US states – including Arizona, California, Kansas, Oklahoma and Texas – were considering proposals for rate adjustments and charges on residential customers with solar PV systems.40
In addition to regulatory policies that stimulate increased renewable electricity generation, renewable obligations or mandates that require the deployment of renewable power capacity are in use worldwide. Electric utility quotas or Renewable Portfolio Standards (RPS) are the most common mandate in use at the national level to promote renewable power. RPS policies were in place nationally in 26 countries by year-end 2015. ( → See Reference Table R21.) The overall pace of new adoption at the national level has slowed significantly in recent years, and no new additions were made at the national level in 2015.
RPS policies remain popular at the sub-national level. As of year-end 2015, RPS or quota policies were in place in 74 states/provinces/territories, including in Belgium (2), Canada (3), India (27 states and 7 union territories) and the United States (29 states, the District of Columbia and three territories). State-level policy makers were by far the most active in revising existing mandates in 2015. Policy changes resulted in a wide array of new and increased obligations as well as in the removal of some existing mandates.
New RPS policies were added in one state and one territory in 2015. In the United States, Vermont upgraded its voluntary standard to mandate that all utilities in the state acquire 55% of electricity from qualifying renewable technologies by 2017, and 75% by 2032.41 The US Virgin Islands codified the existing voluntary goal of 30% by 2025 as a mandatory RPS. In addition, Colorado’s RPS survived a court challenge when the Federal Appeals Court ruled the policy constitutional because it does not impose unlawful regulations on out-of-state companies.42
i In addition to American Samoa, the District of Columbia, the US Virgin Islands and Puerto Rico.
Three US states took steps to expand their RPS policies. California increased its RPS from 33% by 2020 to 50% by 2030.43 The state also set requirements for its three biggest utilitiesi to secure 600 MW of new solar capacity by 2019 under the community-shared solar programmeii.44 Hawaii became the first state to target a fully renewable power supply by increasing its RPS to 100% by 2045.45 New York’s RPS expired at end-2015, but the state’s Public Service Commission was directed to establish a new, more ambitious mandate of 50% renewable power by 2030.46 Elsewhere in North America, the Canadian province of New Brunswick extended its RPS to 40% by 2020, and Nova Scotia established a mandate of 25% in 2015 and 40% by 2020.47
Despite the new adoptions, US RPS policy roll-backs continued in 2015, with Kansas downgrading its existing mandate to a voluntary goal of 20% by 2020. A number of RPS policies in US states – including Michigan, Montana, North Dakota, Oklahoma, South Dakota, Texas and Wisconsin – also were expected to reach their maximum target date at year-end 2015.
The mandated use of renewable energy systems, such as obligations for their installation in new construction, were instituted in a few countries in 2015. France enacted a law that requires all new buildings in commercial zones to be partially covered by vegetation or solar PV panels.48 The Czech Republic and Switzerland introduced building permit exemptions for rooftop solar PV to simplify deployment.49
Several countries have utilised public finance mechanisms as an attempt to drive the investment
needed to increase renewable energy deployment. Many introduced renewable energy tax
incentives in 2015.
Notably, the United States approved multi-year extensions, the longest extensions to-date, of its production and
investment tax credits in late 2015.50 El Salvador, India, Jordan, Mongolia and
Pakistan all added new policies or extended existing policies. By contrast, Japan announced plans to remove tax
breaks for commercial solar installations, set to be implemented in early 2016 as a component of the upcoming
electricity market liberalisation strategy.51
Additional public sector support, such as grants and loans, has been directed towards increasing the deployment of renewable technologies as well as research and development (R&D), including support for enabling technologies, such as energy storage. Globally, 20 countries around the world pledged to double public funding for R&D in clean energy technologies with the launch of the Mission Innovation initiative in 2015.52 At the national level, Australia committed over USD 80 million to support energy storage projects, ranging from technology development to large-scale deployment, and the Czech Republic established a new USD 1.1 billion (CZK 27 billion) 10-year energy efficiency incentive programme that includes support for residential solar PV installations.53 However, some countries reduced funding for renewables during 2015; Denmark, for example, lowered funding for the Energy Technology Development and Demonstration Program – which provides incentives to spur research in new green energy technologies – from USD 55 million to USD 18 million (DKK 385 million to DKK 127 million).54
i The obligation applies to Pacific Gas & Electric (which must secure 272 MW of new capacity), Southern California Edison (269 MW) and San Diego Gas & Electric (59 MW).
ii California's programme defines as "community-shared" a solar electric system that provides power and/or financial benefit to multiple community members.
