RELP 2/2014

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Issue 2/2014

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Rafael Leal-Arcas
Renewable Energy Law and Policy Review 2/2014: pp. 85-86 [Editorial]
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This issue brings together seven very interesting articles and four country reports. The first article is written by Topi Turunen and Kim Talus, and examines the possibility of removing solid recovered fuels and gas derived from waste. By doing so, it examines the applicable European Union (EU) law concerning waste.

Topi Turunen and Kim Talus
National Regulatory Possibilities in Respect of Solid Recovered Fuel
Renewable Energy Law and Policy Review 2/2014: pp. 87-92 [Article]
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I. Introduction This article examines the possibility of removing solid recovered fuels and gas derived from waste (hereinafter referred to as ‘SRF’ and ‘SRF gas’) from the classification of waste under European Union (EU) law. The same criteria on such removal are used whether the aim of regulation in this area is to declassify the substance from waste categories nationally or across the whole of the EU. The practical application of the EU regulation, however, is done on a case-to-case basis and depends, among other things, on industry structures, markets and economic benefits. Discussion of these issues is beyond the scope of this article.

Evgenia Pavlovskaia
Controlling the Fulfillment of the EU Sustainability Criteria for Biofuels (on the basis of Directive 2009/28/EC). Part 2
Renewable Energy Law and Policy Review 2/2014: pp. 93-106 [Article]
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The article reflects on the mechanisms aimed to control the fulfillment of the EU sustainability criteria for biofuels, as they were promoted in Directive 2009/28/EC. The article contains the final results of the research initiated in the work Pavlovskaia, E. (2013) “Controlling the Fulfillment of the EU Sustainability Criteria for Transport Biofuels”, which was published in RELP 4/2013. The article is written in a consistent and summarizing form. It underlines that the EU approach to control the fulfillment of the sustainability criteria for biofuels has certain challenging issues and weaknesses, which make it uncertain whether the EU sustainability criteria can be implemented efficiently. The article points out that EU relies much on independent auditors. Their competence and the results of their work are not double- checked by any of the EU administrative bodies. This can give rise to fraud at any stage of the production chain. What is more, EU allows the co-existence of voluntary sustainability standards, approved by the EU Commission, which contain non-homogeneous sustainability criteria and basically function on their own. This can lead to situations when biofuels with different quality characteristics are treated as the same product. A number of aspects in the EU approach are detected that are not easy to improve in practice. For example, control of the sustainability criterion on the use of land presupposes the existence of a regime that functions beyond what a particular biofuel producer is able and capable of achieving. There are no such regimes at present, and it is doubtful whether and when they are created in the future. Besides, it is not clear how the whole production chains for biofuels should be defined, and how this information should be controlled. The article suggests that the EU approach to control the fulfillment of the sustainability criteria needs further reconsideration, research and development. Alternative and complementary control mechanisms should be worked out.

Nazia Mintz-Habib
The Political Economy of Joining in the Global Value Chain (GVC) of Biodiesel
Renewable Energy Law and Policy Review 2/2014: pp. 107-120 [Article]
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Comparative Case Study Analysis of Jatropha Production

Sustainable development initiatives inspire almost universal praise today since they offerwin-win options for developing countries. Although many reports on this topic offer plans, strategies, andmeasures, the debate about how to accomplish such development remains unresolved. A comparative, case study analysis, based on Tanzanian andMalaysian efforts to scale up their national rural development strategy by joining the biofuels value chain with niche crops like Jatropha curcas, shows that the strategy offers more trade-offs than are readily acknowledged. The effects are analyzed using an institutional feasibility study framework to explore the trade-offs between social capital and economic capital within the global value chain (GVC) of biofuels. The findings suggest that rather than being win-win, sustainable development policies are similar to most types of policy reforms, which advocate for short-term adjustment costs that mar political-economic stability in the society, in the expectation of long-term gains. In conclusion we offer some public policy observations to support the policy makes aiming for the long-termsustainable gains and willing to internalize short-term losses.

Fernando Cordero Martínez
The EU Energy Market Regulation Puzzle: Is There Still a Way Out?
Renewable Energy Law and Policy Review 2/2014: pp. 121-129 [Article]
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The Case for a Fourth Energy Package Along Completely Different Lines

I. Introduction TheEUwas foundedonthewake ofWWII as ameans of preventing another major armed conflict among European nations under the very ‘mercantilistic’ assumption that boosting trade and commerce, through the creation of an internal market between the former enemies would create strong enough economic bonds to make sure that war was no longer a profitable demeanour. Furthermore, encouraging free trade among MS, under fair and effective competition principles, (instead of ‘trusts’ controlledmarkets) would enhance consumer welfare and contribute to social stability. However, the intrinsic characteristics of certainmarkets, especially energy related ones; make them highly unsuited for the application of those principles.

Rafael Leal-Arcas and Luigi Carafa
Road to Paris COP21: Towards Soft Global Governance for Climate Change?
Renewable Energy Law and Policy Review 2/2014: pp. 130-135 [Article]
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This article explores recent climate policy developments in China, the United States (US), and the European Union (EU), as well as their implications for a new global climate regime, expected in December 2015 in Paris. The road to Paris is marked by a shift from global efforts to domestic actions on climate change mitigation, as well as a move from commitments to contributions to carbon emissions reduction. It is argued that the new regime is moving towards a voluntary national pledge and review system which deviates from the EU’s desire for a legally binding climate treaty, bringing any Paris deal closer to the US’s and China’s vision of soft global governance for climate change. This puts a big question mark on whether and how a soft regime could potentially achieve an atmospheric CO2 concentration below 450 parts per million in order to limit global warming to 2 degrees Celsius.

