Renewable Energy: International Perspectives on Sustainability [1st ed.] 978-3-030-14206-3;978-3-030-14207-0

Table of contents :
Front Matter ....Pages i-xl
Front Matter ....Pages 1-1
Economic and Political Foundations of Effective Transition to Renewable Energy: Ordoliberalism, Polanyi, and Cities as Hubs for Climate Leadership and Innovation (Mishka Lysack)....Pages 3-37
Interplay Between Economics and Environment: Determinants of Sustainable Solutions (Tero Rantala, Minna Saunila, Juhani Ukko, Jouni Havukainen)....Pages 39-61
Renewable Energy Strategies for Sustainable Development in the European Union (Erginbay Uğurlu)....Pages 63-87
Front Matter ....Pages 89-89
Energy Transition and Social Movements: The Rise of a Community Choice Movement in California (Ida Dokk Smith)....Pages 91-129
Wind Energy and Policy in Brazil: An Assessment of the State of Bahia (Lucigleide Nery Nascimento)....Pages 131-155
Front Matter ....Pages 157-157
Regulatory Framework for Development of Renewable Energy Generation in Turkey (Özlem Döğerlioğlu Işıksungur)....Pages 159-179
Turkey’s Renewable Energy Prospects Toward the 100th Anniversary of the Republic (Çiğdem Pekar)....Pages 181-210
Renewable Energy in Kazakhstan: Potential and Challenges (Vakur Sumer, Zhengizkhan Zhanaltay, Lidiya Parkhomchik)....Pages 211-229
Back Matter ....Pages 231-257

Citation preview

Renewable Energy International Perspectives on Sustainability Edited by Dmitry Kurochkin Elena V. Shabliy Ekundayo Shittu

Renewable Energy

Dmitry Kurochkin · Elena V. Shabliy · Ekundayo Shittu Editors

Renewable Energy International Perspectives on Sustainability

Editors Dmitry Kurochkin Harvard University Cambridge, MA, USA

Elena V. Shabliy Columbia University New York, NY, USA

Ekundayo Shittu George Washington University Washington, DC, USA

ISBN 978-3-030-14206-3 ISBN 978-3-030-14207-0  (eBook) https://doi.org/10.1007/978-3-030-14207-0 Library of Congress Control Number: 2019932939 © The Editor(s) (if applicable) and The Author(s), under exclusive license to Springer Nature Switzerland AG 2019 This work is subject to copyright. All rights are solely and exclusively licensed by the Publisher, whether the whole or part of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilms or in any other physical way, and transmission or information storage and retrieval, electronic adaptation, computer software, or by similar or dissimilar methodology now known or hereafter developed. The use of general descriptive names, registered names, trademarks, service marks, etc. in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use. The publisher, the authors and the editors are safe to assume that the advice and information in this book are believed to be true and accurate at the date of publication. Neither the publisher nor the authors or the editors give a warranty, expressed or implied, with respect to the material contained herein or for any errors or omissions that may have been made. The publisher remains neutral with regard to jurisdictional claims in published maps and institutional affiliations. This Palgrave Macmillan imprint is published by the registered company Springer Nature Switzerland AG. The registered company address is: Gewerbestrasse 11, 6330 Cham, Switzerland

Foreword

Is another world possible? This is the question more and more humans are asking themselves in these days of what is now called the Anthropocene, that is, an era where humans not solely because of their numbers but because of their actions (those of some more than of others) are weighing on the earth. Through their actions, humans risk to reach a tipping point where new systems will come about and life on earth as we have known it will be gravely endangered, if not threatened with disappearance. We are approaching the end of an epoch that did not begin, but was intensified, with the Industrial Revolution in the eighteenth century that thrived on programmatic domination of humans and nature in concert with widespread colonial expansion. Industrial capitalism was made possible with new modes of producing and implementing energy, that is, with technologies (such as the steam engine) based on the burning of fossil fuels. With its beginnings in Europe and in the United States, industrial capitalism rapidly spread through the world animated by a promethean dream that made humans the conquerors of the earth. Prolonged by ideas of growth and progress, this dream went together with the expansion in space and linear time. Not just the United States and Europe, but the Soviet Union as well, believed in human supremacy v

vi     Foreword

and independence from the earth. In conjunctions with their governing bodies, humans engaged in unbridled development, including the building of roads, dams, and the killing of flora and fauna in the name of progress. Humans were considered to be actors moving about against the static background of the world. In the decades following World War II, this idea reached its apogee while at the same time it began running into a wall. In the 1950s and 1960s, scientists, anthropologists and other humanists took notice of some of the dangers. In Tristes Tropiques (1955), Claude Lévi-Strauss mourned the damage done to the Brazilian forests and its inhabitants by development. In her acclaimed book, Silent Spring (1962), Rachel Carson revealed how chemicals such as DDT killed birds. In Steps to an Ecology of Mind (1972), combining science, anthropology, psychoanalysis, by invoking how the fluttering of a butterfly’s wings in one part of the world could provoke a hurricane in another, Gregory Bateson popularized the idea of feedback loops. Similarly, after having sailed around the world, Michel Serres committed himself to the study of cybernetics and microbiology in order to renew what, in response to Rousseau, he called a natural contract. Like Bateson, Serres argued that humans are no longer thought to be independent, full historical subjects in control but as material beings are linked to a world of open systems and feedback loops. More and more, new materialists today see humans as part of a larger circulation of matter. They continue to question the division between species and even between human and non-human. Simultaneously, there is a renewed interest today in the Cura tradition. The Roman goddess, Cura, made the first human of humus. Humans are made of earth—humus—from which they cannot quite escape. Cognate with Cura, care is needed wherever humans deal with the world. Despite a desire that counter-cultures awakened in the 1960s to return to the land and to nature, it became quickly obvious that humans needed to look at the world and its ecological problems in anticipation of conditions that prevail today, including that is, large urban centers, global markets and inventions in the area of the technosciences. It is up to humans to address these issues with care, a term that since Roman times was charged with ambivalence, as something that is pulling humans down

Foreword     vii

and that, at the same time, is uplifting. With this double polarity of care as both anxiety and potentiality, we can ask the question of the possibility of another world by way of a care of the possible. What kind of catastrophes, some of which are already familiar—droughts, floods, fires, hurricanes, receding glaciers, but also epidemics, just to mention a few—are the result of global warming or climate change? But also, what kind of possibles can be realized with care? Technological advances allow humans to measure and even predict changes. Sensors enable them to feed forward rather than feeding back. However, we can also speculate with our imagination and hopefully realize some potentialities by applying another care of the possible. What other worlds are there? What is possible? What kind of human capacitations would ensure that the nine billions of humans projected to be eleven billions by the end of the twenty-first century can lead a decent life? For Isabelle Stengers, a scientist turned philosopher, care of the possible is a pragmatism. It is a way of not developing grandiose theories but of continually inventing, be it in small steps, another way of being, another ethos, in a world that would begin with the importance of a cosmopolitics. The way we think of the world, of the cosmos is always already political. A politics of subject and object that subtended the actions of humans during the Industrial Revolution is now being replaced by one of entanglements. With such a different vision, we have to develop other ideas of care. With achievements in the techno-sciences, we are in the midst of what some like Klaus Schwab, the founder of the World Economic Forum, believe to be the fourth Industrial Revolution, that is one with artificial intelligence and technologies that will enable us to live in a very different way. Pundits think that many of these technologies are on the threshold of being adopted broadly. New technologies (such robots, driverless cars, AI, 3D printing and the like) are nearing what Schwab calls a tipping point. He and other CEOs ask a two-pronged question: how will novelty and innovation affect humans and the environment? For humans, it is a question of “jobs.” For the environment, one of “sustainability.” However, the question of sustainability should be asked not as an afterthought but as the main question that includes people and the environment. Sustainability is one of the answer to “is another world

viii     Foreword

possible.” Fossil fuels still animate global production. Jussi Parikka and others have shown how the gadgets we use (iphones, computers, etc.) are largely dependent on electricity, hence fossil fuels. Extraction of fossil fuels from the core of the earth and carbon emissions into its atmosphere have recently reached an all-time high. Resistance to the use of fossil fuels is often equated with a resistance to market-capitalism. Yet, as philosopher Felix Guattari has shown, markets are many and of different orientation and facture. Ecological markets are developing rapidly, helped by private citizens and by companies. With our current understanding of the world as an entangled web, to enable humans to live well, that is, to lead decent lives, other ways of producing and conserving energy must be achieved through new and different markets. To enjoy the fourth Industrial Revolution, we have to care so as to make the world sustainable. To arrive at this condition, the first step is to replace fossil fuels with what we now call alternative energies that we see where wind turbines are sprouting on hilltops and fields and where solar panels cover expanses of arid soil. Other alternatives will undoubtedly become possible in the centuries ahead. Yet, there has to be a common desire to change our ways, to adopt a different ethos in the name both of individual citizens and of communities, of countries and continents. It is up to humans to think of their fragility on this earth and to act at the same time, both as citizens and through their representative delegates, that is, through their institutions and governments. To construct an earth or better yet, a planet in common, humans have to situate themselves and relate to one another not in a deadly dialectic but in ongoing negotiation. To live sustainably as citizens, to buy from sustainable markets, to elect governments that believe in sustainability is to care for our lives, those of others and of generations to come. To live sustainably is also a way of not forgetting other forms of life that have had to suffer from our heroic and futile dreams of mastery. With our computer-assisted subjectivities and our increasing reliance on artificial intelligence, we cannot simply accept to live in an impoverished world. A starting point, for making another world possible, is the curbing of fossil fuels and carbon emissions to make sustainability a central project, if not the dream

Foreword     ix

of our lives. We could thus insure the flourishing of humans as well as of fauna and flora. To look at governing bodies and institutions that deploy care to make another world possible—such is what the chapters in this timely book convincingly and productively set out to do. Cambridge, MA, USA

Verena Andermatt Conley Department of Comparative Literature Harvard University

Verena Andermatt Conley  teaches in Comparative Literature and Romance Languages and Literature at Harvard University. Recent publications include Spatial Ecologies (Liverpool) and, with Irving Goh, Nancy Now (Polity). She is currently working on the politics of care in relation to ecology and technology as well as on the transformations of a colonial garden in Algiers.

Acknowledgements

Thanks are due to the faculty at Moscow State University, Harvard Business School, Harvard Divinity School, Tulane Energy Institute, Columbia University, and the National Research University Higher School of Economics.

xi

Contents

Part I  Renewable Energy in Europe 1 Economic and Political Foundations of Effective Transition to Renewable Energy: Ordoliberalism, Polanyi, and Cities as Hubs for Climate Leadership and Innovation Mishka Lysack

3

2 Interplay Between Economics and Environment: Determinants of Sustainable Solutions 39 Tero Rantala, Minna Saunila, Juhani Ukko and Jouni Havukainen 3 Renewable Energy Strategies for Sustainable Development in the European Union 63 Erginbay Uğurlu

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xiv     Contents

Part II  Renewable Energy in North and South America 4 Energy Transition and Social Movements: The Rise of a Community Choice Movement in California 91 Ida Dokk Smith 5 Wind Energy and Policy in Brazil: An Assessment of the State of Bahia 131 Lucigleide Nery Nascimento Part III Renewable Energy in the Middle East and Central Asia 6 Regulatory Framework for Development of Renewable Energy Generation in Turkey 159 Özlem Döğerlioğlu Işıksungur 7 Turkey’s Renewable Energy Prospects Toward the 100th Anniversary of the Republic 181 Çiğdem Pekar 8 Renewable Energy in Kazakhstan: Potential and Challenges 211 Vakur Sumer, Zhengizkhan Zhanaltay and Lidiya Parkhomchik Conclusion 231 Index 233

Editors and Contributors

About the Editors Dmitry Kurochkin  is a Senior Research Analyst at Harvard University. He graduated magna cum laude from Lomonosov Moscow State University where he majored in Physics. Kurochkin earned his Ph.D. in Mathematics at Tulane University and holds Master’s degrees in a variety of fields including Chemistry, Statistics, and Economic Analysis and Policy. Elena V. Shabliy graduated with honors from M. V. Lomonosov Moscow State University and received her Interdisciplinary Ph.D. from Tulane University in 2016. In 2009, she earned a Master of Liberal Arts degree from Tulane. She was a Visiting Scholar at Harvard University in 2015–2017 and Columbia University in 2017–2019. She is the editor of Representations of the Blessed Virgin Mary in World Literature and Art (Lexington, Rowman and Littlefield, 2017) and co-editor of Emancipation Women’s Writing at Fin de Siècle (Routledge, 2018). Currently, she is a Postdoctoral Fellow at Harvard University. xv

xvi     Editors and Contributors

Ekundayo Shittu  conducts basic and applied research at the George Washington University that take a systems engineering approach to aid decision making under uncertainty on investments into energy technology portfolios and in the examination of the economics of climate change response policies. Pivotal to his research is the distillation of how key stakeholders deal with climate change risk and uncertainty. He examines ways of integrating formal decision tools and microeconomics to develop climate and energy policies that aid the adoption of renewable energy technologies. His current research agenda in the arena of technology management and the economics of renewable energy focuses on the interplay between public policy, competition and energy technology investments with aid of mathematical programing including stochastic optimization modeling. His research also studies the strategic interaction between firms’ technology stocks and the external environment through the lenses of transaction cost economics and resource-based view. He has also explored sustainable healthcare intervention strategies in least developed countries particularly on improving accessibility vaccines. His research portfolio has been funded to the tune of over one million dollars in the last five years by the National Science Foundation, Department of Energy, Department of Defense, LMI Research Institute, Toyota Mobility Foundation and Duke Energy Renewables. Over the last decade, he has published more than forty peer-reviewed articles in top tier scholarly journals. He holds a Bachelor’s in engineering degree in Electrical Engineering from the University of Ilorin, Nigeria. He received the Masters’ degree in Industrial Engineering from the American University in Cairo, Egypt, and the Ph.D. degree in Industrial Engineering and Operations Research from the University of Massachusetts Amherst, U.S.

Contributors Özlem Döğerlioğlu Işıksungur  is an Assistant Professor of Commercial Law at İzmir University of Economics of Law Faculty in Turkey. She also serves as a Turkish lawyer and provides legal consultancy. She has two master’s degrees in International Business Law and

Editors and Contributors     xvii

entitled Ph.D. (doctorate) degree from Ankara University in 2011 with her thesis titled “Consumer Regulations in the EU Energy Market and their Repercussions on Turkish Energy Legislation.” Her core expertise areas are Commercial Law, Energy Law, Energy Efficiency Law, Climate Change Law and EU Law. She has extensive experience in research and consultancy on local, international, comparative and European energy law. Until today, she has worked as a legal consultant in many energy and renewable energy projects. Taking part as legal expert in the EU and Word Bank Projects, she has also gained experience on low carbon development. At the same time, she is a columnist in the Turkish Energy Reviews. She is a member of the Turkish Wind Energy Association (TUREB), Turkish Solar Energy Industry Association (GENSED) and World Energy Council Turkish National Committee. Dr. Jouni Havukainen has studied issues related to system analysis of organic and inorganic flows in circular economy on three continents. He has conducted research in BP’s Energy Bioscience Institute in Berkley California, KTU in Kaunas and Zhejiang University in Hangzhou, China. Dr. Jouni has published 29 articles in 10 esteemed journals and in 14 international conferences. His h-index is 9 (Scopus) and his publications have received over 250 citations. Since January 2015, he has been conducting research as a postdoctoral researcher and from January 2019 onwards, he will continue his work as Associate Professor in the Department of Sustainability Science. He is an integral part of the research team, supervises several Ph.D. students and takes part in teaching and supervising undergraduate students. Dr. Mishka Lysack  is a full professor in the Faculty of Social Work and an adjunct assistant professor in Psychiatry in Medicine at the University of Calgary. He has also taught in the faculties of Social Work at Carleton University, Education at Ottawa University, and both the Conflict Studies Program and the Faculty of Human Studies at St. Paul University. Dr. Lysack focuses his research, his innovative knowledge mobilization work and community outreach, and teaching in the areas of climate change and environmental protection, renewable energy, effective public policy, and integrating sustainable economies, health, and social development. Since 2014, Dr. Lysack has

xviii     Editors and Contributors

worked in partnership with the Germany Embassy in Ottawa to bring sector leaders in climate protection and the renewable energy economy in Germany to Canada to meet with Canadian sector leaders to build their capacity to address climate change and transition to a renewable energy economy, supported by grants from both SSHRC and the Klimafonds in the German government. More recently, Dr. Lysack has also developed a new partnership with the UK High Commission in Ottawa, Canada and the UK Consulate in Calgary focusing on the carbon budget as a foundation for effective climate action policy by government and enabling innovative solutions to transition to a renewable energy economy. Lucigleide Nery Nascimento holds a B.S. in Economics from the Universidade Católica do Salvador, Brazil. She earned an M.S. in Natural Resources—Environmental Conservation and a Ph.D. in Natural Resources and Environmental Studies from the University of New Hampshire, United States. She has received several awards, such as the International Doctoral Fellowship from the American Association of University Women and the International Peace Scholarship from the Philanthropic Educational Organization. She has worked in and outside academia. Her multidisciplinary interests include the broader areas of environmental policy, sustainable development and natural resources, and social and ecological economics. She is a Specialist in Production of Economic, Social and Geoenvironmental information (Especialista em Produção de Informações Econômicas, Sociais e Geoambientais) at the Superintendence of Economic and Social Studies of Bahia (Superintendência de Estudos Econômicos e Sociais da Bahia)—SEI, Salvador, Bahia, Brazil. The views and opinions expressed in the chapter are those of the author and do not necessarily reflect the official policy or position of any agency of the Bahian government. Lidiya Parkhomchik is the Head of the Office in Almaty of the Institute of World Economics and Politics (IWEP) under the Foundation of the First President of the Republic of Kazakhstan— Elbasy. She graduated from the Abylai Khan Kazakh University of International Relations and World Languages, Almaty, Kazakhstan. She took up postgraduate studies on the theme “The Struggle for

Editors and Contributors     xix

Spheres of Influence in the Contemporary World: Trends Analysis by the Example of the Caspian Region” at the Al-Farabi Kazakh National University. She was a senior researcher at the Eurasian Research Institute at the Akhmet Yassawi International Kazakh-Turkish University. She also worked as a senior research fellow at the Department of Foreign Policy and International Security Studies at the Kazakhstan Institute for Strategic Studies under the President of the Republic of Kazakhstan, and as a research fellow at the Institute of Philosophy, Political Science and Religious Studies CS MES RK. During academic career, she has published more than 40 scientific papers in Kazakhstani journals (Analytic, Ideas, Kazakhstan-Spectrum, Central Asia’s Affairs) and foreign journals (Problems of Post-Soviet Space, Big Game: Politics, Business and Security in Central Asia, Peace and Policy, Caspian Herald, Russia and New States of Eurasia, Central Asia and Caucasus), and prepared 14 monographs in co-authoring in the field of international relations, internal affairs and regional cooperation. Çiğdem Pekar  has a B.A. degree from the Department of International Relations at Ege University, Turkey, an M.A. degree on ‘European Studies’ from the University of Exeter, UK and a Ph.D. degree in International Relations from Çanakkale Onsekiz Mart University, Turkey. She has spent one academic year at the Center for Non-Proliferation Studies, Monterey, US as a Fulbright Ph.D. researcher. Currently she is pursuing her career at Çanakkale Onsekiz Mart University as an Assistant Professor and head of International Relations Department. Dr. Pekar’s research areas include nuclear non-proliferation regime, Turkey’s nuclear and renewable energy policies and nuclear history. She is a member of several academic and professional societies and organizations such as: International Young/Student Pugwash Group, Women in International Security (WIIS), and International Nuclear Law Association (INLA). Dr. Pekar also serves as the Institution Representative for the IAEA International Nuclear Security Education Network (INSEN) on behalf of her University. Tero Rantala is a Researcher and doctoral student at Lappeenranta University of Technology, Department of Industrial Engineering and Management. His current research focuses on performance

xx     Editors and Contributors

management and measurement of university–industry collaborations. In addition, his current research interests involve different areas of performance management in digital business environments and sustainable business contexts. Minna Saunila, D.Sc. (Tech.)  is a Senior Researcher at Lappeenranta University of Technology, School of Engineering Science. Her research covers topics related to innovation, service operations, as well as sustainable value creation. She has previously published among others in Journal of Engineering and Technology Management, Technology Analysis and Strategic Management, and Journal of Organizational Effectiveness: People and Performance. Ida Dokk Smith is a Ph.D. Fellow at the Department of political science at the University of Oslo. She is affiliated with the research center Strategic Challenges in International Climate and Energy Policy (CICEP), one of three centers for social science-based research on environment-friendly energy established by the Research Council of Norway in 2011. Her research interest is how to transition towards a low carbon energy system within a timeframe that is aligned with international climate change commitments. She is particularly interested in the political dynamics behind such technological system change, and how domestic transitions can be accelerated through policies and changing relationships between traditional energy providers and mobilization of end-users. She has a Masters of International Affairs from Columbia University New York and is a Fulbright Scholar Alumni. She completed a Bachelor of Economics at the University of Bergen. In between her studies, she worked 3 years as a management consultant at PWC Oslo. Dr. Vakur Sumer  is the Director of the Eurasian Research Institute (Ahmet Yesevi University), Almaty, Kazakhstan. He is also a faculty member at the Department of International Relations, Selcuk University, Konya, Turkey. He has received his Ph.D. on International Relations, from Middle East Technical University, Ankara, Turkey. Sumer has worked as a post-doctoral fellow at the Global Research Institute at University of North Carolina-Chapel Hill, NC, USA, and as a visiting scholar at the Department of Environmental Science and

Editors and Contributors     xxi

Policy, University of California-Davis, CA, USA. He was a researcher at Max Planck Institute in Heidelberg, Germany in 2012. Sumer has published articles in journals such as Uluslararası İlişkiler, Water International, and Journal of Peacebuilding and Development. He has coedited a volume, Sustainable Water Use and Management, published by Springer in 2015. He has also published a book with I.B. Tauris in 2016: Water and Politics in Turkey: Structural Change and EU Accession. He also has attended a number of international and national academic conferences. He served as a referee/expert for the European Commission in evaluation of numerous projects. His areas of research include water issues, transboundary rivers, environmental politics, and Turkey’s accession to the European Union. Sumer is a member of ISA (International Studies Association), Environmental Studies Section of ISA, and the International Water Association (IWA). Erginbay Uğurlu  is Associate Professor of Econometrics in İstanbul Aydın University, where he taught econometrics, statistics, and research methods. He has his Ph.D. degree in Econometrics, his M.Sc. in Economics. He was a visiting scholar at the Department of Economics at Columbia University in New York in 2013; his main area of research was sustainable development at Columbia University. In his scholarship, he has focused on time series econometrics and panel data econometrics. Juhani Ukko, D.Sc. (Tech.) is a Senior Researcher at Lappeenranta University of Technology, Department of Industrial Engineering and Management. He is also an Adjunct Professor at Tampere University of Technology. His current research interests involve different areas of performance management and measurement, related to operations management, digital services, innovation and sustainable business. Zhengizkhan Zhanaltay completed his bachelor’s degree at international relations department of KIMEP University in 2010. He completed his master thesis named “Oralmans Integration into Kazakhstani Society: Turkish Kazakh Case” in International Relations department of KIMEP University in 2014. Zhengizkhan Zhanaltay started to work at Eurasian Research Institute in January 2015 as a junior research fellow.

xxii     Editors and Contributors

Since September 2017 working as a deputy director, Zhengizkhan Zhanaltay has published several articles in different Kazakhstani journals and scientific papers in foreign journals like Bilig, Perception, and Central Asia Program. He co-authored a paper titled “Analysis of Bilateral Trade Relations between Turkey and the Russian Federation” and published a book chapter on External and Internal Migration in Central Asia book. His research interests include migration, labor market, international migration politics, labor economics, migrant workers and ethnic migrants’ social and economic integration into society, remittance dynamics and bilateral trade relations.

Acronyms and Abbreviations

BAU Business-As-Usual CACE California Alliance for Community Energy CalCCA California Community Choice Aggregation CCA Community Choice Aggregation CPI Consumer Price Index CPUC California Public Utility Commission EBRD European Bank for Reconstruction and Development EIA Environmental Impact Assessment EML Electricity Market Law EMRA Energy Market Regulatory Authority EREC European Renewable Energy Council EU European Union FIT Feed-in-Tariffs FSC Financial Settlement Center for Renewable Energy GDP Gross Domestic Product GE General Electric GHG Green House Gas IEA International Energy Agency INDC Intended Nationally Determined Contribution IOU Investor Owned Utility IRENA International Renewable Energy Agency xxiii

xxiv     Acronyms and Abbreviations

KEGO Kazakhstan Electricity Grid Operating Company MCE Marin Clean Energy MENR Ministry of Energy and Natural Resources MEU Ministry of Environment and Urbanization MME Ministry of Mines and Energy NCCAP National Climate Change Action Plan of Turkey NCCS National Climate Change Strategy NDC Nationally Determined Contribution NREA National Renewable Energy Action Plan OECD Organization for Economic Cooperation and Development Paris Agreement Paris Climate Change Agreement PG&E Pacific Gas & Electric PSAF Policy Sciences Analytic Framework PV Photovoltaic RE Renewable Energy RES Renewable Energy Sector RPS Renewable Portfolio Standard SCP Sonoma Clean Power SDED San Diego Energy District SDG Sustainable Development Goals SDG&E San Diego Gas & Electric SEA Strategic Environmental Assessment SJPA San Joaquin Power Authority TPES Turkey’s Primary Energy Supply UNDP United Nations Development Program UNECE United Nations Economic Commission for Europe UNFCC United Nations Framework Convention on Climate Change

List of Figures

Fig. 2.1 Fig. 2.2 Fig. 2.3 Fig. 3.1 Fig. 3.2 Fig. 3.3

Fig. 3.4

Research framework 48 Willingness to adopt sustainable solutions among the companies that consider operational determinants to be significant 53 Sustainability determinants of the companies willing to adopt sustainable solutions 54 SDG logo and 17 icons (Source UN [2017]) 65 Classification of renewable energy (Source Roy and Das [2018]) 76 Renewable energy consumption in the EU28 by country (Source World Bank WDI [2018] [World Bank, Sustainable Energy for All (SE4ALL) database from the SE4ALL Global Tracking Framework led jointly by the World Bank, International Energy Agency, and the Energy Sector Management Assistance Program]) 77 Electricity generation from renewable energy sources (GWh) (Source IRENA [2018] [Solar: solar photovoltaic +  concentrated solar power, Bioenergy: Solid biofuels + liquid biofuels, hydropower: renewable hydropower + pumped storage]) 82 xxv

xxvi     List of Figures

Fig. 5.1

The Brazil, the Northeast, and the São Francisco River Basin (shaded area) (Source Figure by author derived from geo-referenced data from Agência Nacional de Águas—Hydroweb [Agência Nacional de Águas do Brasil, “Hidroweb: Sistema de Informações Hidrológicas,” http:// hidroweb.ana.gov.br/, last accessed September 3, 2009]) Fig. 5.2 Bahian domestic energy supply (in percentage), 2000–2015 (Source Built by the author with data from Bahia [2016]) Fig. 5.3 Bahian domestic energy supply: nonrenewable sources (in percentage), 2000–2015 (Source Built by the author with data from Bahia [2016]) Fig. 5.4 Bahian domestic energy supply: renewable sources (in percentage), 2000–2015 (Source Built by the author with data from Bahia [2016]) Fig. 5.5 Bahian domestic energy supply: solar energy (in Megawatt hour), 2012–2015 (Source Built by the author with data from Bahia [2016]) Fig. 5.6 Bahian domestic energy supply: wind energy (in 103 Megawatt hour), 2012–2015 (Source Built by the author with data from Bahia [2016]) Fig. 5.7 Bahian energy use by sector (Source Built by the author with data from Bahia [2016]) Fig. 5.8 Transportation use by source (Source Built by the author with data from Bahia [2016]) Fig. 5.9 Industrial use by source (Source Built by the author with data from Bahia [2016]) Fig. 5.10 Residential use by source (Source Built by the author with data from Bahia [2016]) Fig. 7.1 Installed capacity development of electricity generating facilities from renewable sources (Source Republic of Turkey, The Ministry of Energy and Natural Resources, General Directorate of Renewable Energy. http://www.yegm.gov.tr/yenilenebilir.aspx [Last accessed June 2, 2018])

133 142 142 143 144 144 147 148 149 149

195

List of Tables

Table 2.1 Measurement instrument 49 Table 2.2 Description of data 50 Table 2.3 Differences in willingness to exploit sustainable solutions based on operational determinants 52 Table 3.1 Sustainable development goals and definitions 66 Table 3.2 EU28 energy dependence by product 71 Table 3.3 Renewable energy target of the EU member countries 79 Table 3.4 National sector-specific targets for share of renewable energy for 2020 80 Table 3.5 Overview of differences between wind power and solar PV 82 Table 6.1 Installed power capacity targets for 2023 by RE sources (MW) 168 Table 8.1 Currently the FIT tariffs for supply of electricity produced by renewable sources as follows 222

xxvii

Introduction

Renewable Energy Development Denmark produced more than two-fifths of its energy from wind in 2017 and plans to completely shift to renewables by 2050. This and similar successful examples as well as renewable energy advancements inspire many European and other countries.1 Analogous far-reaching goals are shared by Australia, Canada (Vancouver), Germany, Japan (Fukushima Prefecture), Sweden, etc.2 China remains the leader in global renewable energy generation; and various countries, such as the U.S., the UK, India, Spain, and Turkey, compete in the

1Frederikshavn,

for example, aims at 100% renewables by 2030. According to the World Wind Association, in 2017, Denmark had a new world record: 43% of its power was generated from wind. https://wwindea.org/blog/2018/02/12/2017-statistics/ (Last accessed August 29, 2018). By 2020, Denmark also set a target of 50% electricity consumption generated by wind power (REN21, 2018). http://www.ren21.net/wp-content/uploads/2018/06/17-8652_GSR2018_ FullReport_web_final_.pdf (Last accessed November 27, 2018). 2REN21, 2018, 202.

xxix

xxx     Introduction

Renewable Energy Sector (RES) to attract investments.3 China, the U.S., and many European countries invest in clean energy.4 In 2017 alone, global investments in renewables exceeded $200 billion.5 Sustainable energy is one of the world’s fast-growing industries and expected to be the major economic engine of the coming decades. Over one hundred and fifty countries have developing sustainable energy policies, tax incentives, and laws. One of the critical issues related to the transition to renewables is reducing greenhouse gas (GHG) emissions.6 The purpose of this edited interdisciplinary volume is to provide a current assessment of the legal, political, economic, and other issues related to the development and advancements of renewables worldwide as well as discuss climate change problems which have recently become one of the major concerns among researchers and professionals. This work offers an insight into prospects of renewables and examines the status quo of renewable energy industry in a global context. The book provides an analysis in the international domain and policy conflicts that create obstacles in renewables advancement. This volume presents a collection of essays which shed light on new conclusions and international perspectives and contribute to new policy advancement on the global scale.7 Promotion of green energy is often countryor even region-specific; however, “[p]olicies must be put in place that will foment a clean energy transition, and these policies must be effective globally (as opposed to just shifting emissions from one region to

3http://ieefa.org/ieefa-report-china-continues-position-global-clean-energy-dominance-2017/. According to the International Energy Agency, by 2022 renewable energy capacity should increase by 43% (EIA, 2017). Please see http://www.iea.org/ (Last accessed August 29, 2018). 4China, Europe, and the U.S. “accounted for nearly 75% of the global investment in renewable power and fuel” In 2017, there were significant investments in RES in developing country markets. See REN21, 2018, 15. 5It was the eight in the raw year when global investment exceeded $200 billion. See also https:// obamawhitehouse.archives.gov/sites/default/files/uploads/clean_energy_report_vpotus.pdf (Last accessed May 11, 2019). 6It would be ideal to reduce carbon emissions by 80% in the nearest future. 7In the United States, currently, 12 states implemented Renewable Portfolio Standard policies requiring that a portion of power supplied to retail customers come from renewable energy. See https://www.epa.gov/sites/production/files/2015-08/documents/economic_impact_of_renewable_energy_in_pennsylvania.pdf (Last accessed May 9, 2019).

Introduction     xxxi

another).”8 The necessity of renewable energy development, this book suggests, should become acknowledged by many governments. When the idea of sustainability wins popularity, the appropriate policies implementations processes will become easier and smoother. Governments invest in renewable energy because of multiple reasons, including “energy security and affordability, the potential for job creation, future economic strategic positioning, and addressing environmental and other externalities.”9 In 2017, the RES employed approximately 10.3 million people (REN21, 2018).10 In order to have goals achieved, however, governments should have tax incentives, loans, and grants for Research and Development (R&D). In the U.S., for example, the advancement of various energy sources was supported for over decades; and in the recent years, the renewable energy development has been substantially financed.11 Global energy demand projections are associated with uncertainty. Such factors as, for instance, demographic change and new technological and economic developments may cause significant changes on the global scene. The predictions of the future demographic growth are, however, sometimes contradictive. The United Nations estimates that world population is expected to reach 9.7 billion by 2050. Half of the world’s population growth is projected to be concentrated in India, Nigeria, Pakistan, Democratic Republic of the Congo, Ethiopia, United Republic of Tanzania, the United States of America, Indonesia, and Uganda.12 China and India remain the largest countries in the world by population.13 Per capita energy consumption is expected to further

8Arent,

Douglas et al. The Political Economy of Clean Energy Transitions: A Study Prepared by the United Nations University World Institute for Development Economics Research (UNUWIDER). First ed., (Oxford University Press, 2017), 4. 9http://sitn.hms.harvard.edu/flash/2012/energy-finance/ (Last accessed August 28, 2018). 10http://www.ren21.net/wp-content/uploads/2018/06/17-8652_GSR2018_FullReport_web_final_. pdf, 46. (Last accessed November 27, 2018). Solar photovoltaics (PV) was the largest employer. 11http://sitn.hms.harvard.edu/flash/2012/energy-finance/ (Last accessed August 28, 2018). 12http://www.un.org/en/development/desa/news/population/2015-report.html. (Last accessed December 25, 2017). 13Ibid.

xxxii     Introduction

increase in the nearest future. In many countries, oil use continues to grow, and transport is mostly dependent on petroleum. For example, 97% of UK transport energy comes from petroleum; it is expected to continue contributing to the largest share of total U.S. energy consumption through 2040, although the share will decline slightly (EIA, 2017).14 The revival of the keen interest in renewables appeared particularly after two oil crises that took place first in the 1970s and then in 2008. It was also a catalyst for the development of alternative energy sources. Sustainable consumption is composed of three elements: (1) consuming more efficiently; (2) consuming differently; and (3) consuming less.15 One of the notable examples of energy saving is car share that becomes more popular in many countries. The existing problem of global warming is an important factor in the advancement of renewables. For example, after the UK received reports on global warming, the decision was made to substantially advance, for instance, tidal energy in the country.16 The UK government has a goal of a 60% cut in CO2 emissions by 2050 and expects improved energy efficiency which will lead to a reduction in national energy use.17 Climate change becomes one of the main policy drivers globally. The sustainable future, in addition to scientific and technological analysis, also depends on unbiased financial assessments. It is crucial to grasp potential obstacles that prevent from moving smoothly toward sustainability. In recent years, some misconceptions occurred regarding sustainable energy. One of the most frequent questions is whether

14https://www.eia.gov. In 2016, total U.S. petroleum consumption was about 19.7 million barrels per day, constituting 37% of all the energy consumed in the Unites States. 15David Elliott. Sustainable Energy: Opportunities and Limitations (Basingstoke: Palgrave Macmillan, 2010), 143. 16Tidal and wave energy, despite its great potential, is still not fully recognized in the UK; and the seas were seen as a source of fossil fuel energy until recently, but they also could be a great source of clean energy instead, taking into account that fossil fuels are considered as the real problem for global warming. 17David Elliott. Sustainable Energy: Opportunities and Limitations (Basingstoke: Palgrave Macmillan, 2010), 137.

Introduction     xxxiii

renewable energy is really costly, considering that renewable technologies have significantly advanced in recent years.18 In addition, uncertainties emerge due to the use of newest technologies. In order to scatter all types of uncertainty, “risk management requires knowledge of the uncertainties in both generation output and consumer demand.”19 In addition to being environmentally friendly, the main advantage of the renewable energy sources is related to its inexhaustible nature, while oil resources come to its end sooner or later making renewables particularly attractive to humankind. This book offers a broad discussion, bringing together researchers in the field as well as interdisciplinary scholars. The volume starts with the European Union (EU) and then analyzes the current trends in the U.S. and countries in the Middle East, Central Asia, and Latin America. First, Mishka Lysack (Chapter 1) demonstrates a transition to a 100% renewable energy economy and energy systems (Energiewende) with a climate protection plan and sustainable economic development in Germany; he shows various practices in attaining these goals in Munich, Frankfurt, and Freiburg. These German cities are making significant progress toward complete sustainability. This chapter also examines conditions under which cities become the centers for the development of a renewable energy economy and climate protection, while reaching critical sustainable economic development goals and offering job creation opportunities. These cities help improve social acceptance of renewable energy. Lysack highlights key developments in the history of the Energiewende in Germany, examining challenges and new solutions. This chapter applies the frame of political economy and discusses ideas of Karl Polanyi (1886–1964). Tero Rantala et al. (Chapter 2) examine the determinants of the adoption of sustainable solutions in Finland; the role of sustainable development has been highlighted in the horse industry, which faces the need to solve current and emerging challenges. This study, the

18http://sitn.hms.harvard.edu/flash/2012/energy-finance/

(Last accessed August 28, 2018). Elliott. Sustainable Energy: Opportunities and Limitations (Basingstoke: Palgrave Macmillan, 2010), 28.

19David

xxxiv     Introduction

authors argue, increases understanding of the operational and sustainability determinants affecting the adoption and utilization of sustainable solutions and the effects of the adoption costs. Among operational determinants, perceived costs increase horse industry operators’ willingness to utilize and adopt different sustainable solutions, such as, technological, service, and business-related solutions, while high actual costs shift their willingness to utilize and invest in technology. Erginbay Uğurlu (Chapter 3) describes renewable energy strategies in the European Union. The EU as a whole aims to decrease GHG emissions by at least 20% by 2020 and to have at least 20% of final energy consumption come from renewables. In order to achieve this goal, all EU countries have their own national renewables targets, for example, in Malta—10%, in UK—15%, in France—23%, in Australia—34%, in Finland—38%, and in Sweden—49%.20 The EU countries will also have at least 10% of their transport fuels from renewable sources by 2020. Ida Dokk Smith (Chapter 4) demonstrates the rise of a community choice in the U.S., California. Smith argues that to understand the current surge of local governments launching community choice aggregation programs, one should view these public entities as part of a larger social movement. The author suggests that community choice aggregation is a public entity that buys electricity on the behalf of residents and businesses while leaving distribution to the investor-owned utilities (IOUs). Lucigleide Nery Nascimento (Chapter 5) assesses the production of wind energy in contemporary Brazil focusing on the case of Bahia. The analysis presented in this chapter is based on empirical data, legal statutes, and the existing literature. In her conclusion, Nascimento demonstrates that Bahia has been experiencing a surge in wind energy production; and public policy has had a positive effect on that expansion.

20https://ec.europa.eu/energy/en/topics/renewable-energy/national-action-plans (Last accessed December 2, 2018).

Introduction     xxxv

Özlem Döğerlioğlu Işıksungur (Chapter 6) provides insights into new renewable energy policies and regulations in Turkey and identifies legislative barriers as well as opportunities in the field of RE. Turkish energy policy, renewable energy market, and legislative framework for RE with the focus on electricity generation are analyzed in this chapter. Çiğdem Pekar (Chapter 7) also considers Turkey’s RES development. Turkey’s population and economy is growing fast; thus, Pekar argues, Turkey’s energy policy has been continuously evolving to meet the needs of its changing economy. In 2009, the Turkish government announced its new energy targets under the strategic “Vision 2023.” The Turkish government also adopted further strategies and action plans on RE, energy efficiency, and climate change. The chapter also evaluates the role and potential of renewables in Turkey’s energy mix. Furthermore, Vakur Sumer et al. (Chapter 8) discuss Kazakhstan’s renewable energy development. Kazakhstan is a country with great renewable energy prospects, particularly in wind, hydropower plants, and solar energy. Kazakhstan is the ninth largest country in the world with a population density being among the lowest across the globe; and it has especially favorable climate conditions for RE production. This edited volume could be of use to professionals, researchers, and decision-makers. The analysis of country cases and their comparison allow to assess sustainability and its current trends on a global scale. The increasing interest in clean energy sources, environmental issues, as well as concerns about energy security make this study particularly important. Change of public attitude toward the reality of global warming problem and positive acceptance of clean energy is necessary among a larger group of people. Similarly, back in the nineteenth century, women’s employment seemed to be unrealistic, whereas today, women are active participants in the economy of most developed and developing countries. A woman doctor, for example, is today’s reality and something unacceptable and unheard of in the relatively recent past.

xxxvi     Introduction

Solar and Wind Power There are many types of renewables; technologies have been expanded to harvest energy from solar, wind, biomass, landfill gas, hydro, including tidal, as well as earth’s thermal energy resources.21 Of all renewable technologies, wind and solar power are the fastest growing types. Many issues should be taken into consideration while discussing renewable energy. New technological approaches can make sustainable energy competitive. In Elliott’s Sustainable Energy: Opportunities and Limitations (2010) Milborrow suggests that accurate forecasting, for example, of wind power energy supply guarantees significant energy savings.22 There are many ways to store electricity. Conventional batteries exist along with pumped storage systems and compressed air storage. Milborrow points out that “[b]etter wind prediction is a key issue which will reduce the uncertainty—and hence the cost—of absorbing wind energy and research is under way in both America and Europe to develop better techniques.”23 In the global wind industry, China, the UK, and Germany have the largest markets. However, other countries, such as the U.S., Australia, France, Brazil, Belgium, and Turkey also show a rapid development in this sector.24 The UK is the largest offshore wind market that accounts for over 36% of installed wind capacity.25 According to the Global Wind Energy Council (GWEC), the maturing of the technology has meant that offshore wind is taking shape as a mainstream energy source.26 Generally, there is a steady growth in global wind turbine installed capacity (see Fig. 1).

21See   https://www.epa.gov/sites/production/files/2015-08/documents/economic_impact_of_ renewable_energy_in_pennsylvania.pdf (Last accessed May 9, 2019). 22David Elliot. Sustainable Energy: Opportunities and Limitations (Basingstoke: Palgrave Macmillan, 2010), 38. 23Ibid., 46. 24https://gwec.net/global-figures/global-offshore/ (Last accessed November 29, 2018). 25Ibid. 26http://gwec.net/ (Last accessed November 29, 2018).

Introduction     xxxvii

Fig. 1  Global wind capacity [in MW] (Data Source World wind energy association)

Total installations in 2017 were 52,573 MW, although 2015 presented a better result of 63,633 MW newly added wind energy capacity.27 The overall capacity of wind turbines by 2017 reached 539,291 MW. Table 1 shows that the leading markets in wind energy are China (with a cumulated wind capacity of 188 GW), the U.S. (reaching 89 GW), Germany (56 GW), India (33 GW), Spain (23 GW), as well as the UK (17.9 GW), France (13.8 GW), and Brazil (12.8 GW).28 Table 1  Wind capacity by country from 2013 to 2017 Top 16 + rest of the World [MW] Added Country/ Total capacity Region capacity end 2017 2017 China United States Germany Rest of the World India Spain United Kingdom

Total capacity end 2016

Total capacity end 2015

Total capacity end 2014

Total capacity end 2013

187730 88927

19000 6894

168730 B2033

148000 73867

114763 65754

91413 61108

56164 48500

6145 5600

50019 42822

45192 37522

40468 32219

34658 26493

32879 23026 17352

4600 6 3340

28279 23020 14512

24759 22987 13614

22465 22987 12440

20150 22959 10531 (continued)

27https://wwindea.org/blog/2018/02/12/2017-statistics/ 28https://wwindea.org/blog/2018/02/12/2017-statistics/

(Last accessed November 29, 2018). (Last accessed November 16, 2018).

xxxviii     Introduction Table 1 (continued) Top 16 + rest of the World [MW] Added Country/ Total capacity Region capacity end 2017 2017 France Brazi Canada Italy Turkey Sweden Poland Denmark Portugal Australia Grand Total

13760 12763 12239 9700 6931 6721 6534 5320 5316 4879 539291

1695 1963 341 443 900 228 752 93 0 553 52552

Total capacity end 2016

Total capacity end 2015

Total capacity end 2014

Total capacity end 2013

12065 10800 11898 9257 6081 6493 5782 5227 5316 4326 486661

10293 8715 11205 8958 4718 6029 5100 5064 5050 4186 435259

9296 5962 9694 8663 3763 5425 3834 4883 4953 3806 371374

8254 3399 7698 8551 2958 4470 3390 4772 4724 3049 318577

Data Source World Wind Energy Association

Solar energy is also expected to become one of the most widely used forms of renewable energy in the nearest future: “Solar PV was the top source of new power generating capacity in 2017, due largely to strong growth in China, with more solar PV installed globally than the net additions of fossil fuels and nuclear power combined. Global capacity increased nearly one-third, to approximately 402 GWdc” (REN21, 2018).29 There is a high social acceptance of solar energy because it is noiseless, clean, and easily integrated into the structure of buildings. Other types of renewable energy technologies are en route to be as widely accepted as solar energy. The additional benefits of solar panel systems are easy implementation and installation process.

29http://www.ren21.net/wp-content/uploads/2018/06/17-8652_GSR2018_FullReport_web_ final_.pdf. (Last accessed December 1, 2018).

Introduction     xxxix

Conclusion Renewables can be the main energy source in both urban and rural areas. Population growth and economic development as well as technological improvements lead to the increase of energy consumption worldwide. The number of installed air-conditioners, for instance, significantly grew in the recent past. The next two decades will be crucial and decisive in our choices—whether we are determined to suffer from the consequences of unhealthy and dubious decisions or follow a “more attractive path of sustainable and inclusive development and growth.”30 To avoid climate change, emissions must be cut by at least 30% in the coming years which will also lead to substantial health benefits.31 Dmitry Kurochkin Elena V. Shabliy

References Arent, Douglas, et al. (2017) The Political Economy of Clean Energy Transitions. A Study Prepared by the United Nations University World Institute for Development Economics Research (UNU-WIDER). 1st ed. Oxford: Oxford University Press. Bulkeley, Harriet, et al. (2016) Towards a Cultural Politics of Climate Change: Devices, Desires, and Dissent. Cambridge: Cambridge University Press. Elliott, David. (2010) Sustainable Energy: Opportunities and Limitations. Basingstoke: Palgrave Macmillan. Griffin, James M. (2009) A Smart Energy Policy: An Economist’s Rx for Balancing Cheap, Clean, and Secure Energy. New Haven: Yale University Press. Odum, Howard. (2007) Environment, Power, and Society for the Twenty-First Century: The Hierarchy of Energy. New York: Columbia University Press. Tomain, Joseph P. (2017) Clean Power Politics: The Democratization of Energy. Cambridge: Cambridge University Press. 30 http://www.lse.ac.uk/GranthamInstitute/wp-content/uploads/2018/07/Stern_Economic-

reasons-to-act-on-climate-change-and-to-act-now.pdf (Last accessed November 27, 2018).

31 http://www.lse.ac.uk/GranthamInstitute/wp-content/uploads/2018/07/Stern_Economic-

reasons-to-act-on-climate-change-and-to-act-now.pdf (Last accessed November 27, 2018).

xl     Introduction

Websites https://www.eia.gov (Last accessed December 18, 2017). https://www.statista.com (Last accessed December 19, 2017). http://www.iea-pvps.org/fileadmin/dam/public/report/statistics/IEAPVPS_-_A_Snapshot_of_Global_PV_-_1992-2016__1_.pdf (Last accessed December 19, 2017). https://www.epa.gov/sites/production/files/2015-08/documents/economic_impact_of_renewable_energy_in_pennsylvania.pdf (Last accessed December 19, 2017). https://hbr.org/2007/06/the-black-swan-1 (Last accessed December 14, 2017). https://www.hsph.harvard.edu/nutritionsource/2015/06/12/talking-sustainability-with-dr-gary-adamkiewicz-part-1/ (Last accessed December 14, 2017). http://www.ren21.net/ (Last accessed November 27, 2018).

Part I Renewable Energy in Europe

1 Economic and Political Foundations of Effective Transition to Renewable Energy: Ordoliberalism, Polanyi, and Cities as Hubs for Climate Leadership and Innovation Mishka Lysack In Cape Town, South Africa, on June 19, 2018, C40 Cities released “The Future We Don’t Want—How Climate Change Could Impact the World’s Greatest Cities, ” a report about how billions of “people in thousands of cities around the world will be at risk from climate-related heatwaves, drought, flooding, food shortages, blackouts, and social inequality by mid-century without bold and urgent action to reduce greenhouse gas emissions” (C40 Cities).1 The impacts are deeply concerning: “Headline findings include that by 2050, 1.6 billion people living in over 970 cities, will be regularly exposed to extreme high temperatures, over 800 million people, living in 570 cities, will be vulnerable to sea level rise and coastal flooding, 650 million people, in over 500 cities, will be at risk of water shortages due to climate change, and 2.5 billion people will be living in over 1600 cities where national

1https://www.c40.org/press_releases/the-future-we-don-t-want,

last accessed November 17, 2018.

M. Lysack (*)  University of Calgary, Calgary, AB, Canada e-mail: [email protected] © The Author(s) 2019 D. Kurochkin et al. (eds.), Renewable Energy, https://doi.org/10.1007/978-3-030-14207-0_1

3

4     M. Lysack

food supply is threatened by climate change” (C40 Cities).2 However, the report also demonstrates how much can be done to mitigate these impacts, and provide “concrete examples of bold climate solutions that cities are delivering, which, if adopted at-scale, could help prevent the worst impacts of climate change” (C40 Cities).3 This report underlines the critical role that cities play in mitigating climate through transitioning to a cross-sector renewable energy system, retrofitting buildings for energy efficiency (e.g., energy passive buildings) and energy generation (energy plus buildings), and developing sustainable transportation and urban infrastructure for low/zero-carbon cities. As this report highlights the sense of urgency, “given our recent global shift into irreversible and serious climate change, ... [these actions on the part of cities, states/ provinces and countries] must continue to develop and deepen, and they must do so quickly, if we are to limit the damage of climate destabilization.” (Lysack, 2015, 445)4 The “global agenda of sustainability needs to be focused on ensuring the health and well-being of the biosphere on the planet, upon which all human endeavour is founded” (Lysack, 2008, 99).5 But how can c­ities accomplish this massive undertaking, and what cities could act as role models in transitioning to renewable energy, climate protection leadership, and hubs for innovation which are making significant progress toward these objectives? Is there a larger economic and policy context which facilitates and encourages the renewable energy transition and climate leadership of cities, rather than impedes or inhibits renewable energy and climate protection leadership? What are the key economic resources and analytic tools in Karl Polanyi’s work, and later, in the policy initiatives of ordo-liberalism as a foundation for the renewable energy transition in Germany that have contributed to these economic approaches that support leadership and innovation in renewable energy transition and climate protection 2Ibid. 3Ibid. 4Mishka Lysack. “Effective Policy Influencing and Environmental Advocacy: Health, Climate Change, and Phasing Out Coal.” International Social Work, vol. 58, no. 3, 2015, p. 445. 5Mishka Lysack. “Global Warming as a Moral Issue: Ethics and Economics of Reducing Carbon Emissions.” Interdisciplinary Environmental Review, vol. 10, no. 1–2, 2008, p. 99.

1  Economic and Political Foundations …     5

leadership? And finally, how do cities move forward effectively and strategically in their transition to renewable energy and climate protection and their engagement of citizens in municipal communities as direct economic participants? In this chapter, by way of illustration, I will explore the accomplishments and progress of two leading cities in Germany involved with a renewable energy transition and climate protection and the tools that they have used to move forward in their objectives for renewable energy and climate protection: the large city of Munich (1.4 million) through its municipal utility (Stadtwerke Munich, literally, city works ), and the smaller city of Bottrop, which is transitioning from a long coal history and fossil fuel-centered economy to becoming a city-leader in modelling a transition or renewable energy and climate protection.

Karl Polanyi: Restoring the Social and Environmental Dimensions of the Economy In 1944, as World War II was winding down, two key texts on the economy and politics appeared in the public domain: (1) Hayek’s The Road to Serfdom, which became the signature text for unfettered and deregulated market economies and the inspiration for successive waves of economic neo-liberalization over the decades; and more importantly, (2) Polanyi’s The Great Transformation: The Political and Economic Origins of Our Time, a lesser known book that embodies both a bold and detailed critique of unregulated market economies and their impacts on people and the environment as well as a compelling, historically grounded, and ethical economic alternative. While Karl Polanyi lived in Vienna in the 1920s and early 1930s just prior to the rise of fascism, Polanyi developed his economic and political insights in an “intellectual salon” discussing economics with Hayek and other economists. Polanyi was not only critical of Hayek and his economic/political neoliberalism (unregulated market, so-called free market economies, dominance of the economy in society, primacy of individual choice), but Polanyi developed an alternative perspective and critique of the modern economy and its impacts on

6     M. Lysack

both society and the environment in his best-known book, The Great Transformation. Polanyi explored the development and negative impacts of three macro-economic events: (1) Emergence of self-regulating market as it dis-embeds itself from its normal embeddedness in its social and environmental setting as it emerged during the Industrial Revolution. The dis-embedded dominance of the modern self-regulating market is in stark contrast to the historical norm where the economy is embedded in society and environment, rather than society and environment being embedded in the economy, as it is in contemporary society (2) Polanyi also explores the effects of the commodification of land, labour, and money as key structural components of the modern self-regulating market, providing us with key analytic tools for deconstructing and critiquing the so-called self-regulating market (3) Polanyi also developed alternative economic models, which included protective and reconstructive action through (a) legislation and regulation by government and (b) action by social movements and alternate business models (e.g., co-ops), which Polanyi called the “double movement.” All of Polanyi’s key ideas also re-surfaced in the emergence of ordo-liberalism as a key policy influence on the Renewable Energy Act of 2000, which laid the legislative foundation for the renewable energy transition in Germany. 1. Economy Embedded within Larger Society and within even Larger Context of Environment is Historical Norm; Society/Environment Embedded within Free Market Economy is Modern Exception For Polanyi (2001), the so-called self-regulating market economy is one where the economy and the larger social as well as environmental context have been overwhelmed by the self-regulating market to the point that the society and environment have been reduced to “an adjunct to the market.”6 In such society as our current global economy, instead of “economy being embedded in social relations, social relations are embedded in the economic system,” as the free market gains dominance

6Karl Polanyi. The Great Transformation: The Political and Economic Origins of our Time (Boston: Beacon Press, 2001), 60.

1  Economic and Political Foundations …     7

and influence, and becomes the dominant reality.7 Polanyi argues that society being embedded in the larger economy (rather than the economy being a subset embedded in the larger social and environmental network of relationships) is the historical exception of modernity rather than the norm, even though most of us have been influenced to believe that the society was always embedded within the economy from the beginnings of human society. Drawing on history and anthropological research, Polanyi demonstrates that prior to the emergence of the self-regulating market during the industrial revolution early in the 1800s, the economy was embedded in the larger network and web of social relationships, which in turn was embedded in the larger environment. Citing research in Thurnwald’s book Economics in Primitive Communities, Polanyi (2001) writes: “Markets are not found everywhere; their absence, while indicating a certain isolation and tendency to seclusion, is not associated with any particular development any more than can be inferred from their presence.”8 Based on this research, Polanyi concludes that the “outstanding discovery of recent historical and anthropological research is that man’s economy, as a rule, is submerged in his social relationships.”9As Block (2001) points out, “Polanyi’s intent is to show how sharply this concept differs from the reality of human societies throughout recorded history. Before the nineteenth century, he insists, the human economy was always embedded in society.”10 Polanyi’s research findings are instrumental in relativizing the so-called self-regulating economy from an allegedly unalterable fact of reality that “cannot be changed” to a social construction that can be altered through human intervention, and which also needs to be evaluated for its negative impacts on society and the environment. Becoming aware of this research finding often comes as a surprise to a majority of the populace, underlining how the direction of our economy and society is a choice, 7Ibid. 8Ibid.,

cited in Polanyi (2001, 60–61). 48. 10Fred Block. “Introduction.” In Karl Polanyi (Ed.), The Great Transformation: The Political and Economic Origins of our Time (Boston: Beacon Press, 2001), xxiii. 9Ibid.,

8     M. Lysack

and not an immutable “fact of nature.” But in an age of increasing economic inequality and accelerating climate change and environmental decline, this choice for re-configuring the place of the economy in relationship to society and the environment not only becomes an opportunity, but also becomes a necessity and ethical imperative. The originality of Polanyi’s economic and historical analysis is expressed in his conclusion that the economy de facto cannot become the larger encompassing reality for society and the environment, because such a relationship would be internally contradictory and inherently self-destructive. Polanyi eloquently describes both the social and the environmental outcomes, all of which are disturbingly familiar to us in our present day. “To allow the market mechanism to be the sole director of the fate of human beings and their natural environment… would result in the demolition of society…human beings would perish from the effects of social exposure; they would die as the result of acute social dislocation through vice, perversion, crime, and starvation. Nature would be reduced to its elements, neighborhoods and landscapes defiled, rivers polluted, military safety jeopardized, the power to produce food and raw materials destroyed.”11 During the Industrial Revolution, conservative philosophers and economists theorized that the self-regulating economy could and should be dis-­embedded from society, and persuaded political leaders of the desirability of ­pursuing what we now know was an inherently futile, and ultimately self-destructive agenda. 2. Fictitious Commodities: Reducing Labor, Land, and Money into Commodities and Tradable Goods The opening of Polanyi’s (2001), The Great Transformation provides a stark picture of the pervasive negative impacts of the market on these three key areas of human existence (land, labor, and money), and yet, also foreshadows the historical protective response of what he calls the “double movement.” Polanyi writes: 11Karl

Polanyi. The Great Transformation, 76.