Heating and Cooling
In 2015, the adoption of policies promoting the development and deployment of renewable energy technologies in the heating and cooling sector continued to lag behind policy adoption in the power and transport sectors. However, some leading jurisdictions have begun to recognise the important role that renewables can play in transforming the heating and cooling energy mix and have established regulatory and financial mechanisms to support technologies such as solar water heaters or modern biomass heat.
More policies have been directed towards renewable heating technologies than towards renewable cooling technologies. Policies have focused primarily on smaller-scale solar thermal heating options, with solar water heaters historically receiving the bulk of policy support. Policies have continued to focus primarily on residential and commercial buildings, rather than on the industrial sector. The recent attention granted to utility-scale and industrial heat in some countries – such as Austria, Denmark, Germany, India, Mexico and Tunisia – did not result in the significant expansion of policy support around the world in 2015.55 (→See Figure 40.)
As in the electricity sector, policy makers have aimed to promote renewable heating and cooling through a mix of policies including targets, rate-setting and incentives policies, regulatory mandates and public finance mechanisms. Although examples exist, comparatively little regulatory attention has been focused on renewable heating and cooling, with policy makers instead adopting public finance mechanisms to support the sector. However, building code mandates are used widely at the local level to promote renewable heat. (→See City and Local Governments section.)
At least 45 countries worldwide had renewable heating and cooling targets in place by year-end 2015, with 31 of these in Europe. During 2015, France established a target for a 38% renewable heat share by 2030.56 ( → See Reference Table R23.) A few other countries outlined goals in their INDCs to expand the deployment and manufacturing of renewable heat technologies
in order to decarbonise their heating sectors. For example, Malawi introduced a goal to manufacture 2,000 solar water heaters (no date given) and to increase the penetration of solar water heaters from the 2,000 in place as of 2015 to 20,000 by 2030.57 Bosnia’s INDC submission included the introduction of renewable energy into existing district heating systems and the construction of new district heating systems fuelled by renewable technologies.58 Jordan’s INDC included the goal to provide short-term support for the deployment of solar water heaters.59
In general, policy makers have adopted one of two types of mandates: solar obligations, which have been enacted in 11 countries at the national or state/provincial level, and technology-neutral renewable heat obligations, which were in place in 10 countries by year-end 2015. Mandates have advanced slowly at the national level, particularly in comparison to the municipal level (see City and Local Governments section), and no new mandates were adopted at the national level in 2015.
Financial incentives and public financing also have been extended to support the deployment of renewable heat technologies, although there were few new developments in 2015. Australia announced a new grant scheme covering 50% of project costs for renewable heat for industrial processes as one of the focus areas for investment under the Australia Renewable Energy Agency.60 The Czech Republic expanded its residential subsidy scheme to support district heating and heat recovery and relaxed requirements for solar thermal systems to qualify for incentives.61 France doubled the budget for its renewable heat support scheme Fonds Chaleur – first established in 2009 – to provide USD 455 million (EUR 420 million) to support renewable heat in the industrial, residential and district heating sectors.62 Italy announced its intention to double the size of qualifying projects under its renewable heating and cooling incentive scheme from 1 MW to 2 MW.63 Slovakia launched its long-awaited support scheme to scale up renewable technologies in residential buildings, including rebates of up to 50% of project costs for renewable heat systems.64
At the sub-national level, the Renewable Heat NY programme (introduced in 2014) began offering incentives in the US state of New York for the use of high-efficiency wood heating systems for residential and commercial buildings that lack access to natural gas.65 Despite low international oil and gas prices, few incentives for solar process heat were reduced in 2015; however, Thailand halted its process heat subsidy for 2015–16.66
Transport
In the transport sector, renewable fuels and electric vehicles (EVs) continue to attract attention from policy makers in the form of regulatory measures and fiscal incentives. The vast majority of policies adopted in the renewable transport sector have been directed at the production and use of biodiesel and ethanol. This support has shifted increasingly towards the promotion of second-generation, advanced biofuels in new policy development, although, globally, the majority of policies adopted to date focus predominantly on first-generation biofuels. (→See Figure 41 and Reference Table R24.)