Peter Olaoye Olalere
Privatization of Electricity Industry in Nigeria: Lessons from Europe and United States of America
Renewable Energy Law and Policy Review 2/2014: pp. 136-149 [Article]
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Electric energy plays a pivotal role in the global economic development, hence the developing countries have inadequate electricity supply compared to their developed counterparts. Inadequate access to electricity hinders development in Nigeria and the most substantial efforts towards tackling the electricity deficit commenced with the enactment of the Electric Power Sector reform Act, 2005 (EPSR Act) which aims at privatizing the industry. This paper attempts to critically examine the implementation strategies of the Act vis-a-vis the challenges being faced in bridging the reliable supply gap compared with the developed electricity markets of Europe and United States of America (USA).With emphasis on the transmission and systemoperation subsector, the paper draws lessons from theUnited Kingdomand theUSA; concluding that privatization of the Nigerian electricity industry is the way to a sustainable and more efficient reform.

Kaushik Ranjan Bandyopadhyay and Kasturi Das
Biofuels in South Asia: Connecting the Dots
Renewable Energy Law and Policy Review 2/2014: pp. 150-165 [Article]
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Biofuels are being promoted in South Asian region primarily in blended form with petrol and diesel in order to reduce South Asia’s oil import dependence, make the region energy secure, and also as a socially and environmentally benign fuel. However, given the multipronged challenges confronting the conventional biofuels globally as well as in South Asia, the paper makes an attempt to realistically assess the prospects and problems of biofuels promotion in the region.

Leonie Reins
European Union: A Research Agenda for Shale Gas: Challenges to a Coherent Regulation in the European Union
Renewable Energy Law and Policy Review 2/2014: pp. 167-171 [Report]
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I. Introduction The extraction of shale gas has been hailed as a “game changer” in the United States and has restructured the country’s energy landscape. The United States is by far the biggest producer of shale gas and has the longest history of extraction. The method of releasinghydrocarbons fromthe groundthroughhydraulic fracturing is however also increasingly debated in the European Union (EU) as a possible response to both increasing energy demand in the European Union and dependence on gas imports from third countries such as Russia, while the technology is far from being exercised on a commercial level in the European Union as yet.

Sven Bode and Helmuth-M.Groscurth
Germany: Grid Parity of PV-Installations: A Full Comparison Considering all Taxes and Levies on the Power Consumption of Private Households in Germany
Renewable Energy Law and Policy Review 2/2014: pp. 172-178 [Report]
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In the discussion about the cost of electricity from photovoltaic (PV) systems, a so-called ‘grid parity’ is regularly mentioned. It is said to have been reached by now. According to this line of argument, electricity production costs from PV have decreased so far that the power generated is less expensive than the reference from the public grid. However, the comparison of these costs is incomplete, particularly as various cost components such as levies and taxes are not included in calculation. According to our calculations, the use of self-consumption of photovoltaic systems is indirectly supported with up to 17cents / kWh subsidy. A community with 10, 000 households, of which 30% use the option of self-consumption, loses €48,000 in revenue from the concession fee per year. If an additional 10GW of PV system is installed on private homes, then the corresponding shortfall in taxes and levies amount to €240-460 million per year. In order to increase the share of selfconsumption on electricity generated by PV systems, batteries can be used as an additional energy source. Their use is to be subsidised with a support scheme of €50 million. The actual costs of such a program are significantly higher (by up to 14%), as various taxes and levies will not be paid by self-consuming households. If the current budget is to be maintained at the same level by all electricity consumers, different options exist, including e.g. fixed charges. They would amount to about €250 per household per year in the case of grid fees.

Ari Lampinen
Sweden: Role of Municipal Policy in Renewable Energy Use in Transportation in Sweden
Renewable Energy Law and Policy Review 2/2014: pp. 179-190 [Report]
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In 2009 the European Union set a binding requirement for allMember States to reach aminimum of 10 % share for renewable energy sources in transport energy consumption by 2020. Sweden is the only country, which already met this target and municipal policies have had large role in this achievement. Swedish municipalities have created markets for several key technologies emphasizing the most sustainable ones. Local markets have grown into national markets and in several cases they have diffused to other countries forming international markets.

Kenneth K Odero
Africa: Transforming Africa’s Energy Sector: Lessons from International Experience
Renewable Energy Law and Policy Review 2/2014: pp. 191-198 [Report]
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What lessons can Africa learn from international experience in implementing renewable energy projects? Experience suggests that choice of policy instruments, policy design, and complexity of the policy package (or regulatory regime) should be tailored to the actual conditions of the system in the type of market, supply or demand volume, and nature and level of risks, as well as institutional and administrative capacity. Against a backdrop of policy instruments for renewable energy,we borrowfromtheBrazilian andIndian examples todemonstrate, firstly that a tailor made approach is necessary in Africa, and secondly, renewable energy policy performance depends on a number of key factors. Both Brazil and India have exhibited sustained renewable energy market growth over the years, which can be adduced to a number of factors: (a) strong government commitment (most notably in India); (b) the creation of institutions exclusively focused on renewable energy development at the central and state levels (India); (c) the existence of a growing domestic equipment manufacturing industry (in India, but also emerging in Brazil); (d) a sustained effort toward attracting private sector participation (Brazil, India); and (e) the existence of either a tight reserve margin or a large supply demand gap, which has signaled the need for new capacity investments, among others.

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