1  Economic and Political Foundations …     9

Our thesis is that the idea of the self-adjusting market implied a stark utopia. Such an instrument could not exist for any length of time without annihilating the human and natural substance of society; it would have physically destroyed man and transformed his surroundings into a wilderness. Inevitably society took measures to protect itself, but whatever measures it took impaired the self-regulation of the market, disorganized industrial life, and thus endangered society in yet another way.12 The process of establishing the self-regulating market involved what Polanyi calls “fictitious commodities”: land, labor, and money. Indeed, “land, labour, and money are essential elements of industry; they must also be organized into markets; in fact, these markets form an absolutely vital part of the economic system.”13 Block (2001) suggests that Polanyi terms land, labor and money as “fictitious commodities” primarily largely “because they were not originally produced to be sold on a market. Labor is simply the activity of human beings. Land is subdivided nature, and the supply of money and credit in modern societies is necessarily shaped by government policies.”14 For Polanyi, the inherent contradiction and negative outcomes of reducing land, labor and money into commodities are not only ethical problems, but also underline the importance of human governance and the necessity of the state to counteract the negative forces of the “free” market. Regarding land, Polanyi (2001) insists that to “isolate it and form a market for it was perhaps the weirdest of all the undertakings of our ancestors. Traditionally, land and labour are not separated; labor forms part of life, land remains part of nature…The economic function is but one of the many vital functions of land. It invests [human] life with stability; it is the site of [human] habitation; it is a condition of… physical safety; it is the landscape and the seasons.15 Block (2001) echoes these sentiments from an ethical perspective, by arguing that “it is

12Ibid.,

3. Polanyi. The Great Transformation, 75. 14Fred Block. “Introduction.” In Karl Polanyi (Ed.), The Great Transformation, xxv. 15Karl Polanyi. The Great Transformation, 187. 13Karl

10     M. Lysack

simply wrong to treat nature and human beings as objects whose price will be determined entirely by the market. Such a concept violates the principles that have governed societies for centuries: nature and human life have almost always been recognized as having a sacred dimension. It is impossible to reconcile this sacred dimension with the subordination of labor and nature to the market.”16 3. Double Movement: Protective Responses of Government and Society to Correct Negative Impacts of Free Market Economy The last, and perhaps most important, tool that Polanyi has developed is his notion of the “double movement.” The unregulated market is “constantly pushing human societies to the edge of a precipice. But as the consequences of unrestrained markets become apparent, people resist; they refuse to act like lemmings marching over a cliff to their own destruction.”17 Block underlines how elements of society counteract this tendency: “Instead, they retreat from the tenets of market self-regulation to save society and nature from destruction. In this sense, one might say that disembedding the market is similar to stretching a giant elastic band.”18 Polanyi proposes that the double movement could be “personified as the action of two organizing principles in society, each of them setting specific institutional aims, having the support of definite social forces and using its own distinctive methods. The one was the principle of economic liberalism, aiming at the establishment of a self-regulating market…the other was the principle of social protection aiming at the conservation of man and nature as well as productive organization, relying on the varying support of those immediately affected by the deleterious action of the market…and using protective legislation, restrictive associations, and other instruments of

16Fred 17Fred 18Ibid.

Block. “Introduction.” In Karl Polanyi (Ed.), The Great Transformation, xxv–xxvi. Block. “Introduction.” In Karl Polanyi (Ed.), The Great Transformation, xxv.

1  Economic and Political Foundations …     11

intervention as its methods.”19 More specifically in terms of protecting both humanity and nature, Polanyi was blunt and clear about his deep concern that “leaving the fate of soil and people to the market would be tantamount to annihilating them. Accordingly, the countermove consisted in checking the action of the market in respect to the actors of production, labor, and land.”20 For Polanyi, countermoves to protect humanity and nature can originate on the macro level of government in a “top-down ” movement as legislation or programs, or alternately, it can start on the micro/mezzo level from the “bottom-up ” through historical social movements, such as the women’s rights and suffragette campaign, housing and anti-poverty campaigns, or the abolition of slavery campaign. Regarding an example of a “top-down” approach, Polanyi was quite sympathetic to the New Deal initiative led by US President F. D. Roosevelt to bring in progressive social legislation to combat the Great Depression “so fierce that in its course the New Deal started to build a moat around labor and land, wider than any ever known in Europe.”21 For Polanyi, the negative impacts of the Great Depression were so severe that Roosevelt and his government needed to counteract and neutralize as much of the toxic influence of the Great Depression as possible, building a protective barrier for any initiatives in the U.S. At the same time, the larger policy context that President Roosevelt and his government provided was an empowering legislative envelope that both removed barriers as well as developed strategic pathways for counter-movement actions to be implemented, developing innovative and ground-breaking social policy legislation to address issues such as caring for the elderly, Social Security, the U.S. minimum wage, caring for returning military veterans, child labor laws, and for bank deposits insurance. As innovative and enabling legislation that created a policy context for innovative interventions, all of these actions of the Roosevelt government are strikingly parallel to the implementation of the Renewable Energy Act of 2000 in Germany that

19Karl

Polanyi. The Great Transformation, 138–139. 137. 21Ibid., 211. 20Ibid.,

12     M. Lysack

opened the door and provided a legislative framework and a r­ e-alignment of government resources to create the conditions for the renewable energy transition in Germany to emerge, thrive and to achieve significant milestones. Polanyi (2001) was also interested in endeavors utilizing a bottom-up approach on the mezzo/community scale, such as Robert Owen’s work with cooperatives where workers and owners were one and the same. In 1817, Owen expressed deep concern that the transformation of agricultural and small communities into a web of uncontrolled manufacturing throughout slums of emerging cities “will produce the most lamentable and permanent evils, unless its tendency be counteracted by legislative interference and direction.”22 For Owen, the Industrial Revolution “was causing a social dislocation of stupendous proportions, and the problem of poverty was merely the economic aspect of this event. Owen justly pronounced that unless legislative interference and direction counteracted these devastating forces, great and permanent evils would follow.”23 In so doing, Robert Owen anticipated the later social critiques of industrial England by authors such as Charles Dickens in David Copperfield (1849). However, of direct interest to this chapter, Owen’s interest in innovative business models for ownership for workers in England is an intriguing parallel to the increase in community-based renewable energy cooperatives in Germany in both rural and urban centers, which make up a significant part of the ownership of renewable energy that developed rapidly after the passage of the Renewable Energy Law (Erneuerbare Energien Gesetz ) in Germany in 2000. Polanyi’s description of the “double movement” to counteract the negative impacts of the so-called “free market” is an excellent way of conceptualizing the dynamics in economies in its relationship to society and the environment. Both ordoliberalism as well as the renewable energy transition in Germany which ordo-liberalism strongly influenced are illustrations of the restorative and generative nature of Polanyi’s “double movement.”

22Karl

Polanyi. The Great Transformation, 134. 135; see also 134.

23Ibid.,

1  Economic and Political Foundations …     13

Ordo-Liberalism and Renewable Energy Transition in Germany 1. Ordo-liberalism or the Freiburg School: Economy with Rules and “Referees” One historical example of Polanyi’s ideas such as a restorative “double movement” being enacted in the economic life of a nation would be that of ordo-liberalism (‘ordo’ meaning ‘order’), or what is sometimes called the Freiburg School, which emerged in the period of economic reconstruction of Germany at the end of World War II. After the defeat of the Nazi regime in Germany, it became apparent that the German economy and its capacity to support itself was in ruins as much as the physical built environment of Germany; indeed, much of Europe’s economies were seriously damaged. In what was to come to be known as the Marshall Plan, the U.S. provided leadership to the world’s countries to partner with Germany and the countries of Western Europe to reconstruct the European economy. The Marshal Plan which was extraordinarily successful in harnessing energy for the reconstruction of the German economy was led by Ludwig Erhard, then Economic Affairs Minister in the German Federal Government from 1949 to 1963 (and who later was to become the Chancellor of Germany), who used ordo-liberalism as the primary economic approach for public policy in Germany. The economic approach of ordo-liberalism bears similarities to the discussions of Karl Polanyi in his masterwork The Great Transformation in recognizing that the unregulated market is intrinsically dysfunctional and self-destructive through its exploitation of land and nature/environment and human labor as fictitious commodities. As described earlier, Polanyi showed how the economy became dis-embedded from its social (and environment) setting during the Industrial Revolution, becoming the context for society and the environment rather than the reverse (society and the larger environment being the setting for the economy), thus requiring a “double movement” or correction/interference through governmental and societal measures to bring the economy back in line

14     M. Lysack

with its desired goals of generating wealth and economic value for the common good of society and the protection of the environment. Polanyi’s analysis bears a striking resemblance to the Freiburg School or ordo-liberalism as implemented by the Germany’s Economic Minister Erhard, in seeing the economy as functioning to generate positive outcomes, but where the government needs to intervene as a referee to enforce the rules for the proper functioning of the economy. Using a sports metaphor, renewable energy journalist Craig Morris (Morris and Jungjohann 2016) explains: “If the market is a football game, then ordo-liberals want referees. The refs may sometimes make bad calls, but the game is fairer with them than without. Neoliberals, in contrast, want competing teams to decide whether a foul was committed without refs.”24 Morris and Jungjohann (2016) argues that having no referees has its clear disadvantages for everyone: “…Eventually, however, players who make do without referees end up squabbling over an alleged foul, and the game is held up. On markets, companies that have to work things out among each other also spend a lot of time litigating instead of focusing on their core business. This situation favours large companies with big legal departments.”25 Morris and Jungjohann (2016) concludes by clarifying that the “real choice that we face is therefore not between allegedly free, unregulated markets, but between rules set forth by the government before the game starts and rules set forth by courts while the game is underway.”26 Neoliberalism is like a sports game where there are limited or few rules (and the market is therefore “self-regulating,” or reliant on the so-called “invisible hand” of economist Adam Smith) with no referees (government, courts) to ensure its proper functioning. As a writer in the German newspaper Handelsblatt explains, “The market economy has always been a highly imperfect system that seeks order, stability and perfection without ever being able to achieve it. It is a natural imbalance

24Craig Morris and Arne Jungjohann. Energy Democracy: Germany’s Energiewende to Renewables (Cham, Switzerland: Palgrave Macmillan/Springer Nature, 2016), 168. 25Ibid. 26Ibid., 168.

1  Economic and Political Foundations …     15

system that stumbles form one instability to the next. …Wilhelm Röpke [a German economist considered by many as the co-founder of Ordo-liberalism] already knew that the market economy cannot produce the conditions it needs for life. It is in need of protection, care and permanent correction. It is a process of approach, not a final state… (the market economy) sees itself as a man-made principle of order in which state authorities must intervene time and again to avoid anarchy, mass poverty, and monopolies.”27 Such a description could hardly be interpreted as a ringing endorsement of the self-regulating market of neo-liberalism. However, it is a clear description of how ordo-liberalism sees the market as necessary, but in constant need of oversight and correction through both rules (laws and legislation) and referees (government) for it to function without destroying itself and its foundations (i.e., Polanyi’s fictitious commodities of land/environment and labor). Other academics and researchers (Bonefeld 2013) have identified how ordo-liberalism contributes to the rise of the optimal conditions for society to play a role and communities to take leadership. Bonefeld argues that according to Ordo-liberalism, “there are things more important than GDP in as much as free economy depends on the formation of the moral and social preconditions of market freedom. The social facilitation and moral embedding of free economy are fundamental to the ordo-liberal conception of a human economy”28. The free market intrinsically weakens and destroys the social fiber of the surrounding society and the larger environmental context, and requires constant vigilance, correction, and countervailing actions. Bonefeld argues that the ordo-liberal approach and its attendant policies must be “pursued relentlessly to sustain and maintain the moral sentiments of economic liberty in the face of the destructive sociological and moral effect of free economy. For the ordo-liberals, if unchecked, free economy destroys the moral and social fabric of society.”29 27Craig

Morris and Arne Jungjohann. Energy Democracy: Germany’s Energiewende to Renewables, 166. 28Werner Bonefeld. “Human Economy and Social Policy: On Ordo-Liberalism and Political Authority.” History of the Human Sciences, vol. 26, no. 2, 2013, p. 106. 29Ibid., 119.

16     M. Lysack

In a manner strongly reminiscent of Polanyi’s analysis of the modern market economy and its need for protective intervention by the state and other social forces in a “counter-movement,” Bonefeld (2013) highlights how the state plays an indispensable role in enabling and correcting the functionality of the economy: “ordo-liberal social policy presupposes an ever-vigilant state that governs with strong state authority to secure the capacity of society to cope with economic shocks… For free economy to succeed, it needs to be ordered. It is an ordered economic freedom, and the purpose of government is to provide that order.”30 If the state and other social-legislative countermeasures are successful, it has the potential of opening the way for individuals, organizations, and businesses and communities to enter what Röpke (one of the founders of ordo-liberalism) called “civitas,” “an economy that empowers the individuals as self-provisioning, self-responsible and self-reliant entrepreneurs of their own life-circumstances.”31 As we shall see later, this description of “civitas” bears a resemblance to economic conditions and policy frameworks that would facilitate and support economically engaged citizens, NGOs/co-ops, communities, and regions to become empowered new stakeholders in the emerging renewable energy economy in Germany, Denmark, and other countries, as well as in cities such as Munich and Bottrop. 2. Ordo-Liberalism’s Influence in Fostering Renewable Energy Transition in Germany: Innovative Economic Approaches to Solving Economic, Environmental, and Social Problems Having reviewed the key resources of economist and historian Karl Polanyi of dis-embeddedness/embeddedness, fictitious commodities, and double movement, the question arises as to whether there are any examples of economic approaches that exemplify these core ideas being translated into actual practice. Another prominent German journalist

30Werner Bonefeld. “Human Economy and Social Policy: On Ordo-Liberalism and Political Authority.” History of the Human Sciences, vol. 26, no. 2, 2013, p. 109. 31Ibid., 112.

1  Economic and Political Foundations …     17

and social commentator, Jürgen Jeske, continues in the same ordo-­ liberal tradition in his description of the “visible hand of economic prosperity” as the economic policy framework “championed by former Chancellor Ludwig Erhard, the father of its [Germany’s] post-World War II ‘economic miracle’…in which the state lays the groundwork for a functioning market economy by actively managing the legal framework… It is for this reason that a return to ordo-liberalism is more important than ever…Erhard’s vision of a social market economy was a third way, an alternative to both large-scale intervention [communism] and the risks of laissez-faire liberalism [neo-liberalism]…Unguided capitalism undermined itself, according to Erhard, as monopolists cornered markets and captured the state.”32 Such bears something of a resemblance to the period of economic history described by Polanyi as leading up to the collapse of the post-World War I German government through the rise of economic monopolies and cartels (Toke and Lauber 2007) that preceded the rise of the Nazi state under Hitler. “The Freiburg School authors (ordoliberals) became influential above all in Germany, where they inspired government policy particularly in the 1950s through (economics affairs minister and later chancellor) Erhard and the social market economy which he launched.”33 But ordo-liberalism also provided the economic foundation for the renewable energy transition or Energiewende that emerged in Germany after the passage of the Renewable Energy Act in 2000 by the German Federal Government (for historical overviews of the Energiewende, see Lauber and Mez 2004; Lauber 2002; for recent overviews, see Hinrichs-Rahlwes 2013; Morris and Jungjohann 2016). This innovative legislative initiative generated a market redesign that allowed ordinary German citizens and communities to participate as new

32Juergen

Jeske. The Visible Hand of Economic Prosperity. Project Syndicate, February 25, 2015. Retrieved from: https://www.project-syndicate.org/commentary/germany-economic-progress-policymaking-by-j-rgen-jeske-2015-02?barrier=accessreg, last accessed November 17, 2018, 3, 4, 8, 9. 33David Toke and Volkmar Lauber. “Anglo-Saxon and German Approaches to Neoliberalism and Environmental Policy: The Case of Financing Renewable Energy.” Geoforum, vol. 38, no. 4, 2007, p. 679.

18     M. Lysack

empowered stakeholders, or shareholders in the new emerging renewable energy economy through diverse models of business ownership. In this respect, the German Energiewende is very similar to Polanyi’s idea of the corrective “double movement,” which, in this case, involved the German government intervening in a monopolized energy market dominated by fossil fuel utilities as energy incumbents. By establishing feed-in tariffs (FITs) and other measures that re-designed the energy market, the German Federal Government enlarged the number of players in the energy market by giving priority for both grid access and market access to generators of renewable energy over those producing fossil fuel-based energy. Toke and Lauber (2007) insist that the use of FITs as the heart of this legislative initiative not only generated better outcomes, but is also “associated with an institutional tradition that places emphasis on giving competitive opportunities to new marker entrants in order to break up concentrations of market power by incumbents.”34 Unlike adherents of the Chicago School of neoliberal approaches to the economy who advocate the “self-regulating market” which inevitably shrinks to a few incumbents or a monopoly, leaders in ordo-liberalism in Germany advocated for a market with rules where government would intervene to enhance the market with more competition, rather than permit the diminishing number of market incumbents to shrink the market to an economic elite. As Toke and Lauber (2007) point out, the “view of the ‘ordo-liberals’ of the ‘Freiburg School’ was conditioned in particular by the experience of pre-war Germany when the economy was prepared for war by the Nazi regime. Monopolies and cartels grew in influence and laissez-faire ‘was gradually transformed into a corporatist system’ (Giersch et al. 1992, 27).”35 In this manner, Toke and Lauber (2007) echo Polanyi’s (2001) earlier insights regarding the economic

34David Toke and Volkmar Lauber. “Anglo-Saxon and German Approaches to Neoliberalism and Environmental Policy: The Case of Financing Renewable Energy.” Geoforum, vol. 38, no. 4, 2007, p. 677. 35Ibid., 679.

1  Economic and Political Foundations …     19

conditions preceding and accompanying the rise of fascism in pre-WW II Germany.36 Like Polanyi who stressed the importance of intervening in the dysfunctions of the market in the interests of the common good, Toke and Lauber (2007) maintain that the “social market economy stresses an obligation that serves the public good that goes with property, and the importance of keeping open the possibility to acquire property for newcomers. It stresses limiting the power of economic actors as well as of political actors.”37 In Germany, rather than prioritizing the lowest cost above all else and excluding other values such as breaking up concentrations of power for new market participants, or technological innovation, Germany decided to: (1) increase competition; and (2) prioritize renewable over fossil fuel electricity for promoting environmental sustainability and climate protection, giving renewable energy generators (whether they be individual German citizens, energy or farming cooperatives, or cities) priority access to both the electrical grid and energy markets. The advantage of the German approach to renewable energy was that it was “simple and permit[s] growth in volume if a sufficiently high fixed tariff is set and investor…confidence is secured, goals that were successfully achieved.”38 Through a market re-design using a FIT system, the government also promoted the development of (3) new innovative technologies to increase Germany’s competitiveness as well as enhance the (4) geographical distribution of market participants in across Germany. These combine to thereby (5) increase competitiveness and (6) decrease costs of renewable energy. In the German approach to renewable energy, their “systems also have an advantage in that different fixed tariffs can be set for different renewable energy technologies according to the stage of their development.”39 In Germany’s use of this market re-design in their Renewable Energy Law, co-authored by Dr. Hermann Scheer, an MP in 36Ibid.,

245–256. 680. 38David Toke and Volkmar Lauber. “Anglo-Saxon and German Approaches to Neoliberalism and Environmental Policy: The Case of Financing Renewable Energy.” Geoforum, vol. 38, no. 4, 2007, p. 680. 39Ibid., 680. 37Ibid.,

20     M. Lysack

the Federal German Parliament, “the later development of renewable energy support policy designs was influenced by the earlier ordoliberal emphasis on control of monopoly practices.”40 This linkage that Toke and Lauber (2007) make between ordoliberal ideas and the subsequent development of the policy platform for the renewable energy transition in Germany substantiates the similar and more recent position of renewable energy analysts Morris and Jungjohann (2016). Not infrequently, the criticism is leveled against the initial German approach to its market re-design for promote renewable energy in the Renewable Energy Law of 2000 is not market-based at all when compared to approaches to expanding the renewable energy, such as tradable green certificates. However, this argument was rejected by the European Commission in 2005, which argued that “both instruments are equally market-based in that the regulatory body sets either the price or the quantity and leaves the determination of the other to the market.”41 California’s use of emissions trading for reductions of GHG emissions, similar to the approach used in the old UN Kyoto Protocol, revealed that this approach “will most likely make for slow progress on emissions reductions and inhibit the development of new technologies,” neither of which are desirable traits for an effective economic policy in an era of accelerating climate change.42 In addition, the payments to generators of renewable energy in Germany also acted to internalize the externalized costs of energy (such as the health impacts of coal-fired electricity generation) so that customers are paying the true environmental cost of energy, unlike current neoliberal models of the market where environmental costs are externalized and therefore are not borne by the electricity generator, but rather are dumped as additional costs on society and the environment as a whole. The “relevant point here is that the internalisation of external costs plays an important role in ordo-liberal theory.”43 40Ibid. 41Ibid. 42David Toke and Volkmar Lauber. “Anglo-Saxon and German Approaches to Neoliberalism and Environmental Policy: The Case of Financing Renewable Energy.” Geoforum, vol. 38, no. 4, 2007, p. 681. 43Ibid., 683.

1  Economic and Political Foundations …     21

Toke and Lauber (2007) conclude that the renewable energy transition policy approach that dramatically increased the amount of renewable energy in Germany while making hundreds of thousands of German citizens key and direct economic actors and new empowered stakeholders and/or shareholders in the renewable energy economy was “influenced by the social market economy and the influence of ordo-liberalism on its emergence. …it developed in an institutional setting that was shaped by ordoliberal preferences and its concern for the common good. Thus it emphasizes competition, opportunities for smaller market players against monopolistic practices, and the internalization of external costs.”44 All of these key ethical building blocks of Germany’s approach to promoting renewable energy through its Renewable Energy Law of 2000—(1) concern for the common good, (2) expanding the market to include new economic actors (such as individual citizens, communities, co-ops) as new empowered stakeholders in the emerging renewable energy economy, and (3) internalizing the externalized costs of energy production—are not only congruent with the economic vision articulated in Polanyi’s (2001) model of an economy embedded in its social and environmental setting, but they are also key building blocks for a renewable energy transition and the sustainable/socially just economy which accelerating climate change and environmental deterioration requires us to build.

Cities as Hubs and Incubators for Leadership and Innovation in the Renewable Energy Transition and Climate Protection in Germany As one of the two co-authors of the Renewable Energy Law of 2000 in Germany (the other author was Hans-Josef Fell) which developed policy conditions that fostered the renewable energy transition, Dr. Hermann Scheer, an MP in the German Parliament or Bundestag for

44Ibid.,

685.

22     M. Lysack

about 30 years, is widely acknowledged to have been a key leader in the Energiewende in Germany as well as the movement for renewable energy internationally, serving as the President of EUROSOLAR (European Association for Renewable Energy) and Chair of the World Council for Renewable Energy. In his last book, The Energy Imperative (2012), Scheer provides an engaging and insightful overview of the Energiewende, its past, present, and possible future, highlighting both the challenges and barriers as well as the urgency and the opportunities for the renewable energy transition. Similar to Polanyi’s (2001) emphasis on the “embedded” economy providing social and environmental co-benefits as well as sustainable economic development, Scheer (2012) outlines the priority of having a “timely ordoliberal framework for [a] socially acceptable power supply” and continuation of the Energiewende in Germany.45 Through the Renewable Energy Act as a federal policy platform, Scheer (2012) argues that the “statutory primacy of renewable energy constitutes a regulatory market framework, one…legitimated by its goal of protecting public welfare. This is the central tenet of ordoliberalism, and the exact opposite of neo-liberalism, whose social ‘damage potential’ has been proven in recent years.”46 From Scheer’s (2012) perspective, ordoliberalism bears these key characteristics that qualify it to be the most effective and preferred model of public governance: “the prevention of economic monopolies, the principle of competitive economy, and social obligations which must be met by all economic participants equally— principles which lead to a social economy.”47 In a time of accelerating climate change and environmental degradation, the fact that “these social obligations must be ecological obligations is now evident, thanks to the high social cost of using environmentally damaging resources.”48 Access for all economic actors to the economy and market is germane to the ordoliberal approach: ordoliberalism “reflects the indispensability of public infrastructure which must be equally accessible to all economic 45Hermann Scheer. The Energy Imperative: 100 Percent Renewable Now (New York: Earthscan, 2012), 114. 46Ibid., 115. 47Ibid. 48Ibid.

1  Economic and Political Foundations …     23

participants, producers as well as consumers, and under the same conditions…this is what Jan Tinbergen, the winner of the first-ever Nobel Prize for Economics in 1969, calls ‘social overhead capital’…This was a basic principle common to all economic theories before neoliberalism levered it out and forced public infrastructure to meet target yields.”49 The legislative primacy of renewable energy under the federal EEG (Renewable Energy Law) provides transparency as well as economic equality through elegance of its design: (1) priority of grid access for renewable electricity and other renewable energy; (2) stable income which covers costs through a reasonable return on financial investment, and which declines predictably to avoid windfall runaway profits; and (3) no limit or ceiling on the amount of renewable electricity that is fed into the grid. By the mid 2000s after only a few years, it was becoming increasingly clear that the German approach was proving to be remarkably effective compared with other energy/climate change policy approaches (which could include policy initiatives such as a coal phase-out policy in Alberta, Canada, see Lysack, 2015): “Numerous public policy frameworks and renewable energy introduction programs are being explored…The most effective can be found…especially in Germany at a national…level.”50 The EEG also fosters the conditions for technological innovation in order to reduce costs and augment the yield of renewable electricity generated, leading in turn to more energy efficiencies. As the renewable electricity capacities increased in Germany, the German legislative framework in the EEG created the conditions for not only reducing GHG emissions, but also increased energy self-sufficiency and independence by reducing energy imports, and supporting “regional economic structures and going hand-in-hand with increasingly decentralized energy supply,” creating increasing social and environmental value, rather than only monetary value.51 This trend was noticed by other renewable energy experts and analysts such 49Hermann

Scheer. The Energy Imperative: 100 Percent Renewable Now (New York: Earthscan, 2012), 115. 50Peter Droege. The Renewable City: A Comprehensive Guide to an Urban Revolution (WileyAcademy, 2006), 96. 51Peter Droege. The Renewable City: A Comprehensive Guide to an Urban Revolution, 117.

24     M. Lysack

as Droege (2009): renewable “energy exemplifies and entirely different paradigm, that of decentralization, local resource reliance and regional autonomy,” all of which are effectively implemented at the municipal scale.52 Municipalities and regions were ideal economic participants that could step into these new market designs and localized economies. Cities and regions facilitate the shift of electricity into public hands, allowing oversight and control to be democratically embedded in the local communities. Scientific studies and research into feasibility and economic potential of renewable electricity and other energy sectors on a municipal scale proliferated internationally, including in Germany, giving increasing credence to the understanding of the strategic energy and economic value of ownership and control over energy by cities and local communities. Droege (2009) underlines that this approach of local control of renewable energy on a municipal scale is emerging as a best strategic practice for transitioning to renewable energy: “Direct municipal control over generation proves to be the best way to work toward a renewable portfolio. …having control over local energy production provides much more ability to rapidly respond to the new demands of an increasingly renewable world, while also offering the strength of being able to build up efficient and renewable assets over time, compounding the gains of good practice – instead of being at the whim of generators and distributors without accountability.”53 Interestingly, Droege points to Munich in Germany as a leader and exemplar of this approach, a city to which we will return later in this chapter. For Droege (2009), one of the key challenges that remain to be addressed and shifted is the institutional arrangements of neoliberalism and the fossil fuel era with “centralized, one-way and oligarchic power supply structures, and a stark separation between civil and energyindustrial realms of decision-making. A central feature of this separation included the rampant privatization of municipal and other public 52Peter Droege. 100% Renewable Energy: Energy Autonomy in Action (London: Earthscan, 2009), 6. 53Peter Droege. 100% Renewable Energy: Energy Autonomy in Action (London: Earthscan, 2009), 27.

1  Economic and Political Foundations …     25

facilities throughout the twentieth century and the modernist maxim of maintaining a strict divide between mass consumers and producers.”54 Ordo-liberalism and the renewable energy transition in Germany challenge these practices, re-enfranchising ordinary citizens, communities and cities to be energy producers and managers. Following the same line of reasoning as Droege (2009) and Sheer (2012) underlines how these studies “regularly conclude that solar power generators installed in inner cities alone are sufficient to cover more than half the population’s power needs. Municipal utilities, whether in small towns such as Wolfshagen in North Hesse or large conurbations such as Munich, are beginning to divert their investments towards renewable energy and want to win back their role as power producers.”55 The realization of the clear substantial economic benefits of local renewable energy are steadily becoming more compelling not simply to cities and regions, but also to those in the investment/credit sector: “no large investment risks, the permanent avoidance of fuel costs, no installation delays, general adherence to budgets and short installation times which make capital returns faster.”56 Scheer does not stop with ownership of renewable energy generation by municipalities, regions and communities. Scheer (2012) also sees the strategic value of both electricity generation as well as transmission grids: transmission “networks, too must be socialized in a democratic manner: not only must they become public property, they must also be subjected to efficient, democratic control. This is the case in Denmark and Sweden, for example, where transmission networks are exclusively publically owned.”57 In addition, as one extends the strategic possibilities beyond even these domains, Scheer perceives even further potential opportunities and advantages for what he calls “infrastructure synergies,” which often are independently operated and privately owned networks, such as electricity networks linked to transportation and railway networks, or water 54Ibid.,

19.

55Hermann

2012), 112. 56Ibid., 113. 57Ibid., 127.

Scheer. The Energy Imperative: 100 Percent Renewable Now (New York: Earthscan,

26     M. Lysack

distribution networks linked with hydro power generating renewable electricity. These developments that Scheer and Droege have highlighted are also very similar to the recent emergence of cross-sector coupling (Sektorkopplung), where energy cross-linking in sectors such as electricity, heating/cooling, transportation and industrial production is regarded as a key strategy in reducing GHG emissions and enhancing sustainable energy deployment as part of a larger deep decarbonization of society, as explored in detail by international networks of researchers in the UN’s Sustainable Development Solutions Network in reports such as Pathways to Deep Decarbonization in Germany (Hildebrandt et al. 2015). It is in this context that Scheer (2012) underlies the major role of leadership that cities in Germany have been playing in the renewable energy transition, frequently through their municipal utilities: “It is the municipal power companies above all who are seizing this opportunity to become active participants in structural change, for they see in renewable energy and the expansion of heat and power cogeneration the opportunity to take up the role of producer once again, a role from which they had been rejected over the past decades.”58 As sustainability analyst Anna Leidreiter notes: “Indeed, since 2007 there have been about 170 municipalities which bought back the grid from private companies. Cities that have chosen to not privatize—like Frankfurt and Munich—are now showing that it’s worth keeping energy supply in municipal hands. Both major German cities have a 100% renewable energy target.”59 As cities continue to take up the challenge of climate protection and a renewable energy transition, the UN’s Sustainable Development Goals (SDGs) are being invoked as an empowering analytic and orienting framework in which to develop their cross-sector and multiobjective sustainability and transition masterplans to implement SDG 11 on Sustainable Cites and Communities: “make cities and human

58Hermann Scheer. The Energy Imperative: 100 Percent Renewable Now (New York: Earthscan, 2012), 77. 59Leidreiter, Anna. Hamburg Citizens Vote to Buy Back Energy Grid (2013). Retrieved from: https://energytransition.org/2013/10/hamburg-citizens-buy-back-energy-grid/, para. 6.

1  Economic and Political Foundations …     27

settlements inclusive, safe, resilient and sustainable.”60 Using such a tool makes sense not only because cities are at risk and are vulnerable and susceptible to changes and disturbances precipitated by climate change and environmental decline, but also the fact that the “vast majority of major settlement centres have become dependent on a single set of expiring infrastructure systems: fossil fuels.”61 At the same time, cities are key hubs and centres for change, embodying an “exhilaratingly refreshing conceptual yet practice framework. It spans all aspects of the urban renewable energy revolution, delineating the cultural and economic shift to local and regional autonomy and sufficiency, manifest in the …domains of land use and transport efficiency, finance, regulation, demand management and distributed renewable energy generation technology.”62 Such an orientation is also very timely, given the increasing rate of urbanization (in 2015, 3.9 billion people [54%] live in cities and generated 85% of GDP and 70% of global GHG emissions) as well as the fact that the build-out of new municipal infrastructure for sustainability climate protection will be similar to the previous, massive municipal infrastructure build-out which has been taking place since 1850s. It is to two examples of municipal leadership in renewable energy transition and climate protection on different levels of scale that we now turn to illustrate how cities can provide exemplary leadership in climate protection and a renewable energy transition using both similar and innovatively different pathways: the large city of Munich in Bavaria in southern Germany, and the small city of Bottrop in the industrial coal region (known as the Ruhr) of North-Rhein Westphalia in western Germany. Munich: Leveraging a Municipal Utility as an Effective Tool of Renewable Energy Transition and Climate Protection As a city of 1.4 million and the third largest municipality in Germany, Munich faces considerable challenges in transitioning to a carbon-free 60https://www.un.org/sustainabledevelopment/cities/,

last accessed November 17, 2018. Droege. The Renewable City: A Comprehensive Guide to an Urban Revolution (WileyAcademy, 2006), 27. 62Ibid., 24–25. 61Peter

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community and decarbonizing its economy and energy systems, given that it emits 8 million tons of CO2 or 6.5 tones per capita.63 Despite these challenges and the challenge in the IPCC report on climate change 2007 where the EU environmental ministers established the goal of reducing greenhouse gas emissions by more than 50% percent worldwide or less than two tons of emissions on average per capita by the middle of the century, sustainability analysts insist that “with existing technologies alone, this goal can be achieved and even exceeded in large cities such as Munich.”64 In fact, climate protection leaders argue that Munich can achieve its targets by cutting “its CO2 emissions by up to 90 per cent by mid-century by developing highly efficient building and mobility structures and adapted renewable and low carbon infrastructures.”65 According to a study by researchers at the Wuppertal Institute for Climate, Energy and Environment commissioned by Siemens (Lechtenboehmer et al. 2009), the “most promising methods for reducing emissions are better insulation in buildings, more efficient heating and power cogeneration systems, energy efficient appliances and lighting systems, and power generation from renewable resources and low-carbon power plants.”66 By any measure, the renewable energy goals of Munich are ambitious: 100% RE electricity by 2025, and 100% RE heat by 2040 for the Munich and its hinterland. However, city sustainability researcher Lechtenboehmer (2009) insists that cities like Munich are well equipped and have the capacity to address these serious challenges: “Metropolitan area represent both a high concentration of causes and consequences of climate change and a high capacity 63Stefan Lechtenböhmer. “Paths to a Fossil CO2-free Munich.” In Peter Droege (Ed.), 100% Renewable Energy: Energy Autonomy in Action (London: Earthscan, 2009), 87–92, 88. 64Stefan Lechtenböhmer, Dieter Seifried, and Kora Kristof. Urban Infrastructure: Munich Edition—Paths Toward a Carbon-Free Future (2009). Siemens AG. Retrieved from: https:// www.mobility.siemens.com/mobility/global/SiteCollectionDocuments/en/sustainable-munich-2009-en.pdf, last accessed November 17, 2018, 5. 65Stefan Lechtenböhmer. “Paths to a Fossil CO2-free Munich.” In Peter Droege (Ed.), 100% Renewable Energy: Energy Autonomy in Action (London: Earthscan, 2009), 87–92, 87. 66Stefan Lechtenböhmer, Dieter Seifried, and Kora Kristof. Urban Infrastructure: Munich Edition—Paths Toward a Carbon-Free Future (2009). Siemens AG. Retrieved from: https:// www.mobility.siemens.com/mobility/global/SiteCollectionDocuments/en/sustainable-munich-2009-en.pdf, last accessed November 17, 2018, 6.

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for action. High economic capacity, concentration of scientific and technological as well as economic know-how and decision-making competences puts them into the pole position to develop the way to more climate-friendly and decarbonized lifestyles and economies.”67 In the scenarios developed for Munich by researchers at the Wuppertal Institute (Lechtenboehmer et al. 2009), strategies have been developed and implemented for the decarbonization of the key energy sectors, including heating/cooling of the built environment, electricity, and transportation. Energy demand to support the more sustainable infrastructure will need to be “supplied by more than 60 per cent from a mix of local and regional as well as imported renewable energies, more than half of it coming from renewable electricity and the rest from renewable heat and biofuels.”68 While it is certainly the case that high amounts of investment will need to be made in Munich by the local government, citizens, and the business sector alike, researchers maintain that a strong business case can be made for the enormous costs of the extensive decarbonization of Munich’s building heating/cooling, electricity, and transportation sectors by profiling Munich as a low carbon leader, increasing the “win– win” potential of these sustainability investments being completed. The co-benefits of Munich taking this pathway would be three-fold: (1) substantial job creation and fostering the emergence of new markets generated through investment in low carbon infrastructure; (2) this investment is an effective hedge against future increasing prices and risks of supply challenges, generating energy security and independence; and (3) Munich has the opportunity to enhance its reputation as a sustainability leader first mover, which can not only generate a positive reputation, but which can also encourage the development of business opportunities in the market of sustainable city infrastructure.69

67Stefan Lechtenböhmer. “Paths to a Fossil CO2-free Munich.” In Peter Droege (Ed.), 100% Renewable Energy: Energy Autonomy in Action (London: Earthscan, 2009), 87–92, 87. 68Ibid., 91. 69Stefan Lechtenböhmer. “Paths to a Fossil CO2-free Munich.” In Peter Droege (Ed.), 100% Renewable Energy: Energy Autonomy in Action (London: Earthscan, 2009), 87–92, 92.

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Like many other municipalities in Germany, Munich works through its own municipal utility or Stadtwerke Muenchen SWM (literally “Cityworks Munich”) to initiate and accomplish its objectives for its diverse decarbonization and sustainability programs. Munich accomplished one of its key interim goals in renewable electricity in 2015, when it started producing “more green electricity at its own plants than all households and the underground and tram systems in Munich require.”70 In the heating sector, Munich has the energy objective of becoming the first city in Germany to provide the energy for all of its district heating from renewable energy sources, primarily geothermal. “By 2025, SWM is aiming to produce as much green electricity at its own plants as required to power the entire city of Munich.”71 In the short term, Munich is moving toward its goal of establishing the “generation capacity of over 3.5 billion kilowatt hours of green electricity – a figure that already corresponds with around 50 percent of Munich’s electricity requirements.”72 Munich is an excellent illustration of strong renewable energy and climate protection leadership being implemented by a large city on a significant scale, using a constellation of coordinated strategies for decarbonizing multiple sectors to move steadily toward their climate change and urban sustainability objectives. Moving beyond generating renewable energy in the electricity sector, city leadership in Munich has been intent from the outset to steadily move forward in seeking to achieve its targets across all sectors through its Stadtwerke or municipal utility as its instrument through which to operate. Bottrop: Innovation City Ruhr Model of Transitioning from Coal to Renewable Energy When I visited the city of Bottrop in March 2017 as the guest of Mayor Bernd Tischler (all information for this section comes from 70https://www.swm.de/english/company/energy-transition-munich.html, last accessed November 17, 2018. 71https://www.swm.de/english/company/energy-generation/renewable-energies.html, last accessed November 17, 2018. 72https://www.swm.de/, last accessed November 17, 2018.

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a slide-deck provided to me by Mayor Tischler and Drescher (2017) in a briefing with them when I visited Bottrop), I was looking forward to meeting the mayor of Bottrop along with the Director of the Innovation City Ruhr project, Burkhard Drescher, to learn about their innovative approach. Through my briefing with Mayor Tischler and Mr. Drescher, and a subsequent tour of key Energiewende sites in Bottrop, I received an insider’s look of the workings of the project in the city of Bottrop to shift from its coal-centered economy to a community centered on climate protection and on authoring a new chapter and new direction in their long history as a proud and industrious coal-centered community. I found myself impressed by not only the (1) significant progress that Bottrop has made toward its ambitious targets, but also (2) the level of innovation of the project that secured the award of Innovation City for the Ruhr area of west Germany and (3) the high levels of citizen engagement that has arisen through the project to move the project forward collectively. Bottrop is a city of 120,000 inhabitants with a strong identity anchored in a long history of coal mining, with 3000 employed workers in the coal industry. At the end of 2018, the Prosper-Haniel mine in Bottrop will be closed as one of the last German anthracite or hard-coal mines in Germany, leaving 1000 pitmen-workers in Bottrop needing employment. In addition, Bottrop and many other regions have all been impacted by extreme weather events associated with climate change, including substantial flooding, which caused serious economic and structural damage to the region, all of which has added greater urgency to addressing climate change. For residents of Bottrop, reasons for the energy transition and climate protection approach are clear. When Bottrop won the competition for Innovation City Ruhr in 2010, it had set ambitious targets, including reducing its CO2 emissions by 50% by 2020. Part of its emissions reduction strategy was to upgrade the energy efficiency of its existing building stock, starting with a pilot area within Bottrop, then moving to other districts in the city. From the inception of the program, the project committee also focused on developing a high level of community support and participation through a wide cross-section and series of citizen engagement events, in which more than 20,000 citizens signed up to participate in the

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project, including initiatives such as “Innovation City-Day” with 500 participants, 5 educational workshops with citizens, online outreach “Mitmachen beim Masterplan” (take part in the masterplan), mailings, and tours. At the inception of the project activities, the motto of “Blue Skies; Green Cities was developed, “Blue Skies” signifying both the reduction of coal contaminants in the air and the reduction of the CO2 emissions as climate protection, whereas “Green Cities” underlined the centrality of enhancing the quality of life in Bottrop as a city in 5 fields of action: living, working, energy, mobility, and city. The Innovation City Ruhr program built on the three-way partnerships between the city, industry (who provide investments and access to technological development), and science (through the participation of scientists from several institutes who provide scientific research and expertise as well as climate action accountability by orienting the project toward targets and objectives within a timeline required by science-based evidence). Intent on setting a good example and offering concrete role models of sustainability, the Innovation City Ruhr program has been diligent in demonstrating the practicalities of using new technologies to citizens. Firstly, the program is constructing 4 energy plus houses, 100 heat pumps with PV (photovoltaic) systems and storage, 100 micro-generation plants in multiple areas of the city as demonstration projects, all of which provide modeling how to implement the energy efficiency changes. Secondly, the program provides both information and advice as well as promotion through information events on various topics in the evening, providing over 2100 energy consultations for individual house owners, 388 thermography campaigns, and numerous promotional campaigns for energy-saving building refurbishment and modernization of buildings up to 25% of the cost. And thirdly, community-based “activation” in the neighborhood has included 8995 door-to-door deliberations and 388 thermography sessions completed through neighborhood-centered clinics and offices. The Masterplan for Bottrop consists more than 1300 pages, with 340 ideas for projects, many of which have already been implemented as projects within the city region.

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The Bottrop Blues Skies, Green City project maintains that Bottrop will reach a reduction of 38% of CO2 emissions compared to 2010 by 2020 through activities that are either already in process, or that will be implemented before 2020. In addition, Bottrop has already raised its building refurbishment rate of buildings for energy efficiency (3.65% in 2015) to more than 3× the national rate in Germany (0.80%). Bottrop has also succeeded in attracting significant amounts of sustainability investments to move the project forward: 183 million Euros for completed projects and investments as well as 108 million Euros dedicated to projects yet to be completed. Bottrop also profiles energy transition projects, such as the 100 Combined Heat/Power projects installed in both houses and businesses, some of which are augmented with energy storage, and have the potential of being connected together to construct a virtual power plant, i.e., replacing a base load generation with coordinated uses of individual units. On a much larger scale, Bottrop is converting its sewage treatment plant into a power plant through an investment of more than 50 million Euros. The Innovation City Ruhr project in Bottrop has highlighted five key “lessons learned” (see also Couture and Leidreiter 2014, pp. 10, 44–53 for role of target setting, recommendations for policy-makers, and building the political will) from their experience of implementing their Masterplan and fostering high levels of public engagement that project staff have identified as being key to their success thus far: 1. the conjoint project between industry, science and political leadership: the collaboration between business and industry for innovation and investment leadership, combined with scientists and policy analysts to provide accountability and transparency for tracking the implementation decisions and progress relative to specific targets, provides the requisite foundation for effective development and implementation of renewable energy transition and climate protection objectives by political leadership; 2. significant engagement of citizens of Bottrop: the ongoing and ambitious outreach to and empowerment of citizens of Bottrop using diverse forms of public engagement has been pivotal for

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the building of momentum for Bottrop’s transition from a coalcentered to a low-carbon city; 3. significant gains and progress, especially the retrofitting rate of 3%, a remarkable achievement in itself, given that the national average for retrofitting for energy efficiency in Germany at that point was 0.80%, which in turn has added to the growing sense of momentum and anticipation of success; 4. economic success in attracting new investments in sustainability, as evidenced by the 183 million Euros for completed projects and investments as well as an additional 108 million Euros dedicated to projects yet to be completed (a remarkable achievement for a city of 120,000); and 5. a new vision for the city of Bottrop beyond the closure of its last coal mine in 2018. Mayor Tischler describes the shift taking place in Bottrop more than an urban sustainability strategy, but more broadly as a structural change in the economy as well as a new chapter in the collective historical narrative of Bottrop in energy. For Mayor Tischler, the cultural symbols of the Bottrop in the past (successful coal mining community) need to be re-fashioned into an emerging new energy narrative, built around renewable energy and sustainable energy-efficient housing, while also maintaining a continuity with the past.

Citizen Value To conclude this reflection on cities as hubs of climate leadership and innovation, we return to the notion of ‘citizen value,’ which Hermann Scheer (2012) highlights in his reflections on the co-benefits and positive impacts of cities embracing renewable energy generation, and leveraging this foundation for other social and economic benefits. “As Munich’s Mayor Christian Ude so aptly stated during his speech at the EUROSOLAR conference on “Renewable Energy for Municipal Utilities,” municipal utilities are not bound by any criteria of shareholder value, rather they must operate according to criteria of ‘citizen

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value’.”73 Rather than the generated wealth being funneled back to a small economic elite in the form of purely financial wealth, wealth creation is directed to the benefit of the entire community of citizens in the form of community-wealth to build up the community itself. The range of transformative power that such wealth in common, quite literally “commonwealth,” in multiple areas beyond financial wealth for a few is both significant and engagingly appealing. As a conclusion to this chapter, Scheer (2012) provides a precis of an inspiring vision of future possibilities for cities as hubs for climate protection and innovation: “Bringing back privatized public utilities and networks into communal ownership, or the setting up of new public utilities, is the fundamental precondition for rapid energy change, for the productive use of network synergies and for a generally more productive supply structure. They help to win back decision-making owners for municipal self-management and act as a stimulus to municipal democracy…They will take on an importance far greater than their original role, becoming the key supporters of publically owned infrastructures, without which there can be no socially acceptable economy….Municipalities can again become supporters of ‘commons law’ by making renewable energy, a public property, locally available.”74

References Agora Energiewende. Understanding the Energiewende: FAQ on the Ongoing Transition of the German Power System, 2015. Retrieved from: https://www. agora-energiewende.de/fileadmin/Projekte/2015/Understanding_the_EW/ Agora_Understanding_the_Energiewende.pdf. Block, Fred. “Introduction.” In Karl Polanyi (Ed.), The Great Transformation: The Political and Economic Origins of our Time, xviii–xxxviii. Boston: Beacon Press, 2001.

73Hermann

2012), 129. 74Ibid.

Scheer. The Energy Imperative: 100 Percent Renewable Now (New York: Earthscan,

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Bonefeld, Werner. “Human Economy and Social Policy: On Ordo-Liberalism and Political Authority.” History of the Human Sciences, vol. 26, no. 2, 2013, 106–125. Couture, Toby, & Anna Leidreiter. Policy Handbook: How to Achieve 100% Renewable Energy, 2014. Retrieved from: World Future Council Website: https://www.worldfuturecouncil.org/file/2016/01/WFC_2014_Policy_ Handbook_How_to_achieve_100_Renewable_Energy.pdf. C40 Cities. The Future We Don’t Want—How Climate Change Could Impact the World’s Greatest Cities, 2018. Retrieved from: https://www.c40.org/ other/the-future-we-don-t-want-homepage. Droege, Peter. 100% Renewable Energy: Energy Autonomy in Action. London: Earthscan, 2009. Giersch, H., K. Paque, & H. Schmieding. The Fading Miracle of Four Decades of Market Economy in Germany. Cambridge: Cambridge University Press, 1992. Hillebrandt, Katharina, Sascha Samadi, & Manfred Fischedick. Pathway of Deep Decarbonization in Germany, 2015. Retrieved from: http://deepdecarbonization.org/wp-content/uploads/2015/09/DDPP_DEU.pdf. Hinrichs-Rahlwes, Rainer. Sustainable Energy Policies for Europe: Towards 100% Renewable Energy. London: Taylor & Francis Group, 2013. IdE Institut dezentrale Energietechnologien [Institute for Decentralized Energy Technologies]. 100% Erneuerbare-Energie Regionen Oktober, 2014 [100% Renewable Energy Regions October 2014]. Kassel. Retrieved from: http://www.100-ee.de/fileadmin/redaktion/100ee/Downloads/broschuere/100ee-Karte_Liste_Oktober_2014.pdf. Jeske, Juergen. The Visible Hand of Economic Prosperity. Project Syndicate, February 25, 2015. Retrieved from: https://www.project-syndicate.org/ commentary/germany-economic-progress-policymaking-by-j-rgen-jeske2015-02?barrier=accessreg. Lauber, Volkmar. The Different Concepts of Promoting Res-Electricity and Their Political Careers. In F. Biermann, R. Brohm, & K. Dingwerth (Eds.), PIK Report No. 80, Proceedings of the 2001 Berlin Conference on the Human Dimensions of Global Environmental Change “Global Environmental Change and the National State”, 296–304, 2002. Lauber, Volkmar, & Lutz Mez. Three Decades of Renewable Energy Policies in Germany. Energy & Environment, vol. 15, no. 4, 2004, 599–623. Lechtenböhmer, Stefan. Paths to a Fossil CO2-free Munich. In Peter Droege (Ed.), 100% Renewable Energy: Energy Autonomy in Action, 87–92. London: Earthscan, 2009.

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Lechtenböhmer, Stefan, Dieter Seifried, & Kora Kristof. Urban Infrastructure: Munich Edition—Paths Toward a Carbon-Free Future, 2009. Siemens AG. Retrieved from: https://www.mobility.siemens.com/mobility/global/Site CollectionDocuments/en/sustainable-munich-2009-en.pdf. Leidreiter, Anna. Hamburg Citizens Vote to Buy Back Energy Grid, 2013. Retrieved from: https://energytransition.org/2013/10/hamburg-citizensbuy-back-energy-grid/. Lysack, Mishka. Global Warming as a Moral Issue: Ethics and Economics of Reducing Carbon Emissions. Interdisciplinary Environmental Review, vol. 10, no. 1–2, 2008, 95–109. Retrieved from: https://doi.org/10.1504/ IER.2008.053964. Lysack, Mishka. Effective Policy Influencing and Environmental Advocacy: Health, Climate Change, and Phasing Out Coal. International Social Work, vol. 58, no. 3, 2015, 435–447. https://doi.org/10.1177/00208728 14567485. Morris, Craig, & Arne Jungjohann. Energy Democracy: Germany’s Energiewende to Renewables. Cham, Switzerland: Palgrave Macmillan/Springer Nature, 2016. Pacific Institute for Climate Solutions. (Producer). Effective Climate Leadership in Cities: Lessons from Germany [DVD], 2016. Retrieved from: http://www. pics.uvic.ca/events/effective-climate-leadership-cities-lessons-germany. Polanyi, Karl. The Great Transformation: The Political and Economic Origins of our Time. Boston: Beacon Press, 2001. Scheer, Hermann. The Energy Imperative: 100 Percent Renewable Now. New York: Earthscan, 2012. Tischler, Mayor Bernd, & Burkhard Drescher. Climate-Friendly Urban Renewal: Innovation City Ruhr. Slide-deck from the Mayor’s Office, Mayor Bernd Tischler, 2017. Toke, David, & Volkmar Lauber. “Anglo-Saxon and German Approaches to Neoliberalism and Environmental Policy: The Case of Financing Renewable Energy.” Geoforum, vol. 38, no. 4, 2007, 677–687.

2 Interplay Between Economics and Environment: Determinants of Sustainable Solutions Tero Rantala, Minna Saunila, Juhani Ukko and Jouni Havukainen

Introduction The debate on sustainable development has long focused on the determinants promoting sustainable development. Some scholars have discussed environmental determinants, such as energy savings, pollution prevention, waste recycling, hygienic factors, land occupation, green product design, corporate environmental management, and ease of material

T. Rantala (*) · M. Saunila · J. Ukko  School of Engineering Science, LUT University, Lahti, Finland e-mail: [email protected] M. Saunila e-mail: [email protected] J. Ukko e-mail: [email protected] J. Havukainen  School of Energy Systems, LUT University, Lappeenranta, Finland e-mail: [email protected] © The Author(s) 2019 D. Kurochkin et al. (eds.), Renewable Energy, https://doi.org/10.1007/978-3-030-14207-0_2

39

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handling (Chen et al. 2006; Pretty et al. 2011; Delai and Takahashi 2011; Galdeano-Gómez et al. 2013). Others have investigated the social aspects of sustainability, such as social recognition, human capital development, job creation, and health and safety issues (Choi and Ng 2011; Delai and Takahashi 2011; Galdeano-Gómez et al. 2013; Khan et al. 2016). The economic aspects of sustainable development have also been heavily discussed, and scholars have suggested that sustainable development is driven by cost savings (Horbach et al. 2012, 2013; Del Río et al. 2017; Hojnik and Ruzzier 2016) and increased revenue from new business opportunities (Delai and Takahashi 2011; Mamede and Gomes 2014; Schaltegger et al. 2012). These sustainable development studies with quite narrow viewpoints have yielded conflicting results and an unclear picture of what is being developed. The development target should be clearly defined to understand the determinants of the development. The main focus of this study is to help fill these research gaps by exploring the determinants of the adoption of sustainable solutions in the horse industry. According to Liljenstolpe (2009), the number of horses has steadily increased in Europe, especially in urban areas, in the last 20 years. This situation constitutes some environmental burdens and challenges, one of which is related to horse manure production. Currently, a relatively small amount of the manure produced in urban areas can be used as fertilizer due to the insufficient number of fields, creating challenges, operational harms, and costs to horse industry operators as they search for more sustainable solutions to manure handling. The produced manure, however, could be utilized in energy production or land use. The study was conducted in Finland, where currently only a fraction of the potential of horse manure is utilized and the horse industry continuously requires new sustainable solutions to support its development and manure utilization. New solutions for manure utilization can be investigated from four angles: new technology, services utilization, technology investment, and new business related to horse manure use. The definitions and differences of these solutions are discussed in more detail in the literature section. In this investigation, the possible determinants of the adoption of the desired sustainable solutions are related to sustainability and operations. Sustainability determinants refer to those presented above (nutrient

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cycling, social recognition, job creation, health and safety, human capital development, cost reduction, and new business) while operational determinants consist of perceived harms, perceived cost harms, and actual costs of manure handling. Perceived harms arise as manure handling requires work time, which takes away from more productive work, such as teaching horseback riding and training horses. Perceived costs also derive from this situation as manure handling can be seen as a burden, which should be eliminated with the least cost possible. The actual costs of manure handling can vary greatly depending on the technology level, selected solutions, and size of the horse industry operation. Operational, as well as sustainability, determinants are considered to provide a more comprehensive understanding of the drivers that determine the desired solutions in the studied business environment. The empirical results of the study were collected through a survey of 139 Finnish horse industry operators. The study contributes to research by presenting operational and sustainability determinants that affect the adoption and utilization of sustainable solutions. Although the results are gathered from Finland, they could be useful in other countries as well (e.g., Liljenstolpe 2009). The results of the study can be interesting to horse industry operators in other countries worldwide, other agriculture industry operators, technology and service providers, policy-makers, and governmental officers.

Sustainable Solutions One way to promote sustainable development in various industries is to create novel technologies, services, and business models. Technological solutions play important roles in solving sustainability challenges related to, for example, energy consumption and nutrient recycling (Long et al. 2016). Furthermore, in agriculture-related industries, climate change will affect crop distribution and production, increasing the risks associated with farming (Scherr et al. 2012). Consequently, in the coming decades, global food systems will come under growing pressure, and agriculture-related industries will face the challenge to provide food

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security to growing populations without enjoying ecosystem and environmental security (Calabi-Floody et al. 2018). In addition to solving such environmental sustainability challenges, according to Anadon et al. (2015) and Shrivastava et al. (2016), novel technologies can make significant contributions to societal improvements, such as human well-being and economic growth. At the firm level, technology-related sustainable solutions usually arise from the utilization and adoption of technological solutions and products developed to improve firms’ businesses and solve sustainability challenges. For example, by adopting climate-smart agricultural innovations (Scherr et al. 2012) at the firm and farm levels, operators in agriculture-related industries can achieve sustainable outcomes in nutrient recycling and field productivity while reducing the risk of climate change (Long et al. 2016). In addition to firms’ internal motivation, external factors, such as governmental regulations and increased customer awareness, create incentives for firms to adopt sustainable solutions (Hojnik and Ruzzier 2016). In manufacturing industries, technology plays an important role in sustainable development by enabling improvements to manufacturing processes that reduce energy consumption and required materials (Yang et al. 2016). It, therefore, is necessary to use modern, sustainable technologies in agriculture-related industries to decrease the negative environmental impacts from chemical fertilization and inadequate disposal and reuse of agricultural waste (Calabi-Floody et al. 2018). While societal and external pressures and regulations push firms toward sustainable solutions and technologies, internal reasons and motivations also drive firms to adopt sustainable technologies. Among others, economic reasons, such as cost savings and increased revenue, are seen as drivers of firms’ adopting sustainable technologies. In addition to technology-related sustainable solutions, policymakers, academics, and practitioners have shown growing interest in a broader, holistic perspective on service innovation as a new, promising transcendent business logic fostering sustainability (Enquist et al. 2015; Calabrese et al. 2018). The service sector and sustainable services are increasingly components of firms’ businesses and operations, including the agricultural industries (cf. Martin et al. 2016). The adoption of new sustainable services and strategies is viewed as an

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engine for the renewal of individual firms and entire industries and as a catalyst for business development (Snyder et al. 2016). Recent sustainability trends look more deeply at the development of services, in addition to new products and production processes (Laperche and Picard 2013). Moreover, the negative environmental effects of firms’ operations can be reduced by increasing services in business environments and supply chains and dematerializing operations (Laperche and Picard 2013). Agricultural services have also been presented as a significant measure for promoting the development of modern agriculture and improving its output efficiency (Gao et al. 2018). Consequently, many industrialized countries, with government support, have established agriculture-related service systems with varied forms of services, such as comprehensive service contents, diversified service subjects, and coordinated, efficient operations (Gao et al. 2018). Service delivery and utilization are also considered to be part of firms’ eco-design strategies to mitigate their operations’ negative environmental effects by providing sustainable services rather than tangible products (Geum and Park 2011; Laperche and Picard 2013). Moreover, sustainable services open possibilities for firms to reduce operational harms and operational costs, increase revenue, and promote their brands (Furrer 2010). In such result-oriented services, firms sell and seek capabilities and results instead of technological products. For example, a service with one operator or service provider responsible for all the costs of delivering results motivates optimal energy and materials use (Laperche and Picard 2013). Despite the significant potential of new technological and service-related solutions, they have difficulties succeeding alone in the market (Chesbrough 2010; Yang et al. 2016; Wamsler and Brink 2018). To develop innovative business models to support circular economy goals and sustainable business development in general, it is important to consider that sustainability goals are not usually achieved by adopting only sustainable technologies or services but by also paying attention to business models (Yang et al. 2016; Lüdeke-Freund and Dembek 2017; Diaz Lopez et al. 2018). Although research on business models and business model innovation in general is mature, business model innovations for the circular economy and energy and resource efficiency seem to be less

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studied (Lüdeke-Freund and Dembek 2017; Diaz Lopez et al. 2018). Business model strategies are not necessarily related to new technologies or services but are new ways of creating and delivering value to stakeholders (Björkdahl and Holmén 2013; Yang et al. 2016). A sustainable business model “creates competitive advantage through superior customer value and contributes to the sustainable development of the company and society” (Lüdeke-Freund 2010).1 Furthermore, business model innovations with social elements can support and increase customer interactions and improve unsustainable consumption behavior (Sousa-Zomer and Cauchick Miguel 2016).