Efforts to promote biofuel technologies have employed similar provisions as in the power and heating/cooling sectors – including targets, regulatory measures and tax/financial incentives – to spur growth within the transport sector. New and existing policies have focused almost exclusively on road transport rather than on aviation, rail or shipping. EVs also have received increased support, although to a much lesser degree. The number of jurisdictions that have enacted policies to promote a direct linkage between renewable energy and EVs remains very limited.
A small number of new renewable transport targets were introduced in 2015, with most of these targets in INDC submissions. France set a new target of 15% renewables in final transport energy consumption by 2030; Liberia put forward a target for blending up to 5% palm oil biodiesel by 2030 for vehicle fuels; Lao PDR seeks to increase the use of biofuels to meet 10% of its transport fuel demand by 2025; and Malawi set a goal of increasing the proportion of vehicles running on ethanol to 20% by 2020.67 In the aviation sector, Japan aims to utilise some biofuels for air transport by the time the country hosts the Olympics in 2020.68
Globally, the transport sector continued to be embroiled in debate over the economic and environmental impacts of biofuels, with particularly vocal debates continuing in Europe and the United States in 2015. Critics contend that the full life-cycle emissions associated with the fuels negates the positive environmental impact of displaced fossil fuel consumption, while others challenge concerns about the impact on food crop prices and land use.69
Many long-running policy debates were adjudicated in 2015, with rulings made on obligations for the use of first-generation biofuels in the EU and the United States. After seven years of speculation and negotiation, the European Parliament approved revisions to the EU renewable energy act to establish a limit on the use of first-generation biofuels to meet the EU’s 10% renewable fuels mandate. The new provisions limit crop-based biofuels to a 7% share of the EU’s 2020 10% renewable transport energy target. They also include indicative support for second-generation biofuels through a 0.5% voluntary target and by allowing their contribution to be double-counted towards meeting the overall EU mandate.70 At the national level in the EU, Germany reduced its required blend volumes for biodiesel from 6.25% to 3.5% to bring the requirement in line with the targeted emissions reduction goals.71
In the United States, a similar debate over first-generation biofuel mandates in the form of the Renewable Fuel Standard (RFS) – a national mandate for total volume of biofuel blending – occurred throughout 2015. In December, the US Environmental Protection Agency released updated biomass-based diesel volume requirements that were an increase over previous years but lower than the statutory requirements that originally were set under the RFS.72
Despite ongoing debates over biofuel production and use, biofuel support policies continued to be adopted during 2015. The most commonly used form of regulatory support for the renewable transport sector continues to be biofuel blend mandates, which specify a minimum share or volume of renewable fuel to be blended with traditional transport fuel. At year-end 2015, blend mandates were in place at the national level in 32 countries and 27 states/provinces/territories: 45 jurisdictions mandate specified shares of ethanol and 27 mandate biodiesel blends, with many countries having mandates for both fuels. ( → See Reference Table R25.)
In 2015, Brazil began allowing voluntary biodiesel blending of B20 for road transport; for rail transport, agriculture and industrial uses, the blend ceiling was raised from B7 to B30.73 Brazil also increased its ethanol mandate from E25 to E27.74 Ecuador introduced an E5 blend mandate, which is set to be raised to E10 by 2017.75 India made a number of changes to its national biofuels programme, setting supply quotas for Indian states to comply with the new E10 mandate; a proposed National Policy on Biofuels would increase blending of ethanol and biodiesel in India to 20% by 2017.76 Indonesia raised its blend mandate for transport, household, commercial and industrial sectors from 10% to 15%; Malaysia increased its biofuel mandate from B7 to B10; and Thailand’s B7 mandate came into force.77 A biofuel bill pending adoption in Uganda at year’s end would establish a national 20% biofuel blend mandate if fully adopted.78
The use of additional regulatory measures to promote renewables in the transport sector expanded in 2015 to incorporate auction-based mechanisms, market deregulation and additional forms of mandates. Paraguay mandated that 30% of all new purchases for public fleets be flex-fuel vehicles.79 South Africa introduced a competitive bidding programme similar to its renewable power capacity tenders.80 In India, state-owned oil marketing companies issued a tender to buy 2.7 billion litres of ethanol from domestic sources; additional reforms that deregulate the ethanol market in India allow farmers to produce their own corn-based ethanol.81
