Dagnija Blumberga, Aiga Barisa, Ivars Veidenbergs, Andra Blumberga, Reeli Kuhi-Thalfeldt

Evaluation of RES-E support policies in the Baltic States

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Abstract

Electricity generation is a key sector to consider in a policy aimed at mitigation of greenhouse gases. Renewable energy sources can create substantial environmental and socio-economic benefits such as minimizing greenhouse gas emissions, improving energy security and promoting local economy. A wide range of policy measures are available for national governments to promote renewable electricity generation. Despite the positive effects of increased renewable energy share in national energy balance, it is often associated with high implementation costs. Given the importance of promoting renewable power deployment, and the high financial costs associated with support, it is essential for governments to be aware of performance and effects of introduced or planned policies. An evaluation can help to identify potential adaptations and allocate financial resources as efficiently as possible. This article evaluates policies in support of the deployment of renewable power generation. Power sectors of the three Baltic States – Lithuania, Latvia, and Estonia – are investigated. The aim of the study is to evaluate the existing policy measures and propose new solutions for further renewable electricity support. Analysis is based on system dynamics modeling approach. This modeling approach has been chosen due to its flexibility for extension and revision to address additional questions as they arise. Results suggest that electricity feed-in tariffs are effective in terms of installed capacity increase. However, the intensity of support for each source of renewable energy should be reasonably determined in order to contribute to achievement of national renewable electricity targets.

Keywords: energy efficiency; electricity; feed-in tariff; subsidies.