Determinants of Sustainability Determinants of Sustainability in the Horse Industry The use of horses has a long tradition in Finnish society. The agricultural revolution shifted horses away from labor toward recreation and leisure. Currently, the main use of horses in Finland is associated with the horse racing sport. Nevertheless, many other activities require the use of horses, such as horseback riding, eco-tourism, and various forms of horse activities. Firms in the horse industry have struggled with their profitability for a long time. Increased costs and environmental regulations have brought them additional challenges, and therefore new solutions are needed to augment the profitability and optimize business potential of these firms. A number of different options can be used to integrate sustainable solutions to the existing core business of firms. For example, wastes can be utilized as a material or as energy. The different utilization options can support, for example, the renewable energy production targets and the objectives of circular economy, such as nutrient recycling. Therefore, firms in the horse industry can employ a variety of solutions to build a new business, create jobs, improve energy

1Lüdeke-Freund, Florian. (2010). “Towards a conceptual framework of business models for sustainability.” Environmental Management, 49, 23.

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self-sufficiency, and reduce greenhouse gas emissions. The horse industry offers a productive setting to study sustainable solutions and their determinants. Sustainable horse manure handling is a relevant issue in the horse industry due to the associated costs and labor demand. Solutions can be found in four areas: new technology exploitation, services use, technology investment, and new business related to horse manure utilization. Exploitation of technology could involve transporting manure for local or central utilization and paying a gate fee to, for example, to a communityowned biogas plant or a neighbor for co-utilization without participating in the investment. This would require more involvement in manure handling than exploiting services in which the provider transports and treats the manure while providing the new bedding. Even more involvement is required when investing in technology for exclusive use, such as drum-composting devices. Starting a new business for horse manure utilization, such as centralized treatment of horse manure, demands taking an active role in transforming horse manure into products, such as organic fertilizers. This could mean starting a cooperative as a solution for a larger stakeholder group, such as centralized biogas production or horse manure combustion in a district heating plant. The development of manure-handling solutions from these four perspectives involves sustainability determinants. Hygienic factors, the well-being of stable personnel and horses, and the ease of manure management determine the actions by a stable. Bedding is selected to provide high absorption capacity, be safe for horses to walk on, and ensure good air quality in the stable. The stable machinery allows for easy cleaning and spreading new bedding. In the long term, social recognition, recycling of manure nutrients on arable land, and commitment to environmental causes are becoming important determinants of the development of manure utilization. Good cooperation with neighbors requires socially acceptable manure management, while applying manure on arable land enhances nutrient recycling. Eventually, increased revenue, job creation, and new business development can become determining motivations for finding sustainable solutions to manure handling. Prosperous agricultural regions require innovation to

46     T. Rantala et al.

create new jobs and business opportunities to which the horse industry can contribute. While sustainability determinants guide the development of horse manure handling, they are also affected by the operational determinants of perceived harms, perceived cost harms, and actual costs. Perceived harms arise as manure handling requires work time, which takes away from more productive work, such as teaching horseback riding and training horses. Perceived costs also derive from this situation as manure handling can be seen as a burden, which should be eliminated with the least cost possible. The actual costs of manure handling can vary greatly depending on the technology level, selected solutions, and size of the horse industry operation. Economic benefits are among the most important drivers of sustainable solutions and technologies. For example, sustainable solutions enabling the use of lesser raw materials are easily justified from the economic perspective as operational costs are reduced. The benefits for the company reputation are also important, and some sustainable solution investments can be justified by the positive effect on the company image. Ecolabelling is used to convey the information of these measures on the consumers in a more or less standardized format. McKinsey’s global survey on the business of sustainability (Bonini and Görner 2011) summarizes that companies view the effects on reputation, operational and growth benefits from reduced costs, and new markets and products as the expected benefits from sustainability. The selection of a sustainable solution is increasing because of the increased stakeholder awareness. Stakeholders are increasingly demanding information on the life cycle effects of the products and services rendered. In a highly competitive business environment, sustainable solutions can also provide strategic advancement, for example, by increasing energy efficiency and reducing resource use. The main aim is cost reduction, without which the relocation of a company to country with reduced costs is needed (Radulescu 2017). To establish and integrate sustainable solutions and to achieve the long-term social and environmental sustainability of enterprises,

2  Interplay Between Economics and Environment …     47

sustainable business models with a triple bottom line approach are needed. The sustainable business model archetypes proposed by Bocken et al. (2014) are as follows: maximize material and energy efficiency, create value from waste, substitute with renewables and natural processes, deliver functionality rather than ownership, adopt a stewardship role, encourage sufficiency, re-purpose the business for the society/environment, and develop scale-up solutions.2 These archetypes can partially include the four-step “natural capitalism” agenda proposed by Lovins et al. (1999, 2007): increased productivity of natural resources, imitation of biological production models, changing of business models, and reinvestment in natural capital.

Summary As discussed, today’s horse industry faces a need for sustainable solutions (technologies, services, and business models) to secure its survival. As horses increasingly move closer to urban areas, away from traditional farming areas, environmental and sustainability challenges emerge. This situation makes industry operators potential candidates for the adoption of sustainable solutions. The next section explores how determinants related to sustainability and operations influence horse industry operators’ adoption of sustainable solutions. Sustainability determinants affect operators’ valuation of sustainability aspects, such as nutrient cycling, waste management, hygienic factors, energy consumption, social recognition, ease of material handling, and commitment to environmental causes. Operational determinants reflect the significance of perceived operational harms, perceived cost harms, and actual costs of manure handling (Fig. 2.1).

2Bocken,

N.M.P., Short, S.W., Rana, P., & Evans, S. (2014). “A literature and practice review to develop sustainable business model archetypes.” Journal of Cleaner Production, 65, 43.

48     T. Rantala et al.

Determinants related to sustainability

Determinants related to operations

Sustainable solutions to exploit technology to invest in technology to exploit services

Fig. 2.1  Research framework

Methodology Sample and Data Collection The data for this study were gathered through an online survey questionnaire conducted in August and early September 2016. The population for this study comprised small Finnish companies operating in the horse industry. An invitation to participate in the survey was sent to 631 companies. Among the sent questionnaires, 580 reached the participants, and 51 came back to the researchers with return-to-sender messages, which indicated that the informants’ e-mail addresses were no longer valid. Two reminders were sent, after which the received data were screened. A total of 139 valid responses were received, equaling a response rate of around 24%. To check the non-response bias, the respondents were divided into three groups: the first respondents, the first follow-ups, and the second follow-ups. Analysis of variance tests were run to check the non-response bias, and the analyses indicated that the responses reflected the entire sample well. Table 2.1 presents the measurement instrument. The measures used in the survey included four items describing the horse industry operators’ willingness to adopt sustainable solutions: to exploit technology, to invest in technology, to exploit services, and to do business. These sustainable solutions were identified from the literature and modified into items by

Sustainable solutions

Indicates the significance of the items

Operational determinants

Indicates the real costs of manure handling Indicates willingness to do the items

Indicates the significance of the items

Sustainability determinants

Significance of items

Table 2.1  Measurement instrument

1–7 (1 = not at all significant, 7 = extremely significant) Amount in euros

1–7 (1 = not at all significant, 7 = extremely significant)

Scale

Technological exploitation, technologi- 1–7 (1 = not at all willing, 7 = extremely willing) cal investment, service, and business

Actual costs

Nutrient cycling, commitment to environmental causes, waste management, hygienic factors, energy consumption, land occupied, social recognition, job creation, health and safety, human capital development, cost reduction, income, indirect job creation, new business, and ease of material handling Perceived harms and perceived cost harms

Items

2  Interplay Between Economics and Environment …     49

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the authors. Each item was measured on a scale of 1–7, ranging from not at all willing to extremely willing. Fifteen items representing the different factors of sustainability were adopted from Delai and Takahashi (2011), Mamede and Gomes (2014), Svensson and Wagner (2015), and Khan et al. (2016). These variables were nutrient cycling, commitment to environmental causes, waste management, hygienic factors, energy consumption, land occupation, ease of material handling, social recognition, job creation, health and safety, human capital development, cost reduction, income, indirect jobs, and new business. For each item, the respondents were asked to indicate its significance on a scale of 1–7. Two background variables (i.e., size and type of operation) were entered into the questionnaire. Three other variables, namely, perceived harms, perceived cost harms, and actual costs caused by manure handling, were also included to track the effects of such factors on the operators’ willingness to adopt sustainable solutions. The significance of perceived harms and perceived cost harms was measured on a scale of 1–7, from not significant to very significant. In terms of costs, the respondents were asked to provide the amount of costs in euros. The description of the data in terms of these variables is presented in Table 2.2. Table 2.2  Description of data Size

Type of operation

Perceived harms

Perceived cost harms

Actual costs

Fewer than 20 horses 20–50 horses Over 50 horses No answer Horserace Horse-riding Other No answer No considerable harms Considerable harms No answer No considerable cost harms Considerable cost harms No answer Less than 100 euros a month More than 100 euros a month No answer

No

%

68 62 4 5 26 98 13 2 93 45 1 78 58 3 45 72 22

48.9 44.6 2.9 3.6 18.7 70.5 9.4 1.4 66.9 32.4 0.7 56.1 41.7 2.2 32.4 51.8 15.8

2  Interplay Between Economics and Environment …     51

Results of the Analyses The background variables (i.e., size, type of operation, and distance to a large industry operator) did not affect at a statistically significant level how willing the company is to exploit technology, to invest in technology, to exploit services, or to conduct business. Next, whether differences could be found among companies with different amounts of perceived harms, perceived cost harms, and actual costs caused by the handling of horse manure was investigated. First, the differences were studied according to the amount of perceived harms. The sample was divided into those that considered horse manure handling as considerable harm (mean 5 and higher) and those who did not (mean less than 5). As indicated in Table 2.3, a significant difference was found in all four items. Thus, the amount of perceived harms that horse manure brings to the company affects how willing the company is to exploit technology, to invest in technology, to exploit services, and to conduct business. Second, the differences were studied according to the amount of perceived cost harms. The sample was divided into those that considered horse manure handling as a considerable cost harm (mean 5 and higher) and those that did not (mean less than 5). The results in Table 2.3 indicate significant differences in all four items. Therefore, the amount of perceived cost harms that horse manure brings to the company affects how willing the company is to exploit technology, to invest in technology, to exploit services, and to conduct business. Third, the differences between actual costs were studied. The sample was divided into the companies with costs of less than 100 euros a month in handling horse manure and those with costs of more than 100 euros a month. The results in Table 2.3 indicate significant differences between the two items. Thus, the amount of costs that horse manure brings to the company affects how willing the company is to exploit and invest in technology but not how willing it is to exploit services or to conduct business.

52     T. Rantala et al. Table 2.3  Differences in willingness to exploit sustainable solutions based on operational determinants Sustainable solutions

Willingness to exploit technology Willingness to invest in technology Willingness to exploit services Willingness to conduct business

Willingness to exploit technology Willingness to invest in technology Willingness to exploit services Willingness to conduct business

Willingness to exploit technology Willingness to invest in technology Willingness to exploit services Willingness to conduct business

Means

Difference

Perceived harms Low High 4.4889 6.1364

Z-score −4.297***

3.1573

4.7955

−4.300***

4.5000

5.9333

−3.571***

4.1222

5.2955

−2.992**

Perceived cost harms Low High 4.2105 6.1607

−5.368***

2.9467

4.6071

−4.654***

4.3117

5.8448

−3.709***

3.9733

5.1404

−3.118**

Actual Low 4.2727

costs High 5.7246

2.6818

4.4559

−4.451***

4.6364

5.5556

−2.002

4.2000

4.8088

−1.505

−3.600***

Significant difference Significant difference Significant difference Significant difference

Significant difference Significant difference Significant difference Significant difference

Significant difference Significant difference Not significant difference Not significant difference

Significance at *** p ≤ 0.001, ** 0.001 < p ≤ 0.01

Figure 2.2 illustrates the differences among companies with high perceived harms, perceived cost harms, and actual costs from horse manure handling. When perceived harms and perceived cost harms were high, willingness to adopt sustainable solutions was high. When actual costs were high, willingness to adopt sustainable solutions was not as high.

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Fig. 2.2  Willingness to adopt sustainable solutions among the companies that consider operational determinants to be significant

Next, the data were divided into companies that are willing to adopt sustainable solutions (exploit technology, invest in technology, exploit services, or conduct business) (mean 5 and higher) and those that are not (mean less than 5). The means of the companies willing to adopt sustainable solutions were analyzed. Figure 2.3 illustrates the description of the data by means. It presents what aspects of sustainability are valued by the companies that are most willing to utilize different sustainable solutions. The results show that these companies value ease of material handling, reduction of energy consumption, and cost reduction. Social recognition, human capital development, and job creation are also important for companies that are willing to exploit or invest in sustainable technologies.

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Fig. 2.3  Sustainability determinants of the companies willing to adopt sustainable solutions

Discussion This study examines the determinants of the adoption of sustainable solutions in the horse industry. Previous studies have recently presented cost savings and stricter regulations to be the most frequently proposed determinants of eco-innovation (e.g., Kesidou and Demirel 2012; Horbach et al. 2012; Horbach et al. 2013; Del Río et al. 2017; Hojnik and Ruzzier 2016). Although Hojnik and Ruzzier (2016) presented that many external efforts, such as governmental regulations and increased customer awareness, have been directed toward motivating companies to adopt sustainable solutions in terms of eco-innovation, the results of this study do not fully support this.3 The findings of this study show 3Hojnik,

J., & Ruzzier, M. (2016). “What drives eco-innovation? A review of an emerging literature.” Environmental Innovation and Societal Transitions, 19, 31–41.

2  Interplay Between Economics and Environment …     55

that among horse industry operators, the most important sustainability determinants that increase their willingness to adopt and utilize sustainable solutions are related to the ease of solutions, energy consumption, and cost reduction. To promote the ease of adopted and utilized solutions, the adoption of sustainable services is considered an attractive option. The utilization of sustainable services to solve the horse industry’s current problems related to manure handling is an example of a result-oriented service (Laperche and Picard 2013), in which the service provider has responsibility for all the costs of delivering results and thus strong incentive for manure and energy use. In general, the results of this study indicate that increased internal efficiency and facilitation of operators’ operating activities is the most important motivator for the adoption of sustainable solutions. In addition to cost saving and external pressures, environmental commitment is considered one of the motivators for the adoption of sustainable solutions (Chen et al. 2006).4 Although the results of the Sáez-Martínez et al. (2014) revealed that in the contemporary business environment, companies have a greater awareness of the influence of their activities on the environment and are increasingly motivated by environmental concerns in their pursuit of new solutions and innovations, the results of this study reveal that greater awareness does not directly determine the adoption of sustainable solutions among horse industry operators.5 The results of the study are in accordance with the findings of previous studies (e.g., Horbach et al. 2012, 2013; Del Río et al. 2017; Hojnik and Ruzzier 2016), which argue that cost savings and cost reduction are some of the most meaningful factors that determine the adoption and utilization of sustainable solutions aside from ease of the adopted and utilized solutions. Based on the evidence from this study, this situation also seems to be the case in the horse industry. However, the greater awareness of environmental concerns and 4Chen,

Y.S., Lai, S.B., & Wen, C.T. (2006). “The influence of green innovation performance on corporate advantage in Taiwan.” Journal of Business Ethics, 67 (4), 331–339. 5Sáez-Martínez, F.J., Díaz-García, C., & González-Moreno, A. (2014). “Environmental orientation as a determinant of innovation performance in Young SMEs.” International Journal of Environmental Research, 8 (3), 635–642.

56     T. Rantala et al.

environmental commitment along with the current cost reduction can be linked to energy consumption, which is one of the most important factors determining the current utilization and adaption of sustainable solutions in the horse industry. The study findings also reveal that among operational determinants, horse industry operators with high manure-handling costs are willing to exploit and invest in technology. This result may indicate that technology-based solutions are considered to have a higher potential in cost reduction compared with service-based and business-related solutions. This perception can also be supported by the reluctance of operators with low cost to make technological investments. Therefore, the findings indicate that related to operational determinants, perceived cost harms increase the willingness of horse industry operators to utilize and adopt different sustainable solutions (i.e., technological, service, and business-related solutions), but the actual high-level costs shift their willingness to conduct technology utilization and investment. Currently, sustainable technology utilization and investment are considered the most important solutions to reducing the operational cost caused by manure handling. Although energy consumption and cost reduction seem to be the main determinants for the exploitation of sustainable solutions, the willingness to invest in technologies seems to be associated with social sustainability in terms of social recognition, human capital development, and job creation (Fig. 2.1). These results are in accordance with McKinsey’s global survey on the business of sustainability, which summarizes that companies consider effects on reputation as one of expected benefits of sustainability. Moreover, Sousa-Zomer and Cauchick Miguel (2016) conclude that business model innovations with a social component enable a close interaction with other stakeholders and help to change their unsustainable behavior.6 They find that business models focusing on the delivery of environmental and social benefits rather than economic profit alone can lower environmental 6Sousa-Zomer, T.T. & Cauchick Miguel, P.A. (2016). “Sustainable business models as an innovation strategy in the water sector: An empirical investigation of a sustainable product-service system.” Journal of Cleaner Production, 171, 119–129.

2  Interplay Between Economics and Environment …     57

costs (e.g., lower energy consumption). This finding may indicate that horse industry operators investing in technologies can also be considered pioneers in the industry and interested in adopting business model innovations as well.

Conclusions This study investigates the determinants of the adoption of sustainable solutions in the horse industry. The determinants are divided into those related to sustainability and operations. The results show that the most important determinants are related to operators’ motivation to improve their internal efficiency and operating activities. The most important sustainability determinants were ease of the solutions, energy consumption, and cost reduction. Among operational determinants, the perceived cost harms seem to increase the horse industry operators’ willingness to adopt different types of sustainable solutions. Although the perceived cost harms seem to increase the operators’ motivation to develop sustainable solutions, the actual costs shift the focus of sustainable solutions toward technological solutions. This finding indicates that compared with service and business-related solutions, technologically related sustainable solutions are perceived to be most attractive in cost-cutting and cost reduction. Regarding managerial implications, this study deepens understanding of the influence of sustainability and operations determinants on the adoption of sustainable solutions. The study results indicate that the motivations for adopting sustainable solutions are more internal than external. When developing more sustainable policies and solutions to agriculture-related industries, government decision-makers and politicians should be aware of the determinants driving operators to adopt and utilize sustainable solutions. The study results, therefore, can increase understanding of the development of sustainable solutions in agriculture-related industries. Instead of introducing more regulations and laws, it seems that policy-makers should direct their interest to supporting horse industry operators’ internal motivations to adopt sustainable solutions. Along with decision-makers, sustainable solution

58     T. Rantala et al.

developers and providers, such as service and technology providers, should be aware of the determinants motivating horse industry operators to adopt sustainable solutions. Although the results of this study indicate that the internal motivation and facilitation of internal activities seem to be a meaningful reason for horse industry operators to adopt sustainable solutions, the phenomenon needs more evidence. Therefore, future research could explore in more detail the differences between the internal and external determinants of sustainable solutions in the horse industry. Note that the results were gathered from one country and in one agriculturerelated industry. Therefore, the generalization of the results should be done judiciously even if national differences, even differences in the horse industry, have become less important.

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3 Renewable Energy Strategies for Sustainable Development in the European Union Erginbay Uğurlu

Introduction Nowadays, sustainability is one of the major global concerns; in September 2015, the United Nations General Assembly formally adopted the 2030 Agenda for Sustainable Development that was firmly anchored in the European Treaties. This Agenda has 17 Sustainable Development Goals (SDGs)) and 169 targets for people, planet, and prosperity. The European Union (EU) sustainable development strategy aims to achieve a continuous long-term improvement of the quality of life by managing and using resources efficiently; it was launched by the European Council in Gothenburg in 2001 and renewed in June 2006. The EU aims to decrease its greenhouse gases (GHG) emission by at least 20% by 2020. Some strategies will be applied to decrease the share of GHG emissions in the EU. One of the strategies is to increase the share of renewable energy. The world’s conventional energy sources are

E. Uğurlu (*)  Istanbul Aydin University, Istanbul, Turkey © The Author(s) 2019 D. Kurochkin et al. (eds.), Renewable Energy, https://doi.org/10.1007/978-3-030-14207-0_3

63

64     E. Uğurlu

finite, and their usage is growing; therefore, renewable energy use has a great importance for the sustainable energy consumption. The EU also aims at 20% of renewable energy out of its total energy consumption. The objective of this chapter is to investigate the current trends of the sustainable developments in the EU countries. When the European Union was created in 1993, it had only a few member states. The last to join was Croatia in 2013. In this chapter, all 28 European Member States will be analyzed starting from 2000 to 2017. This chapter consists of three sections. The first section begins with a focus on the importance of sustainable development; then it discusses the SDGs and targets of the European Union in relation to RES. The next section is also dedicated to renewable energy in the EU and investigates both potential and consumption aspects; the last section of the chapter is a summary and conclusion.

Sustainable Development in the European Union Bretherton and Vogler (2008) discuss the origin of sustainable development and natural environmental degradation that was initially articulated in the context of the 1972 United Nations Conference on the Human Environment (UNCHE). Chichilnisky (2006) states that the biggest environmental damage has occurred in the last 50 years. Chichilnisky (2005) asserts that the global emission markets appeared in the United Nations Kyoto Protocol based on their (Chichilnisky 1996, 1997; Chichilnisky and Heal 2000); the protocol was created in 1997 at the United Nations Framework Convention for Climate Change (UNFCCC). Then, the protocol was ratified as international law in February 2005. The European Union did not take into account environmental degradation when it was founded. In November 1973, the European Economic Community (EEC) adopted a Programme of Action, which included a small number of environmental policies; then, twenty-five years later, the EU has some of the most progressive environmental

3  Renewable Energy Strategies for Sustainable Development …     65

Fig. 3.1  SDG logo and 17 icons (Source UN [2017])

policies (Jordan 1999). The 2030 Agenda for Sustainable Development has 17 SDGs and 169 targets. These goals and targets were adopted by the United Nations (UN) in September 2015. Figure 3.1 shows the logo of the SDGs. Sustainable development is defined as “development which meets the needs of the current generations without compromising the ability of future generations to meet their own needs” in the Brundtland Report by the World Commission on Environment and Development (WCED) in 1987.1 Paragraph 54 of the United Nations General Resolution A/RES/70/1 of 25 September 2015 sets out the following 17 “Global Goals” (Kurkowiak et al. 2017). The SDGs are summarized in Table 3.1 by presenting the SDGs’ short names and their short description. Monitoring each goal focuses on the indicators/sub-themes and under these themes, there are subindicators/objectives. The objectives are used to measure the progress of SDGs. For 2017, over the last five-year period, the EU made progress toward 17 SDGs (Kurkowiak et al. 2017). Each SDG has some indicators to measure the progress of the respective SDGs. The European Commission’s commitment is to monitor the progress of the countries 1http://www.un-documents.net/our-common-future.pdf

(Last accessed November 19, 2018).

66     E. Uğurlu Table 3.1  Sustainable development goals and definitions No. SDG

Definition

1. 2.

No poverty Zero hunger

3. 4.

Good health and well-being Quality education

5.

Gender equality

6.

Clean water and sanitation

7.

Affordable and clean energy

8.

Decent work and economic growth

9.

Industrial innovation and infrastructure

10.

Reduced inequalities

11.

13.

Sustainable cities and communities Responsible consumption and production Climate action

14.

Life below water

15.

Life on land

End poverty in all its forms everywhere End hunger, achieve food security and improved nutrition and promote sustainable agriculture Ensure healthy lives and promote well-being for all at all ages Ensure inclusive and equitable quality education and promote lifelong learning opportunities for all Achieve gender equality and empower all women and girls Ensure availability and sustainable management of water and sanitation for all Ensure access to affordable, reliable, sustainable and modern energy for all Promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all Build resilient infrastructure, promote inclusive and sustainable industrialization and foster innovation Reduce inequality within and among countries Make cities and human settlements inclusive, safe, resilient and sustainable Ensure sustainable consumption and production patterns Take urgent action combat climate change and its impacts Conserve and sustainably use the oceans, seas and marine resources for sustainable development Protect, restore and promote sustainable use of terrestrial ecosystems, sustainably manage forests, combat desertification, and halt and reverse land degradation and halt biodiversity loss

12.

(continued)

3  Renewable Energy Strategies for Sustainable Development …     67 Table 3.1  (continued) No. SDG

Definition

16.

Peace, justice and strong institutions

17.

Partnerships for the goals

Promote peaceful and inclusive societies for sustainable development, provide access to justice for all and build effective, accountable and inclusive institutions at all levels Strengthen the means of implementation and revitalize the global partnership for sustainable development

toward the SDGs. The EU classified the progress of the SDGs into four categories: significant progress toward SD objectives, moderate progress toward SD objectives, moderate movement away from SD objectives, and significant movement away from SD objectives.2 Kurkowiak et al. (2017) describe the indicators by a set of specific quantitative rules and some references: The main reference is the Staff Working Document ‘Key European action supporting the 2030 Agenda and the Sustainable Development Goals’ (52), accompanying the Commission Communication COM (2016) 739 ‘Next steps for a sustainable European future’ from 22 November 2016 (53), which addresses EU policy frameworks such as Europe 2020, the 10 Commission priorities, the 7th Environmental Action Programme, the Circular Economy Package and other relevant long-term policies and initiatives.3

These indicators were developed by Eurostat in collaboration with other Commission services and with Eurostat’s partners in the European Statistical System (ESS). The EU SDG indicator consists of 100 indicators, and 41 of them are measured more than one goal.

2 https://ec.europa.eu/eurostat/documents/4031688/8461538/KS-01-17-796-EN-N.pdf/ f9c4e3f9-57eb-4f02-ab7a-42a7ebcf0748 (Last accessed December 2, 2018). 3Kurkowiak, Barbara et al. (eds.), Sustainable Development in the European Union: Monitoring Report on Progress Towards the SDGS in an EU Context (Luxembourg: Publications Office of the European Union 2017), 24.

68     E. Uğurlu

The first SDG, “No poverty,” indicates the multidimensionality of poverty as they relate to the absence of basic needs. Malnutrition, sustainable agricultural production, and adverse impacts of agricultural production are zero hunger goal’s indicator. SDG 3 has four indicators: healthy lives, health determinants, causes of death, and access to health care services. Indicators of SDG 4 are: basic education, tertiary education, and adult education. Progress in SDG 5 is measured by gender-based violence, education, employment, and leadership positions. The indicators of SDG 6 are: sanitation water quality and wateruse efficiency. SDG 7, on Affordable and clean energy goal, is measured by three indicators: energy consumption, energy supply, and access to affordable energy. The indicators of SDG 8 are: sustainable economic growth, employment, and decent work. The indicators of SDG 9, industrial innovation and infrastructure goals, are R&D and innovation and sustainable transport. The indicators of SDG 10 are: inequalities between countries, inequalities within countries, and migration and social inclusion. Quality of life in cities and communities, sustainable transport and adverse environmental impacts are used to measure the progress of SDG 11. Indicators of SDG 12 are: decoupling environmental impacts from economic growth, energy consumption, and waste generation and management. To measure progress in SDG 13, climate mitigation, climate impacts, and climate initiatives are used. Progress in life below water is measured by marine conservation, sustainable fishery, and ocean health. Ecosystem status, land degradation, and biodiversity are indicators of progress of SDG 15. SDG 16’s indicators are peace and personal security, access to justice, and trust in institutions. Progress in the last goal is measured by two indicators that are a global partnership and financial governance within the EU. In the context of this chapter, we are mainly interested in SDG 7. Affordable and clean energy is directly related to this chapter. However, to understand efforts on sustainable development, all of the 17 SDGs are discussed below. In SDG 1, poverty is used as a multidimensional phenomenon; the multidimensional phenomenon has three sub-indicators: income poverty, low work intensity, and severe material deprivation. These three forms of poverty are under the indicator that is named people at risk of poverty or social exclusion. In 2015, 119.0 million

3  Renewable Energy Strategies for Sustainable Development …     69

people (23.8% of the EU population) were at risk of poverty or social exclusion (Kurkowiak et al. 2017). Among the three different forms of poverty, income poverty was the most widespread with 86.8 million people (17.3% of the EU population) in 2015 (Kurkowiak et al. 2017). The sub-goals of SDG 1 are: multidimensional poverty and basic needs. Multidimensional poverty refers to the risk of poverty or social exclusion, income poverty, material deprivation, and low work intensity; basic needs refer to the unmet need for medical care, inability to keep home warm, lack of sanitary facilities, and overcrowding rate. SDG 2 focuses on hunger. The goal aims to take control of malnutrition and agricultural production. Furthermore, agricultural factor income, government support in agriculture, organic farming, and the adverse impacts of agricultural production are on the control list. The key factors of SDG 3 are: resilient food production and future food security. The future food security biodiversity and genetic resources are protected by sustainable agricultural practices. The goal can be divided into three sub-goals. These are: malnutrition, sustainable agricultural production, and adverse impacts of agriculture production. Malnutrition problem mainly focuses on to decrease obesity rates. Although food security is not a major concern for most of the countries, malnutrition problems occur in the EU area. These problems result from nutritionally deficient diets. To achieve the sustainable agricultural production goals, the EU aims to increase agricultural factor income, support agricultural R&D and organic farming. The gross nitrogen balance must be decreased. Negative impacts of agriculture production are aimed to decrease using ammonia emissions from agriculture. Education is fundamental to sustainable development; it is one of the main crucial aspects of world development. Therefore, the fourth SDG is quality education. The two main aims of SDG 4 are to decrease the share of early leavers from education and to narrow the gender gap. Also, the EU aims to increase the number of students in early childhood education and tertiary educational attainment. The EU has concerns about underachievement in reading, mathematics, and science, not in employment and education or training. Goal 5 is achieving gender equality. This goal consists of four topics: gender-based violence, education of women, employment, and leadership positions of women.

70     E. Uğurlu

The EU has made significant progress in gender equality. The gender gap for tertiary educational attainment, gender gap for early leavers from education, the gender gap for employed recent graduates and gender employment gap have decreased since 2011 and gender pay gap has decreased since 2010. The rate of women in senior management and parliaments has increased since 2012. Water is not only an important nutrition for human life but also an essential input for the economy and food security. It is necessary for biodiversity, climate, and ecosystem regulation. Therefore, “Clean water and sanitation” goal is part of the SDGs. One of the targets of SDG 6 is to improve water quality by halving the proportion of untreated wastewater. In the context of the chapter, SDG 7 is the most critical SDG. Although we discuss other 16 SDGs briefly, we discuss SDG 7 extensively because it is in the scope of renewable energy strategies for sustainable development in the EU. The renewable energy sources are the main focus of this chapter. One of the sub-themes of the SDG 7 is energy supply, and its progress is measured by share of renewable energy in gross final energy consumption and energy dependence. SDG 7 has other two sub-themes; energy consumption and access to affordable energy. In 2015, primary energy consumption was 1530 Mtoe (with 7.7% decrease from 2010), final energy consumption was 1082 Mtoe (with 6.9% decrease from 2010), energy consumption in households per capita was 540 kgoe (14.7% decrease from 2010), energy productivity was 8.3 (13.7% increase from 2010), the emissions intensity of energy consumption was 89.1% (with—3.7 index points from 2010), and the share of renewable energy was 16.7% (with 3.8 increase from 2010) (Kurkowiak et al. 2017). Some progress occurred in energy supply and access to affordable energy sub-themes. The energy productivity of the EU (28 member states) has generally increased since 2000. The energy productivity shows the amount of economic output that is produced per unit of gross inland energy consumption. The EU’s dependence on imported energy remained in the 2010s. Although the energy dependence of the EU increased between 2000 and 2009, it has fallen between 2006 and 2009 (Eurostat 2011). The EU member states import their energy from

3  Renewable Energy Strategies for Sustainable Development …     71 Table 3.2  EU28 energy dependence by product 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Solid fuels

Gas

Petroleum

30.6 33.7 33.2 35 38.2 39.4 41.5 41.3 44.8 40.9 39.4 41.9 42.3 44.3 45.8 42.4 40.2

48.8 47.1 50.9 52.1 53.6 57.1 60.3 59.5 61.7 63.6 62.5 67.2 65.9 65.4 67.4 69 70.4

75.7 77.3 75.8 78.3 79.8 82.2 83.5 82.3 84.6 83.8 84.5 85.4 86.7 87.5 87.5 88.8 86.7

Note % of imports in total energy consumption Source Eurostat online data code: sdg_07_50

other countries. Table 3.2 presents energy dependence by product. The table shows that solid fuels decreased from 41.5 to 39.4 within 2006 to 2010, but the rate of the gas increased. EU member states have converted their energy consumption from solid fuels to natural gas and renewable energy. Among imported energy products, petroleum has played the greatest role in energy dependence with the 76% in 2000 and 87% in 2019. As it was stated above, some indicators are measured for more than one goal; for this reason, they have a relationship between themselves. Francisco and Poyatos (2018) developed sustainable development goal index for 17 SDGs for the EU 28 countries. They used the Goal Programming model to estimate the index. Based on the model, they calculated the Pearson correlation between the SDGs and found that the only goal which was correlated with SDG 7 was SDG 13. The correlation coefficient (– 0.43) between SDG 7 and SDG 13 was negative and moderate. Although SDG 7 and SDG 13 have a common purpose, their progress was related adversely.

72     E. Uğurlu

The EU also has the Sustainable Energy Action Plan (SEAP) to reach the EU targets. The SEAP defines concrete reduction measures, together with time frames and assigned responsibilities. The European Community provides several policy tools in order to achieve SEAP. One of the most important policy tools is “Covenant of Majors” (4400 partners of which 2100 Italian Municipalities) of the European Community (Beccali et al. 2015). This policy is about increased energy efficiency and use of renewable energy sources from local and regional authorities. Covenant signatories commit to reach and overcome the EU 2020 goal. The EU (2010) summarizes phases of the SEAP process. The plan consists of three phases: initiation, planning, implementation and monitoring, and reporting phases. The three indicators of SDG 8 are presented in Table 3.1. Sustainable economic growth aims to increase real GDP per capita and resource productivity; employment aims to increase the employment rate and inactivity due to caring responsibilities and decrease long-term unemployment and not in employment, education or training. Besides the employment rate, the rate of involuntary temporary employment is aimed to decrease. Main pillars of SDG 9 are Research and Development (R&D) and innovation. R&D, innovation, sustainable and energy-efficient transport, and mobility systems are the key elements of a competitive economy. The EU has much progress on SDG 9; R&D expenditure has increased since 2010, employment in high-tech manufacturing and knowledge-intensive services has increased since 2011, and share of R&D personnel has increased since 2010. CO2 emissions from new passenger cars, collective passenger transport, and rail and waterways freight transport have decreased since 2011. EU member countries are diverse in the size of the economy and diverse in income levels. SDG 10 aims to increase the income of the bottom 40% of the population and to reduce inequalities within countries and inequalities between countries. SDG 10 comprises not only economic inequalities but also social inequalities. SDG 10 considers disparities in GDP per capita, disparities in disposable household income, financing to developing countries, imports from developing countries, income poverty, at-risk-of-poverty gap, Gini coefficient, and

3  Renewable Energy Strategies for Sustainable Development …     73

asylum applications. SDG 11 aims to cope with problems of urban areas and settings such as providing adequate housing, services, and infrastructure. It is expected that the share of the urban population in Europe will rise to just over 80% by 2050 (Eurostat 2016). Increasing urban population leads to the risk of air quality; as a consequence, both environment and people’s health have been negatively affected. Urbanization causes many other problems such as disturbance by noise, an occurrence of crime, and overcrowding rate. SDG 12 aims to sustain increasing demand for goods such as energy, food, water, and also the increase in world population. Because increasing energy demand is in the context of the goal, SDG 12 is related to energy efficiency and the use of renewable energies. One of the indicators or sub-themes of SDG 12 is energy consumption, and its one of the objectives is a share of renewable energy in gross final energy consumption. Kurkowiak et al. (2017) show that significant progress toward this objective with 16.7% share in 2015 and with the +3.8 pp increase since 2010. Other objectives are: resource productivity, energy productivity, consumption of toxic chemicals, CO2 emissions from new passenger cars, freight transport relative to GDP, final energy consumption, primary energy consumption, and generation of waste and recycling rate. SDG 13 is another goal which is related to renewable energy. Although SDG 13 is related to energy consumption, it is mainly focused on climate change and mitigation of climate change. Therefore, the EU has considerable progress in emissions intensity of energy consumption, climate-related economic losses and near-surface temperature deviation. SDG 14 aims to sustain healthy oceans to produce an essential source of food and income. Objectives of the goal are: sufficiency of protected marine sites, fish catches, overfishing, bathing water quality, and ocean acidity. The EU was one of the largest world markets for fish products, and Britain and France possessed substantial deep-water fishing fleets (Bretherton and Vogler 2008). The earth is losing its biodiversity. SDG 15 aims to protect biodiversity. Another aim is to sustainably manage forests to prevent the earth from deforestation. Main indicators are measured by nine criteria. These are: biochemical oxygen demand in

74     E. Uğurlu

rivers, nitrate in groundwater, phosphate in rivers, the share of forest area, artificial land cover per capita, change in artificial land cover, estimated soil erosion by water, common bird index, and the sufficiency of terrestrial sites designated under the EU Habitats Directive. Sustainable development aims are not only economic, but also social development, such as peace and justice; and ‘effective, accountable and inclusive institutions’ are in the goals of sustainable development. It has three sub-themes: peace and personal security, access to justice, and trust in institutions. Peace and personal security theme is measured by death rate due to homicide, population reporting occurrence of crime, violence, or vandalism in their area, violence to women experienced within 12 months. Access to justice theme is measured by general government total expenditure on law courts, perceived independence of the justice system. SDG 17 aims to create strong partnerships between governments, donors, the private sector and local communities to provide requirements of the achievement of the 2030 Agenda. SDG 17 offers a multilateral trading system under World Trade Organization (WTO). In the context of the goal, the EU helps some countries to advance their economies. In addition, to be a financially advanced economy, it is necessary to be environmentally advanced. Therefore, the EU seeks to transform its economy to become greener. Sustainable development strategies are provided at the national level for the EU. National Sustainable Development Strategies (NSDSs) are developed for the EU member states (Berger and Steurer 2008). The NSDSs should build[ing] upon and harmonize[ing] the various sectoral economic, social and environmental policies and plans that are operating in the country… [and] ensure socially responsible economic development while protecting the resource base and the environment for the benefit of future generations. (UNCED 1992, 8.7)4

4UNCED (United Nations Conference on Environment and Development) Agenda 21 (1992). New York: United Nations. www.un.org/esa/sustdev/documents/agenda21/english/Agenda21.pdf (Last accessed June 11, 2006).

3  Renewable Energy Strategies for Sustainable Development …     75

Berger and Steurer (2008) summarize the NSDSs; they state that at first, a few European countries had developed the NSDSs in the 1990s until the Gothenburg European Council in June 2001.5 The council is grounded on the European Union Sustainable Development Strategy (European Commission 2001), and the European Council (EC) call to the EU member states “to draw up their own national sustainable development strategies” (European Council 2001).6 After the call of EC, the NSDSs were developed, and countries were accessed in September 2002.

Renewable Energy in the European Union To increase economic growth, energy has vital importance for countries, especially for developing ones. But researches show that there is a strong correlation between energy consumption and economic development (Uğurlu 2018). Unfortunately, energy consumption is one of the reasons for climate change and renewable energy is one of the options to mitigate it. The decreasing cost of renewable energy leads to an increasing interest in renewable energy use. Toke (2011) gives historical and definitional information about renewable energy. He states that renewable energy is a starting point associated with anti-nuclear movements in the 1970s. In 2016, renewable energy new generating capacity is almost two-thirds of all new generating capacity installed around the world (FS-UNEP/BNEF 2018). Although developed countries pioneer technological developments, most of the renewable energy installations are also from developing and emerging countries.

5Gerald Berger and Reinhard Steurer. “National Sustainable Development Strategies in EU Member States the Regional Dimension,” in Pursuit of Sustainable Development: New Governance at the Sub-National Level in Europe, edited by Susan Baker and Katerina Eckerberg. Routledge, Taylor & Francis Group, London (2008), pp. 29–49. 6http://ec.europa.eu/smart-regulation/impact/background/docs/goteborg_concl_en.pdf (Last accessed November 19, 2018), 4.

76     E. Uğurlu

Renewable Energy Sources Wind Energy

Solar Energy

Hydro Energy

Bio Energy

Geothermal Energy

Marine Energy

Fig. 3.2  Classification of renewable energy (Source Roy and Das [2018])

Renewable energy can be classified based on the source. Figure 3.2 shows classification of renewable energy. Generation way of renewable energy sources is discussed in Roy and Das (2018). According to them, wind power is generated by the conversion of the kinetic energy, and the solar energy is generated from the power of the sun using photovoltaic (PV) cell or concentrating solar power (CSP) method. Hydropower is generated from water using its potential energy; bioenergy is generated from forest woods and wastes. Geothermal energy is generated from geothermal power plants (GPPs). Marine energy is generated from waves, tidal ranges, tidal currents, ocean currents, and ocean thermal energy conversion (OTEC) and salinity gradients. Hinrichs-Rahlwes (2013) state that, in the EU, some countries are pioneers for renewable energy. Denmark and Spain are the pioneer countries for wind energy development. Spain is the world’s number four in installed wind capacity with 15% wind source in electricity production in 2011. Germany is a pioneer country for successful renewable energy support policies, in particular in the electricity sector. Besides these countries, Sweden, Finland, Austria, and Latvia have high shares of renewable energy. Figure 3.3 illustrates the share of the renewable energy consumption of the EU member countries and their mean energy consumption for the 2000–2015 period. In this figure, the data are not presented yearly; it helps us to understand the difference between countries. The share of the renewable energy of Belgium, Cyprus, Ireland, Malta, Netherland, and the United Kingdom never reach 10%. Although the share of some of the countries such as Bulgaria, Czech Republic, France, Germany, Greece, Hungary, Italy, Poland, Slovak Republic, and Spain exceed 10%, their mean is around 10%. Sweden has the highest share, then Latvia and Finland follow.

AUT BEL BGR HRV CYP CZE DNK EST FIN FRA DEU GRC HUN IRL ITA LVA LTU LUX MLT NLD POL PRT ROU SVK SVN ESP SWE GBR

0

10

20

30

40

50

3  Renewable Energy Strategies for Sustainable Development …     77

Time

Renew

renew_mean

Fig. 3.3  Renewable energy consumption in the EU28 by country (Source World Bank WDI [2018] [World Bank, Sustainable Energy for All (SE4ALL) database from the SE4ALL Global Tracking Framework led jointly by the World Bank, International Energy Agency, and the Energy Sector Management Assistance Program])

The share of renewable energy is systematically growing in the 2000– 2015 period. In Fig. 3.3, the countries are categorized into two groups to a presentation based on the results. Values of the first group of countries range from 0% to 20, which are Belgium, Bulgaria, Cyprus, France, Germany, Hungary, Greece, Ireland, Italy, Luxembourg, Malta, the Netherlands, Poland, Slovak Republic, Spain, and the United Kingdom, and values are those shown on the left axis of the graph. The rest of the countries are in the second group, and their values range from 0 to 60% and are shown on the right axis. In Denmark, Slovenia, and Sweden, renewable energy shares are rapidly increasing in the period. The rates of increase in sixteen years in these countries are around 20%. Thus, the results of the graph show that these countries gave much importance to renewable energy than the other countries in the period. Malta,

78     E. Uğurlu

the smallest country among the EU countries, has the lowest values, but it has a great increase from 2002 (with 0.09%) to 2015 (with 5%). Moreover, according to the EU directive, Malta targeted to generate 5% of its electricity from RE sources by 2010 (Antoine et al. 2008). The share of 2015 was in the range of target level of Malta. However, it is unexpected because of its great economy and income level that the Netherlands’ renewable energy share is very low compared to other countries. The share was approximately 6% with a 4.3% increase from 2000 to 2015. Low share of the Netherland may be the reason for their energy saving and energy efficiency targets. The Netherlands may be aiming to use energy efficiently rather than to use renewable energy. The Dutch government goals were to improve energy savings, energy efficiency, and development of renewable energy by 2020 (Kwant 2003). The projected increase of renewable energy is significantly lower than energy savings and energy efficiency in the Netherlands. Regarding the country data, Germany and the United Kingdom power capacities account for more than half of the renewable power capacities in the EU-28 in 2017. As the countries have a different level of renewable energy consumption, the governments have different renewable energy targets. The share of renewable energy used in the EU is 16.7%, and the EU target is 20%. The targets of the countries can be seen in Table 3.3; also, by comparing with 2015 actual values, we can calculate how close they are to the target. Based on statistics in Table 3.3, Italy, Denmark, Romania, Finland, Hungary, the Czech Republic, Bulgaria, Lithuania, Estonia, Sweden, and Croatia have exceeded their 2020 targets in 2015. The Slovak Republic and Austria are closest to reaching targets. The farthest countries to reach the targets are the Netherlands, France, Ireland, and the United Kingdom. Furthermore, the countries have national sector-specific targets of a share of renewable energy for 2020: heating and cooling targets (hereafter RHC target), renewable transport targets (hereafter RT target), and renewable power targets (RP target). Sweden has the highest RHC target; Finland has the highest RT target; and Austria has the highest RP target. Latvia and Finland are the second and third countries in the

3  Renewable Energy Strategies for Sustainable Development …     79 Table 3.3  Renewable energy target of the EU member countries Country

2015

2020 target

Points off target

Netherlands France Ireland United Kingdom Luxembourg Belgium Malta Spain Cyprus Germany EU Poland Portugal Slovenia Greece Latvia Slovak Rep. Austria Italy Denmark Romania Finland Hungary Czech Republic Bulgaria Lithuania Estonia Sweden Croatia

5.8 15.2 9.2 8.2 5 7.9 5 16.2 9.4 14.6 16.7 11.8 28 22 15.4 37.6 12.9 33 17.5 30.8 24.8 39.3 14.5 15.1 18.2 25.8 28.6 53.9 29

14 23 16 15 11 13 10 20 13 18 20 15 31 25 18 40 14 34 17 30 24 38 13 13 16 23 25 49 20

8.2 7.8 6.8 6.8 6 5.1 5 3.8 3.6 3.4 3.3 3.2 3 3 2.6 2.4 1.1 1 −0.5 −0.8 −0.8 −1.3 −1.5 −2.1 −2.2 −2.8 −3.6 −4.9 −9

Source  https://www.weforum.org/agenda/2017/04/who-s-the-best-in-europewhen-it-comes-to-renewable-energy/

RHC target. Similar to total renewable energy target, Malta and the Netherlands have the lowest RHC target. Among the sector-specific targets, RT targets have the lowest rates for the countries except for Finland, Germany, and Poland. On the other side, the majority of the countries’ RP target is the highest within-country sector-specific targets, except for Malta with 3.8%. The data indicate that, generally, countries’ RP target is higher than other targets, and the result may show that the importance of RP is in government policies (Table 3.4).

ITA 17.1 10.1 26

Country RHC target % RT target % RP target %

LVA 53.4 10 60

BEL 11.9 10 20.9 LTU 39 10 21

BGR 24 11 20.6 LUX 8.5 10 11.8

HRV 19.6 10 39 MLT 6.2 10.7 3.8

CYP 23.5 10 16 NLD 8.7 10 37

CZE 14.1 10.8 14.3 POL 17 20 19.3

DNK 39.8 10 100 PRT 30.6 10 60

EST 38 10 17.6 ROU 22 10 43

FIN 47 40 33 SVK 14.6 10 24

FRA 38 15 27 SVN 30.8 10.5 39.3

DEU 14 20 45

ESP 18.9 11.3 38.1

GRC 20 10.1 40

SWE 62.1 – 62.9

HUN 18.9 10 10.9

GBR 12 10.3 –

IRL 15 10 42.5

Notes FIN RT Target is for 2030, DEU RP Target for 2025, Austria: AUT, Belgium: BEL, Bulgaria: BGR, Croatia: HRV, Cyprus: CYP, Czech Republic: CZE, Denmark: DNK, Estonia: EST, Finland: FIN, France: FRA, Germany: DEU, Greece: GRC, Hungary: HUN, Ireland: IRL, Italy: ITA, Latvia: LVA, Lithuania: LTU, Luxembourg: LUX, Malta: MLT, Netherlands: NLD, Poland: POL, Portugal: PRT, Romania: ROU, Slovak Republic: SVK, Slovenia: SVN, Spain: ESP, Sweden: SWE, and United Kingdom: GBR Source REN21 (2018)

AUT 32.6 11.4 70.6

Country RHC target % RT target % RP target %

Table 3.4  National sector-specific targets for share of renewable energy for 2020

80     E. Uğurlu

3  Renewable Energy Strategies for Sustainable Development …     81

Beginning with the specific renewable sources, wind energy will be discussed at first. Although there is no consensus, James Blyth is one of the first researchers to generate electricity from a wind turbine in 1887, according to Price (2005). He built a wind turbine in the garden of his holiday cottage in England. The average cost of land-based wind decreased by 35% (IEA 2016); and in July 2017, wind power capacity of the EU reached a total of 159.5 GW. Germany had the most considerable wind power installed capacity, followed by Spain, the UK, France, and Italy (Nghiem 2017). The gap between the amount of onshore and offshore wind energy installation decreased since 2005, the reason is decrease in the amount of onshore installation and increase in the amount of offshore installations. Nevertheless, a big part of the decrease arises from onshore installations. Solar energy is another renewable energy source, and it is one of the fastest-growing sources of electricity in the world in 2015; the second source is wind energy. Additionally, the average cost of land-based solar energy decreased by 80% (IEA 2016). Solar energy is produced in two ways: the solar thermal and the PV. Wind and solar PV have some similarities, such as their production level, their prediction of production level, their modularity and their transportation. Their production level depends on the real-time availability of wind and sunlight, their production-level prediction can only be done fairly accurately up to a few days, their connection to the grid can be done via power converter technology, they are more modular than other sources, and they cannot be transported (IEA 2016). However, they have some differences in terms of some factors which are presented in Table 3.5. In addition to Table 3.5, solar energy does not make any noise or any pollution to the environment, and it is considered the most economical renewable energy source (Mekhilef et al. 2011). Solar energy is the conversion of solar irradiation to mechanical energy. Before the commercial electricity system started to use it, hydroelectricity has been the major renewable energy (Toke 2011). According to ManzanoAgugliaro et al. (2017), the estimated technically feasible hydropower is nearly 15,000 TWh/year in the world, and the annual generation of hydroelectric energy is 1021 TWh/year in Europe. In Europe, hydropower is mostly used in electricity production, and its share in

82     E. Uğurlu Table 3.5  Overview of differences between wind power and solar PV Variability at plant level

Variability when aggregated Uncertainty when aggregated Ramps

Modularity Technology

Wind power

Solar PV

Often random on sub seasonal time scales; local conditions may yield pattern Usually with a strong geographical smoothing benefit Shape and timing of generation unknown Depends on resource; typically few extreme events

Planetary motion (days, seasons) with statistical overlay (clouds, fog, snow, etc.) Once “bell shape” is reached, limited benefit

Community and above Non-synchronous grid connection and mechanical power generation Approximately 20–50%

Capacity factor

Unknown scaling factor of a known shape Frequent, largely deterministic and repetitive, steep Household and above Non-synchronous grid connection and electronic power generation Approximately 10–25%

Source IEA (2016: 21) 520

200,000

500

150,000

480

100,000 50,000

800,000 0

600,000

440

6,500

420

6,000

400

5,500

400,000

5,000

200,000 0

460

7,000

1,000,000

2000

2002 Bioenergy

2004

2006

2008

Hydropower

2010 Solar

2012

2014

Wind

2016 Total

4,500

2000

2002

2004

2006

2008

Geothermal

2010

2012

2014

2016

Marine

Fig. 3.4  Electricity generation from renewable energy sources (GWh) (Source IRENA [2018] [Solar: solar photovoltaic + concentrated solar power, Bioenergy: Solid biofuels + liquid biofuels, hydropower: renewable hydropower + pumped storage])

electricity varies from 0 to 99%, and the range of the share is due to geographic constraints and climatic suitability, government policies, and economic capabilities (Lehner et al. 2005). Bartle (2002) gives the detailed information about world hydropower potential and development activities and indicates the European countries’ completed

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and planned hydro plants. Iceland, Italy, Portugal, Bulgaria, Greece, Slovenia, and Romania are the countries which planned to construct new capacity or focus on refurbishment in 2002. The share of electricity produced from renewables is used as the indicator of renewable energy production of the world. Figure 3.4 shows the renewable energy sources in electricity generation. Because the amount of share of the sources ranges very widely, the variables are shown in two separate graphs; then for a better demonstration of the values, in the first graph, solar energy and bioenergy, and in the second graph, marine energy are presented in the right axis of the graphs. Electricity generated from renewable sources almost doubled from 2000 to 2013. The figure shows that hydropower is the main renewable energy source for electricity. Wind energy was the second largest source of electricity generation in 2016 while it was third in 2000. Convergence between hydropower and wind energy can be seen clearly from the graph. According to the data from 2000 to 2016, the growth of the renewable energy sources is –0.017, –0.011, 12.62, 941.67, 4.25, and 0.40 for hydropower, marine, wind, solar, bioenergy, geothermal, respectively. Hydropower and marine grew to just under 0.02 and they nearly remained unchanged. The incredible increase has been in solar energy and the growth of solar energy is 94,166%. Regarding the rank of the growth, the second energy source is wind and the third is bioenergy. Geothermal energy and marine energy are very rarely used compared to other sources. Therefore, they are presented in the right side of the figure. Electricity generation from geothermal energy varies between 4500 and 7000 GWh, and marine energy does between 400 and 520 GWh. Nonetheless, these two renewable energy sources take the last places in terms of the amount of production of electricity.

Conclusion Over the last 50 years, because of the economic growth of the world, energy consumption has increased rapidly and it has a disrupted effect on the environment too. Therefore, creating new energy sources with lower environmental impact has been the concern of scientists and

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governments to develop in a sustainable way. However, sustainable development includes not only environmental issues but also social and economic ones. In the first step, most of the industrialized countries made commitments to reduce emissions. The EU member countries have volunteered to cut their carbon dioxide emissions by committing some initiatives such as the SEAP and SDGs. This chapter focused on the 2030 Agenda for Sustainable Development, adopted by the United Nations (UN) in September 2015, which have 17 goals. The decreasing cost of some of the renewable energy sources has established a growing demand for renewables. In the context of the chapter, renewable energy production and consumption of the EU member countries were investigated. While SDG 6, SDG 12, and SDG 13 aim to increase the share of renewable energy in the gross final energy consumption, SDG goal 7 is the key to a renewable energy development. If the sustainability is considered in economic, social, and all other aspects, the reports and data of EU institutions show that the EU has made a significant progress on sustainable goals. Comparing the recent progress in renewable energy sources, some countries overachieved their 2020 national target, while others will need to make additional efforts. The most significant change in electricity generation is in solar energy technologies, as their costs are declining. In summary, success factors for reaching the 2020 targets include not only increasing the renewable energy use, but also increasing energy efficiency policy efforts.

References Antoine, B., K. Goran, and D. Neven. “Energy Scenarios for Malta☆.” International Journal of Hydrogen Energy 33, no. 16 (2008): 4235–46. https://doi.org/10.1016/j.ijhydene.2008.06.010. Bartle, Alison. “Hydropower Potential and Development Activities.” Energy Policy 30, no. 14 (2002): 1231–39. https://doi.org/10.1016/ s0301-4215(02)00084-8. Beccali, Marco, et al. “Improvement of Energy Efficiency and Quality of Street Lighting in South Italy as an Action of Sustainable Energy Action Plans. The Case Study of Comiso (RG).” Energy 92 (2015): 394–408.