New financial incentives and public investment schemes were introduced in 2015 to promote biofuel production and consumption. India made a number of changes to its national biofuel support programme: tax reductions were established to encourage the production of E10, the national ethanol import tariff was reduced from 7.5% to 5%, the central excise tax (12.36%) on ethanol blended with gasoline was removed, and the government announced an investment of USD 1.53 billion through 2018 to support palm oil production.82 At the sub-national level, the US state of California revised its tax code to make biodiesel a non-taxable fuel.83
Public financing also has been utilised to support R&D in advanced biofuels. For example, in 2015 the US Department of Agriculture announced a USD 70 million loan guarantee to support the development of a cellulosic biofuel facility.84 The US Department of Energy also provided USD 18 million for the production of algae biofuel, aimed at reducing the cost of algae-based fuels.85
In some countries, support for biofuels was reduced. For example, voters in Lithuania chose to remove excise exemptions on biofuel blends that were established in 2001.86 In addition, policies continued to be adopted to protect domestic industries; Brazil enacted an 11.25% import tariff on ethanol, the EU renewed anti-dumping duties against US biodiesel producers until 2020, Malaysia limited imports of Indonesian palm oil, and Indonesia continued to advance its case against the EU at the World Trade Organization (WTO).87
While electric vehicles have received support in a number of countries, policy makers continue to be slow to adopt measures that link them to renewables. A number of measures have been adopted worldwide to promote EVs, such as Jordan’s commitment to install 3,000 solar PV EV charging stations; however, policies directly linking EVs and renewable energy received little to no attention in 2015.88
City and Local Governments
Cities and municipalities are playing a pivotal role in the global energy transition. Cities rely on a mix of regulatory policies, mandates and direct purchasing to support the deployment of renewable energy within their jurisdictions. Local-level support for renewable technologies often is included in broader initiatives to increase air quality, reduce carbon emissions or promote job creation. Support traditionally has been directed towards power generation technologies, but policies and mandates supporting renewable heat and renewable transport, as well as linkages between renewable energy and energy efficiency, have been gaining momentum at the municipal level.
Local-level policies fill the gaps in (or supplement) policy frameworks at the national or state/provincial level to drive local renewable energy growth. In addition to supplementing national frameworks, municipalities can serve a unique role as proving grounds for innovative renewable energy policies, often piloting programmes that later might be adopted by a broader set of cities or at the national level.
Cities also play a major role in adopting some of the world’s most ambitious renewable goals and are leading the rapidly expanding 100% renewable energy movement.
In 2015, municipal policy makers continued to use their unique purchasing and regulatory authority to spur deployment across their jurisdictions, making cities among the most ambitious and fastest-moving governmental actors in adopting renewable technologies. The important role of municipal governments in promoting deployment of renewable energy technologies on a large scale was highlighted throughout the COP21 process. Local-level climate-based commitments to scale up renewable energy solutions became an important component of the Paris negotiations, and will be critical to meeting the goals agreed to in the Paris Agreement. This section provides an overview of actions taken by cities around the world and does not provide a comprehensive list of municipal policy actions.
Cities have assumed a leading role in the promotion of renewable energy through direct purchasing of renewable power equipment. For example, in 2015, Washington, D.C. completed a deal for one of the largest municipal on-site solar PV projects in the United States, increasing the city government’s total installed solar capacity by 70%.89 In Harare, Zimbabwe, the municipal government invested USD 15 million for the purchase and construction of solar streetlights.90
Regulatory measures such as feed-in tariffs and net metering policies also continue to be important tools for promoting the deployment of renewable power capacity at the municipal level. Originally adopted in developed countries in Europe and North America, these mechanisms have begun to spread to the local level in developing and emerging nations, including South Africa. In 2015, Cape Town, South Africa began allowing the sale of surplus energy from renewable energy installations into the municipal grid system through a new net metering programme.91 Elsewhere, Banff became Canada’s first municipality to offer a local FIT programme, although on a very limited scale, supporting only 26 rooftop solar PV systems.92
Through their direct regulatory authorities, cities have instituted obligations to drive the deployment of renewable energy technologies. Several municipalities have enacted mandates that range from utility obligations to purchase renewable power to municipal building codes that mandate the installation of renewable technologies such as solar water heaters. New obligations build on existing municipal mandates in Europe, India and the UAE. In 2015, Denman Prospect in the Australian Capital Territory became Australia’s first suburb to mandate the installation of solar PV systems (of at least 3 kW each) on all new buildings within the territory.93 Austin, Texas (United States) mandated its utility to contract an additional 600 MW of solar PV by 2019.94
