Drivers of effective renewable energy.
Date
2014-07-24
Authors
Treki, Adam
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Abstract
ABSTRACT
Sustainability and „green‟ issues are becoming an integral part of business and
management. There is a conscious shift that needs to be embraced by the business
and management sector. Sustainable energy generation falls into this field. Large
gird connected renewable energy (RE) facilities form a subset of sustainability and
the clean technology sector. Independent Power Producers (IPPs) cannot compete
with traditional fossil fuel generated electricity and hence support policies are
required to encourage and protect these IPPs. Different policy mechanisms have
been deployed with varying degrees of success in predominately developed
countries. Countries like Denmark, Spain and The UK, to mention a few, have
developed RE sectors, where spill over affects have taken place. From a business
perspective, it is important to understand what policies are available and what factors
(drivers) play a key role. This study identifies five main RE policy mechanisms
(Feed-In Tariffs (FITs); Tradable Green Certificates; Renewable Portfolio Standards;
Bidding/Tendering and Fiscal) of which the FIT has experienced the most success in
establishing a RE sector. In addition twenty four key drivers are extracted that feed
into a policy design. Using the qualitative method of Fuzzy Cognitive Mapping, the
study relates the policies to the drivers to identify which drivers are most effective
within a RE sector. Finally the study reviewed the current developments of RE in
South Africa and questions whether the current competitive bidding system with a
tariff ceiling („REBID”) policy is set to create a sustainable local RE sector.
This study has been based on an extensive literature review and the findings have
formed the model. Model validation has used both country specific case studies and
expert input, resulting in a model that can be applied universally. Modelling
concluded that FITs deployed in isolation of the twenty four drivers are no better than
a no-policy stance. In addition the model has identified Big Players, The Non-RE
Sector, Cost Competitiveness and Risk as the most influential drivers and when
managed properly, can lead to a more successful RE sector. Finally, this study could
not conclude with certainty that SA‟s current policy framework is indeed sustainable,
however, if Energy and Capital Costs are monitored and managed, REBID with
South African Renewable Initiative (SARi) have the potential to create a solid RE
sector in SA.
Description
MBA 2012
Keywords
Energy policy, Renewable energy sources ,Government policy