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Berger Gerald, and Reinhard Steurer. “National Sustainable Development Strategies in EU Member States the Regional Dimension.” In Pursuit of Sustainable Development: New Governance at the Sub-National Level in Europe, edited by Susan Baker and Katerina Eckerberg. Routledge, Taylor & Francis Group, London (2008), 29–49. Bretherton, Charlotte, and John Vogler. “The European Union as a Sustainable Development Actor: The Case of External Fisheries Policy.” European Integration 30, no. 3 (2008): 401–17. https://doi. org/10.1080/07036330802142012. Chichilnisky, Graciela. “The Greening of the Bretton Woods.” Financial Times (1996, January 10): 8. http://www.p-i-r.org/pdfs/papers/118.pdf. Chichilnisky, Graciela. “What Is Sustainable Development?” Land Economics 73, no. 4 (1997): 467–91. https://doi.org/10.2307/3147240. Chichilnisky, Graciela. “The Kyoto Protocol: Property Rights and Efficiency of Markets.” In Institutions, Sustainability, and Natural Resources. Sustainability, Economics, and Natural Resources, edited by S. Kant and R.A. Berry, vo.l 2. Springer, Dordrecht (2005), 141–54. Chichilnisky, Graciela. “Global Property Rights: The Kyoto Protocol and the Knowledge Revolution.” SSRN Electronic Journal (2006). https://doi. org/10.2139/ssrn.1377902. Chichilnisky, Graciela, and Geoffrey Heal. Environmental Markets: Equity and Efficiency. Columbia University Press, New York (2000): 280. European Commission. A Sustainable Europe for a Better World: A European Union Strategy for Sustainable Development. COM, Brussels (2001): 269. European Council. “Presidency Conclusions—Göteborg European Council” (June 2001). http://ue.eu.int/ueDocs/cmsData/docs/pressData/en/ec/00200-r1.en1. pdf. Last Accessed March 17, 2018. European Union. “How to Develop a Sustainable Energy Action Plan (SEAP).” Guidebook Part 1, Luxembourg: Publications Office of the European Union (2017). Eurostat. Sustainable Development in the European Union 2011 Monitoring Report of the EU Sustainable Development Strategy. Luxembourg: Publications Office of the European Union (2011). Eurostat. Urban Europe: Statistics on Cities, Towns and Suburbs. Luxembourg: Publications Office of the European Union (2016), 9. Frankfurt School-UNEP Centre/BNEF. Global Trends in Renewable Energy Investment (2018). www.fs-unep-centre.org. Last Accessed October 17, 2018. Guijarro, Francisco, and Juan Poyatos. “Designing a Sustainable Development Goal Index Through a Goal Programming Model: The Case of EU-28

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Countries.” Sustainability 10, no. 9 (2018): 3167. https://doi.org/10.3390/ su10093167. Hinrichs-Rahlwes, Rainer. Sustainable Energy Policies for Europe. 2013. https:// doi.org/10.1201/b15934. IEA. Next Generation Wind and Solar Power from Cost to Value. OECD/IEA, Paris, France (2016). Jordan, Andrew. “Editorial Introduction: The Construction of a Multilevel Environmental Governance System.” Environment and Planning C: Government and Policy 17 (1999): I–17. Kurkowiak, Barbara, et al. (eds.) Sustainable Development in the European Union: Monitoring Report on Progress Towards the SDGS in an EU Context. Publications Office of the European Union, Luxembourg (2017). Kwant, Kees W. “Renewable Energy in the Netherlands: Policy and Instruments.” Biomass and Bioenergy 24, nos. 4–5 (2003): 265–67. https:// doi.org/10.1016/s0961-9534(02)00175-7. Lehner, Bernhard, Gregor Czisch, and Sara Vassolo. “The Impact of Global Change on the Hydropower Potential of Europe: A Model-Based Analysis.” Energy Policy 33, no. 7 (2005): 839–55. https://doi.org/10.1016/j. enpol.2003.10.018. Manzano-Agugliaro, Francisco, Myriam Taher, Antonio Zapata-Sierra, Adel Juaidi, and Francisco G. Montoya. “An Overview of Research and Energy Evolution for Small Hydropower in Europe.” Renewable and Sustainable Energy Reviews 75 (2017): 476–89. https://doi.org/10.1016/j. rser.2016.11.013. Mekhilef, S., R. Saidur, and A. Safari. “A Review on Solar Energy Use in Industries.” Renewable and Sustainable Energy Reviews 15, no. 4 (2011): 1777–90. https://doi.org/10.1016/j.rser.2010.12.018. Nghiem, Aloys. “Wind Energy in Europe: Outlook to 2020 | WindEurope” (2017). Last Accessed November 17, 2018. https://windeurope.org/aboutwind/reports/wind-energy-in-europe-outlook-to-2020/. Price, Trevor J. “James Blyth—Britains First Modern Wind Power Pioneer.” Wind Engineering 29, no. 3 (2005): 191–200. https://doi.org/10.1260/ 030952405774354921. REN21. “Renewables 2018 Global Status Report.” Last Accessed October 17, 2018. http://www.ren21.net/gsr-2018/. Roy, Naruttam Kumar, and Aparupa Das. “Prospects of Renewable Energy Sources.” In Renewable Energy Sources & Energy Storage, edited by Md. Rabiul Islam, N. K. Roy, and S. Rahman. Springer, Singapore (2018). Retrieved from https://doi.org/10.1007/978-981-10-7287-1.

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Toke, David. Ecological Modernisation and Renewable Energy. Palgrave Macmillan, New York (2011). Uğurlu, Erginbay. “Demand of Turkish Energy Market.” In Strengthening the Competitiveness of Enterprises and National Economies, edited by Bojan Krstić. Faculty of Economics, University of Niš, Niš, Serbia (2018): 55–75. UN. Sustainable Development Goals United Nations, Guidelines for the use of the SDG Logo, Including the Colour Wheel, and 17 Icons. United Nations, Department of Public Information (2017). https://www.un.org/sustainabledevelopment/wp-content/uploads/2017/12/UN-Guidelines-for-Useof-SDG-logo-and-17-icons-December-2017.pdf. Last Accessed March 10, 2018. UNCED (United Nations Conference on Environment and Development). Agenda 21 (1992). New York: United Nations. www.un.org/esa/sustdev/ documents/agenda21/english/Agenda21.pdf. Last Accessed March 11, 2006. World Bank, SE4ALL database. (2018). https://datacatalog.worldbank.org/ dataset/sustainable-energy-all. Last Accessed March 10, 2018.

Part II Renewable Energy in North and South America

4 Energy Transition and Social Movements: The Rise of a Community Choice Movement in California Ida Dokk Smith

Introduction The transition toward a low-carbon energy society requires coordination of multiple levels of governance and decision-making.1 Multi-level governance processes have been suggested as both necessary and desirable, however scholars have also questioned whether or not transitions can be steered.2 For instance, during such large-scale system changes, processes can also emerge from below.3 This chapter takes a within-case analysis approach to study one such unanticipated bottom-up process: the rapid formation of community 1Ian

Scoones, Melissa Leach, and Peter Newell, “The Politics of Green Transformations,” in The Politics of Green Transformations, ed. Ian Scoones, Melissa Leach, and Peter Newell, Pathways to sustainability series (London: Routledge, 2015). 2Elizabeth Shove and Gordon Walker, “CAUTION! Transitions ahead: politics, practice, and sustainable transition management,” Environment and Planning A 39 (2007). 3Scoones, Leach, and Newell, “The Politics of Green Transformations.”

I. D. Smith (*)  Department of Political Science, University of Oslo, Oslo, Norway e-mail: [email protected] © The Author(s) 2019 D. Kurochkin et al. (eds.), Renewable Energy, https://doi.org/10.1007/978-3-030-14207-0_4

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choice aggregation (CCA) programs in California. A CCA is a public entity that buys electricity on behalf of residents and businesses within the community, while the investor-owned utility (IOU) remains responsible for distribution and billing.4 It has come to be viewed as a hybrid public utility, where the community takes control over the supply of electricity without owning or managing the grid. Starting with a few environmentally conscious communities in the Bay Area, its popularity has taken decision-makers and the state’s three IOUs by surprise. By mid-2020, it is expected that 85% of IOUs retail will be served by CCAs, coupled with rooftop solar and retail providers, only a decade after the first CCA was launched.5 Upon launching, the CCAs promise higher renewable energy content than the IOUs and are part of local governments’ response to reduce local greenhouse gas emissions. The main argument presented here is that to understand the popularity of the CCA model in California, we have to view these public entities as part of a grassroots campaign that blend climate considerations with anti-utility resentment. The objective with this chapter is to analyze the mobilization of community choice activists in California and explain why climate interests have taken the particular form of a community choice movement. California is a diverse state and this chapter does not intend to study motivation behind each local government’s decision to form a CCA, or evaluate the impact of the CCAs on electricity markets or greenhouse gas (GHG) emissions. Social processes are complex and what is observed depends on the analytical perspective used.6 The origin and dynamics of the community

4Community Choice Aggregator is the most recent actor in California’s electricity market. Most customers have been served by the three IOUs Pacific Gas and Electric (PG&E), San Diego Gas and Electric (SDG&E), Southern California Edison (SCE), but there is also limited number of retail providers serving commercial and industrial customers. In addition, California has several public owned utilities (POUs) not under CPUC authority that serve about a quarter of electricity supplied in the state. 5CPUC, “Consumer and Retail Choice, the Role of the Utility, and an Evolving Regulatory Framework, Staff White Paper ” (California Public Utilities Commission, 2017). 6Arnold J. Meltsner, “Political Feasibility and Policy Analysis,” Public Administration Review 32, no. 6 (1972) and Peter J. May, “Politics and Policy Analysis,” Political Science Quarterly 101, no. 1 (1986).

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choice movement are examined by drawing on social movement theory. Here, scholars have come to view mobilization through the lens of three factors: political opportunity structures, social resource mobilization and framing processes.7 In particular, the chapter identifies a pattern where grassroots activists are mobilized in response to resistance from the IOUs. This movement unfolds in California, one of the most environmentally ambitious states in the U.S. Top-down policy processes include state government’s direct intervention in the electricity system, directing all electricity service providers to meet state mandated renewable energy goals. The IOUs are recognized as some of the most progressive in the U.S. on climate change policies, fully embracing the state’s cap and the trade system.8 This raise questions about the effectiveness of the CCA as a climate policy tool, and why local governments would take on the risk associated with entering the volatile power business. As a demand-side pull policy the CCAs have been criticized for greenwashing and resources shuffling. However, CCA advocates mobilize around the CCA-model not only with the aim of addressing climate change but to build an electricity system based on distributed renewable energy resources. As a local supply-side policy tool, the CCA-model has so far not delivered. To compete on price with the IOUs, the CCAs have mainly sourced power from utility-scale generation rather than local resources. In fact, rapid falling costs of utility-scale generation is one factor that facilitate the launch of CCAs. I find that grassroots activists have also come to engaged with more technical aspects of electricity regulation in order to change the incentive system currently favoring large-scale power generation. The CCA-model as a business model for distributed generation should be understood as evolving. This chapter proceeds in five sections. In the next section, I will present the current situation in California, the research question and the

7Dough McAdam, John D. McCarthy, and Mayer N. Zald, eds., Comparative Perspectives on Social Movements: Political Opportunities, Mobilizing Structures, and Cultural Framings (Cambridge: Cambridge University Press, 1996). 8Bang, Victor, and Andresen, “California’s Cap-and-Trade System: Diffusion and Lessons.”

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theoretical framework. In Section “Theory and Method,” I s­ummarize the theory, method and datasources. Section “The Community Choice Movement in California—Breaking a Monopoly Structure” analyzes the dynamics of the community choice movement. Section “Where TopDown Climate Processes Meet the Community Choice Movement” explores this movement within the context of California’s top-down climate policy processes and changing renewable energy market conditions.

Historical Background and Research Question Current Situation in California To manage the accelerating speed of communities that form CCAs, the California Public Utilities Commission (CPUC) issued in December 2017 a resolution (Resolution E-4907) that required CCAs to submit implementation plans by January 1, one year ahead of serving customers. This was quickly criticized by CCA advocates, as it would delay local government’s ability to implement CCA programs by two years. The decision was yet another “conscious, sneak attack” on community choice.9 The CPUC, tasked with regulating the state’s three IOUs argued that the decision was necessary due to reliability and cost-shift concerns.10 Implementation of CCA programs take place independent of regulatory processes structured to ensure that the state has sufficient electricity supply, leaving the IOUs responsible for customers they no longer serve. Less than a decade has passed since the first operational CCA, Marin Clean Energy (MCE), started serving customers in 2010. Following MCE, the next two CCAs launched in 2014. Then the formation accelerated, particularly along the coast. Between 2016 and 2017, 12 9CACE, Position Paper: Retract CPUC Resolution E-4907, December 21, (California Alliance for Community Energy, 2017). 10CPUC, “Resolution E-4907. Registration Process for Community Choice Aggregators, Draft February 8,” (California Public Utilities Commission, 2018).

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new communities launched or submitted implementation plans to CPUC.11 Over this period, the first CCAs have expanded to neighboring cities and counties.The number of communities currently investigating CCA programs is uncertain. One grassroots organization formed to promote the formation of a CCA in San Diego summarizes the situation on their website: “As of 2017, the growth of Community Choice programs was exceeding SDED’s ability to track monthly developments.”12 The formal process starts with the city or county passing an ordinance that creates an authority to oversee the new electricity entity, followed by an implementation plan and registration with the CPUC. To form a CCA no voter approval is required, but the local government must hold a public hearing.13 During this process, the city or county faces start-up costs related to the preparation of feasibility studies and implementation plans, education and outreach in the community, and investment in a new organization.14 Behind this formal process is a network of individual climate activists and grassroots organizations. Climate activists can be influential in putting the CCA on the local political agenda, participating in drafting the implementation plan, attending public hearings to advocate for the CCA and rallying local leaders to vote for the CCA program. As we will see, their role has also been to coordinate statewide campaigns in order to engage in outreach and education across California. Over time, a social movement has grown to consist of the operational CCAs, their newly formed lobby group California Community Choice Association (CalCCA), statewide advocacy organizations (California Energy Choice and California Alliance for Community Energy), together with multiple climate grassroots organizations. The proponents 11Ibid. 12San

Diego Energy District. “Community Electricity Choice: History and Developments 2002 through 2016,” Accessed May 24, 2018. http://www.sandiegoenergydistrict.org/cca-history.html. 13Steven Weissman and Harry Moren, California’s Proposition 16 June 2010 Primary: An Analysis (Berkeley: University of California Berkeley Law, 2010). 14Garance Burke, Chris Finn, and Andrea Murphy, Community Choice Aggregation: The Viability of AB 117 and Its Role in California’s Energy Market, an Analysis Prepared for the California Public Utilities Commission, (Berkeley: The Goldman School of Public Policy, 2005).

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view the CCA model as a way to bring control of energy decisions to the local level and a way to speed up the transition to a renewable energy economy. The movement is met with reactions ranging from skepticism to full resistance. Critics point to the early CCAs’ use of renewable energy credits and warn about green washing. However, their greatest opponents are the IOUs and affiliated labor unions. As can be expected of monopolies, the IOUs has used their political clout to protect their market.15 The CCAs destabilize not only a monopoly structure, but also interfere with top-down climate policy processes. Scholars have identified a climate coalition as critical for the passage of California’s climate legislation the “California Global Warming Solutions Act of 2006” (AB 32)16 and subsequent climate policy packages that combine cap and trade with direct regulation including the renewable portfolio standard (RPS).17 This coalition has been built over many decades with efforts to address local air pollution and has come to constitute legislators, governor’s office, experts in key agencies and environmental organizations.18 It is in the power sector that California has had the greatest success in addressing climate change. Decision makers favored tool to steer the electricity system towards renewable energy is the renewable portfolio standard (RPS). Since first adopted in 2002 the renewable energy target has been updated through a series of statutes, most recently to a 60% renewable energy goal by 2030 (SB 100 in 2018). From 2008 to 2016, the price of utility-scale solar contracts have gone down with 77%.19 It is exactly when the renewable market is booming that the rate of CCAs accelerates, a new actor in the electricity landscape that creates uncertainty.

15George J. Stigler, “The Theory of Economic Regulation,” The Bell Journal of Economics and Management Science 2, no. 1 (1971): 3–21. 16Janelle Knox‐Hayes, “Negotiating Climate Legislation: Policy Path Dependence and Coalition Stabilization.” Regulation & Governance 6, no. 4 (2012). 17Guri Bang, David G. Victor, and Steinar Andresen, “California’s Cap-and-Trade System: Diffusion and Lessons,” Global Environmental Politics 17, no. 3 (2017): 12–30. 18Ibid. 19CPUC, “2017 Annual Report: Renewables Portfolio Standard,” (California Public Utilities Commission, 2017).

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CCA advocates not only want more renewable energy, they want a particular type: locally distributed power supply. The community choice movement has set out to transform a traditional bulk purchasing entity into a model for decentralized electricity production. The CCA model has not yet proved its ability to deliver. The CCAs have to operate within the limits of the electricity market and compete on price with the IOUs to maintain customers. As local government entities they raise new questions about transparency and accountability.20 Although they are framed as providing the customer choice—an alternative to the IOUs, what is it that really distinguishes them from yet another utility in a market without full retail competition? Despite such counter arguments, a network of grassroots organizations promotes local CCA processes. These organizations want a fully renewable energy system, which they argue can be best achieved through local CCAs that promise a more decentralized, smarter energy systems than the current centralized model. How did this simple bulk power entity spur the imagination of environmentalists and become a center point for a local climate movement in California? The argument in this chapter is that to understand the rapid formation of CCAs and the form of the climate movement in California, we have to study the development of the community choice movement within the regulatory and political environment in which it unfolds.

Theory and Method The Three Explanatory Lenses of Social Movements Social movement scholars have come to view social mobilization through the lens of three factors: (1) political opportunity structures; (2) mobilizing

20Severin Borenstein, “Is “Community Choice” Electric Supply a Solution or a Problem?” Energy Institute at Haas, February 8, 2016. https://energyathaas.wordpress.com/2016/02/08/ is-community-choice-electric-suppy-a-solution-or-a-problem/.

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structures; and (3) framing processes.21 These three lenses provide a theoretical framework to analyze the dynamics of social movements rather than constituting a full explanatory theory.22 The political opportunity structures set the conditions within which movements emerge and develop. The term comprises the formal legal and institutional structures, the informal structure of power relations or elite alliances, as well as state repression.23 Some of these structures are more enduring than others, yet it is the dynamic feature of the opportunity structure that creates opportunities for and constrain movements.24 Changes in the institutional political landscape can create opportunities for mobilization. However, to emerge, develop and have an impact, movements depend on social mobilization structures that channel the efforts of the movement into action.25 According to McCarthy, mobilization structures encompass “agreed upon ways of engaging in collective action” as well as informal and formal structures that are either non-movement related such as friendship networks and unions, to activist network and social movement organizations (SMOs).26 Compared to more objective opportunities or the presence/absence of mobilizing structures, the framing process highlights subjective barriers to mobilization.27 Without the perception of fear or anger, it is

21McAdam, McCarthy, and Zald, Comparative Perspectives on Social Movements: Political Opportunities, Mobilizing Structures, and Cultural Framings. 22Sidney G. Tarrow, Power in Movement, Social Movements and Contentious Politics, 3rd ed. (Cambridge: Cambridge University Press, 2012). 23Doug McAdam, “Conceptual Origins, Current Problems, Future Directions,” in Comparative Perspectives on Social Movements, ed. Doug McAdam, John D. McCarthy, and Mayer N. Zald (Cambridge: Cambridge University Press, 1996). 24Ibid. 25McAdam, “Social Movement Theory and the Prospects for Climate Change Activism in the United States.” 26John D. McCarthy, “Constraints and Opportunities in Adopting, Adapting, and Inventing,” in Comparative Perspectives on Social Movements, ed. D. McAdam, John D. McCarthy, and Mayer N. Zald (Cambridge: Cambridge University Press, 1996), 141. 27McAdam, “Social Movement Theory and the Prospects for Climate Change Activism in the United States.”

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unlikely that a movement will develop. Framing process can be understood as the catalyst for mobilization: mediating between opportunity, organization, and action are the shared meanings and cultural understandings that people bring to any instance of potential mobilization.28

These three elements relate to each other in a dynamic way. Changes in political factors can set “in motion framing processes that further undermine the legitimacy of the system.”29 Framing then not only takes place within the social movement, but also in response to the political opportunity structure. On the other hand, the potential for system-critical framing is again conditioned on access to mobilizing structures. Framing processes are more likely to emerge and have a greater impact where strong organizations exist.30 As the social movement goes from an early phase to a more mature phase, the relative importance of these three lenses changes as well as the factors themselves.31 For instance, over time the movement’s capacity to influence and shape the political environment constitutes a new relationship for empirical investigation. Another example is how the context in which the framing takes place changes. A counter movement can develop that respond by creating their own frames. This can result in a “framing competition.”

Studying CCA as a Social Movement In this chapter I treat the formation of CCAs as a collective act, brought about through broad social mobilization. In California, local activists have stepped up to protect the right for communities to form CCAs 28McAdam,

“Social Movement Theory and the Prospects for Climate Change Activism in the United States.” 29McAdam, McCarthy, and Zald, Comparative Perspectives on Social Movements: Political Opportunities, Mobilizing Structures, and Cultural Framings. 30Ibid. 31Ibid.

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each time the IOUs have attempted to block further expansion. The same activists have formed grassroots organizations that have educated local organizations about benefits of the CCA model, initiated local processes to form CCAs in their communities and rallied local governments. Synthesizing research on social movements, Diani defines social movements as “networks of informal interactions between a plurality of individuals, groups and/or organizations, engaged in political or cultural conflicts, on the basis of shared collective identities.”32 The objective with this study is to describe this network of actors that have come to constitute this movement and analyze its dynamics in the intersection between political opportunity structures, mobilizing structures and framing process.33 Within this movement, the CCAs play a particular role. The CCAs are both the chosen vehicle for activists to pursue their goals, a subject to the framing process, and an actor in the movement themselves. Furthermore, I view the CCA movement as an expression of climate interests. Such activism is generally lacking in the U.S.34 Californians on the other hand, are well known for their commitment to address climate change.35 Local government’s climate action is also on the rise in California.36 This, combined with the state government’s dedication to address climate change, seems to confirm the empirical evidence that mobilization of particular interests occurs at times when the institutional politics are conducive to the movement’s aim.37 32Mario

Diani, “The Concept of Social Movement,” The Sociological Review 40, no. 1 (1992): 1. that I understand social mobilization structures to be mainly those resources available prior to the movement. Over time the boundaries between what is the social mobilization structure and the network of actors that constitutes the movement overlap. 34McAdam, “Social Movement Theory and the Prospects for Climate Change Activism in the United States.” 35Karapin argues that high level of support for climate policy is a result rather than a cause of climate and renewable energy legislation. Roger Karapin, Political Opportunities for Climate Policy: California, New York, and the Federal Government (New York: Cambridge University Press, 2016). 36Louise W. Bedsworth and Ellen Hanak, “Climate Policy at the Local Level: Insights from California,” Global Environmental Change 23, no. 3 (2013). 37McAdam, “Social Movement Theory and the Prospects for Climate Change Activism in the United States.” 33Note

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However, the community choice movement is not only about the end goal. It is concerned with how to reach this goal. It is about the winners and losers of the energy transition, and choice of technological pathways. The puzzle is not climate mobilization, but why such mobilization takes a particular form. Here, the study engages with the literature on the politics of the energy transition38 and the notion of two different technology pathways.39,40 The decentralized electricity model, as an alternative to the current centralized electricity system, also holds promise of a more democratic energy system.41 This study relates to Cheon and Urpelainen’s comparative study of anti-fossil fuel campaigns in the U.S.42 To understand these campaigns, they argue that we have to analyze the nature of the issue at hand. By addressing the fossil fuel industry directly, the nature of the climate change problem changes. The activists are now David fighting Goliath, unified through shared ecological values and where “small-wins”43 create further momentum for growth. Similarly, the CCA-movement is a hybrid movement that unifies social justice organizations, anti-utility activists and local climate activists. Their activities do not carry high costs or risks. Furthermore, as we will see, the formation of individual CCAs and the political battles can be understood as small-wins for the movement. The CCA model has so far received little attention in academic studies. Hess analyzes the CCA model prior to the boom in CCAs in California, from the perspective of grassroots innovations that by

38James

Meadowcroft, “What About the Politics? Sustainable Development, Transition Management, and Long Term Energy Transitions,” Policy Sciences 42, no. 4 (2009): 323–40. 39Scoones, Leach, and Newell, “The Politics of Green Transformations.” 40Gerry Braun and Stan Hazelroth, “Energy Infrastructure Finance: Local Dollars for Local Energy,” The Electricity Journal 28, no. 5 (2015): 6–21. 41Kacper Szulecki, “Conceptualizing Energy Democracy,” Environmental Politics 27, no. 1 (2018): 21–41. 42Andrew Cheon and Johannes Urpelainen, Activism and the Fossil Fuel Industry (London: Routledge, 2018). 43Karl E. Weick, “Small Wins: Redefining the Scale of Social Problems,” American Psychologist 39, no. 1 (1984): 40–49.

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definition involve the aspiration for political and social change.44 He notes that such grassroots innovation can easily be coopted by for-profit interests. From my understanding, this is the first academic work that addresses the broader social movement behind the formation of CCAs in California.

Method and Data This within-case analysis describes the development of what I view as a community choice movement in California from early 2000 until 2017.45 The dependent variable is the network of actors from grassroots community choice activists to the operational CCAs that constitute this movement. The dynamic in which this movement develops can be analyzed from the perspective of opportunity structures, social mobilization and framing process. A case is a unit of a larger population.46 Today, seven states in the U.S. have legislation in place that allows cities and counties to form a CCA program to purchase and develop power on behalf of its residents, businesses and municipal facilities. Among states with CCA legislation in place, California is the only state that does not have retail choice. As such this case should be treated as a special case. The single-case study design indicates that I prioritize internal validity over external.47 The case study draws on primary and secondary resources. Semistructured interviews with CCAs, energy experts and local governments officials were conducted in May/June 2017 (see Appendix 1). During the interviews, we discussed California’s renewable energy transition 44David J. Hess, “Industrial Fields and Countervailing Power: The Transformation of Distributed Solar Energy in the United States,” Global Environmental Change 23, no. 5 (2013): 847–55. 45Recent wildfires in California have again put the IOU model on the political agenda, which might have implications for the CCAs role in the electricity system. This recent situation is not part of the scope here. 46John Gerring, Case Study Research: Principles and Practices (Cambridge: Cambridge University Press, 2006). 47Ibid.

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in general and CCAs in particular. I also attended a CCA community meeting in the City of Mountain View. To document the growth of the movement, I have mapped the CCA legislative history, including regulatory proceedings (Appendix 2). Bill analyses proved particularly helpful as they provide an overview of actors that support and oppose specific bills.48 These lists are not treated as comprehensive, but as an indicative of the type of actors that mobilize. In addition, I have used secondary resources such as reports and news articles to document the context. Document studies allow me to identify the mobilization of actors over time and the particular policy issues that mobilize the CCA advocates. The following analysis is presented in a similar way, chronologically based on key legislative changes. The approach focuses on the interaction between the CCA activists and the electricity regime, while leaving out the local politics for launching individual CCAs.

The Community Choice Movement in California—Breaking a Monopoly Structure Adoption of Community Choice Legislation The crack in the opportunity structure that conditions the development of the community choice movement in California is the passage of AB 117 in 2002. Yet, the concept of community aggregation was already introduced in 1996 as part of the deregulation of the electricity system as a means to enable smaller electricity consumers to benefit from retail competition.49 The understanding of CCA as a consumer protection measure is still reflected in the Public Utility Code, whereas a CCA is

48I

have used the most recent bill analysis that included overview of supporters and opponents. All bills and bill analysis can be found at http://leginfo.legislature.ca.gov/. 49Weissman and Moren, “California’s Proposition 16 June 2010 Primary: An Analysis.”

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authorized in order “to reduce transaction costs to consumers, provide consumer protections, and leverage the negotiation of contracts.”50 The electricity crisis which followed from the deregulation efforts in the 90s, initiated the early CCA advocates to lead the effort that ensured the adoption of AB 117.51 As explained by Hess, the initiative came from community-controlled power advocates in San Francisco.52 Electricity rate hikes and power outages made the city eager to municipalize their electricity service, but their attempts met opposition from PG&E. The CCA model, created by Paul Fenn, had the advantage that it would not involve any public acquisition of the distribution network and appeared as a more palatable solution. It provided an alternative to IOU service, although several still favored full public ownership. Three aspects of the bill are particularly relevant to understand ongoing dynamics. First, the bill introduces a new design feature. Once a CCA was launched, it would become the default option for local residents and businesses who would have the option to opt out.53 Such design would ensure the scale needed for the program to be economically viable.54 The opt-out design was important for the successful launch of the first CCA in California and a source for political conflict. Second, in response to the electricity crisis, state policy-makers authorized the Department of Water Resources (DRW) to purchase electricity for utility customers. To ensure predictable revenue stream and prevent cost shift, CPUC was authorized to roll back retail competition. The launch of CCAs today introduces competition and choice in the IOU’s service territories. There is a strong coalition of industrial and commercial interests that

50CAL.

PUB. UTIL. CODE Sect. 366.2. (c)(1). “Industrial Fields and Countervailing Power: The Transformation of Distributed Solar Energy in the United States.” 52Ibid. 53The opt-out design was also discussed during the deregulation debates. However, at that time the CCA program was designed as an opt-in system. 54Weissman and Moren, “California’s Proposition 16 June 2010 Primary: An Analysis.” 51Hess,

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lobby to bring back full retail competition, while the CCAs favor the current model that reallocates funds to local communities.55 Finally, the bill provides for the recovery of sunk costs, such as the DRW’s procurement and IOUs purchase obligations, associated with each customer that would leave IOU service.56 However, over the years, the scope of the departure fees and non-bypassable charges have changed beyond the electricity crisis costs.57 How these fees are measured and implemented can undermine the viability of CCA formation and operation, and is an ongoing contentious regulatory issue.58 Although there is not yet a statewide community choice movement, the dynamic that would come to define it is already present. For instance, City of San Marcos and Chula Vista both tried to break away from San Diego Gas & Electric (SDG&E) in the early 2000s due to high electricity rates.59 Similarly when the South San Joaquin Irrigation District took steps to acquire PG&E’s assets, it turned into a long political battle. PG&E insisted that their assets were not for sale and suggested the CCA model as an alternative.60 The subsequent public hearings as part of the CPUC rulemaking to implement AB 117 give us an indication of the actors that took an interest in the CCA model at this early stage.61 In addition to the three IOUs, one group consisting of the City and County of San Francisco, the City

55Burke, Finn, and Murphy, “Community Choice Aggregation: The Viability of AB 117 and Its Role in

California’s Energy Market, an Analysis Prepared for the California Public Utilities Commission.” similar bill (AB 9xx (Midgen)) was vetoed by the Governor the year before due concern for cost-shift as CCA-customers would leave IOU service. 57Elizabeth Kelly et al., White Paper on the Evolution of Non-bypassable Charges on Community Choice Aggregation, (MCE Clean Energy, 2017). 58See ibid. and CACE, Power Charge Indifference Adjustment (Pcia), Letter to California Public Utilities Commission, March 2, 2016, (California Alliance for Community Energy, 2016). 59Lisa Kovach, “Power Struggle,” San Diego Business Journal (2004). 60Michelle Macado, “Electricity Providers Fight over Customers in Stockton, Calif., Area,” The Record (KRTBN) 2004. 61CPUC, “Decisions Resolving Phase 2 Issues on Implementation of Community Choice Aggregation Program and Related Matters,” in Decision 05-12-041 December 15, 2005, ed. CPUC (California Public Utilities Commission, 2005). 56A

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of Moreno Valley, the Community Environmental Council, the Local Government Commission, the County of Los Angeles and the City of Chula Vista filed joint briefs as “CCA Community and Supporters.” In addition, consumer protection organizations, Paul Fenn and the first authority to operationalize the CCA concept (San Joaquin Power Authority) were among the participants. The CCA model was created by community power activists in San Francisco, but the city was not alone in pursuing alternatives to IOU service. Furthermore, the electricity crisis had a direct impact on the opportunity structure as concern for reliability and energy independence was put on the agenda. Finally, in the wake of the electricity crisis, the bill (AB 117) was passed with “overwhelming support.”62 Notably, PG&E was in favor, alongside California State Association of Counties, League of California Cities and independent cities.63 Although the opportunity was there, no rapid migration of customers to CCAs was in sight. What was needed was one successful CCA that combined climate change concern and consumer protection. The symbol that proved the unfeasible feasible, that would spark the aspiration for CCA programs across the state.

Early Efforts By the time the Legislature revisited the CCA legislation in 2011, a handful of communities had initiated local processes to explore the CCA program and one had successfully launched in Marin County. Although the initial bill was passed with PG&E’s consent, these local initiatives had turned out to be fraught with controversies. As with earlier efforts of municipalization, PG&E launched local anti-CCA campaigns fighting each individual community and then sponsored a ballot initiative to block any further communities from pursuing CCAs. The

62Darrell Steinberg, Letter from Senator Darrell Steinberg to PG&E CEO Peter Darbee, (December 22, 2009). 63Senate Rules Committee, AB 117 (Midgen), Bill Analysis 091202.

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origin of the next bill (SB 790) was these political battles, in particular the “atrocious behavior” surrounding the launch of MCE.64 The first CCA application authorized by CPUC was the San Joaquin Power Authority (SJPA) in 2007.65 The CCA planned to serve customers in Fresno County and dozens of municipalities in the middle of the state. Two years later the program had to suspend all activities. When SJPA was terminated, the executive director pointed to three separate reasons behind the decision: poor fiscal conditions of local governments due to the state budget deficit; energy market instability; and opposition from PG&E.66 All three explanations are external factors. The CCA was ready, but the timing was never right. In the mid-2000s, industry analysts also indicated that high natural gas prices and lack of providers prevented CCAs from taking place.67 The two first CCAs in California both entered the market at a time of excess supply.68 This explanation mirrors the current claim that CCA programs are taking off due to favorable market conditions.69 Similar to political opportunity structures, favorable market conditions are understood as a facilitating factor. California Alliance for Community Energy (CACE) provides an alternative explanation that addresses the motivation behind the CCA and the social mobilization structure that CCA proponents could draw upon in their effort to launch the CCA. They argue that SJPA’s sole

64Senate

Energy, Utilities and Communications Committee, AB 790 (Leon), Bill Analysis 042611. 65CPUC, “Letter from Steve Larson Executive Director CPUC to David Orth, General Manager Kings River Conservation District,” (California Public Utilities Commission, 2007). 66Power Market Today, “California Community Power Project Set Aside (Again),” July 9, 2009. 67Energy Washington Week, “Retail Electric Utility Competition Likely Will Remain Moribund,” April 12, 2006. 68Seth Baruch and Shawn Marshall, Community Choice Energy in Silicon Valley 2015 Assessment Report, (Prepared for Silicon Valley Community Choice Energy Partnership (SVCCEP) LEAN Energy US, 2015). 69This argument was made by The Utility Reform Network (TURN) at CPUC en banc February 1, 2017 according to the Center for Climate Protection’s comments, accessed January 3, 2019. http://www.cpuc.ca.gov/uploadedFiles/CPUC_Public_Website/Content/Utilities_and_ Industries/Energy/Energy_Programs/Costs_and_Rates/CCA_and_Direct_Access/CPUC%20 CCA%20En%20Banc%20-%20Point-by-Point%20Table%20Final.pdf.

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focus on price competitiveness and not anchoring the program within the local community made the CCA fail. SJPA made a commitment to deliver a five percent discount to the incumbent utility rate. When they could not fulfill, this promise, their “reason to exist evaporated and it ultimately folded.”70 For each of the early communities, there are unique circumstances for the formation of the CCA. For instance, MCE depended on loans from three individuals in addition to the County of Marin to start operations.71 The CCA effort mobilized residents willing to invest not only time but also money in the effort. The second CCA to launch, Sonoma Clean Power (SCP), would also lean on Sonoma Water Authority for resources: financial, legal and political.72 For these early CCAs, a champion within local government was needed to get the programs off the ground.73 As more CCAs have formed and people become familiar with the concept, it has become easier to access finance and efforts receive less reservation from city council members.74 It is beyond the scope of this chapter to provide a thorough account of the motivation and resources mobilized to launch each CCA. Several communities explored the CCA model, and potentially another might have succeeded had Marin not. However, because the framing process tends to depend on where the movement originated,75 it is worth to delve into what the success of Marin in particular has meant for the mobilization of grassroots activism and the success of one CCA in general.

70CACE, Good Energy Is a Bad Deal, Why Good Energy Inc. Is a Bad Choice for Your Community Choice Energy Program, (California Alliance for Community Energy, 2016), 2. 71The County of Marin loaned a total of $540,000 without interest. MEA also issued promissory notes to three individuals for loans totaling $750,000 with interest. MCE, Financial Statement, (MCE, 2010). 72I8. 73Ibid. 74Ibid. 75McAdam, McCarthy, and Zald, Comparative Perspectives on Social Movements: Political Opportunities, Mobilizing Structures, and Cultural Framings.

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From the beginning, the CCA initiative in Marin was anchored in the community’s concern for climate change.76 Marin County was the first county to formally adopt GHG reduction targets in California. MCE also emphasizes their historical linkages to local climate activists on their website: Recognizing the opportunity to increase access to cleaner energy sources and combat the mounting problem of greenhouse gas emissions on a local level, Rebekah Collins, co-Founder of Sustainable Fairfax, brought AB 117 to the attention of the Marin County Board of Supervisors and Fairfax Town Council.77

As the popular story goes, California’s communities took what was essentially a consumer protection vehicle and turned it into a tool to address climate change.78 This linkage between renewable energy and CCA was not unique for Marin. The efforts in San Francisco also combined the CCA process with renewable energy ambitions. Similarly, official statements by Marin County government officials indicate that they too were concerned about price. Yet this close linkage to the environmental agenda has been important for the identity of the CCAs. Such linkage might not have been as evident had the SJPA been the first one out. SJPA planned for both renewable energy and a gas-fired power plant. “For these communities at the end of PG&E’s distribution grid, the reliability and price stability of power are the primary drivers, though clean energy is also a concern.”79 In addition to the environmental concern, the understanding of electricity as a public good has been important for the CCA advocates. However, contrary to efforts in San Francisco that were clearly rooted in the aspiration for full municipalization, Marin County government officials also challenged PG&E to meet their demand for renewable energy.

76I3. 77MCE.

“About us.” Accessed May 24, 2018. https://www.mcecleanenergy.org/about-us/. for instance, LEAN Energy’s Description of CCA in California, accessed May 24, 2018. http://www.leanenergyus.org/cca-by-state/california/. 79Peter Asmus, Introduction to Energy in California, vol. 97, California Natural History Guides (Berkeley: University of California Press, 2009), 321. 78See,

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The response from PG&E was that it would be unfair to offer renewable energy strategies to Marin County not available for other counties.80 Thus, the company’s inability and unwillingness to meet customer demand created new opportunities for CCA advocates.81 What the CCA movement needed was not only the launch of a CCA, but a success story. MCE became that story. By January 2011, the CCA had refinanced their debt, repaid the three individuals and the county, and expected ongoing operating profits.82 Several news articles from this early phase show how PG&E consistently used the argument that communities would take on risk when entering the volatile electricity business.83 Cost and financial risk were also concerns among local elected officials. With the success of MCE, CCA advocates could counter this argument. However, MCE’s focus on meeting renewable energy requirements came at a cost. In their opening bid, the only provider with a competitive offer was Shell Energy.84 To get MCE off the ground, the CCA signed the contract, but it was not well received by environmentalists. Furthermore, MCE promised 25% renewable content. As they expanded, this put upward pressure on costs. The CCA leaned on renewable energy credits to meet their renewable energy goals, leading to accusations of green washing.85 What all of the early CCA initiatives had in common was resistance from PG&E. CPUC found that utility opposition, coupled with lack of clarity regarding certain statutory provisions, had forced some CCA efforts to be abandoned and discouraged others.86 This opposition turned particular fierce in Marin County where PG&E offered cities 80Lisa Weinzimer, “San Fransisco Bay Area Cities Are Taking Close Look at Community Choice Aggregation,” Electric Utility Week, January 14, 2008. 81I2 and I8 also mention the inability of PG&E to meet specific demand. 82MCE, Financial statement, (MCE, 2011). 83See e.g. Jeremy Hay, “An Energy Community: Defeat of State Prop. 16 Boosts opens for those advocating a locally based electricity supply, more utilization of renewable sources,” The Press Democrat, June 11, 2010. 84I8. 85Jim Phelps, “MCE’s and Kate Sears’ $500 million deal with Shell Oil—Part 3 of 3 Parts,” April 30, 2016. https://marinpost.org/blog/2016/4/30/kate-sears-and-shell-oil. 86Senate Energy, Utilities and Communications Committee, SB 790 (Leon), Bill Analysis 050211.

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money if they declined to participate and even threatened to cut off power delivery to the authority.87 Closer to launch, PG&E attempted to hold on to customers by calling customers to solicit an opt-out. CPUC threatened to fine the company.88 However, these were all local fights. When PG&E initiated a statewide ballot initiative, the company turned it into a statewide fight.

The Coordination of the First Statewide CCA Campaign As MCE was prepared to be launched, PG&E changed their tactics. They sponsored a statewide ballot initiative (Proposition 16) that would require a two-thirds majority vote of local voters before cities and counties could establish a CCA or a municipal utility.89 This is the first attempt from PG&E to constrain the opportunity structure by changing the formal legal structure. The ballot initiative would set in motion the first statewide CCA campaign. The campaign against the ballot initiative brought CCA advocates together, advocates who until recently had worked locally without knowing each other.90 Furthermore, the campaign promoted CCA across California. As noted by executive director of TURN, a consumer protection organization: “More people are going to know about community choice and public power who never knew about it before, and they’re going to want it.”91 California Taxpayer’s Association and the California Chamber of Commerce supported the proposition. According to the California

87Jeremy

Hay, “An Energy Community: Defeat of State Prop. 16 Boosts Opes for Those Advocating a Locally Based Electricity Supply, More Utilization of Renewable Sources,” The Press Democrat, June 11, 2010. 88Debra Kahn, “Electricity; Calif. Rebukes PG&E for Anti-competitive Tactics,” Greenwire, May 4, 2010. 89See CaliforniaChoices.org for information and link to campaign documentation, accessed January 3, 2019. https://www.californiachoices.org/proposition-16. 90Ventura County Star, “A corporate bet that will keep losing,” June 16, 2010. 91Ventura County Star, “A corporate bet That will keep losing.”

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Republican Party Voter Guide, the party was also supportive. The proponents emphasized taxpayer protection against local governments taking on debt to expand into costly and risky electric delivery service.92 Campaign financing revealed that PG&E was almost the sole contributor to the $46.1 million raised for the “yes” campaign. The two other IOUs remained on the sideline. This was a solo performance, “one corporation’s attempt to buy a law to protect itself.”93 The proposition was controversial. Eight democratic senators sent a letter to PG&E urging the company to refrain from the initiative, arguing that the initiative was “misguided as a matter of public policy.”94 The senators pointed out that while PG&E had taken steps to advance the state’s renewable energy policy, the company provided less renewable energy as a percentage of total sales than it did when AB 117 passed. The senators viewed the CCAs as an alternative means to develop renewable resources. A broad coalition consisting of civic organizations, media outlets, labor organizations, environmental and political organizations, cities and individuals mobilized under the “No on Prop 16, Stop the PG&E Powergrab.”95 The Local Clean Energy Alliance in the Bay Area write on their website that they played a key role in bringing the coalition together.96 The “no” side organized regional working groups, rallies at CPUC and community outreach. Proposition 16 lost with only a 5% margin. The “no” side had managed to mobilize in PG&E territory, while other parts of California were more supportive.97 The defeat of the proposition can be understood as a small win for CCA advocates that would spur further mobilization across the state. Furthermore, the excessive amount of funds 92See,

for instance, Cal-Tax Position note, http://www.caltax.org/Proposition16SUPPORT.pdf. County Star, “A corporate bet That will keep losing.” 94Steinberg, “Letter from Senator Darrell Steinberg to PG&E CEO Peter Darbee.” 95For full list of supporters Local Clean Energy Alliance, The Coalition Opposing Proposition 16, (Local Clean Energy Alliance, 2010). 96The Local Clean Energy Alliance provide overview over activities and documents from the campaign on their website, accessed May 24, 2018. http://www.localcleanenergy.org/powergrab/ prop-16/alliance-role. 97Marc Lifsher and Dianna Klein, “PG&E’s customers vote down Prop. 16,” Los Angeles Times, June 10, 2010. 93Ventura

4  Energy Transition and Social Movements …     113

spent by PG&E compared to the limited budget of $130,000 available for the no-campaign strengthened the position of the CCA advocates. This is the backdrop of AB 790. In 2011, the legislature adopted the bill in order to remove barriers for local governments interested in launching a CCA, address the abuses of market power by particularly PG&E in the launch and operation of MCE, and regulate IOUs’ ability to spend ratepayer funds on marketing campaigns. The support for the bill reflected the recent battle.98 Environmental organizations that tend to favor more decentralized solutions—Sierra Club and Environment California—are now on board, as are local grassroots organizations such as the Climate Protection Campaign, Local Clean Energy Alliance and Sustainable Mill Valley. Furthermore, new interest from communities is reflected in the number of public authorities, cities and counties supportive to the bill. PG&E did not oppose the bill, but the two other IOUs did. The bill restates the legislature’s intent to enable local governments to take a more active role in electricity service delivery. However, the legislature is not only an elite ally. The same year, the legislature passed AB 976, again sponsored by the Coalition of California Utility Employees. The author pointed to a conflict of interests as local jurisdictions turned to third-party energy experts for advice, who would later turn around to offer service during implementation. Local government officials were ill-equipped to question the assumptions of the advice, while the energy experts had an incentive to paint “rosy scenarios of cheap renewable power.”99 The bill was eventually vetoed by the governor.

From Protecting Opportunity Structures to Advocating Distributed Generation The resistance from PG&E both enabled coordination of CCA activities across California and raised the awareness of the CCA alternative. The company’s resistance contributed to define the interest for the CCA 98Senate 99Senate

Rules Committee, SB 790 (Leon), Bill Analysis 090911. Rules Committee, AB 976 (Hall), Bill Analysis 080812.

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model at the local level: “Now that it’s (Proposition 16) been defeated, this has certainly galvanized the strong supporters of this in Sonoma County.”100 Sonoma County would be the second community to launch their CCA program in 2014. This pattern was repeated when AB 117 was again up for debate. Assembly member Bradford introduced AB 2145 in 2014, again sponsored by the Coalition of California Utility Employees. This time they suggested changing the CCA program to an opt-in system. What is significant this time is how the formal CCA organizations take a different position than the grassroots activists. As the bill moved through the committees, MCE, SCP, LEAN Energy US, and Sierra Club worked to change the language of the bill.101 They succeeded in changing the opt-in clause to a geographical restriction. With this change, the CCAs agreed to withdraw their rejection. Similarly, Sierra Club California withdrew its objection 30 days before the session ended because they could see no environmental issues. However, by now, a statewide coalition called Californians for Energy Choice had formed, determined to stop the bill. Since 2010, community choice advocates had participated in a monthly conference call and now reached out to organizations across the state. The coalition consisted of governments, businesses, environmental justice organizations and clean energy advocates. Grassroots efforts included rallying, direct lobbying and 30,000 opposition emails. Later, the coalition raised money and hired its own lobbyist. Although it cleared two Senate committees, the bill never came up for a vote in the Senate where no one was willing to sponsor the bill. With the bill dead, the CCA advocates formalized the campaign as a CCA advocacy organization. The organization would from now not only work to defend CCAs on the state-level, but also educate and

100Jake Macekzie Sonoma County officials, quote from Jeremy Hay, “An Energy Community: Defeat of State Prop. 16 Boosts Opes for Those Advocating a Locally Based Electricity Supply, More Utilization of Renewable Sources,” The Press Democrat, June 11, 2010. 101See the Local Clean Energy Alliance for a detailed description of the process. Local Clean Energy Alliance. “Victory! AB 2145 Defeated in the California Senate.” Accessed May 24, 2018. http://www.localcleanenergy.org/AB-2145Victory.

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support local communities in their efforts to establish CCAs. According to one of the members: The monopoly utilities made a huge mistake when they forced us to create a coordinated statewide coalition to fight AB 2145. We have now educated thousands of people and legislators to the fact that Community Choice is the state’s most powerful tool to give communities local control over electricity supply, and rapidly build clean energy programs that will put Californians back to work, and combat the climate crisis. We can now use this new coalition to change the game on energy in California.102

However, changing the game on energy is not only about competition and public ownership. CCA proponents are advocates of increased utilization of distributed energy resources. The CCA model is sold to local policy-makers as a way to increase local renewable energy production, create local jobs and produce economic benefits for the community.103 The CCA is the mean to build locally resilient communities. Here, the CCA advocates meet a new barrier: an electricity market that favors large-scale centralized electricity production. CCAs tend to sign up to large renewable energy providers.104 Part of the reason is that as a young organization, a CCA’s main concern is to provide competitive prices to the IOUs in their electric service area.105 The structure that has given rise to the community choice movement also limits the CCAs to deliver on their promises. However, we should not expect local CCA activists to stop once the CCA becomes operational. Environmental grassroots and CCA organizations have also become active in electricity policy in general where they advocate for distributed generation; from changing the

102Quote from Roy L. Hales, “California’s ‘Monopoly Protection Act,’ AB 2145, Is Dead,” The ECOReport, September 3, 2014. 103I10. 104Hess, “Industrial Fields and Countervailing Power: The Transformation of Distributed Solar Energy in the United States.” 105I10.

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transmission access charge and net energy metering, to advocate against regionalization of the electricity market.106 When the Clean Coalition, a national renewable energy policy advocacy group, sponsored a bill (SB 692) to change the method for calculating transmission access charges,107 a broad set of distributed generation advocates, representing solar interests (companies, SEIA and Vote Solar) energy experts and a newly formed DG Industry Association were supportive. In addition, the bill gained support from a host of grassroots organizations that have been active in local CCA initiatives.108 Again, opposition came from utility labor organizations, IOUs and large-scale power producers. What is noteworthy is that we currently have a wide set of activists that engaged with highly technical aspects of the electricity system. Issues such as transmission access charges and resource adequacy processes are technicalities that one might expect to raise little enthusiasm. Yet, with the CCA model in operation, the next step for the CCA advocates is to change the regulatory structure that currently favor large-scale power production.

The Framing Battle Energy democracy or green scam? The motivation might be a more rapid decarbonization, coupled with local jobs, locally sited and distributed energy resources. However, this is still rhetoric.109 There are signs that the CCA model is not without flaws. The solar industry that was one of the drivers behind SCP expresses dissatisfaction with the ability

106See e.g., California Association for Energy Choice position on transmission access charges (TAC) and CALISO regionalization, accessed May 24, 2018. http://cacommunityenergy.org/. 107In California TAC is charged on electricity consumed, independent of the use of the transmission grid. This, the sponsor argues, creates a subsidy for utility scale power supply. 108E.g., Carbon Free Mountain View, Carbon free Palo Alto, East Bay Clean Energy Alliance, San Diego Electric District. Senate Rules Committee, SB 692 (Allen) Bill Analysis 050117. 109I10.

4  Energy Transition and Social Movements …     117

of the SCP to increase locally sourced solar energy.110 Yet, CCA advocates continue to describe the CCA as a success to be copied because of the local economic benefits that come with the program.111 Similarly, AB 2495 also introduced standardization of information provided to customers regarding electricity price and GHG reduction, standard to measure GHG reduction and authorize CPUC to process complaints against CCAs. Consumer protection measures were needed according to the author, because the launch of MCE showed that customers had experienced problems opting out. Furthermore, the CCA did not deliver GHG reduction or lower prices than IOUs.112 These concerns disappeared in what was popularized as the “monopolist act.” Currently, there is an ongoing framing battle between the community choice movement and the IOUs.113 Early on, PG&E used financial risk and cost to taxpayers as an argument to prevent local elected officials from adopting CCAs. Today, such objections are wrapped into the broader goal of addressing climate change. The most controversial CCA process at the moment is in San Diego. The city is currently served by SDG&E, which will lose a significant share of their customers if local policy-makers were to implement a CCA program. Here, the Climate Action Campaign is backing the community choice proposal, while the Clear the Air Coalition is fighting it. The framing battle was further institutionalized when SDG&E’s parent company, Sempra Energy, set up the state’s first shareholder-funded lobbying group on CCA. According to their website, Sempra Service supports CCA under the “right conditions” when such programs are equitable to all electricity ratepayers, lead to real environmental impacts

110I10,

I11. for instance, Baruch and Marshall, “Community Choice Energy in Silicon Valley 2015 Assessment Report” and Fosterra Clean Energy Consulting, Community Choice Energy: What Is the Economic Impact of Local Renewable Power Purchasing? San Joaquin Valley Case Study, (Center for Climate Protection, 2017). 112Assembly Committee on Utilities and Commerce, AB 2145 (Bradford), Bill analysis 042514. 113The author of AB 2145 refers to a survey of 400 residents in the City of Richmond where almost 75% of the responders were not familiar with MCE. 111See,

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and GHG reduction.114 The conflict of interests between CCAs and the IOUs is not addressed. While this framing battle is taking place, there are also more tangible ways the CCA movement is threatened. One ongoing dispute is the exit fee. The CPUC’s decision on how to calculate this fee could undermine new CCA efforts.115 Furthermore, there is also a risk of cooptation as private companies enter what is a promising CCA market and offer an outsourced CCA model to local governments. This has raised concern among CCA advocates, as the structure of such public private partnership is expected to be less responsive to the public interest.116

Where Top-Down Climate Processes Meet the Community Choice Movement The previous section described the political dynamics between the IOUs and the CCA advocates, which over time has come to constitute a community choice movement. Constraining forces spurred further mobilization. The formation of CCAs has also helped the movement to grow. Local grassroots organizations have become statewide advocates for the CCA model, and the early CCAs paved the way settling regulatory disputes. However, this is not only a story about constraining forces or one where climate activists alone turned the CCA into a vehicle to address climate change. Document studies reveal that also state lawmakers saw the CCA model as a means to increase renewable energy production. In response, the California Energy Commission, the state’s energy planning agency, funded a pilot project to examine how CCAs could meet this goal.117 Marin County was one of the participating communities. 114Sempra Services. “Community choice aggregation.” Accessed June 8, 2018. https://www.sempraservices.com/community-choice-aggregation. 115I7. 116CACE, “Good Energy Is a Bad Deal, Why Good Energy Inc. Is a Bad Choice for Your Community Choice Energy Program.” 117G. Patrick Stoner, John Dalessi, and Gerald Braun, Community Choice Aggregation Pilot Project (California Energy Commission [CEC], 2009).

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The political dynamics also tell us that the CCA advocates depended on alliances within the legislature. Hess views the state government as the countervailing power to the IOU.118 The legislature, is however, not one coherent entity as there are pro-utility and pro-CCA views within the same building. The governor’s office has also intervened to protect the CCAs. The elite support, however, seems to have changed over time. For instance, CPUC focus early on was to protect the CCAs from IOU attacks. With the increased popularity of the CCA model, action is also needed to protect IOU customers and ensure reliable electricity service. In addition to these processes directly related to CCAs, two topdown climate policy processes have been identified as particularly relevant. First the California Air and Resources Board (CARB) requires all cities to conduct their own GHG reporting and implement climate city action plans. For local governments, a CCA is a silver bullet, the number one measure that overnight will help the community meet their GHG emission targets.119 This was also the case for Marin County where the CCA model was explored as part of the county’s early GHG targets. The fact that local governments today can buy affordable renewable electricity is a direct result of a few governments, including California, which were willing to invest in market transformation renewable energy programs.120 This brings us to the second policy process, the state’s intervention in the power sector, through regulation and subsidies. Here the electricity structure so fiercely opposed by CCA advocates has also been an important element of the state’s success to bring down the cost of renewable energy. Until now, the legislature has set goals and ordered CPUC to implement them using the IOUs as the vehicle for change.121

118Hess,

“Industrial Fields and Countervailing Power: The Transformation of Distributed Solar Energy in the United States.” 119I8. 120Volkmar Lauber, “Political Economy of Renewable Energy,” in International Encyclopedia of the Social & Behavioral Sciences, 2nd ed., James D. Wright (Oxford: Elsevier, 2015). 121I8.

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When consumers now leave for CCA service, the question arises on who should pay for the first renewable energy contracts that were signed by the IOUs. The CCAs themselves have expressed the desire to take on the role as the state’s vehicle for climate policy.122 Although direct regulation has worked until now, it is not given that it is politically feasible to regulate the society to a low-carbon energy society. For instance, the IOUs will be a barrier for change once the gas infrastructure is up for debate.123 With the CCAs, the state’s ability to fund climate change policies over electricity rates is reduced, but new opportunities for partnerships are created. With the introduction of CCAs, the state’s RPS can be understood as the floor, while the CCAs aspires to higher goals. However, there is a fine line between marketing and real impact. A CCA can buy hydropower from Washington and market their product as 100% GHG free, but there are no mechanisms to ensure that the power was not initially intended for another electricity customer now supplied with coal bought in the spot market.124 The main concern is whether the launch of CCAs is translated into construction of new renewable capacity. Others again argue that these concerns are overstated.125 The community choice movement has proved to have large mobilization power by tapping into anti-utility resentment and local climate concerns, but these two considerations are not always the same. Once AB 2145 was amended in 2014, the environmental organization Sierra Club considered the bill to be unrelated to environmental concern. Given a strong state-level climate coalition in California, we can expect that the CCAs will also be monitored and held accountable. Initiatives that indicate such response are new regulatory requirements, such as signing long-term contracts (SB 350) and GHG emission reporting (AB 1110). 122See e.g., Center for Climate Protection, Comments: CPUC Community Choice Aggregation En Banc February 1, 2017, accessed January 3, 2019. http://www.cpuc.ca.gov/General. aspx?id=6442453177. 123Interview 7. 124I2. 125I7.