Municipalities have a critical role to play in promoting the development of district heating and cooling networks and linking them to renewable energy. In 2015, Amsterdam committed to total decarbonisation of its district heating system and set an immediate goal of increasing connections to a total of 230,000 houses by 2040 (a 70% increase).95 The Austrian city of Graz committed to increasing the share of solar thermal in its district heating network by 20% through the installation of up to 500 MWth of new solar collectors.96 Münster, Germany – the first German city to divest from fossil fuels – invested in hot water storage tanks in 2015 to utilise surplus grid electricity to generate heat for injection into the city’s district heat network as part of a plan to increase renewable energy penetration.97
In the transport sector, several Chinese cities influenced national policy in 2015 by working together to reverse a national corn-based ethanol ban that has been in place since 2006, resulting in the approval of new maize-based ethanol production plants.98 National governments often have introduced biofuel blend mandates as pilot initiatives in relatively small jurisdictions. Kenya adopted an E10 mandate in the city of Kisumu; Mexico established an E2 mandate in the city of Guadalajara, and aims to expand the programme to Mexico City and Monterrey; and Vietnam’s national E5 mandate was initially rolled out in a select group of seven cities.99
A quickly growing list of cities – primarily in Europe, North America, Australia and Japan – are targetting the complete transformation of their energy or power sectors through on-site generation or the purchase of renewable power. In 2015, Byron Shire, Coffs Harbour and Uralla in Australia; Oxford County and Vancouver in Canada; and the US cities of Rochester (Minnesota) and San Diego (California) joined numerous cities around the world that have committed to going 100% renewablei.100 ( → See Reference Table R26.) Many cities already have achieved their goals, including the US cities of Burlington (Vermont), Aspen (Colorado) and Greensburg (Kansas), which all reached 100% renewable electricity during 2015.101
Major global and regional initiatives helped to advance the 100% renewable energy movement in 2015. The Climate Summit for Local Leaders, held in parallel with COP21, issued a declaration in support of a transition to 100% renewable energy by 2050; it was signed by nearly 1,000 mayors from around the world.102 This non-binding commitment builds on examples of leading cities such as Copenhagen, Frankfurt, San Francisco, Sydney and Stockholm.103
Also in 2015, the Global 100% RE Campaign published 12 criteria to help define the concept of 100% renewable energy for local governments and to guide policy makers in initiating their transition to 100% renewables. The Campaign also launched the 100% RE Cities and Regions network to enable peer-learning and exchange among municipalities.104 The Global 100% RE Campaign, along with Europe’s 100% RES Communities and RES Champions League, has brought additional attention to municipal efforts aimed at achieving 100% renewable energy.105
European cities have led in the advancement of local renewable energy solutions through individual action as well as regional-level partnerships. The Covenant of Mayors began as a group of European municipalities committed to meeting and exceeding a 20% reduction in CO2 emissions by 2020, relative to a recommended baseline year of 1990, through increased energy efficiency and renewable energy deployment; new signatories as of 2015 pledge a 40% reduction by 2030 (based on their own Baseline Emission Inventory). Nearly 500 municipalities joined during 2015, and the Covenant had 6,660 signatories by year’s end.106 The majority of the signatories also signed onto a new Covenant of Mayors for Climate and Energy, which calls for an increase in energy efficiency and renewable energy of at least 27% by 2030 over the established baseline.107 In December 2015, both Covenant initiatives pledged to work together to advance municipal efforts to scale up their low-carbon development efforts.108 Additionally, 2015 saw the Covenant of Mayors expanded to include cities in sub-Saharan Africa.109
The Compact of Mayors is a global initiative of voluntary city pledges to reduce local greenhouse gas emissions and enhance resilience to climate change. By end-2015, the Compact had received commitments from 428 cities with a combined population of 376 million residents (or over 5% of the world’s population); this makes it the largest such coalition of city leaders by population.110 Rio de Janeiro became the first city to fully align with the principles outlined in the Compact of Mayors, in August 2015, and was soon joined by Buenos Aires, Cape Town, Copenhagen, Melbourne, New York, Oslo, San Francisco, Stockholm, Sydney and Washington, D.C.111 By year’s end, 43 cities were in compliance with the Compactii.112
i 100% renewable energy targets vary by municipality, with some focused exclusively on electricity and others targeting all energy, including heating and cooling as well as transport.
ii Cities are deemed compliant according to the Compact when they register a commitment, take inventory, create reduction targets and establish a system of measurement, and establish an action plan.
