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FIT Experiences in EmergingAsian Economies

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Globally, there is growing commitment to RE

• Growth in REcapacity

• Boom in REtechnology &manufacturing

 

2

• Increase in greeninvestments

• Widespreadadoption of RE

targets

Source: REN21

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Different policy tools for RE promotion

UKMany

28 developing countries(Turkey, Nicaragua,Sri Lanka)

20 European countries(Spain, Germany)

FranceChina

BrazilPeruUruguay

Feed-in Tariff

RPS

Competitive Procurement(Auction, Bidding)

3

ItalyPhilippines BelgiumSwedenChilePoland

 

countries(Netherlands)

IndiaArgentina

Tradable Green Certificate (TGC) /Renewable Energy Certificate (REC)

Source: WB Study – Design and Performance of Policy Instruments to Promote RE

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Feed-in Tariff (FIT)• FIT – guaranteed rates or fixed price per kilowatt hour for

the use of renewable energy

• FIT varies in different countries depending on:

 – Technology

 – Maximum ca acit

4

 

 – Size and location of the plant

 – Year of operation and operational season

 – Fixed premiums over time versus degression

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Why FIT is an effective policy tool ?• Reduces investment risks

 – Demand risk

 – Off-taker risk

 – Revenue risk

• Creates stable investment environment

5

 – Predictability of revenue streams• Supports small scale RE projects

• Limits impact of RE utilization by spreading the costs toall electricity users

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FIT: Strong force behind RE growth• About 83 countries with RE policies as of 2010 (REN21

Global Status Report)

• FIT most commonly used policy; 50 countries and 25states/provinces use FIT

• FIT was a strong force in wind industry development

6

(Germany, Spain, Denmark)• In Asia, FIT is driving the wind market

• Momentum for FIT as RE policy to accelerate (adoptingFIT as a new policy or revising existing FIT policies)

Source: REN21 Global Status Report 2010

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FIT Experiences in EmergingAsian Economies

Vincent S. PérezChairman, Merritt Partners

Asia Clean Energy Forum20 June 2011

Asian Development Bank