4  Energy Transition and Social Movements …     121

Conclusions Once we start to delve into the development of the community choice movement in California, the early leadership on climate change taken by environmental advocates and local governments stands out. Striking is also the incredible speed with which wind and solar technology have entered the power sector and changed the paradigm of what is feasible. In a video clip from March 2001, one of the behind-the-scenes forces of MCE, Barbara George, is leading a demonstration in front of the state legislature demanding public power: “If we have public power the people will decide what kind of power we will have in the future. We will be able to demand solar power, wind power, clean renewable energy …”126 At that time, California did not have a RPS or GHG reduction target. Fifteen years later, a 100% renewable energy goal is discussed within the same building (SB 100 2017). Such strong public preference for climate policy makes California distinct in a U.S. context. What research on the state-level climate policy has not been able to capture is that this public support does not end at the ballot box. At the moment, it seems like the speed at which the physical power infrastructure is transformed is outpaced by cultural acceptance and demand for renewable energy. Furthermore, new technologies on the consumer side of the electricity system empower the consumer, requiring the electricity regime to adapt. As state-level policy concern has turned from supporting individual renewable energy technologies to the integration of these technologies, the formation of CCAs accelerates. The acceleration is taking place in the cross-section between local governments seeking ways to meet their local GHG targets, new technologies on the distribution side of the grid, merging with ideas of energy democracy and local control. The movement has not only been influential in forming CCAs across the state, the movement has now moved on to advocate for changes of the electricity incentive system. In retrospect, we might find that

126MCE.

“Learning Center.” accessed June 2017. https://www.mcecleanenergy.org/learning-center/.

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the movement has helped to educate and build electricity competence among environmentalists and local governments. Acknowledgements   I want to thank the American-Scandinavian Foundation and Centre for International Climate and Energy Policy (CICEP) for financial support to conduct fieldwork in California spring 2017. I am grateful to all of those whom I interviewed for taking the time out of their busy schedules and to Jeremy Waen for commenting on an early draft.

Appendix 1: Interviews California, Spring 2017   I1.   I2.   I3.   I4.   I5.   I6.   I7.   I8.   I9.   I10.   I11.

City government official, June 28 Consumer protection organization, June 6 Community Choice Aggregation, June 13 (Phone) Community Choice Aggregation July 6 Community Choice Aggregation, July 3 County supervisor, June 20 Energy expert, June 8 (Phone) Energy expert, June 23 Solar advocacy organization, June 29 Solar company, July 4 (Phone) Solar company, July 4 (Phone)

Appendix 2: Legislative Review 2002: AB 117 (Midgen) authorize local governments, independent or together through a joint power authority, to aggregate consumer electric load and purchase electricity from consumers designed as an opt-out program. The bill describes essential CCA program elements, requires the state’s utilities to provide certain services to CCAs, and establishes methods to protect existing utility customers from liabilities that they might otherwise incur when a portion of a utility’s customers transfer their energy services to a CCA.

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2004: CPUC decision D.04-12-046 address rates, cost and tariff allocation issues. 2005: CPUC Decision 05-12-041 establish rules and procedures for the implementation of CCA programs. The Commission determined that AB 117 does not confer general jurisdiction over CCAs but requires the Commission to take certain actions to protect utility bundled customers and assure reasonable service to CCAs. 2007: CPUC authorize the first CCA in California, San Joaquin Valley Power Authority, located in San Joaquin Valley. The application was submitted by the Kings River Conservation District (KRCD) in April 2007. In addition to the Kings River Conservation District, Kings County and 12 cities were behind the initiative the CCA was temporarily suspended in 2009 and formally dissolved in 2013. 2010: Marin Clean Energy (MCE) start serving customers and become the first active CCA in California. Expanded into three other counties. When launched the Member Agencies of MCE included eight of the twelve municipalities located within the geographic boundaries of Marin County. During the second half of 2011 the four remaining municipalities joined. Since 2011 MCE has expanded into three other counties: Contra Costa County, Napa County and Sonoma County (City of Benicia). 2010: The ballot initiative Proposition 16 sponsored by PG&E result in 52.3% against and 47.7% in support. If the initiative had succeeded the constitution would be amended by altering the necessary qualifications for CCA programs. Under the act, a potential local municipal utility and/or CCA (establishment and expansion) would need to gain approval of two thirds of the voters who live in the area the utility would cover. 2011: SB 790 (Leon) adopted by the Legislature and signed into law by the Governor. Directs CPUC to institute a procedure to develop a code of conduct to govern the act of IOUs in relation to communities that consider, form or implement a CCA and to implement this code of conduct. Particularly the bill limits the IOUs ability to use ratepayer funds to market against CCAs. The bill also regulates data sharing from IOUs to CCAs, and allow CCAs to become administrators of public purpose funds for energy efficiency programs.

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2011: AB 976 (Hall) passed both houses in the Legislature. Vetoed by the Governor. The bill would have prohibited consultancies providing advice on the feasibility of forming a CCA to apply for contracts for services during implementation of the same CCA. 2014: Sonoma Clean Power (SCP) in Sonoma County becomes the second CCA to start serving customers. Initially its members consisted of five cities and the unincorporated area of Sonoma County. By 2016 the CCA had expanded to serve the remaining cities in the county, and into Mendocino County. 2014: Lancaster city in Southern California become the first city to launch its own CCA program. 2014: AB 2145 (Bradford) introduced in the Assembly. Initially the policy would change the design of CCA programs to an opt-in system. The bill is later changed to limit CCAs from exceeding a certain geographical boundary. The bill passed the Assembly but did not come up for a vote in the Senate. 2015: SB 350 (Leon) increases the states renewable portfolio standard (RPS) to 50% renewable by 2030. The bill state that CCAs are required to participate in the RPS under the same terms as other electrical corporations. Give the CPUC authority to require CCAs to sign long-term contracts if needed. 2016: CleanPowerSF the San Francisco’s CCA started serving customers. It took over a decade for the city to get the program up and running. CleanPowerSF is administered by the San Francisco Public Utilities Commission (SFPUC). 2016: Peninsula Clean Energy (PCE) in San Mateo County start serving customers. The first feasibility study was done on behalf of 20 cities and the unincorporated San Mateo County. According to their website PCE now serve all of San Mateo County. 2016: California Community Choice Association (CalCCA) was formed to represent the interest of CCA providers in the state legislature. Since formed operational members have grown to 16 CCAs. 2016: AB 1110 (Ting) modifies disclosure requirement to retail supplier of electricity. Every retail supplier is required to annually report to its customer the greenhouse gas (GHG) emission intensity of the supplier’s electricity source, and the GHG emission associated

4  Energy Transition and Social Movements …     125

with all statewide retail electricity sales. Directs California Energy Commission to adopt accounting guidelines through a proceeding. CCAs established after January 1, 2016 is exempt for up to three years. 2017: Silicon Valley Clean Energy (SVCE) in Santa Clara County start serving customers. The CCA is the first to offer 100% GHG-free electricity as their default option. The joint power authority, Silicon Valley Community Choice Energy Partnership (SVCCEP), consisted initially of three cities and the unincorporated Santa Clara County. The partnership was extended and by the time the CCA started serving customers all cities were members of the joint power authority. 2017: San Diego Gas & Electric’s parent company, Sempra Energy, sets up the state’s first shareholder-funded lobbying group on CCA. 2017: En banc organized by CPCU in February. Participants from TURN, CCAs, Clean Coalition, Utilities, CPUC, as well as Shell North America Energy and LEAN Energy U.S. 2017: SB 692 (Allen) sponsored by the Clean Coalition directs CAISO initiate a stakeholder initiative to consider modifications to the methodology to calculate transmission and wheeling access charges. Passed the Senate. 2017: SB 618 (Bradford) specifies existing obligation to file integrated resource plans (IRP) to CPUC, by requiring such integrating resource plan to contribute to a diverse and balanced portfolio of resources. When introduced the bill also expanded CPUC authority over CCAs by requiring CPUC to approve the IRP submitted. 2018: CPUC resolution E-4907. The resolution modifies CCA implementation. After 2019 a CCA would have to submit implementation plans one year before launching. The rule only applies to CCAs that had not filed implementation plans by December 8, 2017.

References Asmus, Peter. Introduction to Energy in California. California Natural History Guides, vol. 97. Berkeley: University of California Press, 2009.

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Bang, Guri, David G. Victor, and Steinar Andresen. “California’s Cap-andTrade System: Diffusion and Lessons.” Global Environmental Politics 17, no. 3 (2017): 12–30. Baruch, Seth, and Shawn Marshall. “Community Choice Energy in Silicon Valley 2015 Assessment Report.” Prepared for Silicon Valley Community Choice Energy Partnership (SVCCEP) LEAN Energy US, 2015. https://www. svcleanenergy.org/files/managed/Document/86/SVCCEPAssessmentReportLEANEnergyMay2015.pdf. Bedsworth, Louise W., and Ellen Hanak. “Climate Policy at the Local Level: Insights from California.” Global Environmental Change 23, no. 3 (2013): 664–77. Borenstein, Severin. “Is ‘Community Choice’ Electric Supply a Solution or a Problem?” Blog. In Energy Institute at Haas, Accessed 8 February 2016. https://www.energyathaas.wordpress.com/2016/02/08/is-communitychoice-electric-suppy-a-solution-or-a-problem/. Braun, Gerry, and Stan Hazelroth. “Energy Infrastructure Finance: Local Dollars for Local Energy.” The Electricity Journal 28, no. 5 (2015): 6–21. Burke, Garance, Chris Finn, and Andrea Murphy. “Community Choice Aggregation: The Viability of AB 117 and Its Role in California’s Energy Market, an Analysis Prepared for the California Public Utilities Commission.” Berkeley: The Goldman School of Public Policy, 2005. http://www.local.org/ goldman.pdf. CACE. “Good Energy Is a Bad Deal, Why Good Energy Inc. Is a Bad Choice for Your Community Choice Energy Program.” California Alliance for Community Energy, 2016. http://cacommunityenergy.org/wp-content/ uploads/2016/10/Good-Energy-is-a-Bad-Deal_10-7-16.pdf. ———. “Position Paper: Retract CPUC Resolution E-4907, December 21.” California Alliance for Community Energy, 2017. http://cacommunityenergy.org/wp-content/uploads/2017/12/CACE-E-4907-Response_final. pdf. ———.“Power Charge Indifference Adjustment (PCIA), Letter to California Public Utilities Commission, March 2, 2016.” California Alliance for Community Energy, 2016. http://cacommunityenergy.org/wp-content/ uploads/2016/03/CACE-PCIA-position-3-2-16.pdf. Cheon, Andrew, and Johannes Urpelainen. Activism and the Fossil Fuel Industry. London: Routledge, 2018. CPUC. “2017 Annual Report: Renewables Portfolio Standard.” California Public Utilities Commission, 2017.

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———. “Consumer and Retail Choice, the Role of the Utility, and an Evolving Regulatory Framework, Staff White Paper.” California Public Utilities Commission, 2017. ———. “Decisions Resolving Phase 2 Issues on Implementation of Community Choice Aggregation Program and Related Matters.” In Decision 05-12-041 December 15, 2005, edited by CPUC: California Public Utilities Commission, 2005. ———. “Letter from Steve Larson Executive Director Cpuc to David Orth, General Manager Kings River Conservation District.” California Public Utilities Commission, 2007. http://www.cpuc.ca.gov/general. aspx?id=2567. ———. “Resolution E-4907. Registration Process for Community Choice Aggregators, Draft February 8.” California Public Utilities Commission, 2018. http://docs.cpuc.ca.gov/publisheddocs/published/g000/m208/k956/ 208956263.pdf. Diani, Mario. “The Concept of Social Movement.” The Sociological Review 40, no. 1 (1992): 1–25. Energy Washington Week. “Retail Electric Utility Competition Likely Will Remain Moribund.” April 12, 2006. Factiva. Fosterra Clean Energy Consulting. Community Choice Energy: What Is the Economic Impact of Local Renewable Power Purchasing? San Joaquin Valley Case Study. Center for Climate Protection, 2017. https://climateprotection. org/wp-content/uploads/2017/06/CCE-Benefits-Report-for-San-JoaquinValley-June-1-2017.pdf. Gerring, John. Case Study Research: Principles and Practices. Cambridge: Cambridge University Press, 2006. https://doi.org/10.1017/ cbo9780511803123. Hales, Roy L. “California’s ‘Monopoly Protection Act,’ AB 2145, Is Dead.” The ECOReport, September 3, 2014. https://theecoreport.com/ california-assembly-bill-2145-is-dead/. Hay, Jeremy. “An Energy Community: Defeat of State Prop. 16 Boosts Opes for Those Advocating a Locally Based Electricity Supply, More Utilization of Renewable Sources.” The Press Democrat, June 11, 2010. Factiva. Hess, David J. “Industrial Fields and Countervailing Power: The Transformation of Distributed Solar Energy in the United States.” Global Environmental Change 23, no. 5 (2013): 847–55. Kahn, Debra. “Electricity; Calif. Rebukes Pg&E for Anti-competitive Tactics.” Greenwire, May 4, 2010. Factiva.

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Karapin, Roger. Political Opportunities for Climate Policy: California, New York, and the Federal Government. New York: Cambridge University Press, 2016. Kelly, Elizabeth, Shalini Swaroop, Nathaniel Malcolm, and Camille Stough. White Paper on the Evolution of Non-Bypassable Charges on Community Choice Aggregation. MCE Clean Energy, 2017. Knox‐Hayes, Janelle. “Negotiating Climate Legislation: Policy Path Dependence and Coalition Stabilization.” Regulation & Governance 6, no. 4 (2012): 545–67. Kovach, Lisa. “Power Struggle.” San Diego Business Journal. 2004. Factiva. Lauber, Volkmar. “Political Economy of Renewable Energy.” In International Encyclopedia of the Social & Behavioral Sciences (2nd Edition), edited by James D. Wright, 367–73. Oxford: Elsevier, 2015. Lifsher, Marc, and Dianna Klein. “PG&E’s Customers Vote Down Prop. 16.” Los Angeles Times, June 10, 2010. http://articles.latimes.com/2010/jun/10/ local/la-me-california-prop16-20100610. Local Clean Energy Alliance. The Coalition Opposing Proposition 16. Local Clean Energy Alliance, 2010. http://www.localcleanenergy.org/files/ NoProp16-Coalition.pdf. Macado, Michelle. “Electricity Providers Fight Over Customers in Stockton, Calif., Area.” The Record (KRTBN), 2004. Factiva. May, Peter J. “Politics and Policy Analysis.” Political Science Quarterly 101, no. 1 (1986): 109–25. McAdam, Doug. “Conceptual Origins, Current Problems, Future Directions.” In Comparative Perspectives on Social Movements, edited by D. McAdam, John D. McCarthy, and Mayer N. Zald. Cambridge: Cambridge University Press, 1996. ———. “Social Movement Theory and the Prospects for Climate Change Activism in the United States.” Annual Review of Political Science 20, no. 1 (2017): 189–208. McAdam, Dough, John D. McCarthy, and Mayer N. Zald, eds., Comparative Perspectives on Social Movements: Political Opportunities, Mobilizing Structures, and Cultural Framings. Cambridge: Cambridge University Press, 1996. McCarthy, John D. “Constraints and Opportunities in Adopting, Adapting, and Inventing.” In Comparative Perspectives on Social Movements, edited by D. McAdam, John D. McCarthy, and Mayer N. Zald. Cambridge: Cambridge University Press, 1996. MCE. Financial Statement. 2010. https://www.mcecleanenergy.org/wp-content/uploads/financial-statements-2010.pdf. ———. Financial Statement. 2011. https://www.mcecleanenergy.org/wp-content/uploads/financial-statements-2011.pdf.

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Meadowcroft, James. “What About the Politics? Sustainable Development, Transition Management, and Long Term Energy Transitions.” Policy Sciences 42, no. 4 (2009): 323. Meltsner, Arnold J. “Political Feasibility and Policy Analysis.” Public Administration Review 32, no. 6 (1972): 859–67. Phelps, Jim. “MCE’s and Kate Sears’ $500 Million Deal with Shell Oil—Part 3 of 3 Parts.” The Marin Post, Blog. April 30, 2016. https://marinpost.org/ blog/2016/4/30/kate-sears-and-shell-oil. Power Market Today. “California Community Power Project Set Aside (Again).” July 9, 2009. Factiva. Scoones, Ian, Melissa Leach, and Peter Newell. “The Politics of Green Transformations.” In The Politics of Green Transformations, edited by Ian Scoones, Melissa Leach and Peter Newell. Pathways to sustainability series. London: Routledge, 2015. Shove, Elizabeth, and Gordon Walker. “CAUTION! Transitions Ahead: Politics, Practice, and Sustainable Transition Management.” Environment and Planning A 39 (2007): 763–70. Steinberg, Darrell. “Letter from Senator Darrell Steinberg to PG&E CEO Peter Darbee.” December 2, 2009. http://www.localcleanenergy.org/files/ Steinberg_a_Darbee-16.pdf. Stigler, George J. “The Theory of Economic Regulation.” The Bell Journal of Economics and Management Science 2, no. 1 (1971): 3–21. Stoner, G. Patrick, John Dalessi, and Gerald Braun. “Community Choice Aggregation Pilot Project.” California Energy Commission CEC, 2009. https://www.energy.ca.gov/2008publications/CEC-500-2008-091/CEC500-2008-091.PDF. Szulecki, Kacper. “Conceptualizing Energy Democracy.” Environmental Politics 27, no. 1 (2018): 21–41. Tarrow, Sidney G. Power in Movement, Social Movements and Contentious Politics. 3rd ed. Cambridge: Cambridge University Press, 2011. Ventura County Star. “A corporate bet that will keep losing.” June 16, 2010. Factiva. Weick, Karl E. “Small Wins: Redefining the Scale of Social Problems.” American Psychologist 39, no. 1 (1984): 40–49. Weinzimer, Lisa. “San Fransisco Bay Area Cities Are Taking Close Look at Community Choice Aggregation.” Electric Utility Week, January 14, 2008. Factiva. Weissman, Steven, and Harry Moren. “California’s Proposition 16 June 2010 Primary: An Analysis.” Berkeley: University of California Berkeley Law, 2010.

5 Wind Energy and Policy in Brazil: An Assessment of the State of Bahia Lucigleide Nery Nascimento

Introduction Modern societies’ need for energy is insatiable. The production and use of energy give rise to innumerable consequences or externalities. Dams and river flow management have negatively affected aquatic species, fishermen, and local culture in Brazil and elsewhere.1,2 Worldwide, the burning of fossil fuel is responsible for the emissions and build-up in the atmosphere of carbon dioxide—CO2 and other greenhouse gases— GHGs leading to global warming/climate change and consequences

1Peter

Henry Gleick, The World’s Water 2008–2009: The Biennial Report on Freshwater Resources (Washington: Island Press, 2009), 139–50. 2Lucigleide Nery Nascimento, “The Long Journey to Become the ‘River of National Unity’: The São Francisco River Basin from 1940 to 2008 and the Interactions of Environment, Government and Local Citizens” (PhD diss., University of New Hampshire, 2010).

L. N. Nascimento (*)  Superintendência de Estudos Econômicos e Sociais da Bahia (SEI), Salvador, Bahia, Brazil © The Author(s) 2019 D. Kurochkin et al. (eds.), Renewable Energy, https://doi.org/10.1007/978-3-030-14207-0_5

131

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such as extreme weather events.3 In comparison to hydropower and fossil energy, wind power involves lesser known environmental impacts. Wind is a source of renewable and primary energy and when in operation, wind turbines are GHGs emissions free. A mixed hydro-thermal-wind power system produces electrical energy in Brazil. The Northeast and Southeast/South of the country have significant potential to wind electrical energy4 because of the frequency and intensity of the airstream there.5 In addition, the hydro capacity is distributed in various parts of the nation. The regional networks (south, southeast/central west, north and northeast) of electrical energy production and transmission lines are unified in a countrywide grid and shape the National Interconnected Electrical Energy System (Sistema Interligado Nacional )—SIN. Brazil has an installed generation capacity of 158,500,112 kW (in April 15, 2018). Wind energy accounted for 7.54% of used sources. But hydropower is still the major origin of electricity in that country. It meant 64.59% of the source of electrical energy used in the nation. Thermal sources supplied 27.47% of the electricity used.6,7,8 The study of this form of renewable energy in Brazil, and the effects of federal policies upon Bahia, is of relevance to natural resources management and governmental policy. The production and use of wind power could complement hydropower electricity and would allow water resources to be allocated to other purposes in the

3Intergovernmental Panel on Climate Change, “The Climate System: An Overview in Climate Change 2001: The Scientific Basis,” http://www.grida.no (Last accessed October 8, 2005). 4Ministério de Minas e Energia do Brasil, Plano Nacional de Energia 2030 (Brasília: Ministério de Minas e Energia, 2007). 5Alexandre Filgueiras and Thelma Maria V.e Silva, “Wind Energy in Brazil—Present and Future,” Renewable and Sustainable Energy Reviews 7, no. 5 (2003): 439–51. 6Electrical energy obtained by the combustion of fossil fuel or biomass; or released in nuclear reactions. 7Agência Nacional de Energia Elétrica do Brasil, “Banco de Informações de Geração: Capacidade de Geração do Brasil,” http://www2.aneel.gov.br/aplicacoes/capacidadebrasil/capacidadebrasil.cfm (Last accessed April 18, 2018). 8Agência Nacional de Energia Elétrica do Brasil, “Banco de Informações de Geração: Fontes de Energia Exploradas no Brasil,” http://www2.aneel.gov.br/aplicacoes/capacidadebrasil/Combustivel. cfm (Last accessed April 15, 2018).

5  Wind Energy and Policy in Brazil …     133

Fig. 5.1  The Brazil, the Northeast, and the São Francisco River Basin (shaded area) (Source Figure by author derived from geo-referenced data from Agência Nacional de Águas—Hydroweb [Agência Nacional de Águas do Brasil, “Hidroweb: Sistema de Informações Hidrológicas,” http://hidroweb.ana.gov.br/, last accessed September 3, 2009])

drought-prone São Francisco River Basin in the Northeast of Brazil (Fig. 5.1). Nearly 48% of the watershed lies in the state of Bahia.9 The period of highest wind velocity (May–November) coincides with the lowest flow of the São Francisco River which is the major source of hydroelectrical power from the region to the national system and

9Comitê

da Bacia Hidrográfica do Rio São Francisco, Plano de Recursos Hídricos da Bacia Hidrográfica Do Rio São Francisco 2004–2013 (Salvador: Comitê da Bacia Hidrográfica do Rio São Francisco, 2004).

134     L. N. Nascimento

of water for local irrigation.10,11 Nine dams and the human management of them govern the flow of that river. However, an average of 100 MW of wind energy saves 40 m3/s of water of the São Francisco.12

Methodology The Policy Sciences Analytic Framework (PSAF) is a tool for policy analysis.13 Developed by Harold Lasswell in the 1930s, PSAF’s three major dimensions are: problem orientation, context or social process, and decision process.14 The instrument aims to improve knowledge of and in policy.15 Lasswell (1971) suggested that policy should have stability, being lawful and enforceable, and having a source of support. It should also be comprehensive, fitting different situations and not only attempting to address a moment of crisis.16 A policy needs to be able to adjust to a changing environment and human systems. Policy is a decision made and put into effect.17 However, the PSAF analyst should recognize that its outcome also depends upon the participants, their interactions and how they interact, and their context, including the natural environment, where the issue of concern is embedded.18 As a Policy Sciences analysis, this research 10Alexandre

Filgueiras and Thelma Maria V.e Silva, “Wind Energy in Brazil—Present and Future,” Renewable and Sustainable Energy Reviews 7, no. 5 (2003): 439–51. 11Agência Nacional de Energia Elétrica do Brasil, Atlas de Energia Elétrica do Brasil (Brasília: Agência Nacional de Energia Elétrica, 2005). 12Ministério de Minas e Energia do Brasil, “Benefícios do Proinfa,” http://www.mme.gov.br/ web/guest/acesso-a-informacao/acoes-e-programas/programas/proinfa/beneficios (Last accessed April 15, 2018). 13Harold Dwight Lasswell, “The Policy Sciences of Development,” World Politics 17, no. 2 (1965): 286–309. 14Timothy W. Clark, The Policy Process: A Practical Guide for Natural Resources Professionals (New Haven, CT: Yale University Press, 2002). 15Harold Dwight Lasswell, A Pre-view of Policy Sciences (New York: Elsevier, 1971). 16Ibid. 17Harold Dwight Lasswell, “The Interactions of World Organization and Society,” The Yale Law Journal 55, no. 5 (August 1946): 889–909. 18Lucigleide Nery Nascimento, “The Long Journey to Become the ‘River of National Unity’: The São Francisco River Basin from 1940 to 2008 and the Interactions of Environment, Government and Local Citizens” (PhD diss., University of New Hampshire, 2010).

5  Wind Energy and Policy in Brazil …     135

ends with, among other things, an evaluation of successes and failures of the PROINFA program (Program of Incentives for Alternative Electricity Sources). This qualitative research is based upon the collection and the critical review of empirical data, relevant legal statutes, and the secondary literature.19 Academic libraries, governmental collections, and news media provided quantitative and qualitative data. This study synthesizes research from a variety of sources from different fields to gain knowledge about an important subject—renewable energy. The conclusions of this multidisciplinary way of analyzing and reporting on wind energy and governmental policy for the sector (PROINFA), in Brazil, focusing upon the case of Bahia, then serve as the basis to provide recommendations, adding to the literature on policy, environmental, and socio-economic studies.

The Policy Sciences Analytic Framework: Problem Orientation—Describing Trends In Brazil, wind energy’s history can be summarized as follows: • In 1992, Fernando de Noronha, an archipelago off the northeastern coast received the first wind engine for electricity generation capable of producing 75 kW of potency.20 • In 2002, the nation created the Alternative Source of Electric Energy Incentive Program (Programa de Incentivo às Fontes Alternativas de Energia Elétrica)—PROINFA (Law No. 10,438 of April 2002).21 The program mandated, during its first phase, the implementation of 3300 MW of installed capacity, employing equally three forms of alternatives sources: wind, small-scale hydropower plants, and biomass.

19Joseph

Alex Maxwell, Qualitative Research Design: An Interactive Approach (London: Sage, 1996). Nacional de Energia Elétrica do Brasil, Atlas de Energia Elétrica do Brasil (Brasília: Agência Nacional de Energia Elétrica, 2008). 21Lei No. 10,438 of April 26, 2002 – Dispõe Sobre a Expansão da Oferta de Energia Elétrica…Diário Oficial da União edição extra (2002). 20Agência

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• In 2004, PROINFA announced its first public call to contract energy from renewable sources and more than one-third of the total agreed was from wind power.22 • In 2009, the federal government held the first specific public auction to contract reserve of wind energy to meet national demands.23 Most of these wind energy enterprises were in Rio Grande do Norte, Ceará, Rio Grande do Sul, Bahia, Paraná, and Piauí. Four of these states are situated in the Northeast of Brazil. • In 2011, the nation’s installed capacity exceeded 1,000,000 kW. By October of that same year, approximately 1% of the Brazilian electric energy came from wind power.24 • In 2017, Brazil’s installed capacity exceeded 10,000,000 kW, about 7% of the nation’s electric energy.25

The Policy Sciences Analytic Framework: The Decision Process The decision process involving wind energy mostly comprised of reactive measures. A crisis in the electric system influenced major governmental steps. The droughts in the Northeast of Brazil caused hydropower energy shortages in 2001 and 2002. The scarcity spurred the search for alternative sources; and the federal government launched PROINFA. The program supports wind and other renewable energy

22Ricardo Marques Dutra, and Alexandre Salem Szklo, “Incentive Policies for Promoting Wind Power Production in Brazil: Scenarios for the Alternative Energy Sources Incentive Program (PROINFA) Under the New Brazilian Electric Power Sector Regulation,” Renewable Energy 33, no. 1 (January 2008): 65–76. 23Ministério de Minas e Energia do Brasil, Plano Decenal de Expansão de Energia 2019 (Brasília: Ministério de Minas e Energia, 2010). 24Agência Nacional de Energia Elétrica do Brasil, “Banco de Informações de Geração: Capacidade de Geração do Brasil,” http://www.aneel.gov.br/aplicacoes/capacidadebrasil/capacidadebrasil.asp (Last accessed October 2, 2011). 25Banco Nacional do Desenvolvimento, “O Desenrolar da Energia Eólica no Brasil,” https:// www.bndes.gov.br/wps/portal/site/home/conhecimento/noticias/noticia/energia-eolica-brasil (Last accessed April 29, 2018).

5  Wind Energy and Policy in Brazil …     137

projects such as biomass and small-scale hydropower plants.26 Indeed, the PROINFA regulates and provides incentives for alternative power production in Brazil. The objective is to increase the share of electrical energy from such renewable sources supplied by independent power producers to the National Interconnected Electrical Energy System.27 The law initially mandated the implementation of 3300 MW of installed capacity employing equally three alternatives sources: wind, small-scale hydropower plants, and biomass. The second stage of the program set the goal of 10% of the national annual electricity consumption resulting from the three sources established by PROINFA. The Ministry of Mines and Energy (Ministério de Minas e Energia )—MME oversees planning (e.g., coordinates energy-related planning, implements energy policy, defines the economic value of energy). Three important points regarding the PROINFA were the limit set to the use of national equipment (initially at least 50% of the value) and services in the provision of electrical energy from alternative basis; the definition of such sources; and the long-term financial benefit for the projects. A share of the market was reserved to defend the development of domestic industry for wind power generation’s equipment, setting base limits for the use of national technology. Such domestic industry protection has a long history in Brazil going back to Kubitschek’s program to develop a Brazilian vehicle industry.28 The government provided economic incentives for those in the protected marketplace, it bought energy in auctions at prices for the specific source above an established price floor that made the businesses financially and economically possible for a long-term period (initially for a fifteen-year timeframe; later altered for a term of twenty-year). In Brazil, electricity produced by wind power has employed equipment manufactured by corporations such as Enercon, Suzlon, Vestas, Wobben, IMPSA-WPE, GE/Alstom, Siemens/Gamesa, WEG and 26Lei

No. 10,438 of April 26, 2002 – Dispõe sobre a Expansão da Oferta de Energia Elétrica… Diário Oficial da União edição extra (2002). 27Lei No. 10,438 of April 26, 2002 – Dispõe sobre a Expansão da Oferta de Energia Elétrica… Diário Oficial da União edição extra (2002). 28Juscelino Kubitschek de Oliveira, the JK, served as President of Brazil from 1956 to 1961.

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Acciona. WobbenWindpower, a subsidiary of Germany’s Enercon was the first large-scale wind engine factory to install an industrial facility in Brazil.29 State and/or state-mixed-capital corporations have also taken part in this growth. Other variables have positively affected the development of wind power in Brazil: funding programs from the Brazilian Socio-Economic Development Bank (Banco Nacional de Desenvolvimento Econômico e Social)—BNDES and the Superintendence for the Development of the Northeast (Superintendência do Desenvolvimento do Nordeste)—SUDENE; and tax breaks for wind energy equipment/parts.30,31,32

The Policy Sciences Analytic Framework: The Social Process Worldwide, the literature on public perception has shown support for renewable energy at the general level but presents controversies and opposition at the local level.33 In Brazil, a search of the general media shows a positive interest in wind energy especially of its possibility for regional development in areas such as the Northeast, including job creation and concerns over sustainability. Wind is seen as a clean source of energy with low environmental impacts. In addition, the towers attract tourists who come to see the farms. But, at the local level,

29Wobben Windpower—Enercon, “Wobben Windpower—Enercon,” http://www.wobben.com. br/ (Last accessed October 10, 2011). 30Leila Coimbra, “Cresce Desembolso do BNDES com Energia,” A Folha de São Paulo Online, http://www1.folha.uol.com.br/mercado/953597-cresce-desembolso-do-bndes-com-energia.shtml (Last accessed August 3, 2011). 31Fecomércio, Informe Técnico (Rio de Janeiro: Fecomércio, 2010). 32Banco Nacional do Desenvolvimento, “O Desenrolar da Energia Eólica no Brasil,” https://www. bndes.gov.br/wps/portal/site/home/conhecimento/noticias/noticia/energia-eolica-brasil (Last accessed April 29, 2018). 33Patrick Devine-Wright, “Beyond Nimbyism: Towards an Integrated Framework for Understanding Public Perceptions of Wind Energy,” Wind Energy 8, no. 2 (2005): 125–39.

5  Wind Energy and Policy in Brazil …     139

nongovernmental organizations have documented the socially negative side of wind projects: pressure upon land laborers; change in natural landscape; private appropriation of the commons; etc.34,35,36

The Policy Sciences Analytic Framework: Achieving the Proposed Goals Brazil faced challenges regarding the expansion of the installed capacity and use of this form of renewable energy potential. Initially, wind-generated electricity was not commercially competitive.37,38 Businesses experienced difficulties to meet the program’s requirement regarding the contribution of national equipment.39 Even after implementation, it took time for some projects to be connected to the national electricity grid.40,41 Brazil had approximately 13 GW of installed capacity in April 2018.42

34Comissão

Pastoral da Terra Regional Bahia, “Empresas de Energia Eólica Ameaçam Camponeses,” http://cptba.org.br/2011/09/21/empresas-de-energia-eolica-ameacam-camponeses/ (Last accessed August 23, 2012). 35Comissão Pastoral da Terra Nacional, “Comunidades de Remanso, na Bahia, relatam invasões de terra por grandes empresas,” https://www.cptnacional.org.br/publicacoes/12-noticias/conflitos/2547-comunidades-de-remanso-na-bahia-relatam-invasoes-de-terra-por-grandes-empresas (Last accessed April 29, 2018). 36Movimento Ecossocialista de Pernambuco, “Conflitos Sócio-Ambientais em Instalações Eólicas,” http://www.mespe.com.br/profiles/blogs/conflitos-socio-ambientais-em-instalacoes-eolicas (Last accessed April 29, 2018). 37Ministério de Minas e Energia do Brasil, Plano Nacional de Energia 2030 (Brasília: Ministério de Minas e Energia, 2007). 38E. Cotta, “Crise Faz Mercado de Geração Eólica Crescer 13 Vezes no País,” Brasil Econômico Online, http://www.epe.gov.br (Last accessed February 10, 2012). 39Rafael Alves da Costa, Bruna Pretti Casotti, and Rodrigo Luiz Sias de Azevedo, “Um Panorama da Indústria de Bens de Capital Relacionados à Energia Eólica,” BNDES Setorial, no. 29 (March 2009): 229–78. 40Josette Goulart, “Um Terço de Eólicas Está com Cronograma Atrasado,” Valor Online, http:// www.valoronline.com.br/impresso/empresas/102/424365/um-terco-de-eolicas-esta-com-cronograma-atrasado (Last accessed October 10, 2011). 41D. Gomes, “Atraso em Parque Eólico Provoca Prejuízo,” A Tarde, April 22, 2012, B2. 42Agência Nacional de Energia Elétrica do Brasil, “Banco de Informações de Geração: Capacidade de Geração do Brasil,” http://www2.aneel.gov.br/aplicacoes/capacidadebrasil/capacidadebrasil.cfm (Last accessed April 15, 2018).

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The 2010–2019 ten-year National Plan projected an increase in the capability of production of energy from alternative sources, especially from wind, biomass using sugarcane waste, and small-scale hydropower stations— PCH. In the case of wind energy, the plan estimated a four-fold increase.43 Brazil also exceeded that objective. As in China, the United States, and Germany, governmental renewable energy policy led to the growth of wind energy in Brazil.44 PROINFA has a stable source of support; electricity consumers, except the low-income ones, pay for the costs of the program and for the electricity. It is flexible to changes; allows the contract via auctions of other types of renewable energy (biomass, small-scale hydropower plants) and alterations in deadlines and in the percent of national capital composition, etc. to meet Brazilian reality.

Wind Energy in Bahia: The Case Study45 The Northeastern state of Bahia, one of the twenty-seven Federative Units of Brazil, comprises an extent of 564,733.081 km2, with a population of 14,016,906 inhabitants, mostly living in urban zones, according to the last census (2010). Commerce and service are the two major sectors of its economy. In relation to the size of its territory, Bahia is ranked the fifth of the country. But, regarding population, the state occupies the position of fourth.46 The area of Bahia includes five biomes: caatinga, savannah, Atlantic forest, coastal and marine. Bahian semi-arid region, with an annual average rainfall of 800 millimeters or less, is subjected to periodic droughts and embraces 278 of its 417 municipalities, approximately

43Ministério de Minas e Energia do Brasil, Plano Decenal de Expansão de Energia 2019 (Brasília: Ministério de Minas e Energia, 2010). 44United Nations Framework Convention on Climate Change, “Policies Drive Wind Energy Growth in China, the US and Germany,” https://unfccc.int/news/policies-drive-wind-energy-growth-in-chinathe-us-and-germany (Last accessed August 19, 2015). 45Robert K. Yin, Case Study Research: Design and Methods, 2nd ed. (London: Sage, 1994). 46Instituto Brasileiro de Geografia e Estatística, “Estado@Bahia,” https://cidades.ibge.gov.br/brasil/ba/panorama (Last accessed April 17, 2018).

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7,675,656 people.47 Water availability is a critical issue and a limiting factor. Bahia state has an estimated onshore gross potential to generate wind energy as being in the amount of 70 GW by towers with a height of 100 meters, accounting for 273 TWh/year, in areas with wind speed above 7.0 m/s.48

Bahian Energy Grid: The Supply Bahian gross domestic supply comprises production, import, inventory variation, export, untapped energy, and injections.49 In Bahia, the domestic energy supply was of 14,618×103 tons of oil equivalent (toe), in 2000. Renewable energy accounted for 29% of that amount. Fifteen years later, the percentage went up to 32.6% of the total (18,817×103 toe) for the state. For the period under investigation, the renewable energy supply reached its low in 2001 (26.8%) and its peak in 2009 (34.5%) (Fig. 5.2). Figure 5.2 showed only a slight increase in the share of renewable energy, a total of 3.6 percentage points, with a consequent reduction of its counterpart caused basically by the decrease in the contribution of the principal source, petroleum and oil products, from 2000 to 2015 (Fig. 5.3).50 The renewable sources exhibited a more diverse change in its composition than the nonrenewable ones: an increase in the stake of other primary renewable sources from 1.9 to 11.5%; a decrease in the

47Superintendência

de Desenvolvimento do Nordeste, “Nova Delimitação Semiárido: Bahia,” http://sudene.gov.br/images/arquivos/semiarido/arquivos/Rela%C3%A7%C3%A3o_de_ Munic%C3%ADpios_Semi%C3%A1rido.pdf (Last accessed April 29, 2018). 48Camargo-Schubert Engenheiros Associados, et al., Atlas Eólico: Bahia (Curitiba: Camargo Schubert; Salvador: SECTI: SEINFRA: CIMATEC/SENAI, 2013). 49Secretaria de Infraestrutura do Estado da Bahia, “Balanço Energético da Bahia 2016,” http://www. infraestrutura.ba.gov.br/arquivos/File/publicacoes/beeba2016.zip (Last accessed February 11, 2018). 50Uranium (U O –yellowcake) also integrates the list of nonrenewable energy sources in Bahia, in the 3 8 category Other Primary Sources. However, it is not used in the state. In 1998, uranium began to be explored and processed into yellowcake, in Caetité, Bahia, the only Brazilian uranium mine in operation. Indústrias Nucleares do Brasil, “Caetité—Unidade de Concentrado de Urânio,” http://www.inb. gov.br/pt-br/A-INB/Onde-estamos/Caetit%C3%A9 (Last accessed April 9, 2018).

142     L. N. Nascimento 100 90 80 70 60 50 40 30 20 10

Nonrenewable energy

2015

2014

2013

2012

2011

2010

2009

2008

2007

2006

2005

2004

2003

2002

2001

2000

0

Renewable energy

in percentage

Fig. 5.2  Bahian domestic energy supply (in percentage), 2000–2015 (Source Built by the author with data from Bahia [2016])

75 70 65 60 55 50 45 40 35 30 25 20 15 10 5 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Petroleum and oil products %

Natural Gas %

Coal and Derivaves %

Other primary nonrenewable sources %

Fig. 5.3  Bahian domestic energy supply: nonrenewable sources (in percentage), 2000–2015 (Source Built by the author with data from Bahia [2016])

5  Wind Energy and Policy in Brazil …     143 35 30 25

in percentage

20 15 10 5 0

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Hydraulic energy and electricity %

Firewood and charcoal %

Sugar cane products %

Other primary renewable sources %

Fig. 5.4  Bahian domestic energy supply: renewable sources (in percentage), 2000–2015 (Source Built by the author with data from Bahia [2016])

participation of firewood and charcoal from 14.4 to 7.8%; a duplication of the portion of sugarcane products from 2.2 to 4%; and a reduction of the share of hydraulic energy and electricity from 10.5 to 9% (Fig. 5.4). Years of droughts in the Northeast of Brazil reduced the volume of water resources available in reservoirs and the supply of hydraulic energy and electricity during the years of 2001, 2008, 2013–2015. During the last period mentioned, the time of abnormal weather incident of reduced precipitations, there was an increase in the use of nonrenewable energy, such as petroleum and oil products, for thermal generation, showing the vulnerability of the system to climate change and extremal events. Other primary renewable sources jumped from 277×103 toe, in 2000, to 2157×103 toe, in 2015. This category includes: biogas, solar and wind energy (Figs. 5.5 and 5.6). But the contributions of the two first types are minor compared to the generation by the

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2015 2014 2013 2012 -

1.000

2.000

3.000

4.000

5.000

Fig. 5.5  Bahian domestic energy supply: solar energy (in Megawatt hour), 2012–2015 (Source Built by the author with data from Bahia [2016])

Fig. 5.6  Bahian domestic energy supply: wind energy (in 103 Megawatt hour), 2012–2015 (Source Built by the author with data from Bahia [2016])

forces of wind in the state. The solar and wind energy started to show up in Bahia energy grid report in 2012.51 By the end of 2015, 47 wind parks accounted for 1232.39 MW of installed potency.52 The Termoverde Salvador generates power via domestic solid waste from three municipalities: Bahian capital, Salvador; Lauro de Freitas; and 51Secretaria de Infraestrutura do Estado da Bahia, “Balanço Energético da Bahia 2016,” http:// www.infraestrutura.ba.gov.br/arquivos/File/publicacoes/beeba2016.zip (Last accessed February 11, 2018). 52Ibid.

5  Wind Energy and Policy in Brazil …     145

Simões Filho. The initiative receives carbon credit, a mechanism established under the Kyoto Protocol. A developing nation receives such incentives to support sustainable development initiatives to offset the emission of GHGs. The Brazilian Energy Research Company (Empresa de Pesquisa Energética)—EPE revealed that the share of renewables in the national energy grid (internal energy supply) was among the largest in the world. This South American Nation had an index of 43.5% (2016); the proportion is above the world’s average.53 Bahia presented a percentage of 32.6% in 2015. Federal incentives have influenced the expansion and diversification of renewable energy sources and generation. In 2002, the former Brazilian President Fernando Henrique Cardoso sanctioned Law No. 10,438, of April 26, 2002, which created the Incentive Program for Alternative Energy Sources (Programa de Incentivo às Fontes Alternativas de Energia Elétrica)—PROINFA.54 In 2004, PROINFA announced its first public call for energy from renewable sources, and more than a third of the total agreed upon was to generation by wind.55 In 2009, the federal government held the first specific public auction to contract wind energy reserve to meet national demands.56 In recent years, Bahia has expanded the generation of renewables, with emphasis on wind power. In 2012, the state’s first wind farm was inaugurated in Brotas de Macaúbas.57 According to the Bahian State

53Empresa

de Pesquisa Energética do Brasil, Balanço Energético Nacional – Relatório Síntese 2017 ano base 2016, https://ben.epe.gov.br (Last accessed April 2, 2017). 54Lei No. 10,438 of April 26, 2002 - Dispõe sobre a Expansão da Oferta de Energia Elétrica… Diário Oficial da União edição extra (2002). 55Ricardo Marques Dutra, and Alexandre Salem Szklo, “Incentive Policies for Promoting Wind Power Production in Brazil: Scenarios for the Alternative Energy Sources Incentive Program (PROINFA) Under the New Brazilian Electric Power Sector Regulation,” Renewable Energy 33, no. 1 (January 2008): 65–76. 56Ministério de Minas e Energia do Brasil, Plano Decenal de Expansão de Energia 2019 (Brasília: Ministério de Minas e Energia, 2010). 57Casa Civil da Bahia, Balanço das Ações 2007–2014, http://hostnave.com.br/pdf-ipad-balanco-8anos/Balanc%CC%A7o-8anos-iPad.pdf (Last accessed April 30, 2018).

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Infrastructure Secretariat (Secretaria de Infraestrutura do Estado da Bahia), 47 wind farms, accounting for 1232.39 MW of installed capacity, were located at Bahia by the end of 2015.58

Bahian Energy Grid: The Major Uses Transport stood out as the segment with the highest usage (Fig. 5.7). At the end of the analyzed period (2000–2015), it also presented an upward trend jumping from 24.8%, in 2000, to 35.1% in 2015. The industrial sector occupied that prominence position until 2009, but from 2000 to 2015 decreased from 35.3 to 28.5%. Likewise, there was a sharp drop in the percentage of residential energy consumption, from 25.7 to 16.7% for the fifteen-year interval. The reduction in the final energy use in residences in the state was possibly influenced by several phenomena: the economic crisis of 1998/1999 and reduction of household income, the electricity rationing of 2001 and, mainly, the use of equipment with greater energy efficiency. In 2001, the also former President Fernando Henrique Cardoso sanctioned Law No. 10,295 of October 17, 2001, on the conservation and rational use of energy in Brazil.59 The Article 2, for example, refers to the establishment of maximum levels of energy consumption and energy efficiency minimums for machines and appliances.60 In addition, in 2010, joint resolutions (Resolution No. 1.007 and 1.008

58Secretaria de Infraestrutura do Estado da Bahia, “Balanço Energético da Bahia 2016,” http:// www.infraestrutura.ba.gov.br/arquivos/File/publicacoes/beeba2016.zip (Last accessed February 11, 2018). 59Lei No. 10,295 of October 17, 2001 - Dispõe sobre a Política Nacional de Conservação e Uso Racional de Energia e dá outras Providências. Diário Oficial da União, sec. 1, 1 (2001). 60Lei No. 10,295 of October 17, 2001 - Dispõe sobre a Política Nacional de Conservação e Uso Racional de Energia e dá outras Providências. Diário Oficial da União, sec. 1, 1 (2001).

5  Wind Energy and Policy in Brazil …     147

Fig. 5.7  Bahian energy use by sector (Source Built by the author with data from Bahia [2016])

of December 31, 2010) from ministries of the Mines and Energy, Science and Technology and of the Development, Industry and Foreign Trade set the gradual end of the use of incandescent lamps and the replacement by fluorescents with lower energy uses.61,62 The three sectors (transportation, industrial, and residential) with the highest final energy consumption, in the state, presented the following sources: 61Portaria

Interministerial No. 1.007 of December 31, 2010, http://www.mme.gov.br/ documents/10584/904396/Portaria_interminestral+1007+de+31-12-2010+Publicado+no+DOU+de+06-01-2011/d94edaad-5e85-45de-b002-f3ebe91d51d1?version=1.1 (Last accessed April 28, 2018). 62Portaria Interministerial No. 1.008 of December 31, 2010, http://www.mme.gov.br/documents/10584/1139097/Portaria_Interministerial_nx_1008_2010.pdf/e6cab7cb-f58d-4aa99ce9-8a6028718759 (Last accessed April 28, 2018).

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60

50

40

30

20

10

0 2000

2001

2002

2003

2004

2005 2006 2007 Natural gas % Fuel oil % Kerosene % Ethyl alcohol %

2008

2009 2010 2011 Diesel oil % Gasoline % Eletric energy %

2012

2013

2014

2015

Fig. 5.8  Transportation use by source (Source Built by the author with data from Bahia [2016])

• The transportation sector consumed, basically, diesel oil for buses and trucks. The second predominant source was gasoline. It is important to notice a substantial increase in the fleet of automobiles and motorcycles in the state. The third position was occupied by ethyl alcohol. The analysis of graphical representations for gasoline and ethyl alcohol reveals that there is substitution in its uses. One reason is the flexfuel fleet, which uses both fuels. Another factor that influences the supply and consumption of alcohol is the price of sugar and alcohol in international trade (Fig. 5.8). • Petroleum derivatives, electricity, and natural gas were the main sources of energy consumed by the industrial sector in recent years. The general tendency is the reduction in the use of the first and increase in the percentage used by the other two sources (Fig. 5.9).

5  Wind Energy and Policy in Brazil …     149 40 35 30 25 20 15 10 5 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Natural gas % Other primary sources % Electricity % Biomass %

Steam coal % Petroleum derivaves % Coke %

Fig. 5.9  Industrial use by source (Source Built by the author with data from Bahia [2016])

70 60 50 40 30 20 10 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Natural gas % Liquefied petroleum gas % Electricity %

Firewood % Kerosene % Charcoal %

Fig. 5.10  Residential use by source (Source Built by the author with data from Bahia [2016])

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• The final energy consumption of the residential sector corroborates the changes in the forms of illumination of the homes and of cooking of foods. For these purposes, the proportion of the use of electric energy and Liquefied Petroleum Gas (LPG) increased between 2000 and 2015 (Fig. 5.10). However, the percentage for the fuelwood source is still high, especially when compared to the index for Brazil.63

Renewable Energy: The Major Uses in Bahia The production of wind energy and its links to the national power line system participates in the direct use of two major sectors in the state of Bahia: industrial and residential. Regarding the transportation segment, there is a mandatory policy in Brazil of adding biodiesel to diesel oil sold in the country. Law No. 13,263 of March 23, 2016 made mandatory new percentages of vegetable oils or animal fat, renewable and biodegradable, present in diesel oil. An amount of 8% was established to be added to diesel within 12 months after the date of enactment of this law, 9% within 24 months after the said date and 10% within thirty-six months of the publication of this law.64

Conclusion Wind energy needs to overcome the view of being more than a complementary source.65 Technically, Brazil has the know-how of hydropower station construction and a long history of hydroelectricity production besides of a rich contribution of hydro resources. Despite the regional differences, Brazil has large rivers. The natural environment favors hydropower. But

63Empresa

de Pesquisa Energética do Brasil, Balanço Energético Nacional – Relatório Síntese 2017 ano base 2016, https://ben.epe.gov.br (Last accessed April 2, 2017). 64Lei No. 13,263 of March 23, 2016, http://www.planalto.gov.br/ccivil_03/_ato2015-2018/2016/ lei/L13263.htm (Last accessed April 30, 2018). 65Ministério de Minas e Energia do Brasil, Matriz Energética Nacional 2030 (Brasília: Ministério de Minas e Energia, 2007).

5  Wind Energy and Policy in Brazil …     151

that form of power production on a large-scale causes impacts: impairs the migration of aquatic species, destroying fishing population; leads to change in river physical characteristics, changing flow level and habitat; and forces populations toward other ways of life due to degradation of fisheries, land displacement, and migration. Furthermore, the conflict between nonconsumptive (e.g., hydropower) and consumptive uses (e.g., irrigation, domestic water supply) of hydro resources will worsen in the future due to climate change and a growing demand for water, food, and energy in the São Francisco river basin. The use of wind power will allow the employment of the scarce resources in applications without substitutes. The new legal instrument altered the existing form of governance, or lack of it, of the wind power generation and use in Brazil and consequently, in Bahia. Regarding wind power, PROINFA is meeting its objective: increasing the production and use of this and other sources of renewable energy. The program and consequently, the national state have propelled the development of wind energy in Brazil and in Bahia. The policy is flexible to changes because it allows the contract via auctions of diverse sources of energy, not only wind, to meet the problem of power shortage and growing demand for energy. It has a stable source of financial support; the consumers pay the bills. Although, it is important to pay attention to and address the documented conflicts. Wind farms projects also must be part of a long-term plan. They must include the decommissioning phase to avoid the risks of environmental waste and contamination, in the future, during the phase-out of the farm.

References Agência Nacional de Águas do Brasil. “Hidroweb: Sistema de Informações Hidrológicas.” http://hidroweb.ana.gov.br/ (Last accessed September 3, 2009). Agência Nacional de Energia Elétrica do Brasil. Atlas de Energia Elétrica do Brasil. Brasília: Agência Nacional de Energia Elétrica, 2005. ———. Atlas de Energia Elétrica do Brasil. Brasília: Agência Nacional de Energia Elétrica, 2008. ———.“Banco de Informações de Geração: Fontes de Energia Exploradas no Brasil.” http://www2.aneel.gov.br/aplicacoes/capacidadebrasil/Combustivel. cfm (Last accessed April 15, 2018).

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———. “Banco de Informações de Geração: Capacidade de Geração do Brasil.” http://www2.aneel.gov.br/aplicacoes/capacidadebrasil/capacidadebrasil.cfm (Last accessed April 18, 2018). Banco Nacional do Desenvolvimento. “O Desenrolar da Energia Eólica no Brasil.” https://www.bndes.gov.br/wps/portal/site/home/conhecimento/ noticias/noticia/energia-eolica-brasil (Last accessed April 29, 2018). Casa Civil da Bahia. Balanço das Ações 2007–2014. http://hostnave.com.br/ pdf-ipad-balanco-8-anos/Balanc%CC%A7o-8anos-iPad.pdf (Last accessed April 30, 2018). Camargo-Schubert Engenheiros Associados, et  al. Atlas Eólico: Bahia. Curitiba: Camargo Schubert; Salvador: SECTI: SEINFRA: CIMATEC/ SENAI, 2013. Clark, Timothy W. The Policy Process: A Practical Guide for Natural Resources Professionals. New Haven, CT: Yale University Press, 2002. Coimbra, Leila. “Cresce Desembolso do BNDES com Energia.” A Folha de São Paulo Online. http://www1.folha.uol.com.br/mercado/953597cresce-desembolso-do-bndes-com-energia.shtml (Last accessed August 3, 2011). Comissão Pastoral da Terra Nacional. “Comunidades de Remanso, na Bahia, relatam invasões de terra por grandes empresas.” https://www.cptnacional. org.br/publicacoes/12-noticias/conflitos/2547-comunidades-de-remanso-na-bahia-relatam-invasoes-de-terra-por-grandes-empresas (Last accessed April 29, 2018). Comissão Pastoral da Terra Regional Bahia. “Empresas de Energia Eólica Ameaçam Camponeses.” http://cptba.org.br/2011/09/21/empresas-de-energia-eolica-ameacam-camponeses/ (Last accessed October 23, 2012). Comitê da Bacia Hidrográfica do Rio São Francisco. Plano de Recursos Hídricos da Bacia Hidrográfica Do Rio São Francisco 2004–2013. Salvador: Comitê da Bacia Hidrográfica do Rio São Francisco, 2004. Costa, Rafael Alves da, Bruna Pretti Casotti, and Rodrigo Luiz Sias de Azevedo. “Um Panorama da Indústria de Bens de Capital Relacionados à Energia Eólica.” BNDES Setorial, no. 29 (March 2009): 229–78. Cotta, E. “Crise Faz Mercado de Geração Eólica Crescer 13 Vezes no País.” Brasil Econômico Online, http://www.epe.gov.br/pt (Last accessed February 10, 2012). Devine-Wright, Patrick. “Beyond Nimbyism: Towards an Integrated Framework for Understanding Public Perceptions of Wind Energy.” Wind Energy 8, no. 2 (2005): 125–39.

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Dutra, Ricardo Marques, and Alexandre Salem Szklo. “Incentive Policies for Promoting Wind Power Production in Brazil: Scenarios for the Alternative Energy Sources Incentive Program (PROINFA) Under the New Brazilian Electric Power Sector Regulation.” Renewable Energy 33, no. 1 (January 2008): 65–76. Empresa de Pesquisa Energética do Brasil. Balanço Energético Nacional— Relatório Síntese 2017 ano base 2016. http://www.epe.gov.br/pt (Last accessed April 2, 2017). Fecomércio. Informe Técnico. Rio de Janeiro: Fecomércio, 2010. Filgueiras, Alexandre, and Thelma Maria V.e Silva. “Wind Energy in Brazil— Present and Future.” Renewable and Sustainable Energy Reviews 7, no. 5 (2003): 439–51. Gleick, Peter Henry. “Three Gorges Dam Project, Yangtze River, China.” In The World’s Water 2008–2009: The Biennial Report on Freshwater Resources, edited by Peter Henry Gleick, 139–50. Washington: Island Press, 2009. Gomes, D. “Atraso em Parque Eólico Provoca Prejuízo.” A Tarde, April 22, 2012, B2. Goulart, Josette, “Um Terço de Eólicas Está com Cronograma Atrasado.” Valor Online. http://www.valoronline.com.br/impresso/empresas/102/424365/ um-terco-de-eolicas-esta-com-cronograma-atrasado (Last accessed May 10, 2011). Indústrias Nucleares do Brasil. “Caetité – Unidade de Concentrado de Urânio.” http://www.inb.gov.br/pt-br/A-INB/Onde-estamos/Caetit%C3%A9 (Last accessed April 9, 2018). Instituto Brasileiro de Geografia e Estatística. “Estado@Bahia.” https://cidades. ibge.gov.br/brasil/ba/panorama (Last accessed April 17, 2018). Intergovernmental Panel on Climate Change. “The Climate System: An Overview in Climate Change 2001: The Scientific Basis.” http://www.grida. no/ (Last accessed October 8, 2005). Lasswell, Harold Dwight. “The Interactions of World Organization and Society.” The Yale Law Journal 55, no. 5 (August 1946): 889–909. ———. “The Policy Sciences of Development.” World Politics 17, no. 2 (1965): 286–309. ———. A Pre-view of Policy Sciences. New York: Elsevier, 1971. Lei No. 10,295 of October 17, 2001 – Dispõe sobre a Política Nacional de Conservação e Uso Racional de Energia e dá outras Providências. Diário Oficial da União, sec. 1, 1 (2001).

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Lei No. 10,438 of April 26, 2002 – Dispõe sobre a Expansão da Oferta de Energia Elétrica…Diário Oficial da União edição extra (2002). Lei No. 13,263 of March 23, 2016. http://www.planalto.gov.br/ccivil_03/_ ato2015-2018/2016/lei/L13263.htm (Last accessed April 30, 2018). Maxwell, Joseph Alex. Qualitative Research Design: An Interactive Approach. London: Sage, 1996. Ministério de Minas e Energia do Brasil. Matriz Energética Nacional 2030. Brasília: Ministério de Minas e Energia, 2007a. ———. Plano Nacional de Energia 2030. Brasília: Ministério de Minas e Energia, 2007b. ———. Plano Decenal de Expansão de Energia 2019. Brasília: Ministério de Minas e Energia, 2010. ———. “Benefícios do Proinfa.” http://www.mme.gov.br/web/guest/acesso-a-informacao/acoes-e-programas/programas/proinfa/beneficios (Last accessed April 15, 2018). Movimento Ecossocialista de Pernambuco. “Conflitos Sócio-Ambientais em Instalações Eólicas.” http://www.mespe.com.br/profiles/blogs/conflitos-socio-ambientais-em-instalacoes-eolicas (Last accessed April 29, 2018). Nascimento, Lucigleide Nery. “The Long Journey to Become the ‘River of National Unity’: The São Francisco River Basin from 1940 to 2008 and the Interactions of Environment, Government and Local Citizens.” PhD diss., University of New Hampshire, 2010. Portaria Interministerial No. 1.007 of December 31, 2010. http://www. m m e . g ov. b r / d o c u m e n t s / 1 0 5 8 4 / 9 0 4 3 9 6 / Po r t a r i a _ i n t e r m i n e s tral+1007+de+31-12-2010+Publicado+no+DOU+de+06-01-2011/d94edaad5e85-45de-b002-f3ebe91d51d1?version=1.1 (Last accessed April 28, 2018). Portaria Interministerial No. 1.008 of December 31, 2010. http://www. mme.gov.br/documents/10584/1139097/Portaria_Interministerial_ nx_1008_2010.pdf/e6cab7cb-f58d-4aa9-9ce9-8a6028718759 (Last accessed April 28, 2018). Secretaria de Infraestrutura do Estado da Bahia. “Balanço Energético da Bahia 2016.”  http://www.infraestrutura.ba.gov.br/arquivos/File/publicacoes/ beeba2016.zip (Last accessed February 11, 2018). Superintendência de Desenvolvimento do Nordeste. “Nova Delimitação Semiárido: Bahia.” http://sudene.gov.br/images/arquivos/semiarido/ a r q u i v o s / Re l a % C 3 % A 7 % C 3 % A 3 o _ d e _ Mu n i c % C 3 % A D p i o s _ Semi%C3%A1rido.pdf (Last accessed April 29, 2018).

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United Nations Framework Convention on Climate Change. “Policies Drive Wind Energy Growth in China, the US and Germany.” https://unfccc.int/ news/policies-drive-wind-energy-growth-in-china-the-us-and-germany (Last accessed August 19, 2015). Wobben Windpower—Enercon. “Wobben Windpower—Enercon.” http:// www.wobben.com.br/ (Last accessed October 10, 2011). Yin, Robert K. Case Study Research: Design and Methods. 2nd ed. London: Sage, 1994.

Part III Renewable Energy in the Middle East and Central Asia

6 Regulatory Framework for Development of Renewable Energy Generation in Turkey Özlem Döğerlioğlu Işıksungur

Introduction In today’s developed world, the concepts—climate change, global warming, and environment—are not as basic as in the past. Beyond their ecological meanings, these concepts are now multi-disciplinary terms that have direct relation to other disciplines such as economy, energy, industry, technology, law, and more. According to the Stern Report,1 which considers the economic costs of the impacts of climate change and the costs and benefits of action to reduce the emissions of greenhouse gases (GHGs), the cost of climate change is equivalent to 1Stern

Review on the Economics of Climate Change, see http://webarchive.nationalarchives. gov.uk/, http:/www.hm-treasury.gov.uk/independent_reviews/stern_review_economics_climate_ change/stern_review_report.cfm, last accessed 28 February 2018.

This paper has been prepared considering the legislation and market developments in force in August 2018.

Ö. Döğerlioğlu Işıksungur (*)  Faculty of Law, Izmir University of Economics, Izmir, Turkey e-mail: [email protected] © The Author(s) 2019 D. Kurochkin et al. (eds.), Renewable Energy, https://doi.org/10.1007/978-3-030-14207-0_6

159

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approximately 5–10% loss in global GDP. The Report also estimates that the annual costs of stabilization at 500–550 ppm CO2 equivalent to be around 1% of annual global GDP by 2050. Energy has a vital importance as being an indispensable element for human life (heat, transportation, lighting, communication, input for many manufacturing branches, etc.), in addition to being a key instrument for economic growth and sustainable development. Parallel to growth of population, the need and demand of energy and related services are increasing. Correspondingly, greenhouse gas (GHG) emissions resulting from energy use are steadily increasing. For example, it is estimated that electricity consumption in Turkey will be approximately 530,000 GWh by 2023.2 The shift of energy supply towards renewables will require $31 trillion dollar renewable investment, while coal and natural gas options require $8 trillion dollar investments. The annual GHG emissions, however, will be 1.05 million tons of CO2 equivalent in the case of renewables and only to 71.30 million tons of CO2 equivalent in the later case.3 At this point, Renewable energy (RE) emerges as one of the most important mitigation options4 for the dilemma—satisfying the growth in energy need and demand on the one side and reducing GHG emissions on the other side. Doubtless, stable and reliable RE systems may, “if implemented properly, contribute to social and economic development, energy access, a secure energy supply, and reducing negative impacts on the environment and health”5 as well as lessen the impact of fossil fuel price uncertainty. This chapter provides insights into renewable energy policies and regulations in Turkey with the focus on electricity generation and identifies generally legislative barriers 2Melikoğlu,

Mehmet: “Vision 2023: Feasibility Analysis of Turkey’s Renewable Energy Projection,” Elsevier, Renewable Energy, Volume 50, February 2013, pp. 570–575. 3Melikoğlu, Mehmet: “Vision 2023: Feasibility Analysis of Turkey’s Renewable Energy Projection,” p. 570. 4Renewable Energy Sources and Climate Change Mitigation, Summary for Policy Makers and Technical Summary, published for the Intergovernmental Panel on Climate Change, edited by Ottmar Edenhofer, Ramón Pichs-Madruga, Youba Sokona, et al., 2012, p. 7. See https://www. ipcc.ch/pdf/special-reports/srren/SRREN_FD_SPM_final.pdf, last accessed 28 February 2018. 5Renewable Energy Sources and Climate Change Mitigation, p. 7.

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and opportunities that prevent or enable widespread deployment of RE. First, Turkish energy policy, renewable energy market, and Legislative Framework for RE with the focus on generation are analyzed consecutively. Following the regulatory framework that aims at improving largescale investments, “Barriers and opportunities” of the Turkish current renewable energy market are discussed.

Policy for Development of Renewable Energy According to the International Energy Agency Turkey Report (2017),6 the Turkish economy had a 4.7% average annual real growth rate of the gross domestic product (GDP) over the period between 2002 and 2014: GDP increased to over $800 billion in 2014, up from 305 billion in 2003. Along with its fast-growing economy and increasing population, energy demand in Turkey is increasing rapidly. In the coming years, Turkey’s economic development is expected to continue and thus the energy demand is also projected to increase. For example, the gross electricity consumption in Turkey in 2017 was 294.9 billion Kwh and 121 billion Kwh by the end of May 2018. And electricity consumption by the year 2023 is expected to rise by 5.5 to 357.4 TWh.7 On the other hand, according to the Ministry of Energy and Natural Resources data,8 Turkey’s total primary energy supply (TPES) was 129.7 million tons of oil-equivalent (Mtoe) in 2015 with an increase of 54% from 84.2 Mtoe in 2005. Turkey’s economy is dependent on imported energy sources, and as of the year 2015, only 24.8% of the TPES covered by Turkey’s domestic energy production.9 Moreover, primary energy consumption is mainly based on imported fossil fuels. This situation makes “energy supply security” a top priority in the government’s agenda. New generation investments, 6International

Energy Agency, Energy Policies of IEA Countries: Turkey 2016 Review (IEA Report), September 2016, p. 22. https://www.iea.org/publications/freepublications/publication/Energy PoliciesofIEACountriesTurkey.pdf, last accessed 1 September 2018. 7See http://www.enerji.gov.tr/en-US/Pages/Electricity, last accessed 1 November 2018. 8IEA Report, p. 21. 9Ibid., p. 23.

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diversification of energy sources, promoting RE and energy efficiency can be listed as the important tools for Turkey to avoid the risks of high energy dependency and to develop a sustainable energy model.10

Energy Policy in Turkey As stressed in the Turkish energy-related legislative documents, the main aim of the Turkish energy policy is to ensure secure, sustainable, affordable, and transparent energy market through private investments11 in a competitive environment for the purpose of energy supply to the consumers in an efficient, sustainable, low-cost, and environment-friendly manner. Moreover, diversifying energy supply and promotion of indigenous energy production are of importance. For this purpose, the energy strategy is based on Turkey’s vision for 2023 (the centennial foundation of the Republic) and envisages targets for the energy sector, such as raising the total installed power capacity to 120 GW; increasing the share of renewables to 30%; maximizing the use of hydropower; increasing the wind power installed capacity to 20,000 MW; installing power plants that will provide 1000 MW of geothermal and 5000 MW of solar energy; raising the natural gas storage capacity; commissioning nuclear power plants (there are two operational nuclear power plants, with the third being under construction); increasing the coal-fired installed capacity from the current level of 17.3–30 GW.12 The Ministry of Energy and Natural Resources (MENR) created Institutional Strategic Plans covering the periods 2010–2014 and 2015–2019, respectively.13 The plan covering the period of 2015–2019 10Turkish

National Renewable Energy Action Plan, Ministry of Energy and Natural Resources, December 2014, p. 8. http://www.eigm.gov.tr/File/?path=ROOT%2f4%2fDocuments%2fEnerji% 20Politikas%C4%B1%2fTurkiye_Ulusal_Yenilenebilir_Enerji_Eylem_Plani.pdf, last accessed 1 August 2018. 11M. Tükenmez, E. Demireli, “Renewable Energy Policy in Turkey with the New Legal regulations”, Elsevier, Renewable Energy, Volume 39, Issue 1, March 2012, p. 9. 12See http://www.invest.gov.tr/en-US/Pages/Home.aspx, last accessed 26 November 2018. 13The Ministry of Energy and Natural Resources (MENR), Strategic Plan (2015–2019), https:// sp.enerji.gov.tr/ETKB_2015_2019_Stratejik_Plani.pdf, last accessed 26 November 2018.

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was updated and published in the end of 2017; and National Energy and Mine Strategy was publicly announced with the following slogan: “Independent energy, powerful Turkey.” In the new period, Turkey aims to convert its geographical advantages into opportunities. The new policy is constructed on three pillars: security of supply, indigenization of energy, and formation of a foreseeable energy market. Turkey plans to give priority to domestic resources; make progress in renewable energy through local production, Research & Development and Renewable Energy Resource Zone (RE-Zone/YEKA); increase the share of renewable energy resources in total energy production by at least 30%; increase energy efficiency; make the free market conditions operate fully and provide enhancement in the investment environment; and provide diversity of oil and natural gas supply; enhance Turkey’s influence in the area of regional and global energy by turning the country into an energy hub and terminal.

Climate Change Policy and Renewable Energy Interaction in Turkey Taking into consideration the local, national, and global challenges and opportunities presented by climate change, Turkey conducts its activities on combating climate change, on an equitable basis, within the framework of the principle of common but differentiated responsibilities and within its own capabilities, with the belief that implementation of inventive policies and measures at the national level is necessary in order to protect the global climate system and pursue sustainable development.14

For the purpose of attaining sustainable development with the goal of climate change mitigation and the transition to low-carbon growth, Turkish regulatory framework for Climate Change is shaped in the Policy Documents, Strategy Papers, and Legislative Documents. 14Republic

of Turkey, Climate Change Strategy 2010–2020, Foreword of Erdoğan Bayraktar, The Republic of Turkey Minister of Environment and Urbanization, p. 5; See http://www.dsi.gov.tr/ docs/iklim-degisikligi/ulusal_iklim_de%C4%9Fi%C5%9Fikli%C4%9Fi_strateji_belgesi_eng. pdf?sfvrsn=0, last accessed 26 November 2018.

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The government’s strategic visions and the defined targets on related specific area/sector relevant to climate change are shown in Policy Documents, Strategy Papers15 and the legislative structure is constructed in compatible with Turkey’s legislative hierarchy.16 In the international arena, Turkey has shown its commitment to protect the climate system for the benefit of the present and future generations by being party to the United Nations Framework Convention on Climate Change (UNFCCC) since 2004 and Kyoto Protocol since 2009, having no emission reduction targets under the Kyoto Protocol. Additionally, The Paris Climate Change Agreement (Paris Agreement)17 has been signed but the ratification process has not finished yet. Meanwhile, Turkey submitted its Intended Nationally Determined Contribution (INDC)18 on September 30, 2015 with a GHG reduction target of up to 21% below business-as-usual (BAU) by 2030. This is almost two and

15The National Climate Change Policy Documents can be categorized as “multi-sectoral” and “sector specific.” The documents such as 10th National Development Plan, National Climate Change Strategy, National Climate Change Action Plan, Energy Efficiency Strategy Paper taking part in multi-sectoral documents group and the documents such as Strategic Plan of the Ministry of Energy and Natural Resources and Electricity Market and Supply Security Strategy Document compose sector specific documents. 16In this hierarchy, constitution takes part at the top and is followed by laws. Laws precede regulations, regulations precede by-law which in turn are higher in legislative hierarchy as compared to communiqués. In Turkey, generally “regulation” term is preferred instead of by-law. Within this study, compatible with Turkey application, regulation term is used for the same purpose. 17The Paris Climate Change Agreement (Paris Agreement) was the key outcome of the Paris Climate Conference (COP21) in December 2015. The central aim of the Paris Agreement’s is to strengthen the global response to the threat of climate change by keeping a global temperature rise this century well below 2 °C above pre-industrial levels and to limit the temperature increase even further to 1.5 °C. Additionally, the agreement aims to strengthen the ability of countries to deal with the impacts of climate change. The Paris Agreement requires all Parties to put forward their best efforts through “nationally determined contributions” (NDCs) and to strengthen these efforts in the years ahead. Moreover, all Parties shall report regularly on their emissions and on their implementation efforts. It is expected that the developed countries will have certain reduction targets and they will complete their transition to a carbon neutral economy by the end of 2050. The Paris Agreement was opened for signature on April 22, 2016. Until today (January 2018) 197 countries including Turkey signed it but 172 countries ratified it. The Agreement is in force as of 4 November in 2016. 18For Turkish Intended Nationally Determined Contribution, see http://www4.unfccc.int/submissions/INDC/Published%20Documents/Turkey/1/The_INDC_of_TURKEY_v.15.19.30.pdf, last accessed 26 November 2018.

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a half times the 2014 emission level of 467.6 million tons of CO2 equivalent, according to the Turkish Statistical Institute.19 INDC, which shall be converted to nationally determined contributions (NDC) after ratification process, outlines intended efforts of Turkey to reduce GHG emissions after 2020. Additionally, plans and policies to be implemented in the renewable energy sector for realizing the targets of INDC, are summarized in INDC as follows: increasing capacity of production of electricity from solar power to 10 GW until 2030; increasing capacity of production of electricity from wind power to 16 GW until 2030; and tapping the full hydroelectric potential. INDC has been supported by national climate change policy documents such as 10th National Development Plan, National Climate Change Strategy (NCCS), National Climate Change Action Plan, and National Energy Efficiency Strategy. For example, 10th National Development Plan20 refers to the global importance of “green growth” concept and sets “common but differentiated responsibilities” and “respective capacities”21 by highlighting the importance of renewable energy and efficient usage of energy. National climate change vision is defined in NCCS22 as to “become a country fully integrating climate change-related objectives into its development policies, disseminating energy efficiency, increasing the use of clean and renewable energy resources, actively participating in the efforts for tackling climate change within its “special circumstances,” and providing its citizens with a high quality of

19Turkish

Statistical Institute 2016 (TÜİK). National Greenhouse Gas Inventory Report 1990–2014. 20Republic of Turkey Ministry of Development, the 10th National Development Plan (covers the 2014–2018 period), see http://www.mod.gov.tr/Lists/RecentPublications/Attachments/75/ The%20Tenth%20Development%20Plan%20(2014-2018).pdf, last accessed 26 November 2018. 21Republic of Turkey Ministry of Development, the 10th National Development Plan, p. 13. 22Republic of Turkey Climate Change Strategy 2010–2020. See http://www.dsi.gov.tr/docs/ iklim-degisikligi/ulusal_iklim_de%C4%9Fi%C5%9Fikli%C4%9Fi_strateji_belgesi_eng.pdf?sfvrsn=0, last accessed 26 November 2018. The NCCS was prepared by stakeholders from the Coordination Board on Climate Change (CBCC), related private sector participants, NGOs, and it was approved by the Higher Planning Council in May 2010.

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life and welfare with low-carbon intensity.” For the purpose of reducing GHG emissions from energy sector,23 short-, mid-, and long-term strategies are set including but not limited to the following: Energy certificate for buildings and increasing the renewable energy use in buildings (short-term); increasing low and zero GHG emission technologies (clean coal, nuclear, renewable energy); usage of alternative fuels (midterm); share of renewables will be 30% in 2030; GHG emissions from electricity generation will be decreased by 7% compared to reference scenario by 2020 (long-term). In the National Climate Change Action Plan,24 clear objectives for both mitigation and adaptation aspects of climate change are set. Besides, it emphasizes national climate change vision and identifies sectoral (energy, industry, forestry, agriculture, buildings, transport, and waste) actions for short-, medium-, and long-term goals to reduce GHG emissions. The energy sector oriented strategies include: by 2015, reduce primary energy intensity by 10% compared to 2008; ensure that the share of renewable energy in electricity production is increased; reduce nationwide electricity distribution losses to 8% by 2023; for buildings, at least 20% of the annual energy demand of new buildings are met via renewable energy resources as of 2017. Moreover, in the legislative structure, Article 3(h) of the Environmental Law directly accepts “utilization of market-based mechanisms such as support of renewable energy sources and clean technologies, emission price, contamination price, carbon trading” as one of the targeted general principles regarding environmental protection and preventing environmental pollution. In summary, as discussed in the different policy documents above, renewable energy and deployment of RE are accepted as one of the most important tools to combat climate change in Turkey.

23NCCS sets some short-, medium-, and long-term strategies for GHG emission reduction in the energy, transportation, industry, waste, land use, agriculture, and forestry sectors. 24Republic of Turkey, Ministry of Environment and Urbanization, National Climate Change Action Plan, see http://www.dsi.gov.tr/docs/iklim-degisikligi/%C4%B1depeng.pdf?sfvrsn=2, last accessed 26 November 2018.

6  Regulatory Framework for Development of Renewable Energy …     167

Electricity Generation from Renewable Energy Sources in Turkey Renewables include hydropower, geothermal energy, solar, wind power, biofuels, and waste. In the line with Turkish National Energy and Mine Policy Strategy and the motto “More Domestic, More Renewable” for “supplying continuous, uninterrupted, accessible, and cost-effective energy,” renewable sources have strategic importance.25 Moreover, the substantial potential of Turkey for renewable energy, particularly hydro, wind, solar, and geothermal and diversification of energy sources needs, require maximum level of domestic and renewable resources usage for electricity generation. Turkey aims to have at least 30% of electricity generated from renewable sources by 2023. In addition, the transport sector’s 10% of energy need are expected to be produced from the renewable energy sources.26 In the scope of the 2023 targets, the total installed capacity of REs projected as shown in Table 6.1. According to the Energy Agency Report,27 RE accounted for 15.7 Mtoe or 12.1% of Turkey’s TPES in 2015. Biofuels and waste cover 2.5%, hydro—4.4%, geothermal—3.7%, solar—0.7%, and wind— 0.8%. Moreover, solar, wind, and geothermal power is increasing. Three generation models are in place in the Turkish renewable energy market: unlicensed, licensed, and the RE-Zone (YEKA). The portion of renewable energy sources in the total installed capacity that are based on these models is increasing rapidly.

25http://www.yegm.gov.tr/document/20180102M1_2018_eng.pdf, last accessed 28 November 2018. 26Ministry of Energy and Natural Resources, Turkey’s National Renewable Energy Action Plan, December 2014, p. 8. See http://www.eigm.gov.tr/File/?path=ROOT%2f4%2f Documents%2fEnerji%20Politikas%C4%B1%2fTurkiye_Ulusal_Yenilenebilir_Enerji_Eylem_ Plani.pdf, last accessed 20 August 2018. 27IEA Report, p. 165.

168     Ö. Döğerlioğlu Işıksungur Table 6.1  Installed power capacity targets for 2023 by RE sources (MW)

Hydropower Wind Solar Geothermal Biomass

34,000 20,000 5000 1000 1000

Source MENR

Turkey’s potential to benefit from solar energy is high. The country’s solar energy capacity increased by means of unlicensed project. Meanwhile, the bidding process for Turkey’s Konya-Karapınar region (Karapınar RE-Zone/YEKA), with the capacity of 1000 MW (a power plant, a photovoltaic solar module plant and a research and development center as well as electrical energy and solar module production activities) has been concluded. It will be constructed on a nearly 2000 hectare area; a total of $1.3 billion will be invested in this project. It is planned to generate approximately 1.7 billion kWh of electricity which can power 600,000 houses.28 As for wind power, the bidding process for Turkey’s wind RE-Zone/ YEKA with the capacity of 1000 MW was finished in August 2017; 65% of domestic production, including technological parts and other components and 80% of domestic engineer employment, are required. Following the commissioning period, each year a minimum of 3 billion kilowatt-hours of electricity will be generated by the power plants and 1.5 million tons of carbon emissions reduction will be achieved thanks to the new wind facilities.29 Moreover, Turkey plans for an offshore wind project tender with a capacity of 1200 MW. According to an announcement in the Official Gazette on June 21st of 2018, applications for the tender will be accepted until October 23rd of 2018. The ceiling price for one

28Erdal Tanas Karagöl, Ismail Kavaz, Salihe Kaya, and Büşra Zeynep Özdemir, National Energy and Mining Policy of Turkey, Analysis (SETA Report), July 2017, p. 16. https://setav.org/en/ assets/uploads/2017/08/Analysis35.pdf, last accessed 26 November 2018. 29Hurriyet Gazette News, see http://www.hurriyet.com.tr/ekonomi/son-dakika-yeka-ihalesininkazanani-belli-oldu-40539083, last accessed 1 September 2018.

6  Regulatory Framework for Development of Renewable Energy …     169

Megawatt-hour has been set as $8 and applicants will compete for the lowest bid in a reverse auction. The purchase guarantee is defined in the announcement as the first 50 Terawatts-hour of electricity production starting from the first commissioning of the plant. The candidate regions are announced as Saros and Gallipoli located in the Marmara region and Kıyıköy in Thrace.

Review of the Existing Legislative Framework for Electricity Generation from Renewable Sources: Legislative Tools and Models Energy, with its effect on many sensitive subjects including but not limited to economy and national security, constitutes one of the significant factors on policy and strategy determination process. States move toward renewable energy sources because of the requirements to diversify the energy sources and to decrease the global warming and foreign-source dependency and encourage the energy obtained from renewable sources. In Turkey, as discussed above, it is encouraged to generate energy from renewable energy sources such as wind, sun, and geothermal which are sustainable. Moreover, these sources do not emit GHG by contrast with fossil fuels or emit it at a negligible level and, therefore, are defined as clean energy. In this way, by encouraging the usage of renewable energy, it is aimed to mitigate the carbon emissions besides decreasing the foreign-source dependency and providing security of energy supply in compatible with National Energy and Mine Strategy. As of 2018, Turkey, having a total of 35 GW installed capacity in renewable energy,30 strives to increase the level of renewable energy in total energy consumption by at least 30% as part of its 2023 targets. Significant investments have mostly been made in modern renewable

30SETA

Report p. 17.

170     Ö. Döğerlioğlu Işıksungur

energy sources (wind, solar, biomass). Additionally, electricity generation from renewable sources is also an important tool for mitigation of the carbon emissions and emission trading systems set by Kyoto Protocol.31 Due to its special status,32 Turkey does not have emission reduction targets under the Kyoto Protocol and also has no access to the flexible market mechanisms such as CDM and JI. In the absence of absolute binding emission targets and without access to the CDM, Turkey became an active country in the voluntary carbon markets since 2006. Electricity Market Law (EML) No. 6446 is the main legislation for the electricity generation in Turkey.33 The first EML, which entered into effect within the framework of transforming the electricity market from a vertically integrated structure into a competitive structure, was the EML No. 4628 which became effective in 2001. EML No. 4628, which has been amended many times until 2013, has left its place to EML No. 6446 on March 30, 2013. As a result, today, the main legislation with respect to electricity market is EML No. 6446. However, with the entry into effect of EML No. 6446, the previous EML No. 4628 was not abolished,34 but its name was changed to Law on Organization and Duties of Energy Market Regulatory Authority. In other words, while EML No. 4628 regulates organizations, duties, authority, and responsibilities of the Energy Market Regulatory Authority (EMRA) and the procedures regarding the personnel affairs of its employees; EML No. 6446 regulates market 31Further

information on emission trading sytems in Turkey, please see: “Roadmap for the consideration of establishment and operation of a Greenhouse Gas Emissions Trading System in Turkey”. https://www.ecofys.com/files/files/pmr-ecofys-et-al-2016-roadmap-ets-turkey.pdf, last accessed 28 February 2018. 32Turkey has been a party to UNFCCC since 2004 and the Kyoto Protocol since 2009. In the Marrakesh Accord (CP7), Turkey was removed from the list of countries in Annex II of the KP, and the special circumstances of Turkey were recognized by the parties. Following this decision, Turkey is not an Annex-II country, and accordingly, it is not responsible for providing technical and financial support to developing countries in line with the UNFCCC and Kyoto Protocol. Although Turkey is an Annex-I country according to the UNFCCC, it is accepted as a developing country, and there has access to funds to combat climate change. Based on Decision of Marrakesh Accord (CP7) to recognize Turkey’s special circumstances on 10 November 2001, Turkey’s access to international climate finance is currently being negotiated with the Parties. 33Electricity Market Law published in the Official Gazette dated 30 March 2013 and Numbered 28603. Subjected to many modifications in different times. Lastly updated on 27 March 2018. 34Law on Organization and Duties of Energy Market Regulatory Authority Numbered 4628 published in the Official Gazette dated 3 March 2001 and Numbered 24335.

6  Regulatory Framework for Development of Renewable Energy …     171

activities (the electricity generation, transmission, distribution, wholesale and retail sale, import and export, and market operation) and the rights and obligations of all natural and legal persons related to these activities. EML No. 6446 aims to ensure a financially sound, stable, and transparent electricity market that operates in accordance with the provisions of private law in a competitive environment, and an independent regulation, and audit in this market for the purpose of electricity supply to the consumers in an efficient, sustainable, low-cost and environmentfriendly manner. Moreover, as a general rule, it requires operation of market activities under a license obtained from EMRA. However, unlicensed electricity generation is possible. To sum up, EML offers mainly two models namely licensed and unlicensed for electricity generation. It also refers to third model: RE-Zone/YEKA model. Within the frame of unlicensed electricity generation, which allows the establishment of electricity generation plants up to 1 Megawatt by using non-fossil renewable energy sources such as hydro, wind, solar, geothermal, biomass energy, and gas obtained from biomass (including landfill gas), wave, stream, and tidal energy; there is no obligation to obtain licenses and to establish a company unlike licensed generation. In this generation model, everyone, regardless of whether they are natural or legal persons, has the opportunity to generate their own electricity provided that they have an electricity subscription. The formalities in unlicensed generation are reduced and measuring data shall not be required; however, surplus electricity can only be sold to the system in unlicensed electricity generation. In other words, electricity trading (selling electricity to 3rd parties) is not permitted. Therefore, those who plan to generate electricity from renewable energy sources and to sell it to 3rd parties, i.e. to trade electricity as a business model, are obliged to get a license and establish a company. Some of the other important points can be summarized as follows: transfer of shares is forbidden from the date of application for a call letter until the temporary acceptance of the Unlicensed Facility. The maximum capacity to be provided by a distribution company to an entity related with unlicensed wind and solar projects through a particular substation is limited to 1 MW. Installed capacity of an Unlicensed Facility cannot be 30 times more than the electricity consumption at the consumption point. By means of last modification dated

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March 27, 2018, electricity storage and demand response-related market activities shall also be listed among unlicensed activities. As opposed to the unlicensed model, the licensed model requires the legal entity to be established as a joint stock company or a limited liability company and its shares must be registered, except for the shares traded in the stock exchange in pursuant to the capital market legislation for joint stock companies. The license shall be granted for a minimum period of ten years and maximum period of forty-nine years. On the other hand, any legal person applying for a generation license shall be provided by the Authority primarily with a fixed-term preliminary license to obtain the written permits, approvals, licenses, etc. required by the legislation to initiate the generation facility investment and to obtain the ownership right or usufruct of the field on which the generation facility will be installed. The period of any preliminary license shall not exceed twenty-four months, except for force majeure. But the Board may extend this period by half based on the source type and the installed capacity. Apart from the exceptions set up by the Board in a by-law, if the shareholding structure of a legal person with a preliminary license changes directly or indirectly, some shares are transferred, some processes and procedures resulting in or leading to the transfer of the shares are conducted by the date when the license is obtained, or the obligations determined by the Authority are not fulfilled, then the preliminary license of the legal person shall be annulled. The pre-license shall be converted to license in case of the fulfilling of the obligations successfully. Moreover, in this model, expropriation is possible and trading of electricity by bilateral agreement is permitted. Another main legislative tool for electricity generation from renewable sources is Law on Utilization of Renewable Sources for the Purpose of Generating Electrical Energy No. 5346 (Renewable Energy Law).35 This Law is the first basic legislation for support of renewable energy. Its purpose is to expand the utilization of renewable energy sources for generating electric energy, to benefit from these resources in a secure, economic

35Law on Utilization of Renewable Sources for the purpose of Generating Electrical Energy Numbered 5346, published in the Official Gazette dated 8 May 2005 and Numbered 25819. Last modified on 17 June 2016.

6  Regulatory Framework for Development of Renewable Energy …     173

and qualified manner, to increase the diversification of energy resources, to reduce GHG emissions, to assess waste products, to protect the environment and to develop the related manufacturing industries for realizing these objectives. It encompasses the procedures and principles of the conservation of renewable energy resource areas, certification of the energy generated from these sources and utilization of these sources. The legal entity holding generation license shall be granted by EMRA with a Renewable Energy Resource Certificate for the purpose of identification and monitoring of the resource type in purchasing and sale of the electrical energy generated from renewable energy resources in the domestic and international markets. Moreover, the legislation offers incentive systems to support renewable energy generation. Primary sources have been complemented by secondary legislations which form the basis for the detailed implementation of the licensed and unlicensed model of electricity generation. Although there are many secondary legislations, they are different for unlicensed and licensed models. In this perspective, related with licensed generation, Electricity Market License Regulation,36 The Competition Regulation on Pre-licensed Application for Wind and Solar Plants,37 and The Regulation on Renewable Energy Source Areas (RESA) become prominent.38 As the third model, Renewable Energy Resource Zone, (RE-Zone in Turkish YEKA) enables to use property that belongs to public as well as privately owned property in order to make effective and efficient use of renewable energy sources. Additionally, completing investment projects rapidly by assigning these areas to investors, and enabling high-tech equipment used in the generation facilities to be domestically manufactured or supplied and contribute to technology transfer are other objectives. The main difference between the licensed electricity model and this model is that the usage and/or the manufacturing of domestic

36Electricity

Market License Regulation, published in the Official Gazette dated 2 November 2013 and Numbered 28809. Lastly some of the articles are revised on 15 December 2017. 37The Competition Regulation on Pre-licensed Application for Wind and Solar Plants published in the Official Gazette dated 13 May 2017 and Numbered 30065. 38The Regulation on Renewable Energy Source Areas published in the Official Gazette dated 9 October 2016 and Numbered 29852. Some of the articles are revised by the Official Gazette dated 11 April 2017 and Numbered 30035.

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equipment for the construction and development of the renewable energy power plant is a pre-requisite for such investment. No requirement for measured data and urgent expropriation of privately owned land is enforced. In order to choose the investor, a competition will be carried out based on a reverse auction, with the ceiling price of electric power determined under the Renewable Energy Law. Moreover, it offers 15 years electricity purchase guarantee. For unlicensed generation, Regulation on Unlicensed Electricity Generation39 and Communiqué on Implementation of Unlicensed Electricity Generation40 are accepted as the main secondary legislations. Moreover, rooftop solar projects with a capacity up to 10 kW are regulated by Board decision: Principles and Procedures on Solar Based Unlicensed Generation Plant Applications of which is connected from the same measurement point with the consumption plant.41 The Board decision requires the consumption plant and generation plant to be at the same point (connection from the same meter) and covers not only rooftop implementations but also front of buildings. Similar approach to unlicensed generation model is used, facilitating the procedures, lessening the requirements; spreading the renewable energy generation, and its usage in residential areas are targeted. In addition to the legislations mentioned above, the Regulation on the Certification and Support of Renewable Energy Sources42 comes to the forefront among the other important secondary legislations regardless of whether licensed or unlicensed.

39Regulation

on Unlicensed Electricity Generation, published in the Official Gazette dated 2 October 2013 and Numbered 28783. Revised in different times. Lastly some of the articles are revised on 17 January 2018. 40Communiqué on implementation of Unlicensed Electricity Generation, published in the Official Gazette dated 2 October 2013 and Numbered 28783. Lastly some of the articles are revised on 15 May 2017. 41Principles and Procedures on Solar Based Unlicensed Generation Plant Applications of which is connected from the same measurement point with the consumption plant, published in the Official Gazette dated 18 January 2018 and Numbered 30305. 42Regulation on the Certification and Supporting of Renewable Energy Sources, published in the Official Gazette dated 1 October 2013 and Numbered 28782.

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Barriers and Opportunities in Renewable Energy Generation in Turkey While the legislations provide incentives, they also create obstacles in terms of investments in both licensed and unlicensed electricity markets. The electricity market, which has been in a rapid change and transition period with the effectuated legislations in sequence, has brought new rules for all market players and makers. The new rules of the game and frequent legislation modifications sometimes create uncertainty in terms of generators and executors. Yet, the absence of previous examples obliges the implementation of the trial and error method; however, this method poses serious risks for investors due to the high cost of energy investments. Lack of coordination among institutions, frequent legislation updates, and some implementation defects cause uncertainty and drive the investors away. On the other hand, as a fast-developing market, Turkish Renewable Energy Market offers many opportunities supported with legislations. In this context, the legislations provide many incentives which take root in either EML No. 6446 or Renewable Energy Law No. 5346 besides relevant secondary legislations. The incentives can be categorized as Feed-in tariffs, local content support, acquisition of land, investment incentives such as: exemption from VAT and customs duties for all machinery and equipment used in the relevant power plant. Within this scope, financial support and purchase guarantee have been provided for electricity generated from renewable energy sources under the RES Law. The incentive figures are determined on the US dollar bases and vary according to renewable energy sources types. Without doubt, the difference in the incentive amount depending on the resource type is a positive aspect for renewable energy projects that show a cost difference according to the source used. The law brought 13.3 US Dollar cent/kWh fixed price guarantee for solar power plants (photovoltaic and condensed solar energy) and for biomass power plants (including landfill gas), 7.3 US Dollar cent/kWh fixed price guarantee for hydroelectric and wind power plants and 10.5 US Dollar cent/kWh fixed price guarantee for geothermal power plants, provided that these power plants started to operate before December 31, 2015; and this will

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be applied for 10 years following the operation of these power plants. This period has been extended by the Decree of the Council of Ministers from 1 Janurary 2016 to 31 December 2020 and leads the investment to be highly profitable without bearing any risks. On the other hand, the question of what will happen after 2020 is still not answered. Licensed legal entities will be able to benefit from the local additional contribution to the domestic production of the components used in the power plants for a period of 5 years from the date of entry into operation of the power plant, in addition to the provided fixed price. It is added to FIT prices of the relevant renewable energy generation facility. However, the investor wishing to be subjected to the RES Support Mechanism in the next calendar year in order to benefit from the price guarantee is obliged to obtain RES Certificates and apply to the EMRA until the 31 October. Those who are subject to the RES Support Mechanism cannot leave the practice in the year they are included in the practice. Apart from price support, there are other incentives provided to the investor such as land use, renting, and easement right, and 85% discount applied during the first ten years of investment and operation periods, priority to power plants based on renewable energy resources during a certain period. Moreover, in the RE-Zone (YEKA) model many of the formal steps such as environmental impact assessment, geological studies, expropriation, and zoning will be completed by the related institution on behalf of investors. Additionally, it offers 15 years electricity purchase guarantee. The planned offshore wind power tender is an important step, but there is no legal framework in place. Last but not least, real person investors of small-sized rooftop projects up 10 kW are exempted from a number of procedures and administrative obstacles such as obtaining a license and also income tax.43 On the other hand, lack of legal financial model, such as power purchase agreement and lease, is the main obstacle for rooftop solar projects, both residential and industrial.

43Law on Modification of some Decrees with the effect of Law and Tax Law Numbered 7103, published in Official Gazette dated 27 March 2018 and Numbered 30373.

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Conclusion For the purpose of reducing energy dependency in response to increased energy demand, Turkey, in accordance with National Energy and Mine Strategy and Vision 2023 targets for its own national sources and potential geographical advantage. Moreover, in order to avoid the risks of high energy dependency, Turkey diversifies the energy sources and, in this context, encourages renewable energy resource usage and promotes the electricity generation from renewable energy resources. RE is also accepted as one of the most important mitigation options and tools of Turkey for satisfying the growth in energy need by reducing GHG emissions, besides being the key pillar of its strategy. As part of the indigenization policy, increasing the share of renewable energy in total energy production by at least 30% was set as the target of Turkey. For capturing this goal, more renewable energy investments are compulsory and indispensable. On the other hand, building an enabling environment is very critical to increase the renewable energy investments. Over the past decade, Turkey has made substantial progress on the regulatory side to promote electricity generation from renewable sources. The government issued framework legislations; and these legislations are updated according to the market requirements and the shortcomings of legislation determined in practice. RE investments are supported with incentives, such as price support (Feed-in-tariffs for different renewable sources), purchase guarantee, and land use. The installed capacity is increasing. In recent history, Turkey launched two mega tenders for solar and wind energy, each with a total 1000 MW installed capacity, designed on the basis of a fixed FIT, 65% of local production, as well as guaranteed R&D investment for a period of 10 years. The offshore wind tender with a capacity of 1200 MW is announced with planning to be completed in near future. Although there are shortcomings in theory and practice, it seems Turkish fast-growing renewable market, particularly RE-Zone and probably rooftop solar projects, will be attractive markets for investors.

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References Legislative Documents Communiqué on implementation of Unlicensed Electricity Generation, published in the Official Gazette dated 2 October 2013 and Numbered 28783. Electricity Market Law published in the Official Gazette dated 30 March 2013 and Numbered 28603. Electricity Market License Regulation, published in the Official Gazette dated 2 November 2013 and Numbered 28809. Law on Modification of some Decrees with the effect of Law and Tax Law Numbered 7103, published in Official Gazette dated 27 March 2018 and Numbered 30373. Law on Utilization of Renewable Sources for the purpose of Generating Electrical Energy Numbered 5346, published in Official Gazette dated 8 May 2005 and Numbered 25819. Ministry of Energy and Natural Resources, Turkish National Renewable Energy Action Plan, December 2014. Principles and Procedures on Solar Based Unlicensed Generation Plant Applications of which is connected from the same measurement point with the consumption plant, published in the Official Gazette dated 18 January 2018 and Numbered 30305. Regulation on the Certification and Supporting of Renewable Energy Sources, published in Official Gazette dated 1 October 2013 and Numbered 28782. Regulation on Unlicensed Electricity Generation,published in the Official Gazette dated 10 February 2013 and Numbered 28783. Republic of Turkey Climate Change Strategy 2010–2020. Republic of Turkey Environmental Law Official Gazette dated 11 August 1983 and Numbered 18132. Republic of Turkey, Ministry of Environment and Urbanization, National Climate Change Action Plan. Republic of Turkey Ministry of Development, the 10th National Development Plan. The Competition Regulation on Pre-licensed Application for Wind and Solar Plants Published in the Official Gazette dated 13 May 2017 and Numbered 30065.

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The Ministry of Energy and Natural Resources (MENR), Strategic Plan (2015–2019). The Regulation on Renewable Energy Source Areas Published in the Official Gazette dated 9 October 2016 and Numbered 29852. Turkish Energy Efficiency Strategy Paper 2012–2023. Turkish Intended Nationally Determined Contribution.

Other Documents Erdal, Tanas, Karagöl, Ismail, et al. National Energy and Mining Policy of Turkey, Analysis (SETA Report), July 2017. International Energy Agency, Energy Policies of IEA Countries: Turkey 2016 Review (IEA Report), September 2016. Melikoğlu, Mehmet. “Vision 2023: Feasibility Analysis of Turkey’s Renewable Energy Projection”. Elsevier, Renewable Energy, Volume 50, February 2013, pp. 570–575. Presidency of Republic of Turkey, Investment Office. Turkey’s Renewable Energy Market and Investment Opportunities, April 2018. Renewable Energy Sources and Climate Change Mitigation. Summary for Policy Makers and Technical Summary, published for the Intergovernmental Panel on Climate Change, Edited by Ottmar Edenhofer, Ramón Pichs-Madruga, YoubaSokona, et al., 2012. Stern Review on the Economics of Climate Change. Tükenmez, M., and Demireli E. “Renewable Energy Policy in Turkey with the New Legal Regulations”. Elsevier, Renewable Energy, Volume 39, Issue 1, March 2012, pp. 1–9. Turkish Statistical Institute 2016 (TÜİK), National Greenhouse Gas Inventory Report 1990-2014

7 Turkey’s Renewable Energy Prospects Toward the 100th Anniversary of the Republic Çiğdem Pekar

Introduction Renewable energy is produced by natural resources that are constantly renewed by nature and is regarded as an important tool to reduce global carbon emissions and dependency on fossil fuels. Furthermore, the development of renewable energy technologies presents a significant potential to increase employment rates and economic welfare. There exist several documents evaluating the current status of world renewables and projecting their role in the global energy supply. REN21 Renewables 2017 Global Status Report is one of the most comprehensive reports in this regard. The report says that, since 2011 “world primary energy demand has grown by an annual average of around 1.8% ”.

Ç. Pekar (*)  Department of International Relations, Faculty of Political Science, Çanakkale Onsekiz Mart University, Çanakkale, Turkey e-mail: [email protected] © The Author(s) 2019 D. Kurochkin et al. (eds.), Renewable Energy, https://doi.org/10.1007/978-3-030-14207-0_7

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This growth in energy demand is seen primarily in developing countries.1 The report also states that by the end of 2016 renewables constitute an estimated 30% of the world’s power generating capacity which is enough to supply about 24.5% of global electricity.2 Top countries for total installed renewable electric capacity are China, the United States, Brazil, Germany, and Canada.3 With 30 member countries, International Energy Agency (IEA) is another important forum in the field of energy security, economic development, and environmental awareness. Agency’s report of 2010 coins “energy security” and “climate change” as the “twin challenges.”4 Renewable energy resources are universally regarded as the clear answer to these challenges. Most of the countries in the world are working towards setting and achieving renewable energy targets for a sustainable future. IEA World Energy Outlook report of 2009 clearly states that “a low-carbon energy revolution” is needed to achieve climate change mitigation.5 Several governments adopted new renewable energy targets. Some of these targets include 100% renewable energy in the framework of 2015 Paris Agreement of the United Nations Framework Convention on Climate Change (UNFCCC), which entered into force at the 22nd Conference of the Parties (COP22) in November 2016. European countries have an ambitious policy for renewable energy. “Energy roadmap 2050” report of the European Commission states that “RES power generation capacity in 2050 would be more than twice as high as today’s total power generation capacity from all

1REN21. 2017. “Renewables 2017 Global Status Report,” 29, http://www.ren21.net/wp-content/ uploads/2017/06/17-8399_GSR_2017_Full_Report_0621_Opt.pdf (Last accessed June 2, 2018). 2Ibid., 33. Hydropower provides about 16.6% of global electricity in this calculation. Rest is as follows: Wind power: 4%, Bio-power: 2, Solar PV: 1.5% Ocean, CSP and geothermal power: 0.4% (ibid., 36). 3Ibid., 37. According to the REN21 Report, as of 2016 “China was home to more than one-quarter of the world’s renewable power capacity – totalling approximately 564 GW, including about 305 GW of hydropower” (ibid., 33). 4International Energy Agency (IEA). 2010. “World Energy Outlook 2010,” https://webstore.iea. org/world-energy-outlook-2010 (Last accessed April 6, 2018). 5International Energy Agency (IEA). 2009. “Executive Summary World Energy Outlook 2009,” 7 (Last accessed April 6, 2018).

7  Turkey’s Renewable Energy Prospects …     183

sources.”6 Furthermore, 2010 report by the European Renewable Energy Council (EREC) titled “A 100% Renewable Energy Vision for the European Union” presents an ambitious vision for the European Union countries which puts forward a 100% renewable energy system by 2050.7 Investment in renewable power sector is also following an upwards trend in the last years. REN21 Report states that “…investment in new renewable power capacity (including hydropower) was roughly double that in fossil fuel generating capacity” in 2016.8 As a result of the global trend of these investments, in 2016 renewable energy sector employed 9.8 million people.9 As an intergovernmental organization supporting countries in their transition to a sustainable energy future, International Renewable Energy Agency (IRENA), also points out in its “2018 annual review on renewable energy and jobs” that renewable energy jobs grew 5.3% in 2017, with the total surpassing 10 million worldwide.10 Turkey is no exception, it also has a growing interest in renewable energy generation, according to the “National Renewable Energy Action Plan,” announced by the Turkish Ministry of Energy and Natural Resources in 2014, Turkey’s main strategic issues regarding energy policy in the next decade includes a “reduction of energy dependency in order to mitigate the risks linked to high energy dependency on fossil fuel supplies from other countries” and reaching an “additional capacity of 125,000 MW and supply the estimated demand growth of 75.4% between 2012 and 2023.”11 In order to reach these targets Turkey has been working towards utilizing 6European

Commission. 2011. “Energy Roadmap 2050,” 7, https://ec.europa.eu/energy/sites/ ener/files/documents/2012_energy_roadmap_2050_en_0.pdf (Last accessed April 6, 2018). 7European Renewable Energy Council (EREC). 2010. “Rethinking 2050: A 100 Percent Renewable Energy Vision for the European Union,” 6 (Last accessed April 6, 2018). 8http://www.ren21.net/gsr-2017/pages/summary/summary/ (Last accessed November 27, 2018). 9Ibid. 10International Renewable Energy Agency (IRENA). 2018. “Renewable Energy and Jobs— Annual Review 2018,” http://irena.org/publications/2018/May/Renewable-Energy-and-JobsAnnual-Review-2018 (Last accessed November 29, 2018). 11Republic of Turkey, Ministry of Energy and Natural Resources (MENR). 2014. “National Renewable Energy Action Plan for Turkey (NREAP),” 22, https://www.ebrd.com/documents/ commsandbis/turkeynationalrenewableenergyactionplan.pdf+&cd=1&hl=tr&ct=clnk&gl=tr (Last accessed April 2, 2018).

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its renewable energy resources. Plan puts forward ambitious targets for renewable energy production. It aims at an increase in country’s renewable energy from 25.5 GW in 2013 to 61 GW in 2023. General Directorate of Renewable Energy under the Ministry of Energy and Natural Resources (MENR) states that as of April 2018, Turkey’s renewable energy installed capacity is around 38.9 GW (YEGM 2018). According to the Ministry, as of the end of July 2018, number of electricity generation plants in Turkey were 3098 with an 85,200 MW electricity generation installed capacity. There exists 613 hydraulic, 40 coal, 186 wind, 33 geothermal, 288 natural gas, 1773 solar, 165 other power plants (MENR 2018a). In order to understand and evaluate Turkey’s ambitious renewable energy policy, first of all it is necessary to assess the country’s motivations.

Turkey’s Motivations for Renewable Energy Generation As a developing country Turkey has been experiencing a stable growing economy (with some distractions in some years) as well as population growth since its foundation. As the Turkish Ministry of Foreign Affairs points out with a reference to 2016 data, country has the “highest rate of growing energy demand among OECD countries over the last 15 years” (MFA 2018). The Turkish Ministry of Energy and Natural Resources states that “electricity consumption in the year 2023 is expected to rise by 5,5%” (MENR 2018a). In order to meet the growing need of energy, the country works towards facilitating its natural resources for power generation and tries to balance energy import dependence on the other. In addition to these aims, Turkey also has international environmental goals and commitments. As it is put in Turkey’s Energy Policies of IEA Countries 2016 Review, “Turkey’s energy policy has continuously evolved” to meet these challenges and goals.12 12International Energy Agency (IEA). 2016. “Energy Policies of IEA Countries-Turkey 2016 Review Report,” 9, https://euagenda.eu/upload/publications/untitled-53148-ea.pdf? (Last accessed April 30, 2018).

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According to the current literature and analysis Turkey’s growing interest in renewable energy resources can be explained by the following concerns of the Turkish government: (a) growing energy demand due to economic growth and increased population, (b) energy security, and (c) international environmental commitments.

(a) Growing Energy Demand Due to Economic Growth and Increased Population Turkey has been experiencing a continuous economic growth during recent decades. As of April 2018, Turkey is the 17th-largest economy in the world with its estimated population of 80.3 million and with a GDP of around $860 billion. GDP per capita in Turkey is around $11,000 which nearly tripled between the dates of 2000 and 2016 (Worldbank 2018). Turkey has experienced an economic growth at an average rate of 5% in the last decade. There is also an expected 4.3% growth rate for the years between 2018 and 2030. According to IEA, this growth is “major driver of energy demand and investment in the Turkish energy market.”13 Primary energy consumption is another significant factor in the country’s increase in electricity demand. The UNFCCC Report on Turkey’s 6th National Communication states that during the period of 1990 and 2013, primary energy consumption increased by 128.4%.14 According to the MENR, in 2017 electricity consumption increased by 5.6% and reached 294.9 billion kWh (MENR 2018a). According to the Ministry, in the next 15 years, the annual electricity demand will increase by 5.25% annually; and it will almost be doubled between 2013 and 2023.15 As well as the increase in electricity demand, Turkey

13Ibid. 14United

Nations Framework Convention on Climate Change (UNFCCC). 2016a. “Turkey’s 6th National Communication,” 6, http://unfccc.int/files/national_reports/non-annex_i_natcom/ application/pdf/6_bildirim_eng_11_reducedfilesize.pdf (Last accessed May 5, 2018). 15Ibid., 62.

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also experienced a significant gas demand. For instance, in 2017 Turkey has consumed 53.5 billion m3 gas (MENR 2018e). It can be said that a deeper look at Turkish government institutions projections regarding increasing energy demand present some inconsistencies. On the one hand, in its Third Biennial Report Ministry foresees country’s “electricity demand in 2030 will reach 580 Twh under the business-as-usual scenario.”16 On the other hand, in its 6th National Communication to the UNFCCC Turkey states that “[i]n the framework of the official plans (existing strategy papers, development plans, etc.), it is shown that the electricity demand (according to the final electricity demand series determined by the MENR) will be 463 Twh in the High Demand Scenario and 381 Twh in the Low Demand Scenario in 2023 and will reach 660 and 506 Twh in 2030 level according to the same scenario.”17 In spite of the inconsistencies stated above, it is an obvious fact that Turkey will experience an increasing energy demand in the coming decades.

(b) Energy Security The IEA defines energy security as the “uninterrupted availability of energy sources at an affordable price” (IEA 2018).18 In Turkish case, both—“uninterrupted availability” and “affordable price” elements of this definition—present significant challenges for the country; such as the electricity generation sources, imports and pricing. It can be said that there exists a significant gap between Turkey’s primary energy consumption and production. Turkey’s rate of dependence on foreign energy supply is at around 75%, which is mainly based on oil and natural gas. Turkey is able to meet only around 26% of its total energy 16United Nations Framework Convention on Climate Change (UNFCCC). 2018. “Turkey’s Third Biennial Report,” 60, http://unfccc.int/files/national_reports/biennial_reports_and_iar/ submitted_biennial_reports/application/pdf/1428795_turkey-br3-1-tur.br3.english.pdf (Last accessed May 6, 2018). 17UNFCCC (2016a, 42). 18International Energy Agency (IEA). 2018. “Energy Security,” https://www.iea.org/topics/energysecurity/ (Last accessed May 20, 2018).

7  Turkey’s Renewable Energy Prospects …     187

demand from its own domestic resources.19 Thus, in terms of energy security most important challenge for Turkey is the country’s dependence on Russian natural gas for its electricity generation. Since most of the electricity generation is met by natural gas (around 44%), this situation bears an “important risk.”20 Rest of the electricity generation was met mainly by coal hydroelectric and wind. Turkey’s other gas imports are mainly from Iran and Azerbaijan. Furthermore, Turkey also imports LNG from Algeria and Nigeria. Turkey’s indigenous natural gas production is relatively low. Above-mentioned energy security concerns clearly explain a growing importance given to renewable energy development by the Turkish government. As 2016 IEA report on energy policies of Turkey correctly observes, Turkey’s region presents important geopolitical challenges which impacts the country’s electricity security.21 Thus, energy security is one of the main priorities of the Turkish government. Another priority for Turkey is environmental concerns. In 2004 Turkey has become a party to UNFCCC which is an important international framework to reduce GHG and global average temperature. Turkey is a part to Kyoto Protocol since 2009. As a result, currently Turkey is under international commitments towards these goals.

(c) International Environmental Commitments Turkey reiterates its support for renewable energy development and sets renewable energy targets along with an aim of decreasing the country’s GHG emissions in its several policy papers, submitted both at national and international levels. At the national level, so far, Turkey has announced two key national documents regarding climate change in conjunction with renewable energy: “National Climate Change Strategy Document,” 19Republic

of Turkey, Ministry of Energy and Natural Resources (MENR). 2014a. “National Renewable Energy Action Plan for Turkey (NREAP),” 17, https://www.ebrd.com/documents/ commsandbis/turkeynationalrenewableenergyactionplan.pdf+&cd=1&hl=tr&ct=clnk&gl=tr (Last accessed April 2, 2018). 20UNFCCC (2016a, 41). 21IEA (2016, 10).

188     Ç. Pekar

covering years 2010–2020, and Climate Change National Action Plan, covering years 2011–2023. It is not surprising to observe that both documents lay out common key policies and actions. Both documents contain the mitigation, compliance, financing, technology policies of the country in this field. Since the latter document was prepared, in accordance with the former one, actions, timing of applications and responsibilities for compliance are explained in detail in the Climate Change National Action Plan. Turkey adopts “common but differentiated responsibilities” principle in both documents for control of GHG emissions. At the international level, the UNFCCC 21st Conference of the Parties (COP21) presents particular importance for Turkey. With this document Turkey, put a (GHG) emissions reduction target for the year 2030. In the first-ever Nationally Determined Contribution (NDC), Turkey announced its intention to “cap GHG emissions growth at 21% below the business-as-usual (BAU) increase expected for 2030.”22 In order to understand Turkey’s commitment for reducing its GHG emissions, it is important to grasp the international framework set out by the UNFCCC and Turkey’s special status in this framework. Under the framework of the 1992 UNFCCC, several countries have put proposals regarding how much they aim to reduce their GHG emissions in the near- and long-term. Thus UNFCCC established an annexes system which groups countries as Annex I and Annex II countries; there is also a group of non-Annex countries. While the Annex I countries consist of the industrialized countries who are members of the OECD and former USSR countries (Economies in Transition Countries), Annex II countries are developed and industrialized countries. The last group—non-Annex countries, consist of developing countries. Turkey, as a member of OECD, was included in both Annexes I and II. As a developing country, Turkey did not become a party to the Convention and submit its demand to be removed from the Annexes I and II. Following Turkey’s continuous demand, in 2001 by the Decision 26/CP.7, Turkey was removed from the Annex II. Although it was not removed from the Annex I as it has been asked 22Ibid.,

14.

7  Turkey’s Renewable Energy Prospects …     189

for, parties of the Convention invited to recognize the “special circumstances of Turkey, which place Turkey, after becoming a Party, in a situation different from that of other Parties included in Annex I to the Convention.”23 As a result, in 2004 Turkey became a Party to the UNFCCC as an Annex I Party with “special circumstances” and submitted its First National Communication in 2007.24 As mentioned above, Turkey also became a Party to the Kyoto Protocol in 2009. Due to the fact that Turkey is not listed in the Annex-B of the Protocol, the country has been exempted from any quantitative emission mitigation targets or limitation commitments in the first period of the Protocol (2008–2012). Until this specified date, Turkey’s responsibility under the Protocol was only limited to the Article 10 of the Protocol.25 In the light of these international commitments, Turkey’s Higher Planning Council presented a National Climate Change Strategy in 2010. Following this important step, the National Climate Change Action Plan of Turkey (NCCAP) for the period of 2011–2023 was announced in 2012. Following submission of its first national communication on climate change in 2007, Turkey has submitted its sixth national communication to the UNFCCC in 2016. Furthermore, following the 21st Conference of the Parties (COP21) in 2015, Turkey has submitted its first intended nationally determined contribution (INDC) in October 2015 to the UNFCCC. In its sixth national communication Turkey presents two GHG projections for the period of 2012–2030. First projection is the BAU (‘without measures’) scenario; and the second one is the mitigation (‘with measures’) scenario. Turkey projects an increase of 226.9% under the 23United

Nations Framework Convention on Climate Change (UNFCCC). 2016a. “Turkey’s 6th National Communication,” 62.63, http://unfccc.int/files/national_reports/non-annex_i_natcom/ application/pdf/6_bildirim_eng_11_reducedfilesize.pdf (Last accessed May 5, 2018). 24Also see Climate Policy Observer. 2017. “A Tangled Case—Turkey’s Status Under the UNFCCC and the Paris Agreement,” ICCG Reflection No. 53. http://climateobserver.org/tangled-case-turkey-status-unfccc-paris-agreement (Last accessed November 28, 2018). 25UNFCCC (2018, 47). However, as IEA Report on Turkey states, “Turkey has suffered from being an Annex I party as it could not benefit from Kyoto’s flexibility mechanisms, such as the clean development mechanism (CDM), and support from developed countries, including finance, capacity building and technology development despite being a developing country” (IEA 2016, 29–30).

190     Ç. Pekar

BAU scenario for 2020. Under the mitigation scenario, this ratio is 206.8%. As the UNFCCC Report on Turkey’s sixth communication puts it, both two ratios are above the 1990 level.26 Following the year 2020, Turkey defines its climate change policy as “integrating climate change goals with development policies and increasing the exploitation of clean and renewable energy sources.”27 In this context, Turkey aims to work towards this goal by reducing emission in different economic sectors (energy production, industry, agriculture, waste, buildings, transport and forestry). After taking these concrete steps by 2030, Turkey projects an increase in GHG emissions by 456.2% under the BAU scenario and 357.8% under the mitigation scenario, which are still above the 1990 level.28 As a result, Turkey states a GHG reduction target of up to 21% below BAU scenario by 2030. According to the calculation on Climate Action Tracker web page, this target is equivalent to a 348% increase from 1990 levels, or a 97% increase from 2012 levels.29 In the light of the above mentioned major concerns, Turkey has been working on increasing the share of renewables in its energy mix. In this regard, the Turkish government has set several targets, which would be reached by a set of energy policies.

Turkey’s Renewable Energy Policies and Targets In Turkey there are two responsible Turkish authorities in charge of policies to coordinate and support renewable energy resources; the MENR and the Energy Market Regulatory Authority (EMRA). Especially MENR is responsible for the implementation of the renewable energy targets which were set by the Turkish government. During the implementation, environmental impact assessment is overseen by 26United Nations Framework Convention on Climate Change (UNFCCC). 2016b. “Report on Turkey’s 6th National Communication,” FCCC/IDR.6/TUR, 11, http://unfccc.int/resource/ docs/2016/idr/tur06.pdf (May 5, 2018). 27Ibid. 28Ibid., 11–12. 29https://climateactiontracker.org/ (Last accessed November 28, 2018).

7  Turkey’s Renewable Energy Prospects …     191

the Ministry of Environment and Urbanization (MEU). Tendering processes of grid capacity for solar and wind energy projects are operated by the Turkish Electricity Transmission Corporation (TEİAŞ). It is also responsible for the collection and redistribution of the feed-in tariffs (FIT). All of these institutions are working towards achieving Turkey’s ambitious renewable energy targets. It is frequently pointed out in these authorities’ strategy papers that Turkey needs to diversify the energy supply sources, in order to access sustainable and secure energy. On the other hand, Turkey aims to promote its indigenous energy production with a particular emphasis from renewable energy resources. “Vision 2023” targets, which mark the 100th anniversary of the Republic of Turkey, were announced by the Turkish government in 2009. They clearly present these energy ambitions among other targets such as growing economy and exports. “Vision 2023” aims at promoting indigenous energy resources, including coal (which would be a challenging factor for achieving Turkey’s international environmental commitments), raising the share of renewable energy in the electricity mix to reach 30%; improving energy efficiency by reducing energy consumption by 20% below 2010 levels and starting up two or three nuclear power plants.30 In this regard, Turkey’s Electricity Market and Supply Security Strategy (2009) with the Electricity Energy Market Law (No. 6446) also highlights the potential role of renewables in the country’s energy mix. The strategy paper echoes “Vision 2023” targets in order to meet growing energy demand. As Turkey has stated in its 6th National Communication to UNFCCC, its general energy policy aims to “supply the necessary energy in order to support economic growth and social development in time.”31 There are several relevant factors that are needed to be fulfilled such as supply in a “reliable and cost-effective manner,” “reasonable prices” and “environmentally sensitive way.”32 In order to ensure energy

30IEA

(2016, 28). (2016a, 104).

31UNFCCC 32Ibid.

192     Ç. Pekar

security Turkey aims to follow several main strategies and policies. In its 6th National Communication these strategies are outlined as: (a) Providing resource diversity by prioritizing local resources, (b) Increasing the share of renewable energy resources in energy supply, (c) Increasing energy efficiency, (d) Giving full operability to free market conditions and improving the investment environment, (e) Providing resource diversity in petrol and natural gas fields and taking the measures to mitigate the risks arising out of import, (f ) Becoming an energy corridor and terminal within the context of regional collaboration processes using the geostrategic position effectively, (g) Providing for environmentally sensitive execution of activities in energy and natural resources, (h) Increasing contribution of natural resources to the country’s economy, (i) Increasing production of industrial raw materials, metal and nonmetal minerals and providing for their domestic use, (j) And to make energy accessible for consumers in cost, time and amount aspects.33 The Turkish government also announced other documents with ambitious targets regarding renewable energy in order both to ensure energy security and fulfill its climate change commitments. 2014 National Renewable Energy Action Plan (NREAP) is a comprehensive document which lays out clear targets for an increase in renewable power capacity of the country. This plan was announced as an outcome of cooperation between the European Bank for Reconstruction and Development (EBRD), Deloitte and MENR. Following a general evaluation of the renewable energy policies and the potential of Turkey, it puts forward ambitious targets for renewable energy production. It targets an increase in country’s renewable energy from 25.5 GW in 2013 to 61 GW in 33Ibid.

7  Turkey’s Renewable Energy Prospects …     193

2023. According to the plan, the biggest increase will take place for wind energy: from 2.8 GW to 20 GW in this period. It also aims to expand the use of solar power in electricity generation to utilize Turkey’s potential. Solar energy (PV and CSP) is targeted to reach 5 GW. Geothermal and biomass are targeted to generate 1 GW of electricity each by this date. Hydro power plants as the main renewable power source of the country are targeted to increase 34 GW installed capacity by 2023. It also aims to achieve a 10% share of renewable energy use in the transport sector. Finally, the Plan aims to use all of 1 GW of geothermal electricity potential in Turkey by 2023 (NREAP 2014a). According to the Plan, total gross electricity generation would be 159,433 GWh. It represents 37% of the total forecast consumption in 2023. According to the targets mentioned in the Action Plan, “the gross electricity generation in 2023 would be 91,800 GWh for hydropower, 50,000 GWh for onshore wind energy, 5100 GWh for geothermal energy, 8000 GWh for solar energy, and 4533 GWh for biomass.”34 It is also pointed out in the Plan that the country “is one of the highest countries in terms of energy consumption per GDP (energy intensity) compared to the rest of the largest European countries (excluding Poland).”35 In this regard, Energy Efficiency Strategy Document (2012) and Energy Efficiency Improvement Program Action Plan and Production Based on Local Resources Program Action Plan (2014) are other important government documents which were built on the indicative target of the “Vision 2023.” While the first document aims to reduce Turkey’s energy intensity by at least 20% by 2023, both of these documents set detailed energy saving targets and actions. Turkey’s National Energy Efficiency Action Plan (NEEAP), which covers the years between 2017 and 2023, with the motto: “More Domestic, More Renewable”— “for supplying continuous, uninterrupted, accessible and cost-effective energy.”36 34MENR

(2014a, 69–70). 17. 36Republic of Turkey, Ministry of Energy and Natural Resources, General Directorate of Renewable Energy (Yenilenebilir Enerji Genel Müdürlüğü-YEGM), iv, http://www.yegm.gov.tr/document/ 20180102M1_2018_eng.pdf (Last accessed June 1, 2018). 35Ibid.,

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The Tenth Five Years Development Plan (2013) which covers the dates between 2014 and 2018 also makes emphasis on the renewable energy development and presents the concept of “green growth,” in order to reach sustainable development targets of the country. The Plan states that “utilization of especially renewable energy resources both for primary energy supply and for electricity generation is of crucial importance for enabling sustainable development.”37 Turkey’s INDC document which was submitted in September 2015 in the following of the Paris COP21 Conference is also an important document to understand the countries renewable policies. In this document Turkey takes a further step and makes renewable energy production projections for the year of 2030. 2015–2019 Strategic Plan of the MENR (2014b) which covers the dates of 2015–2019 also lays out Turkey’s goals and objectives regarding security of energy supply, particularly with a special emphasis on renewable energy resources. It presents three key objectives to ensure security of supply: (i) “to ensure strong and reliable energy infrastructure,” (ii) “to ensure the diversity of the fuel mix by limiting the use of imported natural gas in power generation to a share of 38%, by increasing the use of domestic coal (60 TWh by 2019) and renewable energy sources, by fostering indigenous oil and gas production”; and (iii) “to manage demand peaks effectively, including market-based demand-side participation mechanisms in the electricity market.”38 Today, Turkey continues to increase number of new renewable energy generation facilities and to increase the share of renewable energy generation. In order to make a general evaluation of the country’s performance one should look into details of the official data and charts.

37Republic of Turkey, Ministry of Development. 2014. “The Tenth Development Plan (2014– 2018),” 174, http://www.mod.gov.tr/Lists/RecentPublications/Attachments/75/The%20Tenth%20 Development%20Plan%20(2014-2018).pdf (Last accessed June 1, 2018). 38IEA (2016, 29).

7  Turkey’s Renewable Energy Prospects …     195

Fig. 7.1  Installed capacity development of electricity generating facilities from renewable sources (Source Republic of Turkey, The Ministry of Energy and Natural Resources, General Directorate of Renewable Energy. http://www.yegm. gov.tr/yenilenebilir.aspx [Last accessed June 2, 2018])

Current Renewable Energy Status in Turkey According to the MENR as of the end of July 2018, number of electricity generation plants in Turkey were 3098 with a 85,200 MW electricity generation installed capacity. There exists 613 hydraulic, 40 coal, 186 wind, 33 geothermal, 288 natural gas, 1773 solar, 165 other power plants (MENR 2018a). General Directorate of Renewable Energy under the Ministry states that as of April 2018 Turkey’s renewable energy installed capacity is around 38.9 GW (YEGM 2018). Generating facilities utilizing renewable energy resources constitutes around 45% of total installed capacity; 32% of total installed capacity consists of generating facilities utilizing hydraulic resources, 7.6% wind energy resources, 1.2% geothermal energy resources, and 4% solar energy resources. While the share of natural gas is 27.2%, other non-renewable resource, coal-based power plants, generates 21.9% of country’s electricity need. The rest (around 5.9%) is supplied by other resources (MENR 2018a). Figure 7.1 puts forward a clear picture of the installed capacity development of electricity generating facilities from renewable sources in Turkey.

196     Ç. Pekar

(a) Hydropower in Turkey According to the REN21 report, in 2016 Turkey’s hydropower capacity has expanded by 0.8 GW, with a total installed capacity of 26.7 GW.39 The report states: “[f ]ollowing a sharp recovery in production in 2015, hydropower output remained virtually unchanged in 2016, at 66.9 TWh.”40 Turkey keeps adding more capacity; the report places Turkey as the seventh leading country, adding the most capacity in 2016.41 The Ministry announces that, by the end of 2017, Turkey has a total of 628 hydropower plants which constitutes a 27,273 MW installed capacity. This is almost 32% of the country’s total installed capacity. In 2017 electricity generation from these plants are 58.5 billion kWh which constitutes 19.8% of Turkey’s electricity production (MENR 2018c).

(b) Wind Power in Turkey Regarding wind power, it is seen that in 2016 Turkey had a record year, adding nearly 1.4 GW reaching a total of 6.1 GW.42 With this wind power usage capacity Turkey had a ranking among the top 10 countries for new capacity building. Furthermore, in 2016, the Turkish government adopted policies, which include “a premium of up to 50% higher tariffs under the country’s wind power FIT if all turbine components are made in the country ”.43 39REN21

(2017, 59).

40Ibid. 41The top countries for hydropower capacity are China, Brazil, the United States, Canada, the Russian Federation, India and Norway, which together accounted for about 62% of installed capacity at the end of 2016 (REN21, 56). 42REN21 (2017, 82). Also see Turkish Wind Energy Association (TWEA, January 2017). “Turkish Wind Energy Statistics Report,” http://www.tureb.com.tr/files/tureb_sayfa/duyurular/2017_duyurular/subat/turkiye_ruzgar_enerjisi_istatistik_raporu_ocak_2017.pdf (June 2, 2018) and Wind Europe (2017). “Wind in Power: 2016 European Statistics.” https://windeurope.org/wp-content/uploads/files/about-wind/statistics/WindEurope-Annual-Statistics-2016. pdf (March 2, 2018). 43REN21 (2017, 82).

7  Turkey’s Renewable Energy Prospects …     197

The Ministry states that, by the end of 2017, Turkey has a total of 207 operating wind power plants, which constitutes a 6516 MW installed capacity; this is 7.6% of the country’s total installed capacity. In 2017, electricity generation from wind power plants are 17,909 GWh, which constitutes 6.06% of Turkey’s electricity production (MENR 2018d).

(c) Geothermal Power in Turkey Turkey is also becoming more active in using its national geothermal sources. According to the REN21 report, Turkey is one of the two leading countries (with Indonesia) in new geothermal power installations.44 As of the end of the 2016, countries with the largest amounts of geothermal power generating capacity are the United States (3.6 GW), the Philippines (1.9 GW), Indonesia (1.6 GW), New Zealand (1.0 GW), Mexico (0.9 GW), Italy (0.8 GW), Turkey (0.8 GW), Iceland (0.7 GW), Kenya (0.6 GW), and Japan (0.5 GW).45 Turkey opened 20 geothermal power plants in two years (2015 and 2016), which has increased the capacity by about 200 MW for a total of 821 MW. As a result, the country’s geothermal energy generation has risen 25% in 2016 alone, to 4.21 TWh.46 Furthermore, Turkish MENR has estimated that the “economic potential of geothermal for power generation to be in the range of 600 MW, of which 94.2 was already in operation by 2014 and 127.5 MW under construction.”47 After this date, Turkey made an important progress to utilize its geothermal power generation capacity. As it is seen clearly, Turkey is actively using its geothermal energy in electricity generation. On the other hand, Turkey with its important geothermal heat capacity, intends to utilize it. According to the REN21 report as of the end of 2016, Turkey is the top second country in terms

44Ibid.,

52.

45Ibid. 46Ibid. 47IEA

(2016, 176).

198     Ç. Pekar

of total geothermal heat capacity (2.9 GWth)48 and direct geothermal heat use (12.5 TWh),49 following China. The National Renewable Energy Action Plan for Turkey (NREAP) states that it is expected that considering the actual developments in geothermal energy the “geothermal installed capacity might surpass 1,000 MW.”50 The Ministry states that by the end of 2017 Turkey has a total of 40 operating geothermal power plants which constitutes a 1064 MW installed capacity. This is 1.2% of the country’s total installed capacity. In 2017, electricity generation from wind power plants are 5970 GWh, which constitutes 2.02% of Turkey’s electricity production (MENR 2018f).

(d) Solar Power in Turkey Turkey’s solar power potential as well as total installed solar power capacity is small to date, due to its geographical location. Especially the southern part of the country has a significant solar energy potential. According to the Ministry, Turkey has an annually 2741 hours (7.5 hours/daily) of solar radiation. It can be said that solar energy generation is growing. In 2016, there was an important tender for the Turkish solar energy sector. The country held a tender for a single 1 GW solar PV plant. In the same year, the Turkish government adopted a 50% tariff on solar panel imports. For the first time in the country, “a local content requirement also was applied to tender specifications for the Karapinar solar PV project, for which it is anticipated that 75% of module components will be manufactured locally.”51 The Ministry states that by the end of 2017 Turkey has a total of 3616 solar power plants, which constitutes a 3421 MW installed capacity. This is 4% of the country’s total installed capacity. In 2017, 48The countries with the largest geothermal direct use capacity were China (6.1 GWth), Turkey (2.9 GWth), Japan (2.1 GWth), Iceland (2.0 GWth), India (1.0 GWth), Hungary (0.9 GWth), Italy (0.8 GWth) and the United States (0.6 GWth). 50 Together, these eight countries accounted for about 80% of total global capacity (REN21 2017, 55). 49Ibid. 50MENR (2014a, 50). 51REN21 (2017, 124–125).

7  Turkey’s Renewable Energy Prospects …     199

electricity generation from solar power plants are 2684 GWh, which constitutes 0.91% of Turkey’s electricity production (MENR 2018g). Turkey is also very enthusiastic to use its solar thermal capacity which is mainly used to provide hot water and heat in cool places. As of 2016, Turkey has the third biggest solar thermal capacity in the world, following China and the United States.52 In 2016, Turkey is the second leading country for new installations. By the end of 2015, country has 13.6 GWth (19.4 million m2) of solar thermal capacity in operation which saved Turkey around 10% of its annual natural gas consumption.53

(e) Biomass Power in Turkey According to the NREAP, Turkey also has a total of 8.7 million tons of potential biomass. As it has been pointed out before, the government aims to develop 1000 MW of installed capacity to 2023.54 The ministry states that, by the end of 2017, Turkey has a total of 1223 biomass power plants which constitutes a 634.2 MW installed capacity. This is 0.7% of the country’s total installed capacity. In 2017, electricity generation from biomass power plants are 2796 GWh, which constitutes 0.95% of Turkey’s electricity production (MENR 2018h).

Recent Legal Developments in Turkey’s Renewable Energy Sector The 2005 Law on the Utilization of Renewable Energy Resources for the Purpose of Generating Electrical Energy (Law No: 5346) established a legal framework for the promotion of renewable energy sources in Turkey, which can be labeled as an incentive plan for the promotion of renewable energy in the country. The 2007 Energy Efficiency Law

52Ibid.,

75.

53Ibid. 54IEA

(2016, 176).

200     Ç. Pekar

No. 5627 establishes a legal platform for energy efficiency and subsidies for electricity production from renewable resources. The 2007 Geothermal Law No. 5686 and the 2013 Electricity Market Law No. 6446 include important legal provisions for power generation from renewable energy. The 2005 Law (No. 5346) was comprehensively modified by the Law Amending the Utilization of Renewable Energy Resources in Electricity Generation (Law No. 6094) in 2010. Law No. 6094 is particularly important in Turkey’s renewable energy policy since technology-specific FITs are introduced for the first time. In addition, Renewable Energy Resources Support Mechanism (YEKDEM) was introduced with this law. Both of these mechanisms aim to introduce differentiated FITs for different renewable energy sources and to provide attractive guarantees and payments for project developers and other participants who are offering renewable energy in the electricity market. Turkey has provided additional tariffs if the renewable energy facility is constructed by local manufactured components. If the requirements are met, the additional tariff is provided for a five years term, starting from the operation date of the production facility. It is obvious that Turkey aims to encourage investors to purchase local content manufactured goods.55 The Turkish government also introduced the Renewable Energy Resource Areas (YEKA) strategy which aims to determine and create employment via establishment of domestic factories in the most suitable areas for renewable energy production. This strategy includes a tender process of the production of renewable energy on “Renewable Energy Designated Areas.”

Renewable Energy Performance of Turkey Turkey’s yearly targets, regarding renewable energy generation, is assessed in detail; the country has been presenting a good performance, particularly in hydro and solar power sectors. According to the Turkish Ministry of Energy and Natural Resources, General Directorate of Renewable 55Ibid.,

178.

7  Turkey’s Renewable Energy Prospects …     201

Energy Turkey’s total installed capacity of electric generating plants, using renewable energy sources, is 38,907.9 MW as of May 2018.56 While hydro power constitutes most of the renewable energy production (27,293 MW), wind energy comes second with 6516 MW. Solar energy (3420 MW), geothermal energy (1063 MW), and biomass (634 MW) follows hydro and wind energy. Furthermore, the NREAP provides clear targets per year/per technology for the period of 2013–2023. The plan states that, given the targets presented below, the gross electricity generation by 2023 would be 91,800 GWh for hydropower, 50,000 GWh for onshore wind energy, 5100 GWh for geothermal energy, 8000 GWh for solar energy, and 4533 GWh for biomass. The total gross electricity generation is projected to be 159,433 GWh by 2023, which represents 37% of the total forecast consumption in 2023. It should be kept in mind that the government’s commitment is 30% (127,324 GWh).57 An overview of Turkey’s current performance in renewable energy indicates that, in the case of hydro power, there are small gaps between Turkey’s yearly targets and current status. Turkey presents a better performance in solar, geo, and biomass power. Turkey targets 28,763 MW (in 2017) and 30,382 MW (in 2018) electricity generation from hydro power. The final target for 2023 is 34,000 MW. In the wind power Turkey needs to work harder, in order to reach its goals. Turkey targets 9549 MW (in 2017) and 11458 MW (in 2018) wind energy while it achieves only 6516 MW up to date. The final target for 2023 is 20000 MW wind power. As for solar power, Turkey aims to have 1800 MW (in 2017) and 2400 MW (in 2018) electricity production from solar power; it already had a 3420 MW. The final target for solar power is 5000 MW by 2023. Turkey also has enthusiastic targets for geothermal power and biomass. For geothermal Turkey targets 559 MW (in 2017) and 1000 MW (in 2018); recently it has achieved a 1063 MW electricity generation from its geothermal plants. The final 56Data accessed from the Ministry of Energy and Natural Resources, General Directorate of Renewable Energy on May 5, 2018. http://www.yegm.gov.tr/anasayfa.aspx (Last accessed May 5, 2018). 57MENR (2014a, 67).

202     Ç. Pekar

target for geothermal power is 5000 MW by 2023. Finally, Turkey aims 530 MW (in 2017) and 606 MW (in 2018) electricity generation from biomass. So far, Turkey achieved 634 MW in this field; and the final target for biomass power is 1000 MW by 2023. International agencies also observe Turkey’s growing performance in renewable energy generation. According to IRENA report, in 2017 total installed capacity of renewables in the power sector was 34.5 GW by the end of 2016. As it was foreseen by the Turkish government, the fastest growth was in hydro power plants with 4.4 GW growth and wind energy with 3 GW, in comparison with the year 2015. The installed capacity of PV plants also increased (almost tripled) and amounted to 0.8 MW. Geothermal targets were almost fulfilled with a total installed capacity of 0.9 GW by the end of 2016 (IRENA 2017). IEA 2016 report on Turkey also observes that, after 2014, the share of renewable energy in the country’s energy mix has remained stable following a “rapid take-off” during the period 2009–2014. In this period, the renewable energy capacity of Turkey almost doubled from 15.6 GW to 28 GW. The report also points out that, with a stable renewable energy capacity, after this boom period, Turkey has continued to experience an increasing demand in electricity and natural gas.58

Conclusion In order to answer growing energy need, energy security challenges, and to fulfill its international commitments, generation of electricity from renewables presents significant importance for Turkey. Government policies and interventions present significant importance for the renewable energy development. As it is assessed in the study, since the beginning of 2000, the Turkish government has been working towards the promotion of renewable energy in the country’s national energy mix. There are several factors, such as growing population/energy need, energy security, environmental concerns, and economic role of energy imports which 58IEA

(2016, 15–16).

7  Turkey’s Renewable Energy Prospects …     203

have led the government to these efforts. To this end, the government has worked towards establishment of a legal framework and a consistent policy via several laws, plans and strategy plans. The consistency of all these documents present significant importance for the renewable energy prospects of Turkey. Turkey has dramatically expanded its renewable energy during 2000s and 2010s. According to Turkey’s 6th National Communication, the number of electricity power plants which was 300 in 2002 increased to 1059 as of the end of September 2014.59 By 2017 this number increased to 5021; 628 of the existing plants are hydraulic plants, 207—wind power plants, 40—geothermal plants, and 3616 of them are solar power plants. Turkey also has 286 natural gas plants, 41 coal plants. The rest of 203 plants are other resources (MENR 2018b). In the light of the data evaluated in the study, several potential challenges would be pointed out for Turkey’s future renewable energy performance. First of all, renewable energy targets which were set by the Turkish government are challenging to achieve, due to several factors, such as lack of state encouragement, financial support, and attraction of FITs. As it is clear from the government’s projections, especially wind and hydro energy, have been very challenging targets. Major potential obstacles were stated as the following in the NREAP: …investors have difficulty in accessing financial support, as most financial providers take the feed-in tariff as the reference price for electricity (however, the forecasted market price is higher than this feed-in tariff) and the forecasted project cash flow (based on feed-in tariffs) are not attractive enough for financial providers and guarantees are required creating a barrier for new generation facilities.60

Furthermore, as it is stated in the IEA report on Turkey, there exist several challenges about grid integration rules and electricity network upgrades and connections. The agency evaluates that these are “not adequate to satisfy the strong interest in RE licenses by the private sector.”61 59UNFCCC

(2016a, 107). (2014a, 31). 61IEA (2016, 11). 60MENR

204     Ç. Pekar

Moreover, high license and connection fees for renewable projects, delays in grid connection and expansion should be taken into account in evaluation of these obstacles.62 Secondly, the Turkish government plans to increasingly utilize the country’s coal mines for electricity generation. Among other leading actors, such as China and India, Turkey seems to be on the way of becoming one of the largest coal plants constructor country. Building new coal-fired power plants presents a challenge with the country’s international environmental commitments and national emission targets.63 Turkey’s Strategic Plan 2015–2019 aims mostly to meet growing energy demand by increasing the annual electricity generation from domestic coal. According to the Climate Action Tracker, this increase is about 54%, which is above 2012 levels. Turkey has around 67 coal-fired power units, which have a total of 16.3 GW capacity, and more are currently under development. Analysis based on Global Coal Plant Tracker report states that “combined, their estimated annual emissions would amount to 205 MtCO2 roughly half of Turkey’s national emissions today.”64 The UNFCCC report on Turkey’s 6th National Communication also makes emphasis on the country’s plans for coal-based electricity. The report states that in its 6th NC Turkey declared its aim “to increase local coal-based electricity power production from 32 billion kWh in 2013 to 57 billion kWh in 2018, even though this is likely to lead to an increase in emissions.”65 Emre İşeri and Defne Günay (2017) also see the government’s coal policy as “Turkey’s contradiction between its energy and climate change policies.”66 They state that “on the one hand, Turkey signed an agreement committing to reduce CO2, on the other hand, it was

62Ibid.,

179. “A Tangled Case—Turkey’s Status Under the UNFCCC and the Paris Agreement,” ICCG Reflection No. 53, July 2017. 64https://climateactiontracker.org/countries/turkey/current-policy-projections/ (Last accessed November 28, 2018). 65UNFCCC (2016a, 28–29). 66Emre İşeri and Defne Günay (2017). “Assessing Turkey’s Climate Change Commitments: The Case of Turkey’s Energy Policy,” Perceptıons XXII (2–3) (Summer–Autumn), 107–130. 63See:

7  Turkey’s Renewable Energy Prospects …     205

planning to build around 80 coal-fired thermal power plants.”67 According to these Turkish scholars, considering about 80 new thermal power plants, multiplier effect on emissions, bells are ringing for Turkey’s sustainable energy future.68 New coal plants will likely “be perceived contradictory with Turkey’s COP21 pledges at Paris,” and will have “negative implications on the global level.”69 According to the IEA report, Turkey’s coal-based energy production policy is not consistent with its climate goals. The report states that “the INDC BAU sees GHG emissions rise by 512% of 1990 levels.”70 The IEA analysis for COP21 shows that, “Turkey will need to considerably increase ambitions in the areas of renewable energy (hydro, wind and solar) and energy efficiency.”71 In addition, environmental concerns and public acceptance issues, especially regarding hydropower, present a challenge to be addressed for the hydropower generation in the future. It is clear from the data that, although Turkey has achieved its “Vision 2023” RE target of 30% in total energy generation, most of this power is hydropower. There is a growing opposition against hydropower plants, particularly in the Black Sea region of the country, due to several reasons, such as environmental and social costs. Turkey’s one of the major targets in RE is increasing its hydropower capacity. However, strong opposition from environmental groups presents an obstacle. REN21 report points out that “due to high levels of dissolved calcite in the country’s geothermal reservoirs,” a “typical” open-loop 50 MW geothermal plant emits 1 kilogram of CO2 per kWh, or approximately 1200 tons per day’ in Turkey.72 According to the report, “[i]n some instances, CO2 emissions from geothermal power generation in Turkey may be double those from coal-fired power plants.”73 Without doubt, these

67Ibid.,

116.

68Ibid. 69Ibid. 70IEA

(2016, 16). 15. 72REN21 (2017, 56). 73Ibid. 71Ibid.,

206     Ç. Pekar

special circumstances present additional challenges for Turkey in terms of fulfilling environmental commitments and achieve renewable energy targets at the same time. Another critique has come from IEA regarding Turkey’s coal policy. According to the agency, since Turkey is mainly an energy importer “security of supply has prevailed over environmental concerns in the past.”74 Finally, inconsistencies in the official strategy documents and plans present important challenges for the country’s renewable energy and GHG emission prospects. Some analysts highlight some uncertain points regarding Turkey’s announced targets and data regarding both prospects. According to these views, the Turkish government has overestimated the 2030 power demand.75 Another inconsistency is pointed out by a study in Emre İşeri and Defne Günay (2017) with a reference to a news by Cuneyt Kozakoğlu (2015). They have rightly pointed out that, although “Turkey pledged to reduce GHG to 4.2% per year by 2030” in its INDC, “this commitment is not based on a realistic calculation of Turkey’s actual performance so far.”76 While GHG emissions in Turkey grew 3.9% on average per year, between the years 1990 and 2013, “Turkey assumes the expected growth in GHG emissions will be 5.7% per year and commits itself to reducing them to 4.2%.”77 That clearly means a “significant growth in comparison to a 3.9% increase that took place in the same period.”78 The IEA Review on Turkey states that the Turkish government has “set out a plethora of technology-specific renewable energy targets in different strategies and plans for 2023 and 2030 which are not consistent.”79 According

74IEA

(2016, 31). Also see: Okşan Bayülgen, “Two Steps Forward, One Step Back: How Politics Dim the Lights on Turkey’s Renewable Energy Future,” Perceptıons XVIII (4) (Winter 2013), pp. 71–98; Pınar Ertör-Akyazı, Fikret Adaman, Begüm Özkaynak, and Ünal Zenginobuz, “‘Citizens’ Preferences on Nuclear and Renewable Energy Sources: Evidence from Turkey,” Energy Policy, 47, 309–320. 75Also see: http://climateactiontracker.org/countries/turkey.html and Unearthed (2014). “Turkey: Growing Electricity Demand Can Be Met by Renewables at the Same Cost as Coal—Says Bloomberg,”  https://unearthed.greenpeace.org/2014/11/18/turkey-growing-electricity-demand-canmet-renewables-cost-coal-says-bloomberg/ (Last accessed May 2, 2018). 76Emre İşeri and Defne Günay (2017). 77Ibid. 78Ibid., 117. 79IEA (2016, 15–16).

7  Turkey’s Renewable Energy Prospects …     207

to the Agency “overlaps and inconsistencies between the different strategies and action plans hinder the assessment of progress and the identification of gaps in the progress towards the targets and priorities.” 80 In spite of the potential challenges emphasized in the study, it is obvious that, if Turkey achieves the above-mentioned targets, it will significantly decrease its gas import dependence from other countries. In this regard, Turkey makes natural gas projection for its target year 2023. According to the NREAP, due to energy generation from renewables 21 billion m3 of natural gas importation will be avoided along with 47 million tons of CO2 emissions by 2023. That is equal to an annual reduction of natural gas imports worth $4 billion.81 There will be positive economic contributions for Turkey as well. Development of renewable energy facilities would lead to an increase in equipment, components and services supply which would have an important impact on the country’s GDP and unemployment rates. Potential R&D activities would also substantially support human resources development in the country.

References Climate Policy Observer. 2017. “A Tangled Case—Turkey’s Status Under the UNFCCC and the Paris Agreement.” ICCG Reflection No. 53. http://climateobserver.org/tangled-case-turkey-status-unfccc-paris-agreement/ (Last accessed April 30, 2018). Climateactiontracker. 2018. “Turkey—Pledges and Targets.” http://climateactiontracker.org/countries/turkey.html (Last accessed May 20, 2018). Cüneyt Kozakoğlu. 2015. “10 grafikte BM İklimDeğişikliğiKonferansı ve Türkiye.” BBC Türkçe, November 30. https://www.bbc.com/turkce/ ekonomi/2015/11/151130_cop21_turkiye_cuneyt_kazokoglu (Last accessed April 30, 2018). European Commission. 2011. “Energy Roadmap 2050.” https://ec.europa.eu/ energy/sites/ener/files/documents/2012_energy_roadmap_2050_en_0.pdf (Last accessed April 6, 2018). 80Ibid.,

14. (2014a, 71).

81MENR

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European Renewable Energy Council (EREC). 2010. “Rethinking 2050: A 100 Percent Renewable Energy Vision for the European Union.” (Last accessed April 6, 2018). International Energy Agency (IEA). 2009. “Executive Summary World Energy Outlook 2009.” (Last accessed April 6, 2018). ———. 2010. “World Energy Outlook 2010.” https://webstore.iea.org/ world-energy-outlook-2010 (Last accessed April 6, 2018). ———. 2016. “Energy Policies of IEA Countries-Turkey 2016 Review Report.” https://euagenda.eu/upload/publications/untitled-53148-ea.pdf? (Last accessed April 30, 2018). ———. 2018. “Energy Security.” https://www.iea.org/topics/energysecurity/ (Last accessed May 20, 2018). International Renewable Energy Agency (IRENA). 2017. “Renewable Energy Statistics 2017.” http://www.irena.org/publications/2017/Jul/RenewableEnergy-Statistics-2017 (Last accessed June 1, 2018). ———. 2018. “Renewable Energy and Jobs—Annual Review 2018.” http:// irena.org/publications/2018/May/Renewable-Energy-and-Jobs-AnnualReview-2018 (Last accessed November 29, 2018). İşeri, Emre, and Defne Günay. 2017. “Assessing Turkey’s Climate Change Commitments: The Case of Turkey’s Energy Policy.” Perceptıons XXII (2–3) (Summer–Autumn), pp. 107–130. REN21. 2017. “Renewables 2017 Global Status Report.” http://www. ren21.net/wp-content/uploads/2017/06/17-8399_GSR_2017_Full_ Report_0621_Opt.pdf (Last accessed June 2, 2018). Republic of Turkey, Ministry of Development. 2014. “The Tenth Development Plan (2014–2018).” http://www.mod.gov.tr/Lists/Recent Publications/Attachments/75/The%20Tenth%20Development%20 Plan%20(2014-2018).pdf (Last accessed June 1, 2018). Republic of Turkey, Ministry of Energy and Natural Resources (MENR). 2012. “Energy-Efficiency Strategy Document (2012–2023).” http://www. eie.gov.tr/verimlilik/document/Energy_Efficiency_Strategy_Paper.pdf (Last accessed June 1, 2018). ———. 2014a. “National Renewable Energy Action Plan for Turkey (NREAP).” https://www.ebrd.com/documents/commsandbis/turkeynationalrenewableenergyactionplan.pdf+&cd=1&hl=tr&ct=clnk&gl=tr (Last accessed April 2, 2018). ———. 2014b. “Stratejik Plan (Strategic Plan) 2015–2019.” http://www.enerji.gov. tr/File/?path=ROOT%2f1%2fDocuments%2fStratejik%20Plan%2fETKB%20 2015-2019%20Stratejik%20Plani.pdf (Last accessed April 20, 2018).

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———. 2016. “FaaliyetRaporu.” http://www.enerji.gov.tr/File/?path= ROOT%2f1%2fDocuments%2fFaaliyet%20Raporu%2fetkb_fr_ds_225x 300mm_bask%C3%B0_d.pdf (Last accessed June 2, 2018). ———. 2018. “Energy Efficiency Improvement Program Action Plan.” (Ulusal Enerji Verimliliği Eylem Planı). http://www.resmigazete.gov.tr/eskiler/2018/01/20180102M1-1-1.pdf (Last accessed June 2, 2018). ———. MENR, 2018a. “Electricity.” http://www.enerji.gov.tr/en-US/Pages/ Electricity (Last accessed June 2, 2018). ———. MENR, 2018b. http://www.enerji.gov.tr/tr-TR/Sayfalar/Elektrik (Last accessed May 20, 2018). ———. MENR, 2018c. http://www.enerji.gov.tr/tr-TR/Sayfalar/Hidrolik (Last accessed May 20, 2018). ———. MENR, 2018d. http://www.enerji.gov.tr/tr-TR/Sayfalar/Ruzgar (Last accessed May 20, 2018). ———. MENR, 2018e. http://www.enerji.gov.tr/tr-TR/Sayfalar/Dogal-Gaz (Last accessed May 20, 2018). ———. MENR, 2018f. http://www.enerji.gov.tr/tr-TR/Sayfalar/Jeotermal (Last accessed May 20, 2018). ———. MENR, 2018g. http://www.enerji.gov.tr/tr-TR/Sayfalar/Gunes (Last accessed May 20, 2018). ———. MENR, 2018h. http://www.enerji.gov.tr/tr-TR/Sayfalar/Biyokutle (Last accessed May 20, 2018). Republic of Turkey, Ministry of Energy and Natural Resources, General Directorate of Renewable Energy (Yenilenebilir Enerji Genel MüdürlüğüYEGM). http://www.yegm.gov.tr/document/20180102M1_2018_eng.pdf (Last accessed June 1, 2018). Republic of Turkey, Ministry of Energy and Natural Resources, General Directorate of Renewable Energy. http://www.yegm.gov.tr/anasayfa.aspx (Last accessed June 2, 2018). Republic of Turkey, Ministry of Foreign Affairs (MFA). 2018. “Turkey’s Energy Profıle and Strategy.” http://www.mfa.gov.tr/turkeys-energy-strategy. en.mfa (Last accessed May 5, 2018). Turkish Wind Energy Association (TWEA). 2017. “Turkish Wind Energy Statistics Report,” January. http://www.tureb.com.tr/files/tureb_sayfa/ duyurular/2017_duyurular/subat/turkiye_ruzgar_enerjisi_istatistik_raporu_ ocak_2017.pdf (Last accessed June 2, 2018). Unearthed. 2014. “Turkey: Growing Electricity Demand Can Be Met by Renewables at the Same Cost as Coal—Says Bloomberg.” https://unearthed. greenpeace.org/2014/11/18/turkey-growing-electricity-demand-can-met-renewables-cost-coal-says-bloomberg/ (Last accessed May 2, 2018).

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United Nations Framework Convention on Climate Change (UNFCCC). 2015. “Republic of Turkey Intended Nationally Determined Contribution.” http:// www4.unfccc.int/submissions/INDC/Published%20Documents/Turkey/1/ The_INDC_of_TURKEY_v.15.19.30.pdf (Last accessed May 5, 2018). ———. 2016a. “Turkey’s 6th National Communication.” http://unfccc.int/ files/national_reports/non-annex_i_natcom/application/pdf/6_bildirim_ eng_11_reducedfilesize.pdf (Last accessed May 5, 2018). ———. 2016b. “Report on Turkey’s 6th National Communication.” FCCC/ IDR.6/TUR. http://unfccc.int/resource/docs/2016/idr/tur06.pdf (Last accessed May 5, 2018). ———. 2018. “Turkey’s Third Biennial Report.” http://unfccc.int/files/ national_reports/biennial_reports_and_iar/submitted_biennial_reports/ application/pdf/1428795_turkey-br3-1-tur.br3.english.pdf (Last accessed June 5, 2018). Wind Europe. 2017. “Wind in Power: 2016 European Statistics.” https://windeurope.org/wp-content/uploads/files/about-wind/statistics/WindEuropeAnnual-Statistics-2016.pdf (Last accessed March 2, 2018). Worldbank. 2018. “Turkey Country Snapshot.” http://pubdocs.worldbank. org/en/372961524127066297/Turkey-Snapshot-Spring2018.pdf (Last accessed June 5, 2018).

8 Renewable Energy in Kazakhstan: Potential and Challenges Vakur Sumer, Zhengizkhan Zhanaltay and Lidiya Parkhomchik

Introduction Kazakhstan enjoys a relatively high potential in renewable energy sources of wind and solar, thanks to its favorable geographic conditions, vast surface area with high sun radiation, as well as windy conditions of the country. Following the independence of the country in 1991, Kazakhstan began diversifying its energy supply sources with an aim of harvesting its significant renewable energy potential. Several legislations have been adopted in terms of regulations of the renewable energy market and getting aligned with similar international practices.

V. Sumer (*) · Z. Zhanaltay · L. Parkhomchik  Eurasian Research Institute, Akhmet Yassawi University, Almaty, Kazakhstan V. Sumer  Department of International Relations, Selcuk University, Konya, Turkey © The Author(s) 2019 D. Kurochkin et al. (eds.), Renewable Energy, https://doi.org/10.1007/978-3-030-14207-0_8

211

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Kazakhstan has joined the UN Framework Convention on Climate Change in 1995 and ratified the Kyoto Protocol in 2009. By supporting environmental initiatives, Kazakhstan has shown interest in contributing to the effort of solving the problem of climate change. In 2009, Kazakhstan has accepted a law on the use of renewable energy sources; this law introduced favorable conditions for construction and conducting operational facilities in the renewable energy sector (RES). This was one of the first major steps toward drawing attention to the development of RES. The Kazakh government took another major step in 2013 and decided to use the feed-in tariffs (FITs) fixed for 15 years that guarantees the purchase of electricity generated from renewable energy sources.1 In 2013, the government also announced several short- and longterm strategies on developing RES in Kazakhstan: the Plan of Action for the Development of Alternative and Renewable Energy 2013–2020, the Concept for Ecological Safety; the National Program of Wind Power Development; the 2030 Electricity Development Program, and the 2020 Plan Development of Renewable Energy, Concept for the Transition to a Green Economy. These roadmap plans were designed to reduce the institutional barriers by indicating the willingness of the government to support RES in Kazakhstan. According to the Concept for the Transition to a Green Economy, the share of electricity generation is expected to increase from its current 1 to 3% by 2020, 30% by 2030, and 50% by 2050. In line with the Plan of Action for the Development of Alternative and Renewable Energy 2013–2020, the Kazakh government, as the first phase until 2020, aims to prepare a suitable infrastructure for the RES and provide solutions to existing issues (Karatayev and Clarke 2016).2 Despite these significant steps toward the development of RES, Kazakhstan still needs further advancements in terms of amelioration of market conditions in the country. 1Medium.com,

2017, last accessed November 30, 2019. Karatayev and Michèle L. Clarke. (2016). A Review of Current Energy Systems and Green Energy Potential in Kazakhstan. Renewable and Sustainable Energy Reviews no. 55: 491– 504. Retrieved from http://eprints.nottingham.ac.uk/32575/1/karatayev%20and%20clarke%20 2016%20energy%20review.pdf, last accessed August 16, 2018. 2Marat

8  Renewable Energy in Kazakhstan: Potential and Challenges     213

Potential of Renewable Energy in Kazakhstan The geographical position of Kazakhstan makes it suitable for wind and solar energy generation. More than 50% of its territory has a 4–5 m/s wind speed where in some places it reaches 8–10 m/s. In order to establish a wind plant, wind speed needs to be higher than 5 m/s where more than 8–9 m/s are considered as exceptional conditions. As a result, wind energy has a 1.8 TWh potential and could be spearheading energy source within the RES in Kazakhstan. At the Djungar Gate, which is 600 km northeast of Almaty and next to China’s Xinjiang Uygur Autonomous Region, the wind energy production appears to be promising (Lewis 2007).3 The Djungar Gate area is regarded as the best wind climate in the world; in this area, the turbines would “operate at a full load for over half the year” (Petersen 1999). According to the Energy Sector Management Assistance Program (World Bank 2017), the Chilik Corridor, 100 km east of Almaty is also another big spot, where annual wind speed average—5 m/s in summer and 9 m/s in winter. A study funded by the Renewable Energy and Energy Efficiency Partnership estimates that this region also has the potential for 1000 MW of wind capacity. In terms of solar energy, Kazakhstan enjoys sunny weather with an energy capacity from 2200 to 3000 hours per year with an average insolation of 1300–1800 kW/ m3/ per year which translates into 3.76 TWh (Kashkinbekov 2017).4 Taking all these facts into consideration, as well as both—economic and environmental benefits, the Kazakh government has put more emphasis on the sector development.

3Jonna

Lewis. (2007). “A Comparison of Wind Power Industry Development Strategies in Spain, India and China.” Prepared for the Center for Resource Solutions, http://www.resourcesolutions.org, last accessed October 4, 2018. 4Arman Kashkinbekov. (2017). “Visions for a Clean Energy Future. European Union Energy Day Clean Energy Solutions for the Buildings of the Future Astana EXPO.” Retrieved from http://euenergyday.eu/expo2017/doc/Presentations/Presentation_A.Kashkinbekov.pdf, last Accessed August 15, 2018.

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Legal Aspects of the Green Energy Transition in Kazakhstan Along with other countries in the international community, Kazakhstan has a deep concern for the greening of the global energy sector. Being elected in November 2012 by the International Exhibitions Bureau as the venue to host EXPO-2017, Astana focused on the urgent energy issues. The chosen theme provided an opportunity for participants to concentrate on alternative energy of the future, by means of which, it would become possible to move from fossil fuels to more sustainable energy sources. Moreover, having achieved the inclusion of the Partnership Program Green Bridge (PPGB) in the final document of the Rio+20 UN Conference on Sustainable Development, Kazakhstan demonstrated its willingness to assist the technology transfer and environment management experience putting in place improved legal conditions to encourage a new wave of green industry. In fact, since Kazakhstan committed itself to implement the objectives of the Agenda for the twenty-first century, the Millennium Summit, the World Summit on Sustainable Development and the Rio+20, Astana established the basic legal documents in the field of sustainable development and green growth. Kazakhstan is the first Central Asian state, which started to develop policies that contribute to transitioning to a low-carbon economy. Adopted in 2009, the Law on the Support of Renewable Energy has established the legal basis for promoting the use of renewable energy in the country, establishing a strategic goal to facilitate the transition to the green energy. In accordance with the Strategic Plan on Development of Kazakhstan till 2020 approved in 2010 envisaged that the share of the renewable energy in total energy consumption should have reached 1.5% by 2015, increasing to over 3% by 2020. Within the framework of the State Program of IndustrialInnovative Development of Kazakhstan for 2010–2014, the renewable energy production should have reached 1 million MW per year in 2014 or 1% of total energy consumption.

8  Renewable Energy in Kazakhstan: Potential and Challenges     215

However, the real movement and positive developments in relation to renewable energy strategy implementation took place after approval of basic legal documents in the field of the green economy, such as the PPGB, Kazakhstan-2050 Strategy, and the Concept for Transition of Kazakhstan to Green Economy. Initiated at the III Astana Economic Forum in 2010, the PPGB was created by Kazakhstan to establish a practical mechanism to achieve an international shift to a green economy. The initiative was already supported by more than 120 states of Europe, Asia, and the Pacific. Under the program, it is planned to bring together the countries of Central Asia and the Eurasian region, promoting the technology transfer, knowledge exchange, and financial support with the support from key international institutions and the private sector. During the sixth Ministerial Conference on Environment and Development in Asia and the Pacific held in October 2010, the participants confirmed that the goal of the Astana Green Bridge Initiative is to facilitate the establishment of a Europe–Asia–Pacific partnership for a shift from the current conventional development patterns of green growth (The United Nations 2010). In order to promote the PPGB, the Action Plan (Roadmap) for the further promotion of the period 2018–2020 was adopted by Astana in November 2017. Moreover, as part of the follow-up of the implementation of the PPGB, the Ministry of Energy held five large international conferences titled Green Bridge. Indeed, the Fifth International Forum Partnership Program Green Bridge was held during the International Exhibition EXPO-2017 on July 12–13, 2017. Within the framework of the Forum, low-carbon technologies and policies were discussed in the implementation of the Paris Climate Agreement and the mobilization of green finance.5 As of the end of 2017, 16 countries and 16 non-governmental organizations joined the Charter of the PPGB. Furthermore, within the program, Astana is trying to expand the International Center for the Development of Green Technologies and Investment Projects Energy of the Future.

5Egov.kz,

2018, last accessed November 30, 2018.

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Another fundamental legal document in the field of achieving sustainable development through greening of economy is “Kazakhstan-2050 Strategy: New Political Course of the Established State,” which was announced by President Nursultan Nazarbayev during his annual state of the nation address in December 2012.6 The Kazakhstan-2050 Strategy calls for strengthening the macroeconomic indicators in order to enter the list of the top 30 most developed economies by 2050. The Strategy assumes the additional increase of the GDP by 3%, the creation of more than 500,000 new jobs, the development of new industries and services by 2050. According to the estimations, there is still the inefficient use of natural resources in the country, which resulted in the economic losses in the amount of $8 billion per year. Therefore, Kazakhstan is intended to implement the transition to the green economy allocating the necessary funding. Indeed, in order to provide a maximum contribution to the well-being of the population, in May 2013, Kazakhstan adopted Green Economy Concept policy aimed to diversify the economy through the moving from a hydrocarbon-oriented model to green energy technologies-oriented model of economic development. By announcing the National Concept for Transition to a Green Economy, the Kazakh government adopted new legal frameworks to encourage the transition toward renewables. The Concept helped to eliminate institutional barriers for the renewable energy development, providing specific action plans and instruments to create developed renewable energy market. Kazakhstan requires significant government leadership and support to meet its vision for 2050. There is a strong political momentum to move toward the green economy in Kazakhstan. Indeed, Astana clearly demonstrates its intention to improve infrastructure over the coming 20 years by implementing green technologies and increasing the installed capacity of the RES in the total energy generation of the country. For instance, according to the Concept, it is expected to bring the share of renewable energy (solar, wind, hydro, nuclear) in electricity generation to 3% by 2020 rising to 30% by 2030 and 50% by 2050 with the share of gas power plants in electricity production amounting 6Akorda.kz,

2012, last accessed November 30, 2018.

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to 25% by 2030 and 30% by 2050. In addition, the document aims to decrease the current level of carbon dioxide emissions in the power generation by 40% of that in 2012 until 2020, as well as to increase the share of water users with permanent access to the central drinking water supply system in cities to 100% by 2020 and in rural settlements to 80% by 2020. Finally, the Concept set ambitious targets such as to decrease energy intensity of GDP by 10% until 2015 and by 25% by 2020 compared to the 2008 baseline, as well as to provide the threefold increase in labor efficiency in agriculture by 2020. In order to achieve the green economy development, it was announced that significant funds would be invested in the energy sector in the amount $50 billion by 2030 and around $100 billion by 2050, up to 50% of which would be allocated to renewable and alternative energy. In fact, the amount of investments required to implement the Concept until 2050 is expected at the level of $3–4 billion per annum. The average investments will constitute about 1% of the GDP, reaching its peak at 1.8% of the GDP in 2020–2024 (The National Bank of Kazakhstan 2014). According to some estimates, the growing demand for electricity generation will require the construction of new power generation capacity in Kazakhstan, namely, 11–12 GW by 2030 and 32–36 GW by 2050. In this context, the total electricity demand would range from 136 to 145 TWh in 2030 and from 172 to 188 TWh in 2050. As a result, the decommissioned old coal power plants should be replaced by new wind and solar power plants. It is expected that by 2020 the share of wind and solar plants in the total volume of electricity generation will reach 3%, increasing to 10% by 2030 with the installed capacity of 4.6 GW for wind and 0.5 GW for solar. After reaching this target, RES would become acceptably competitive as compared to conventional energy sources. In order to implement the mentioned large-scale transformations, the Council for Transition to Green Economy was established under the President of Kazakhstan in 2014. According to the National Report on the Green Economy for 2014–2016 prepared by the Council, favorable conditions have been created for investments in renewable energy sources through the introduction of fixed tariffs, as well as targeted assistance in the installation of renewable energy sources. According to the report, the share of renewable energy in the total electricity production

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in Kazakhstan doubled, reaching 1% in 2016 (The Ministry of Energy of Kazakhstan 2017). According to the Ministry of Energy, in 2017, the volume of renewable energy generated in the country totaled 1.7 billion kWh. In accordance with the Ministerial Action Plan for development of RES for 2013–2020, it was expected that over 106 renewable energy facilities with the installed capacity of 3054.55 MW should be created. In fact, it was planned that 34 wind turbines, 28 solar power plants, 41 small hydropower stations, and 3 biopower stations with installed capacity of 1787 MW, 713.5 MW, 539 MW, and 15.05 MW respectively would be put into operation. However, after the mentioned plan ceased to be valid in 2017, it is difficult to assess the exact number of new power generation capacities that should be built. In 2014, the Committee for Water Resources of the Ministry of Agriculture of Kazakhstan came to an agreement with the European Union (EU), the United Nations Development Program (UNDP), and the UN Economic Commission for Europe (UNECE) to launch the joint project “Supporting Kazakhstan’s Transition to a Green Economy Model for 2015–2018,” aimed to contribute to the environmentally sustainable economic development of the country by integrating best green practices and technologies. The joint EU-UNDP-UNECE project was supported by the EU in the amount of €7.1 million (Kaiyrbekov 2016).7 Under these circumstances, Kazakhstan is ready to cooperate with its partners and international organization, in order to improve the legal tools for reaching green economy targets. Indeed, at the beginning of 2018 UNECE developed the draft Protocol on Strategic Environmental Assessment and the Convention on Environmental Impact Assessment (EIA) in a Transboundary Context aimed to develop recommendations for Kazakhstan to introduce a strategic environmental assessment (SEA) procedure, establishing a national SEA practice. In order to provide the legislative assistance, the Concept of the Fuel and Energy Complex of Kazakhstan until 2030 was selected as a document for a pilot SEA (The Ministry of Foreign Affairs of Kazakhstan 2017).

7https://astanatimes.com/2016/03/water-use-key-to-launch-of-kazakhstans-transition-to-green-

economy/, last accessed November 30, 2018.

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Therefore, increased attention paid to shaping relevant legislations that provide opportunities for widening the introduction of renewable energy sources into the energy supply system of Kazakhstan shows Astana’s intention to construct the energy generation facilities with the use of RES. As a result, there is a clear vision of how the sector should be improved. However, the Kazakh Government has just started the process of shifting from traditional energy sources-oriented economy toward the development of the renewable energy facilities. In fact, according to Minister of Energy of Kazakhstan KanatBozumbayev, as of June 2018, there are 58 enterprises that currently use renewable energy sources with a total capacity of 352 MW. It is expected that the figures will reach 68 facilities and approximately 490 MW by the end of the year (Astana Times 2018). Therefore, it is obvious that despite major legislative shifts Kazakhstan is still encountering considerable problems in the process of RES introduction.

Barriers Preventing Development of Renewable Energy Sector in Kazakhstan During the last decade, serious efforts were made by the Kazakh government to increase the preparedness and infrastructure for attracting new investments to RES in Kazakhstan. However, there is still quite a long road ahead, in order to provide better conditions for investors, since many other developing and developed countries compete in order to attract foreign investors. Currently, the share of RES in total electricity production is around 1% and considering the targets set by the government there is a long way to go and many steps to be taken and implementation process of the planned actions needs to be guided efficiently (Irgibayev and Karabayeva 2017).8 Therefore, the government has sped up its efforts in

8Arsen Irgibayev and Anara Karabayeva. (2017). “Improvement of Renewable Energy Support Policies in Kazakhstan.” Graduate School of Public Policy Nazarbayev University. Retrieved from https://nur.nu.edu.kz/bitstream/handle/123456789/2426/POLICY%20ANALYSIS%20EXERCISE. pdf?sequence=1&isAllowed=y, last accessed August 17, 2018.

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2018 in order to provide solutions, modifications for the obstacles preventing the rapid development of RES in Kazakhstan to attract foreign investments. On May 10, 2018, the government has announced an economic formula which will annually change the FIT by taking economic conditions in the country like exchange rate and inflation into consideration. When we analyze the obstacles preventing the RES development in Kazakhstan to take off and expand rapidly, there are a number of different issues on different topics. Therefore, we need to look at this issue from various angles. It could be said that economic concerns are the major reasons leaving investors in doubt during the decision-making process on whether to invest or not. From the investors’ side, the main issue was no price adaption mechanism for FIT which is set in 2013 which is not changed despite the sharp depreciation of tenge against the dollar during the last 5 years. The second issue being a new market means there is little research on the investment process. Therefore, investors clearly cannot calculate their startup costs, potential revenues and whether the established FIT prices are sufficient enough to compensate their investment (Karatayev et al. 2016).9 From the technical side, there is a concern for the status of accessing the power grids for electricity purchase. Power grids let certain large industrial clients to purchase electricity with certain privileges allow them to reduce their operational costs. On this point, the government has allowed certain privileges like not paying the transmission fee. However, the RES law aims at solving issues if a dispute appears between buyer and seller since if the seller refuses to sell with privileges or delays their supply buyer companies have to rely on their rights which is not clearly defined on the RES law as indicated by some experts on the issue (Chikanayev 2016).10 From the market side, there are also number issues

9Marat Karatayev, Stephen Hall S., Yelena Kalyuzhnova, and Michèle L. Clarke Clarke. (2016). “Renewable Energy Technology Uptake in Kazakhstan: Policy Drivers and Barriers in a Transitional Economy.” Renewable and Sustainable Energy Reviews no. 66: 120–136. 10Shaimerden Chikanayev. (2016). “Financing Renewable Energy Projects in Kazakhstan: Key Legal Challenges.” The Grata Law firm. Retrieved from http://www.gratanet.com/uploads/ user_11/files/%5BGRat.%5D%20Financing%20of%20Renewable%20Energy%20Projects%20 in%20Kazakhstan%20-%20Key%20Legal%20Challenges%20(March,%202016).pdf, last accessed August 18, 2018.

8  Renewable Energy in Kazakhstan: Potential and Challenges     221

which increase the concerns of investors since as government grants a 15-year purchase for auction winners, however, the RES law lacks a clear identification of obliged buyers and certain dispute issues. Because contract winners sign an agreement with the Financial Settlement Center for Renewable Energy (FSC) and FSC could only pay electricity producers if customers buy the produced electricity. Although FSC is incorporated with Kazakhstan Electricity Grid Operating Company (KEGOC), FSC here is only a reseller and its only revenues seem to be the payment from customers. This situation also creates certain problems with the creditworthiness of the renewable energy projects because under these condition banks and lenders might not feel comfortable with providing a loan to renewable energy companies (Chikanayev 2016).11 From political side of the issue RES in Kazakhstan has to compete with non-renewable or “grey power” projects and lobby where country’s economy heavily dependents on extraction and export of natural resource mainly oil and gas. In addition to that, currently, within electricity production, the share of cheap domestically produced coal consists more than 70%.12 According to forecasts, oil reserves in Kazakhstan would deplete around 2050 and this number for coal is 2160. As for now, there are rich natural resources in the country, which are one of the main engines of economic development. Therefore, in the government’s agenda, grey power claims the priority and the major share of funding within the energy sector. It could be expected that the grey power lobby could stand in the way of RES as an obstacle in order to protect their business model in any way they can (Karatayev et al. 2016).13

11Shaimerden Chikanayev. (2016). “Financing Renewable Energy Projects in Kazakhstan: Key Legal Challenges.” The Grata Law firm. Retrieved from http://www.gratanet.com/uploads/ user_11/files/%5BGRat.%5D%20Financing%20of%20Renewable%20Energy%20Projects%20 in%20Kazakhstan%20-%20Key%20Legal%20Challenges%20(March,%202016).pdf, last accessed August 18, 2018. 12IEA.org, 2017, last accessed November 30, 2018. 13Marat Karatayev, Stephen Hall S., Yelena Kalyuzhnova, and Michèle L. Clarke Clarke. (2016). “Renewable Energy Technology Uptake in Kazakhstan: Policy Drivers and Barriers in a Transitional Economy.” 120–136.

222     V. Sumer et al. Table 8.1  Currently the FIT tariffs for supply of electricity produced by renewable sources as follows

Type

Tariff, KZT/kWh

Wind power Solar power Small hydropower Biogas plants

22.68 34.61 16.71 32.23

Source Rfc.kegoc.kz (2018)

Although Kazakhstan has great prospects on RES, especially on wind and solar energy, however, after 5 years, since the grant plans and programs have been started in 2013, there is no major leap forward in this sector. This is due to the aforementioned category of issues where numerous economic, political, and technical problems require a modification, solution and detailed clear laws and regulations. When we look at these issues in detail, we see a number of different conditions and issues, which act as disincentives for foreign investors. As it mentioned before, the government has declared an economic formula to fix the tariff. Every year in October, changes in exchange rate and consumer price index (CPI) will be taken into consideration while calculating the new FIT prices as follows: Tt+1 = Tt+1 ∗ (1 + 0.3 ∗ (CPIt − 100%)/100% + 0.7 ∗ (USDt+1 − USDt )/USDt , ),

where Tt is FIT price, USDt is exchange rate, and CPIt consumer price index in year t (Table 8.1). However, comparing with other countries the electricity prices in Kazakhstan are quite low. For instance, the electricity price in Kazakhstan is 2.10 (US cents per kWh) wherein renewable energy powerhouse countries like Germany, Spain, and China it is 19.22, 11.40, and 8.10 (US cents per kWh) respectively. Thus the low electricity prices in Kazakhstan dissuade certain investors to invest. This is due to usage of cheap domestic coal in electricity production and government subsidies on keeping the electricity prices low. Therefore, RES needs to compete with other priorities of the government

8  Renewable Energy in Kazakhstan: Potential and Challenges     223

(Karatayev et al. 2016).14 Thus the government fixed a major issue on electricity prices with bringing a revision mechanism for FIT but now it needs to find ways to make the electricity production and sale attractive to investors. In addition to that, electricity prices change according to regions and day and night times (Karatayev et al. 2016).15 The government gave permission to construct a plant only in certain approved areas, which, according to some experts and investors, have seen as an artificial barrier. If a plot with a good potential is not listed in approved places, then its potential cannot be fully achieved. If plant permission is given in a region, where the electricity price is cheaper than some other regions, desire to invest in the selected place might decrease (Chikanayev 2016).16 Certain economically technical issues, like these, might complicate the decision-making process for small and medium companies to invest in Kazakhstan to RES. In relations with electricity prices and FIT, another issue is predictability of startup cost of the projects. Although the operational costs of renewable plants are relatively low, compared with non-renewable facilities, however, the startup cost of renewable energy is quite high. Being a new and current, a small market makes it difficult to estimate startup costs for companies. They could prefer to import equipment from abroad since production of renewable energy equipment, like wind tribunes, and solar panels, is not well developed enough in Kazakhstan. The transportation costs could increase the startup expenses since Kazakhstan is a landlocked country and the only way to transport is by railway (UNDP 2017). Due to the abovementioned conditions, regarding RES in Kazakhstan, investors, according to their background condition, might face a different set of problems which ease certain barriers for some of

14Marat Karatayev, Stephen Hall S., Yelena Kalyuzhnova, and Michèle L. Clarke Clarke. (2016). “Renewable Energy Technology Uptake in Kazakhstan: Policy Drivers and Barriers in a Transitional Economy.” 120–136. 15Ibid. 16Shaimerden Chikanayev. (2016). “Financing Renewable Energy Projects in Kazakhstan: Key Legal Challenges.”

224     V. Sumer et al.

them and create additional troubles for others. Taking all these conditions into consideration, companies and investors within the country and from near abroad would have an additional advantage, compared with investors from far abroad. Therefore, it could be said that certain barriers reflect differently, according to the conditions of companies or investors (Karatayev et al. 2016).17 In line with the development procedures of RES in Kazakhstan, FSC, under the supervision of Ministry of Energy, has organized auctions for gaining a right to construct plants and produce renewable energies for spring tender season which held between May 23rd and June 7th, in 2018. During this period, 5 wind plants, 3 solar, 1 biogas, and 1 hydro—in total 10 auctions were organized and companies mainly from Russia, Turkey, France, China, Bulgaria, and domestic firms have participated. As a result of the auctions, the majority of the winners were local companies. As it could be seen from the participants and winners of the tenders the complexity and geographical conditions have increased the interests of domestic firms and companies from near abroad which has strong bilateral relations with Kazakhstan. Due to positive changes in the sector, large energy companies have started to pay attention to RES in Kazakhstan, where the Italian energy giant ENI company on June 12, 2018 has announced their investment plans for a 50 MW wind farm located North West of Kazakhstan where ENI will develop and operate the Badamsha plant. Regarding the Badamsha project, the Memorandum of Understanding has been signed between General Electric (GE), the Minister of Energy, Kanat Bozumbayev, and ENI. The construction of the project expected to be starting soon and planned to be finished by the end of 2019. The potential contribution of this plant annually to the region will be 198 GWh.18 On June 23, 2018, governor of Mangistau region EralyTugzhanov has signed a memorandum of cooperation on the implementation of the project for the 17Marat Karatayev, Stephen Hall S., Yelena Kalyuzhnova, and Michèle L. Clarke Clarke. (2016). “Renewable Energy Technology Uptake in Kazakhstan: Policy Drivers and Barriers in a Transitional Economy.” 120–136. 18Eni.com, 2018, last accessed November 30, 2018.

8  Renewable Energy in Kazakhstan: Potential and Challenges     225

construction of a wind farm near Fort-Shevchenko with a capacity of 42 MW with South Wind Power LLP, Horgos Jiuhe SilkBridge New Energy Co.19 When we look at the conditions of entering these tenders, bureaucracy could be difficult to manage since, if a company wants to make an off-take agreement with the FSC, they need to be included into the list of eligible renewable energy producers list which is prepared by the Ministry of Energy. However, it is indicated by some experts that certain rules and regulations on entering the list like time duration and some parts of the procedure are not clearly established, in order to be an eligible candidate for the list (Chikanayev 2016).20 Therefore, alongside with the economic concerns, there are also a number of issues with bureaucratic procedures which might be complicated for foreign investors to deal with. Another technical issue is that the vast area of Kazakhstan makes it difficult to transmit electricity to the entire country since the major power lines are located in the Northern part of the country which is connected with Southern and Western lines. Majority of the power transmission lines around 25,000 kilometers are built in the Soviet era. These result in electricity losses around 18% and in some regions it is up to 40% (DBK 2014). Electricity production from renewable energy sources could be useful by producing electricity locally in order to prevent losses from transfers to the certain extent. Renewable energy companies, therefore, could be useful for local electricity consumption. However, as some experts indicate, renewable energy projects on the case of energy efficiency need to compete with infrastructure renewal projects, which could be seen as “low hanging fruit” for decision-­makers when they compare with renewable energy projects. For instance, KEGOC is working on the issue, in order to identify vulnerable transmission lines, which require modernization. According to the estimates, 15 projects will be implemented until 2025 worth $3 billion to construct and modernize the identified locations. 19Kamila

Aliyeva. (2018). “Kazakhstan to Build Wind Power Plant.” Azernews.com. Retrieved from https://www.azernews.az/region/135234.html, last accessed August 20, 2018. 20Shaimerden Chikanayev. (2016). “Financing Renewable Energy Projects in Kazakhstan: Key Legal Challenges.”

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The Kazakh government has set ambitious plans to develop its RES under the certain timeline and state programs. In June 2018, there are 58 enterprises that currently use renewable energy sources with a total capacity of 352 MW. In order to realize the desired aims, the various abovementioned problems and issues need to be handled by the responsible authorities in order to clear the obstacles standing in the way of RES to develop even further. The sector needs a large amount of investments to grow in accordance with the visions for the sector. The government plans to invest around $100 billion by 2050 meaning RES requires approximately $3 billion investments annually which constitute around 1% of its GDP.

Conclusion Kazakhstan has a long way to go to reach its designated goals in RES. The recent strong political willingness to attract new foreign investors has drawn more attention to the sector; it encourages investors to invest and develop RES in Kazakhstan. If the current political structure supports the sector, we could assume positive results for RES; it will revive and turn into a sector which could become an alternative to grey power in Kazakhstan economically, with an advantage of being more environment-friendly.

References Akorda.kz. (2012). “‘Kazakhstan—2050’ Strategy.” New Political Course of Established State [ER]. Access mode: ‘Kazakhstan-2050’ Strategy: New Political Course of Established State. Retrieved from http://www.akorda.kz/ ru/. Last accessed August 20, 2018. Aliyeva, K. (2018). “Kazakhstan to Build Wind Power Plant.” Retrieved from https://www.azernews.az/region/135234.html. Last accessed August 20, 2018. Astana Times. (2018). “58 Enterprises in Kazakhstan Utilise Renewable Energy, Says Energy Minister.” Retrieved from https://astanatimes. com/2018/06/58-enterprises-in-kazakhstan-utilise-renewable-energysays-energy-minister/. Last accessed August 23, 2018.

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Chikanayev, S. (2016). “Financing Renewable Energy Projects in Kazakhstan: Key Legal Challenges.” The Grata Law firm. Retrieved from http://www. gratanet.com/uploads/user_11/files/%5BGRATA%5D%20Financing%20 of%20Renewable%20Energy%20Projects%20in%20Kazakhstan%20-%20 Key%20Legal%20Challenges%20(March,%202016).pdf. Last accessed August 18, 2018. DBK. (2014). “Review on Electricity Sector on Kazakhstan. Development Bank of Kazakhstan (DBK).” Retrieved from http://www.kdb.kz/file. php?id_file=5054. Last accessed August 20 2018. Eni.com. (2018). “ENI to Develop in Kazakhstan Its First Large-Scale Wind Farm Abroad.” Retrieved from https://www.eni.com/docs/en_IT/enicom/ media/press-release/2018/06/pr-eni-badamsha.pdf. Last accessed August 18, 2018. Export.gov. (2017). “Kazakhstan—Electrical Power Generation.” The U.S. Department of Commerce’s International Trade Administration Export. gov. Retrieved from https://www.export.gov/article?id=Kazakhstan-Electrical-Power-Generation. Last accessed August 19, 2018. IEA.org. (2017). “Kazakhstan Energy Factsheet.” International Energy Agency. Retrieved from http://www.iea.org/countries/non-membercountries/ kazakhstan/Kazakhstan_EU4Energy_Factsheet.pdf. Last accessed August 16, 2018. Irgibayev, A., and Karabayeva, A. (2017). “Improvement of Renewable Energy Support Policies in Kazakhstan.” Graduate School of Public Policy Nazarbayev University. Retrieved from https://nur.nu.edu.kz/bitstream/ handle/123456789/2426/POLICY%20ANALYSIS%20EXERCISE.pdf?sequence=1&isAllowed=y. Last accessed August 17, 2018. Kaiyrbekov, A. (2016). “Water Use Key to Launch of Kazakhstan’s Transition to Green Economy.” The Astana Times. https://astanatimes.com/2016/03/ water-use-key-to-launch-of-kazakhstans-transition-to-green-economy/. Last accessed November 30, 2018. Karatayev, M., Hall, S., Kalyuzhnova, Y., Clarke, M. L. (2016). “Renewable Energy Technology Uptake in Kazakhstan: Policy Drivers and Barriers in a Transitional Economy.” Renewable and Sustainable Energy Reviews no. 66: 120–136. Karatayev, Marat, and Clarke, M. L. (2016). “A Review of Current Energy Systems and Green Energy Potential in Kazakhstan.” Renewable and Sustainable Energy Reviews no. 55: 491–504. Retrieved from http://eprints. nottingham.ac.uk/32575/1/karatayev%20and%20clarke%202016%20 energy%20review.pdf. Last accessed August 16, 2018.

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Kashkinbekov, A. (2017). “Visions for a Clean Energy Future. European Union Energy Day Clean Energy Solutions for the Buildings of the Future Astana EXPO.” Retrieved from http://euenergyday.eu/expo2017/doc/Presentations/ Presentation_A.Kashkinbekov.pdf. Last accessed August 15, 2018. Kazakhstan Green Energy. (2017). Rio+20 Summit. Retrieved from https:// www.kzgreenenergy.com/rio20-summit/. Last accessed August 20, 2018. Lewis, J. (2007). “A Comparison of Wind Power Industry Development Strategies in Spain, India and China. Prepared for the Center for Resource Solutions.” http://www.resourcesolutions.org. Last accessed October 4, 2018. Medium.com. (2017). “Kazakhstan Could Become a PV Solar Energy Powerhouse.” Retrieved from https://medium.com/@solar.dao/kazakhstancould-become-a-pv-solar-energy-powerhouse-6f682a5efa07. Last accessed August 16, 2018. Petersen, E. (1999). Wind Power Potential of the Djungar Gate and Chilik Corridor. Copenhagen, Denmark: Technical University of Denmark. Rfc.kegoc.kz. (2018). “Prices and Rates on Renewable Energy Technology. Financial Settlement Center of Renewable Energy LLP.” Retrieved from https://rfc.kegoc.kz/en/vie/prices/fixed-rates. Last accessed August 17, 2018. The Ministry of Foreign Affairs of Kazakhstan. (2017). “Towards a Green Economy: Kazakhstan Has Started the Second, Practical Phase to Establish a Strategic Environmental Assessment National Framework.” Retrieved from http://mfa.gov.kz/en/geneva/content-view/towards-a-green-economy-kazakhstan-has-started-the-second-practical-phase-to-establish-a-strategic-environmental-assessment-national-framework. Last accessed August 23, 2018. The National Bank of Kazakhstan. (2014). “The Concept for Transition of the Republic of Kazakhstan to ‘Green Economy’.” The National Bank of Kazakhstan. Retrieved from http://www.nationalbank.kz/cont/publish488539_24140.pdf. Last accessed March 9, 2019. UNDP. (2017). “Kazakhstan: DREI—Derisking Renewable Energy Investment.” United Nations Development Program (UNDP). Retrieved from http:// www.undp.org/content/undp/en/home/librarypage/environment-energy/ low_emission_climateresilientdevelopment/derisking-renewable-energy-investment/drei-kazakhstan.html. Last accessed August 23, 2018. United Nations. (2010). Astana “Green Bridge” Initiative: Europe-Asia-Pacific Partnership for the Implementation of “Green Growth.” Retrieved from http://gbpp.org/wp-content/uploads/2014/04/MCED6_13E_AGBI.pdf. Last accessed August 19, 2018.

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World Bank. (2017). Energy Sector Management Assistance Program Annual Report 2017 (English). Energy Sector Management Assistance Program. Washington, DC: World Bank Group. Zoinet.com. (2018). “Kazakhstan Climate Facts and Policy.” Zoi Environment Network. Retrieved from https://zoinet.org/wp-content/uploads/2018/02/ CC-Kazakhstan-web-2016.pdf. Last accessed August 22, 2018.

Conclusion

The term sustainability has a broad meaning, including sustainable peace building. The cases in this book provide insights into renewable energy development and efforts on the global scale. It starts with a remarkable Germany’s initiative and moves to the case of Finland’s renewable innovations in the horse industry. Then this book provides an assessment of renewables in the EU. Further, this volume demonstrates the success of sustainable thinking in the U.S. analyzing the case of California. In Brazil, the wind energy development demonstrates a positive trend. Turkey that is celebrating its 100th Anniversary of the Republic also aims at renewable advancement. Finally, Kazakhstan has thriving prospects in sustainability. A growing number of researchers in the field prove that the question of renewable energy is very important and leaves no space for social indifference and inertia. The aim of this edited volume is to discuss challenges associated with appropriate energy policy design, encourage technological innovations, and contribute to the important dialogue of renewable energy development and climate change mitigation. This work encourages further research and actions in the field of sustainability and climate change. The book fosters the shift in public opinion, suggesting that the politics of fear should be changed to a fearless © The Editor(s) (if applicable) and The Author(s), under exclusive license to Springer Nature Switzerland AG 2019 D. Kurochkin et al. (eds.), Renewable Energy, https://doi.org/10.1007/978-3-030-14207-0

231

232     Conclusion

approach when it comes to the beauty of sustainability. The idea of regenerating power itself is very natural and will remain attractive until its full realization and implementation worldwide. The life on this planet may exist as long as the Sun shines; the power coming from solar energy, wind energy, tidal energy, etc. is our inevitable future.

Index

A

AB 117 112 Abnormal weather incident 143 Absolute binding emission targets 170 Absorption 45 Academic libraries 135 Academics 15 Academic work 102 Acciona 138 Accountability 24 Accusations 110 activists 101 Activities 107 Actors 100 Adaptation aspects 166 Adaption 220 Adequate housing 73 Administrative obstacles 176 Adoption xxxiv, 40, 42 Adult education 68

Advocacy group 116 Advocacy organization 114 Advocates 94, 115 Affordability xxxi Agenda 8 The 2030 Agenda for Sustainable Development 65 Agenda for Sustainable Development 63 Agricultural communities 12 Agricultural industries 42 Agricultural production 69 negative impacts of 69 Agricultural waste 42 Agriculture 41, 69 Aims 226 Air Coalition 117 Air pollution 96 Alcohol 148 Algeria 187 Almaty 213

© The Editor(s) (if applicable) and The Author(s), under exclusive license to Springer Nature Switzerland AG 2019 D. Kurochkin et al. (eds.), Renewable Energy, https://doi.org/10.1007/978-3-030-14207-0

233

234     Index

Alternative energy xxxii, 212 Ambitious targets 31 Amelioration 212 America xxxvi Ammonia 69 Analytic tools 6 Anarchy 15 Ancestors 9 Anger, perception of 98 Angles 220 Animal fat 150 Anthracite 31 Anthropological research 7 Anticipation of success 34 Anti-fossil fuel campaigns 101 Anti-nuclear movements 75 Anti-utility 101, 120 Applications 151 Appropriation 139 Aquatic species 131, 151 Artificial land 74 Asia 215 Assembly member Bradford 114 Assessment studies 176 Astana 214 Asylum applications 73 Atlantic forest 140 Atrocious behavior 107 Auction 136, 151, 169 Australia xxix, xxxiv, xxxvi Austria 76, 78–80 Author 113, 117 Authority 16, 106, 172 Automobiles 148 Autonomy 24, 27 Awareness 54, 182 Azerbaijan 187

B

Background condition 223 Badamsha plant 224 Bahia xxxiv, 136 Bahian gross domestic supply 141 Bahian semi-arid region 140 Bahian State Infrastructure Secretariat 145 Ballot box 121 Ballot initiative 106, 111 Banco Nacional de Desenvolvimento Econômico e Social 138 Bank deposits insurance 11 Barrier 11, 22, 113, 115, 161, 223 Battle 113 Bavaria 27 Bay Area 112 Beauty 232 Bedding 45 Belgium xxxvi, 76, 77, 79 Bilateral relations 224 Bill 92, 106, 107, 113, 116 Biodegradable 150 Biodiesel 150 Biodiversity 68–70 Bioenergy 83 Biofuels 29, 167 Biogas 143 Biomass xxxvi, 135, 140 Biopower stations 218 Block, Fred 7 Blyth, James 81 Board decision 174 Bonefeld, Werner 16 Bottom-up process 11, 12, 91–92 Bottrop 5, 16, 27 Bottrop Blues Skies 33

Index     235

Bozumbayev, Kanat 219 Bradford 125 Brazil xxxiv, 131, 150 Brazilian Energy Research Company 145 Brazilian Socio-Economic Development Bank 138 Britain 73 Broad coalition 112 Broad social mobilization 99 Brotas de Macaúbas 145 Brundtland Report 65 Budget deficit 107 Buildings 4 Bulgaria 76–78, 224 Bulk power entity spur 97 Bureaucracy 225 Business 14, 33, 102, 104, 114 models 6, 41, 56 related solutions 56 Business-as-usual (BAU) 164 C

Caatinga 140 California xxxiv, 92, 102, 120, 123 California Air and Resources Board (CARB) 119 California Alliance for Community Energy (CACE) 107 California Chamber of Commerce 111 California Community Choice Association (CalCCA) 95 California Energy Choice and California Alliance for Community Energy 95 California Energy Commission 118

California Global Warming Solutions Act 96 California local activists 99 Californians 115 California Public Utilities Commission (CPUC) 94 California Republican Party Voter Guide 111 California State Association of Counties, League of California Cities 106 California Taxpayer’s Association 111 Campaign 112 Canada xxix, 182 Capacity 183 Cap and trade 96 Cape Town 3 Capitalism 17 Capital market legislation 172 Carbon credit 145 Carbon dioxide 131 Carbon dioxide emissions xxxii, 72, 84 Carbon-free community 27 Carbon intensity 166 Carbon trading 166 Cardoso, Fernando Henrique 146 Care 15 Cartels 17 Case analysis 102 Cash flow 203 Cauchick Miguel, P.A. 56 Ceará 136 Ceiling 23 Ceiling price 174 Centennial foundation 162 Central Asia xxxiii, 215 Chancellor 17

236     Index

Chancellor of Germany 13 Charlotte, Bretherton 64 Charter 215 Cheap renewable power 113 Chemical fertilization 42 Cheon, Andrew 101 Chicago School 18 Chichilnisky, Graciela 64 Childhood education 69 Child labor laws 11 Chilik Corridor 213 China xxix Christian Ude 34 Chula Vista 105, 106 Citizens 16, 21 City 104 Civic organizations 112 Clean Coalition 116, 125 Clean energy xxx advocates 114 programs 115 transition xxx Climate 70 Climate Action Campaign 117 Climate activism 92 Climate activists 102 Climate change xxx, xxxii, xxxv, 4, 21, 28, 42, 143, 165 problemchanges 101 related objectives 165 vision 166 Climate Change National Action Plan 188 Climate coalition 96 Climate conditions xxxv Climate crisis 115 Climate-friendly 29 Climate grassroots organizations 95 Climate leadership 4

Climate mitigation 68 Climate movement 97 Climate policy packages 96 Climate protection xxxiii, 5, 27, 28 Climate Protection Campaign 113 Climate protection leadership 4 Climatic suitability 82 CO2 28 Coal 5, 184, 194 Coal-based power plants 195 Coalition of California Utility Employees 113, 114 Coastal flooding 3 Coastal region 140 Collaboration 192 Collective act 99 Commentator 17 Commerce 140 Commercial interest 104 Commission services 67 Commitment 50, 184, 185, 188, 202 Commodification 6 Commodities 8 Common bird index 74 Common good 14, 21 Communication 160 Communiqué on Implementation of Unlicensed Electricity Generation 174 Communism 17 Communities 5, 16, 24 Community 106, 109, 115, 123 aggregation 103 Community choice 97, 101, 115 Community choice advocates 114 Community choice aggregation (CCA) xxxiv, 91, 123 activists 115

Index     237

application 107 aspiration for 106 community and supporters 106 efforts 118 formation of 99 implementation of 94 individual 103 initiatives 110 market 118 operational 102 organizations 115 process 117 programs 107 viability of 105 Community-controlled power 104 Community Environmental Council 106 The Competition Regulation on Prelicensed Application for Wind and Solar Plants 173 Competitive environment 171 Competitiveness 19 Competitive prices 115 Complementary source 150 Compliance 188 Concentrating solar power (CSP) 76 Concrete role-models 32 Conference 34, 189 Conflicts 151 Consequences 131 Conservation 10 Construction 162 Consumer protection measures 117 Consumer protection organization 111 Consumer protections 104 Consumers 23, 104, 192 Consumption 44, 137, 147

Consumptive uses 151 Contamination 151, 166 Contracts, negotiation of 104 Contradictory 8 Contributor 112 Conventional batteries xxxvi Convention on Environmental Impact Assessment (EIA) 218 Cooling targets 78 Cooperatives 19 Co-ops 21 Corporate environmental management 39 Corporatist system 18 Corridor 192 Counter arguments 97 Counter-movement 16, 99 Counterpart 141 Counties 95 County of Los Angeles 106 County of Marin 108 County of San Francisco 105 Co-utilization 45 Covenant of Majors 72 Crack 103 Creditworthiness 221 Crisis costs 105 Criticism 20 Croatia 64, 78 Cross-sector 26 Cultural acceptance 121 Cultural symbols 34 Culture 131 Customer 104, 117, 124, 125 Customer awareness 42 Cyprus 76, 77, 79 Czech Republic 76, 78

238     Index D

Das, Aparupa 76 Data 161 Datasources 94 David 101 David Copperfield 12 Death 68 Death rate 74 Debate 39, 114 Decarbonization 26, 29, 116 Decentralization 24 Decision-makers 57 Decision-making 24, 91, 220 Decision process 134 Decree of the Council of Ministers 176 de facto 8 Deficient diets 69 Definitional information 75 Deforestation 73 Degradation 22, 68, 151 Delai, I. 50 Deloitte 192 Dematerializing operations 43 Democratic energy system 101 Democratic Republic of the Congo xxxi Demographic change xxxi Demographic growth xxxi Demonstration 121 Demonstration projects 32 Denmark xxix, 76–78 Department of Water Resources (DRW) 104 Departure fees 105 Dependency 181 Deployment 26, 161 Deregulation 103 Desirability 8

Deterioration 21 Determinants xxxiv, 39 Determination process 169 Development 7, 64 DG Industry Association 116 Diani 100 Dickens, Charles 12 Diesel oil 148, 150 Dilemma 160 Directs California Energy Commission 125 Disincentives 222 Dispute 221 Distribution network 104 Diversification 145, 163, 167, 173 Djungar Gate 213 Document studies 118 Domestic markets 173 Domestic production 168 Domestic resources 187 Dominance 5 Double movement 10 Drescher, Burkhard 31 Drivers 41 Droege, Peter 24, 25 Drought 133, 140 Drum-composting devices 45 Dutch government 78 Dynamics 12, 92, 98, 104, 119 Dysfunctions 19 E

Eco-design 43 Eco-innovation 54 Eco-labelling 46 Ecological meanings 159 Ecological values 101 Economic Affairs Minister 13

Index     239

Economic approach 13, 16 Economic benefits 115, 117 Economic capacity 29 Economic development xxxi, xxxiii, 22 Economic elite 18 Economic growth 42, 72, 75, 83 Economic inequality 8 Economic insights 5 Economic liberalism 10 Economic losses 73 Economic miracle 17 Economic models 6 Economic participants 22 Economic producers 23 Economic shocks 16 Economics in Primitive Communities 7 Economic system 6, 9 Economists 5 Economy xxxv, 8, 72, 78, 161 Ecosystem 42 Ecosystem regulation 70 Ecosystem status 68 Eco-tourism 44 Education 68, 69 Efficiency 47, 146 Electrical grid 19 Electric Energy Incentive Program 135 Electricity xxxvi, 104 competence 122 consumers 103 crisis 104 customer 120 establishment of 171 generation xxxv, 83, 84 incentive system 121 market 116

market limits 97 production 76, 97 ratehikes 104 ratepayers 117 rates 105 regime 121 sales 125 sector 76 service 104, 119 service providers 93 supply 115 system 101, 103, 116, 121 Electricity generation 20, 25 Electricity generator 20 Electricity Market Law (EML) 170, 200 Electricity Market License Regulation 173 Elements 99 Elite alliances 98 E-mail addresses 48 Embeddedness 6 Emerging countries 75 Emissions intensity 70 Emissions trading 20 Emphasis 145, 204 Empirical data 135 Empirical investigation 99 Employment 31, 68, 69 rate 72, 181 Empresa de Pesquisa Energética 145 Encouragement 203 Endangered society 9 Endorsement 15 Enercon 137 Energiewende xxxiii Energy xxix access 160 ambitions 109

240     Index

certificate 166 consumption xxxi, 41, 70, 75, 78, 83, 150 democracy 116 dependency 177 efficiency 73, 84, 123, 165 grid 145 independence 106 installations 75 investments 177 market 107, 163 policy xxx, xxxv production 70, 163 resources 115 savings 39 sector 166 security xxxi, xxxv, 187 source xxxi, 83, 214 supply security 161 systems xxxiii terminal 163 transition 101 Energy demand 29 Energy Efficiency Improvement Program Action Plan 193 Energy generation 4 The Energy Imperative 22 Energy Market Regulatory Authority (EMRA) 170, 176, 190 Energy narrative 34 Energy plus buildings 4 “Energy roadmap 2050” 182 Energy Sector Management Assistance Program 213 Energy sectors 29 Energy supply 23 Energy transition 21, 22 England 12 Entrepreneurs 16

Environment 6, 12, 14 Environmental burdens 40 Environmental decline 8, 27 Environmental friendly xxxiii Environmental grassroots 115 Environmental impacts 117 Environmental issues 114 Environmentalists 110 Environmental justice organizations 114 Environmental organizations 112 Environmental pollution 166 Environmental security 42 Environment California 113 Equipment 137 Erhard, Ludwig 13, 17 Estonia 78–80 Ethical building blocks 21 Ethical imperative 8 Ethical problems 9 Ethiopia xxxi Ethyl alcohol 148 EU directive 78 EU Habitats Directive 74 EU member countries 72 Eurasian region 215 Europe xxxvi, 40 European Association for Renewable Energy 22 European Bank for Reconstruction and Development (EBRD) 192 European Commission 20 European Community 72 European Council (EC) 63, 75 European countries xxx European economy 13 European Member States 64 European Statistical System (ESS) 67

Index     241

European Treaties 63 European Union (EU) xxxiii, 183 European Union Sustainable Development Strategy 75 Euros 33 Eurostat 67 Eurostat’s partners 67 EU SDG indicator 67 Evidence 100 Exception 183 Executors 175 Exhibition 215 Experts 223 Explanation mirrors 107 Exploitation 13, 45, 190 Export 141 External factors 107 Externalities 131 External validity 102 Extremal events 143 Extreme weather events 31 F

Fairfax Town Council 109 Farming 41 Fascism 5 Fastest-growing sources 81 Favorable market conditions 107 Fear, perception of 98 Federal government 145 Federal incentives 145 Federal policies 132 Federal policy platform 22 Federative Units, of Brazil 140 Feed-in tariffs (FITs) 18 Fenn, Paul 104, 106 Fernando de Noronha 135 Fertilizer 40

Fictitious commodities 9, 13 Finance 215 Financial assessments xxxii Financial benefit 137 Financial investment 23 Financial risk 117 Financial Settlement Center for Renewable Energy (FSC) 221 Financial support 151, 175 Finland xxxiii, 40, 41, 78 Fish catches 73 Fishermen 131 Fishery 68, 151 Fishing population 151 Fish products 73 FIT system 19 Flex-fuel fleet 148 Fluorescent 147 Food production 69 Food security 69 Football game 14 Force majeure 172 Forecasting xxxvi Foreign investors 222 Foreign-source dependency 169 Forest area 74 Forestry 190 Forest woods 76 Formal legal structure 111 Formation 15, 91, 94, 101, 102, 118 Formula 222 Fort-Shevchenko 225 Fossil energy 132 Fossil fuel xxxviii, 5, 27, 131, 181, 214 Fossil fuel era 24 Fossil fuel industry 101 Fostering sustainability 42 Foundations 15

242     Index

Founders 16 Framework 16, 163 Framing battle 117 Framing competition 99 Framing process 93, 98, 100, 102 France xxxvi, 73, 76–78, 81, 224 Frankfurt xxxiii, 26 Free market 6 Free market economy 6, 10 Freiburg xxxiii Freiburg School 13 Freight transport 73 Frequency 132 Fresno County 107 Friendship networks 98 Friendship unions 98 Funding 216 G

Gallipoli 169 Game on energy 115 Gas-fired power plant 109 Gas infrastructure 120 Gasoline 148 Gas prices 107 GDP 15 Gender-based violence 69 Gender equality 69 Gender gap 69 General Directorate of Renewable Energy 184 General Electric (GE) 224 Generation 65, 68, 113 facility 176 models 167 Generators 18, 20, 175 Genetic resources 69 Geographical advantage 177

Geographical boundary 124 Geographical distribution 19 Geographical restriction 114 Geographic conditions 211 Geological studies 176 George, Barbara 121 Geostrategic position 192 Geothermal energy 76, 83, 167, 169, 184, 193 Geothermal power plants (GPPs) 76 Gerald, Berger 75 German approach 19 German cities xxxiii German economist 15 German Federal Government 13, 17 Germany xxix, 4–6, 76, 77 GHG emissions 20, 26 Gini coefficient 72 Global capacity xxxviii Global carbon emissions 181 Global climate system 163 Global economy 6 Global energy demand xxxi Global food systems 41 Global Goals 65 Global partnership 68 Global renewable energy generation xxix Global survey 56 Global warming xxxii, xxxv, 159 Goal 69, 120, 184 Goal index 71 Goal programming model 71 Goliath 101 Gomes, C.F. 50 Goods 8, 73 Gothenburg 63 Gothenburg European Council 75 Governance 9, 91

Index     243

Government 6, 100, 114 Governmental collections 135 Governmental measures 13 Governmental regulations 42 Government policies 9 Government resources 12 Governor 113, 124 Graphical representations 148 Graph marine energy 83 Grassroots 92 Grassroots activism 108 Grassroots activists 93, 114 Grassroots efforts 114 Grassroots innovations 101 Grassroots organization 95, 97, 100, 118 Great depression 11 The Great Transformation: The Political and Economic Origins of Our Time 5 Greece 76, 77 Green Bridge 215 Green certificates 20 Green City project 33 Green energy xxx Green growth 165, 194 Greenhouse gas (GHG) 109 emission xxx, xxxiv, 119, 124 reduction 117, 118 Greenhouse gas emission 3 Green industry 214 Green product design 39 “Grey power” 221 Grid 92 Grid access 18, 23 Gross, energy in 70 Gross domestic product (GDP) 73, 160, 161, 216

Groundwater 74 Groundwork 17 Growing economy 184 Growth 19, 214 Guarantees 200 Guijarro, Francisco 71 Günay, Defne 204 H

Habitat 9, 151 Handelsblatt 14 Hans-Josef Fell 21 Hayek 5 Health 68, 160 and safety issues 40 benefits xxxix Healthy oceans 73 Heat 29, 160 Heating targets 78 Hedge 29 High Demand Scenario 186 High-tech equipment 173 High-tech manufacturing 72 Hinrichs-Rahlwes, Rainer 76 Hinterland 28 Historical example 13 Historical information 75 Historical norm 6 Historical social movements 11 Holiday cottage 81 Holistic perspective 42 Home warm 69 Homicide population 74 Horseback 41 Household income 72 Houses 33 Housing 11

244     Index

Hubs 4, 21 Human beings 8 Human capital 40 Human existence 8 Human intervention 7 Humanity 11 Humankind xxxiii Human life 160 Human societies 7, 10 Human systems 134 Hungary 76–79 Hunger 69 Hybrid movement 101 Hybrid public utility 92 Hydraulic energy 143 Hydraulics 184 Hydrocarbon-oriented model 216 Hydroelectrical power 133 Hydroelectricity 81, 150 Hydroelectric potential 165 Hydro energy xxxvi, 167, 171 Hydropower 76, 81, 83, 120, 132, 150, 167 Hydro power 26 Hydropower energy 83 Hydropower plants xxxv, 140 Hydropower station 140, 150, 218 Hydro resources 150 Hydro-thermal-wind 132 Hygienic factors 39 I

Iceland 83 Identification 207, 221 Illustration 30 Imagination 97 Implementation 33 phase 135

plans 94 process xxxviii Import 141, 184 IMPSA-WPE 137 Inability 69 Incentive Program for Alternative Energy Sources 145 Incentives 137, 175 Inclusion quality 68 Income poverty 68, 69 Income tax 176 Incubators 21 Incumbents 18 Incumbent utility rate 108 Independent cities 106 Independent energy 163 India xxix, xxxi, 204 Indicator 67, 68 Indifference 231 Indigenization 163 Indigenization policy 177 Indigenous energy 162 Indispensability 22 Indispensable element 160 Indonesia xxxi, 197 Industrial coalition 104 Industrial innovation 68 Industrial-innovative development 214 Industrialized countries 84 Industrial revolution 6–8, 13 Industrial sector 146–148 Industry 33, 159 Industry analysts 107 Inequalities 68 Inertia 231 Inflation 220 Informal interactions 100 Infrastructure 22, 23, 29, 216

Index     245

Infrastructure synergies 25 Infrastructure systems 27 Inhabitants 140 Inherent contradiction 9 Initiation phase 72 Injections 141 Innovation 4, 23, 31, 42, 43 Innovation City Ruhr 33 Innovative 11 Innovative approach 31 Innovative business models 12 Innovative legislative initiative 17 Innovative technologies 19 Insights 231 Installation process xxxviii Institutional aims 10 Institutional political landscape, changes in 98 Institutional Strategic Plans 162 Institutional structures 98 Institutional tradition 18 Intellectual salon 5 Intended Nationally Determined Contribution (INDC) 164 Interests, conflict of 113 Internalization 21 Internal motivation 42 Internal validity 102 International arena 164 International Energy Agency (IEA) 182 International Energy Agency Turkey Report 161 International Exhibitions Bureau 214 International Forum Partnership Program Green Bridge 215 International law 64 International markets 173 International trade 148

Intervention 11, 16, 17, 119 Inventory 141 Investigation 141 Investment 33, 95, 162, 169, 185, 220, 226 Investment environment, enhancement in 163 Investment projects 173 Investor 19 Investor-owned utilities (IOUs) xxxiv, 92, 93, 104 Investors 220, 221 Invisible hand 14 Iran 187 Ireland 76–78 İşeri, Emre 204 Isolation 7 Italy 76–78 J

Japan xxix Jeske, Jürgen 17 Job creation 29, 40 Job opportunities xxxiii John, Vogler 64 Jungjohann, Arne 20 Justice 74 Justice organizations 101 K

Karl Polanyi 4, 5 Kazakhstan 211, 212 Kazakhstan Electricity Grid Operating Company (KEGOC) 221 Kenya 197 Key leader 22

246     Index

Key legislative changes 103 Key strategy 26 Key supporters 35 Khan, E.A. 50 Kilowatt 30 Kinetic energy 76 Kings County 123 Kings River Conservation District (KRCD) 123 Knowledge-intensive services 72 Konya-Karapınar 168 Kurkowiak, Barbara 67, 73 Kyoto Protocol 145, 170 Kıyıköy 169 L

Labor 11 Labor organizations 112 Labor unions 96 Labour 6 Laissez-faire 18 Lancaster 124 Land 6 Land displacement 151 Landfill gas xxxvi, 171 Land occupation 39 Large city 5 Large-scale centralized electricity production 115 Large-scale system changes 91 Lasswell, Harold 134 Latin America xxxiii Latvia 76, 79 Lauro de Freitas 144 Law on Utilization of Renewable Sources for the Purpose of Generating Electrical Energy 172

Laws xxx Leadership 4, 13, 69 LEAN Energy US 114, 125 Legal financial model 176 Legal instrument 151 Legal statutes 135 Legislation 6, 11, 102, 173 Legislative documents, energy-related 162 Legislative framework xxxv, 12, 161 Legislative history 103 Legislative interference 12 Legislators 96, 115 Legislature 106, 113 Leidreiter, Anna 26 Lens 97 Leverage 104 Liberty 15 License 172, 203 Licensed legal entities 176 Licensed model 173 Life-circumstances 16 Lifestyles 29 Lighting systems 28 Liljenstolpe 40 Liquefied Petroleum Gas (LPG) 150 Lithuania 78, 79 Loans xxxi, 108 Lobbygroup 95 Lobbyist 114 Local Clean Energy Alliance 112, 113 Local climate activists 101 Local communities 105 Local control 115 Local government 29, 112, 118, 122 Local Government Commission 106 Local initiatives 106 Local jurisdictions 113

Index     247

Local politics 103 Local residents 104 Local voters 111 Long-term strategies 166 Low-carbon city 34 Low-carbon economy 214 Low-carbon energy society 91, 120 Low-carbon technologies 215 Luxembourg 77, 79 M

Machinery 175 Macroeconomic indicators 216 Malnutrition 68, 69 Malta xxxiv, 76–78 Mamede, P. 50 Management 68 Managerial implications 57 Mangistau 224 Manufacturing branches 160 Manzano-Agugliaro, Francisco 81 Marin 108 Marin Clean Energy (MCE) 94, 114, 123 Marin County 106, 109, 123 Marin County Board of Supervisors 109 Marine conservation 68 Marine energy 76, 83 Marine region 140 Market 97 Market access 18 Market activities 170 Market economies 5 Market freedom 15 Marketing campaigns 113 Market mechanism 8

Market players 175 Market power 18 Market requirements 177 Market shortcomings 177 Marmara 169 Marshall plan 13 Mass poverty 15 Masterplan 26, 32 Material deprivation 68, 69 Mathematics 69 Mature phase 99 McCarthy, John D. 98 Mechanisms, flexible 170 Media outlets 112 Medical care 69 Megawatt 171 Member agencies 123 Memorandum of Understanding 224 Mendocino County 124 Metaphor 14 Metropolitan 28 Middle East xxxiii Migration 151 Military safety 8 Military veterans 11 Millennium Summit 214 Mine Policy Strategy 167 Mine strategy 169, 177 Minimum wage 11 Minister 17, 28 Ministerial Conference on Environment and Development 215 Minister of Energy 224 Ministry of Energy and Natural Resources (MENR) 161, 162, 184–186 Mitigation 160, 170, 177

248     Index

Mobility 28, 32 Mobilization 98–100, 108, 112, 118, 120, 215 Moderate movement 67 Moderate progress 67 Modernist maxim 25 Modernity 7 Modernization 32, 225 Modification 222 Modularity 81 Momentum for growth 101 Monetary value 23 Money 6 Monitoring phase 72 Monopolies 15, 22 Monopolist act 117 Monopolists 17 Monopolized energy 18 Monopoly 18 Monopoly structure 96 Monopoly utilities 115 Monthly conference call 114 Moral effect 15 Moreno Valley 106 Morris, Craig 14, 20 Motivation 184 Motorcycles 148 Mountain View 103 Movement 101, 108 Multidimensional phenomenon 68 Multidimensional poverty 69 Multidisciplinary 135 Multilateral trading system 74 Munich xxxiii, 5 Municipal facilities 102 Municipality(ies) 27, 107 Municipalization 106, 109 Municipal scale 24 Municipal utility 5, 111, 123

N

Napa County 123 Nation 216 National Climate Change Action Plan (NCCAP) 165, 166, 189 National Climate Change Strategy (NCCS) 165 National Climate Change Strategy Document 187 National Communication 185, 192 National Development Plan 165 National energy 169, 177 National Energy and Mine Strategy 163 National Energy Efficiency Strategy 165 National food supply 3 National Interconnected Electrical Energy System 132, 137 National renewables targets xxxiv National security 169 National Sustainable Development Strategies (NSDSs) 74, 75 “Natural capitalism” 47 Natural environment 8 Natural gas 184, 187 Natural imbalance system 14 Natural landscape 139 Natural resources 181 Natural substance 9 Nazarbayev, Nursultan 216 Nazi regime 13, 18 Negative forces 9 Negative impacts 8 Negative outcomes 9 Neighboring cities 95 Neoliberal approaches 18 Neoliberalism 5 Netherlands 76–78

Index     249

Network 7, 95, 97, 100, 102 Newcomers 19 News articles 103 News media 135 NGOs 16 Nigeria xxxi, 187 Nitrate 74 Nitrogen 69 Nobel Prize for Economics 23 Noise 73 Non-consumptive uses 151 Non-renewable resources 195 Northeastern coast 135 Northeast of Brazil 133, 136, 143 North-Rhein Westphalia 27 Nuclear power plants 162 Nutrient cycling 40 Nutrient recycling 41 Nutrition 70 O

Obesity rates 69 Objectives 5, 73, 194 Obligations 22 Obstacles xxxii, 202, 226 Ocean acidity 73 Official Gazette 168 Offset 145 Offshore wind energy installation 81 Offshore wind tender 177 Oil crises xxxii Oil products 141 Onshore wind energy installation 81 Opportunity structure 98, 102, 111 Opposition emails 114 Optimal conditions 15 Opt-out design 104 Opt-out program 122

Ordo-liberalism 12, 14, 22 Ordo-liberal theory 20 Organic farming 69 Organic fertilizers 45 Organization 10 Origin 92 Overfishing 73 Overwhelming support 106 Ownership 12, 18, 24, 25, 115 Oxygen 73 P

Pacific 215 Pacific Gas and Electric (PG&E) 92 Pacific states 215 Pakistan xxxi Palatable solution 104 Paradigm 24, 121 Paraná 136 Paris Agreement 182 Paris Climate Change Agreement 164 Paris COP21 Conference 194 Parliaments 70 Partnership Program Green Bridge (PPGB) 214, 215 Partnerships 74, 120 Passenger cars 72, 73 Passive buildings 4 Pathways to Deep Decarbonization (Germany) 26 Payments 200 Peace 74 Peak 141 Peninsula Clean Energy (PCE) 124 Permanent avoidance 25 Personal security theme 74 Petroleum 141, 143, 148

250     Index

PG&E territory 112 Phase 99 Phase-out 151 Philippines 197 Philosophers 8 Phosphate 74 Photovoltaic (PV) 81 cell 76 solar module 168 Photovoltaic system 32 Physical characteristics 151 Piauí 136 Pillars 163 Pilot project 118 Pioneer 75, 76 Planet 63 Planning phase 72 Pledges 205 Plurality 100 Poland 76, 77 Polanyi’s model 21 Policy(ies) 15, 17, 72 Policy context 11 Policy initiatives 4 Policy-makers 41, 42, 104, 115 Policy Sciences 134 Policy Sciences Analytic Framework (PSAF) 134 Political actors 19 Political battle 101, 105 Political conflict 104 Political dynamics 118 Political economy xxxiii Political environment 97, 99 Political leaders 8 Political leadership 33 Political opportunity structure 93, 99, 107 Political organizations 112

Politics 5 Pollution 81 Pollution prevention 39 Population xxxv, 48, 185 density xxxv growth 184 increasing 161 unit 102 Portfolio 24 Portfolio standard set 120 Portugal 79 Positive outcomes 14 Post-World War II 17 Potentialmobilization 99 Poverty, problem of 12 Poverty 11, 68 Power authority 125 Powerful tool 115 Powerhouse 222 Power infrastructure 121 Power plants 28, 168, 175 Power purchase agreement and lease 176 Power sector 119 Power supply 22, 97 Poyatos, Juan 71 Practices 211 Precipitation 143 Predictability 223 Preparedness 219 President Fernando Henrique Cardoso 145 Pressure 139 Price, Trevor J. 81 Prices 117 Primary sources 173 Principal source 141 Private companies 26, 118 Privately owned networks 25

Index     251

Private sector 215 Pro-CCA 119 Production 42, 73, 131, 184 Production Based on Local Resources Program Action Plan 193 Profitability 44 Profitinterests 102 Programa de Incentivoàs Fontes Alternativas de Energia Elétrica 135, 145 Programme of Action 64 Program of Incentives for Alternative Electricity Sources 135 Programs 117 PROINFA program 135 Project committee 31 Promotional campaigns 32 Prosper-Haniel 31 Protection 15 Protection vehicle 109 protective action 6 Protective barrier 11 Protective legislation 10 Protective responses 10 Protocol 64, 189 Pro-utility 119 Provisions 110 Public acquisition 104 Public auction 145 Public domain 5 Public entities xxxiv Public good 19, 109 Public governance 22 Public hearings 105 Public interest 118 Public ownership 104 Public policy xxxiv, 112 Public Utility Code 103 Public welfare 22

Purchase guarantee 177 Puzzle 101 Q

Qualitative data 135 Qualitative research 135 Quality 70 education 69 long-term improvement of 63 Quantitative data 135 Quantitative rules 67 R

Rail 72 Railway 223 Railway networks 25 Rapid formation 97 Rapid migration 106 Rate 69 Ratepayer funds 113 Ratification process 164, 165 Raw materials 8 Realization 232 Real-time availability 81 Rebekah Collins 109 Recognition 41 Reconstructive action 6 Recreation 44 Recycling rate 73 Redistribution 191 Reduction 143, 183 Referee 14 Reflection 34 Refurbishment 83 Regional authorities 72 Regionalization 116 Regional working groups 112

252     Index

Registration Process for Community Choice Aggregators 94 Regulation 6, 120 The Regulation on Renewable Energy Source Areas (RESA) 173 Regulation on Unlicensed Electricity Generation 174 Regulatory 20, 97, 105 Reinhard, Steurer 75 Relocation 46 Renewable electricity 119 Renewable Energy Act (2000) 11, 22 Renewable Energy and Energy Efficiency Partnership 213 Renewable energy development xxxi, xxxv Renewable energy economy xxxiii Renewable energy generation 34 Renewable energy goal 121 Renewable energy industry xxx Renewable Energy Law (2000) 20, 174 Renewable energy market xxxv Renewable Energy Resources Support Mechanism (YEKDEM) 200 Renewable Energy Sector (RES) xxx, 165, 183, 212 Renewable energy transition 4, 17, 21 Renewable energy xxix, xxxi 100% renewable energy target 26 Renewable portfolio standard (RPS) 96 Reporting phase 72 Repression 98 Republic 231 Reputation 46

Research and Development (R&D) 72 Researchers 81, 231 Resemblance 14 Residential sector 147 Residents 92, 102, 108 Resistance 110 Resource adequacy processes 116 Resource reliance 24 Retail competition 97, 103, 105 Retail supplier 124 Revenue 40, 221 Revenue stream 104 Revision mechanism 223 Rio Grande do Norte 136 Rio Grande do Sul 136 Risk management xxxiii River Basin 133 River flow management 131 Rivers 74, 150 Roadmap 212 Roll back retail competition 104 Romania 78, 79 Rooftop 174, 176, 177 Roosevelt, F.D. 11 Röpke, Wilhelm 15 Rosy scenarios 113 Roy, Naruttam Kumar 76 Ruhr 27 Ruhr Model 30 Rulemaking 105 Rural centers 12 S

Salinity gradients 76 Salvador 144 San Diego 95

Index     253

San Diego Gas and Electric (SDG&E) 105, 125 San Francisco 104, 109 San Francisco Public Utilities Commission (SFPUC) 124 Sanitation 68, 70 San Joaquin Power Authority (SJPA) 107 San Joaquin Valley 123 San Joaquin Valley Power Authority 123 San Marcos 105 San Mateo County 124 Santa Clara County 125 São Francisco 133 Saros 169 Savannah 140 Scarce resources 151 Scheer, Hermann 19, 21, 22, 25, 34 Scholars 96, 205 Science 69 SD objectives 67 Sea level rise 3 Seclusion 7 Secretaria de Infraestrutura do Estado da Bahia 146 SEIA 116 Sektorkopplung 26 Self-adjusting market 9 Self-destructive 8 Self-regulating economy 8 Self-regulating market 6, 7, 9, 10, 15, 18 Self-regulating market economy 6 Sempra energy 117, 125 Sempra service 117 Senate 114, 124 Senate committees 114

Senators 112 Sensitive subjects 169 Service-based solutions 56 Shareholder-funded lobbying group 117 Shareholding structure 172 Sheer 25 Shell energy 110 Shell North America Energy 125 Siemens 28 Sierra Club California 113, 114 Significant gains 34 Significant progress 31, 34 Silicon Valley Clean Energy (SVCE) 125 Silicon Valley Community Choice Energy Partnership (SVCCEP) 125 Simões Filho 145 Single-case study 102 Sistema Interligado Nacional 132 Skepticism 96 Slavery, abolition of 11 Slovak Republic 76–78 Slovenia 77, 79 Small-wins 101 Smith, Adam 14 Social acceptance xxxiii Social co-benefits 22 Social context 6 Social dimentions 5 Social dislocation 8 Social economy 22 Social exclusion 68 Social exposure 8 Social forces 10 Social inequality 3 Social mobilization 102

254     Index

Social movement xxxiv, 6, 100, 102 Social network 7 Social policy 11 Social problems 16 Social protection 10 Social relations 6 Social resource mobilization 93 Social security 11 Societal measures 13 Society 6, 9, 13, 14 Socio-economic studies 135 Sociological effect 15 Soil erosion 74 Solar based unlicensed generation plant applications, principles and procedures on 174 Solar energy xxxv, xxxviii, 76, 83, 84, 143, 167, 171 Solar energy resources xxxvi Solar interests 116 Solar projects 176 Solar radiation 198 Solar thermal 81 Sonoma Clean Power (SCP) 108, 114, 124 Sonoma County 114, 123, 124 Sonoma Water Authority 108 Sousa-Zomer, T.T. 56 South Africa 3 South American Nation 145 Southern California 124 Southern California Edison (SCE) 92 Southern Germany 27 South San Joaquin Irrigation District 105 Soviet era 225 Spain xxix, xxxvii, 76, 77, 81

Special case 102 Special circumstances 165 Spot market 120 Stability 134 Stadtwerke 30 Stakeholders 16, 21 Standardization 117 Startup costs 220 Statewide advocacy organizations 95 Statewide coalition 114, 115 Statewide community choice movement 105 Statewide fight 111 Stewardship 47 Stock exchange 172 Storage systems xxxvi Strategic energy 24 Strategic issues 183 Strategic pathways 11 Strategic visions 164 Strategies 63 Structural components 6 Subordination 10 Substantial deep-water 73 Substantial increase 148 Substitutes 151 Success 96, 108, 117 Success story 110 Suffragette campaign 11 Sugarcane products 143 Sugarcane waste 140 Sunlight 81 Sun shines 232 Superintendence for the Development of the Northeast (SUDENE) 138 Superintendência do Desenvolvimento do Nordeste 138

Index     255

Supply structure 35 Surface 211 Sustainability xxxi, xxxii, 231 Sustainable Cites and Communities 26 Sustainable consumption xxxii Sustainable development 39, 41, 65, 74, 75, 163 Sustainable Development Goals (SDGs) 63–65, 84 Sustainable Energy Action Plan (SEAP) 72, 84 Sustainable energy xxx Sustainable future xxxii Sustainable Mill Valley 113 Sustainable solutions 41 Sustainable technologies 42 Suzlon 137 Svensson, G. 50 Sweden xxix, 25, 76–78 Symbol 106 Synergies 35 System-critical framing, potential 99 T

Takahashi, S. 50 Target level 78, 162 Tariff 19, 200 Tax incentives xxx Taxpayer 112 Technical aspects 93 Technicalities 116 Technological developments xxxi Technological improvements xxxix Technological pathways 101 Temperatures 3 Tendency 7, 10, 12

Tenders 224 Termoverde Salvador 144 Terrestrial sites 74 Tertiary educational attainment 69 Thermal energy resources xxxvi Thermal generation 143 Thermal sources 132 Thermography 32 Thrace 169 Thurnwald 7 Tidal currents 76 Tidal energy xxxii, xxxvi, 171, 232 Tidal ranges 76 Timeframe 137 Tinbergen, Jan 23 Tischler, Bernd 30 Tischler, Mayor 34 Tools 5 Top-down climate policy processes 94, 96 “Top-down” movement 11 Tours 32 Toxic chemicals 73 Traditional bulk 97 Transaction costs 104 Transboundary Context 218 Transformation 119 Transition xxx, 214 Transmission 220 Transmission access charges 116 Transmission grids 25 Transmission networks 25 Transparency 33, 97 Transportation 4 Transportation sector 147, 148 Transport efficiency 27 Treatment 33 Trust 68

256     Index

Tugzhanov, Eraly 224 Turbines 132 Turkey xxix, xxxv Turkey’s legislative hierarchy 164 Turkish Electricity Transmission Corporation (TEİAŞ) 191 Turkish government xxxv Turkish Ministry of Energy and Natural Resources (MENR) 183, 184 Turkish National Energy 167 U

U.S. context 121 Uganda xxxi UK government xxxii UN Conference on Sustainable Development 214 Unique circumstances 108 United Kingdom (UK) xxix, 76, 78, 81 United Nations (UN) xxxi, 84 United Nations Framework Convention on Climate Change (UNFCCC) 64, 164, 182 United Nations General Assembly 63 United Nations General Resolution 65 United Nations Kyoto Protocol 64 United Republic of Tanzania xxxi United States (US) xxix, xxxi Unlicensed facility 171 Unlicensed model 172, 173 Unregulated market 10, 13 UN’s Sustainable Development Goals (SDGs) 26

UN’s Sustainable Development Solutions Network 26 Urban areas 40 Urban centers 12 Urpelainen, Johannes 101 Utility opposition 110 Utilization xxxiv, 42, 199 V

Vandalism 74 Variation 141 Vegetable oils 150 Vehicle 100, 119 Vehicle industry 137 Velocity 133 Vestas 137 Video clip 121 Vienna 5 Viewpoints 40 Vigilance 15 Vote Solar 116 Vulnerability 143 W

Wagner, B. 50 Washington 120 Waste 76, 166 Waste recycling 39 Wastewater 70 Water 70, 73, 74, 76, 141, 151 Water shortages 3 Waterways freight 72 Waves 5, 76 Wealth 14, 35 Welfare 181 Western Germany 27 Whim of generators 24

Index     257

Wilderness 9 Willingness 48, 214, 226 Wind xxix, xxxv, 184 Wind energy xxxiv, 83, 167, 171 production xxxiv resources xxxvi Wind facilities 168 Windfall 23 Wind farms 146 Wind industry xxxvi Wind project tender 168 Wind speed 213 Wind turbine xxxvi, 81 Winners 100, 221, 224 Winter 213 WobbenWindpower 138 Women 69

Women’s rights 11 World Commission on Environment and Development (WCED) 65 World Council for Renewable Energy 22 World population xxxi, 73 World Trade Organization (WTO) 74 World War II 5 Worldwide 28, 131 Wuppertal Institute 29 Wuppertal Institute for Climate 28 X

Xinjiang Uygur Autonomous Region 213