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FeedFeedFeedFeed----in Tariff Methodologies and Financing:in Tariff Methodologies and Financing:in Tariff Methodologies and Financing:in Tariff Methodologies and Financing:
Options for AsiaOptions for AsiaOptions for AsiaOptions for Asia
FeedFeedFeedFeed----in Tariff Workshoin Tariff Workshoin Tariff Workshoin Tariff Worksho
Asian Development BankAsian Development BankAsian Development BankAsian Development Bank20202020----21 June 201121 June 201121 June 201121 June 2011
Manila, PhilippinesManila, PhilippinesManila, PhilippinesManila, Philippines
RomeoRomeoRomeoRomeo PacudanPacudanPacudanPacudan PhDPhDPhDPhDEnergy Specialist (Consultant)Energy Specialist (Consultant)Energy Specialist (Consultant)Energy Specialist (Consultant)
Asian Development BankAsian Development BankAsian Development BankAsian Development Bank
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Structure of PresentationStructure of PresentationStructure of PresentationStructure of Presentation
RE Promotion PoliciesRE Promotion PoliciesRE Promotion PoliciesRE Promotion Policies
FeedFeedFeedFeed----in Tariff Design Optionsin Tariff Design Optionsin Tariff Design Optionsin Tariff Design Options
Funding OptionsFunding OptionsFunding OptionsFunding Options Final RemarksFinal RemarksFinal RemarksFinal Remarks
test
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Subsidy andgrants
Tax incentives
Feed-in tariff
Regulatorypolicies
1. RE Promotion Policies1. RE Promotion Policies1. RE Promotion Policies1. RE Promotion Policies
from fiscal incentives to regulatory policiesfrom fiscal incentives to regulatory policiesfrom fiscal incentives to regulatory policiesfrom fiscal incentives to regulatory policies
test
nergypayments
Fiscalincentives
Obligations RE Certificates Net Metering
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F UKNO
NEGR
LTUS
C DK
NZ
DK US ITA
H
A P
NE
C UKT K GR
SWD CH J NOF
LB
CBD K T H
NZGR
IRF L
USFI PAAUSITA
DK
UKJ
NO
NECH
SW
E
EFI
AUS
CZ
FID
F UKNO
NEGR
LTUS
C DK
NZ
DK US ITA
H
A P
NE
C UKT K GR
SWD CH J NOF
LB
CBD K T H
NZGR
IRF L
USFI PAAUSITA
DK
UKJ
NO
NECH
SW
E
EFI
AUS
CZ
FID
RD & D
InvestmentIncentives
1. RE Promotion Policies1. RE Promotion Policies1. RE Promotion Policies1. RE Promotion Policies
RE Policy Evolution in Developed Countries:RE Policy Evolution in Developed Countries:RE Policy Evolution in Developed Countries:RE Policy Evolution in Developed Countries:Shift to regulatory policies supported by fiscal incentivesShift to regulatory policies supported by fiscal incentivesShift to regulatory policies supported by fiscal incentivesShift to regulatory policies supported by fiscal incentives
SWBHAUS
NE ITA
DKA
J
DK E HL
AUSACH
D
FI B NE
ITA SW
LJCAUS
DCH PUS ITA
HFAL
ITAUK
PUS K NEDK
E
B SW
D
GRCH NOIR C
CZ
SW
NZ F
IR
NO UK
EU
GR
CZ
J
K
CZ KB
FI K
NOUK
SWBHAUS
NE ITA
DKA
J
DK E HL
AUSACH
D
FI B NE
ITA SW
LJCAUS
DCH PUS ITA
HFAL
ITAUK
PUS K NEDK
E
B SW
D
GRCH NOIR C
CZ
SW
NZ F
IR
NO UK
EU
GR
CZ
J
K
CZ KB
FI K
NOUK
1970 1980 1990 2000
Feed-in Tariffs
VoluntaryPrograms
Obligations
TradableCertificates
Source: IEA 2005
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PolicyInstruments
TaxMeasures
InvestmentIncentives
Feed-inTariffs
1. RE Promotion Policies1. RE Promotion Policies1. RE Promotion Policies1. RE Promotion Policies
RE Policy Evolution and Power Market ReformsRE Policy Evolution and Power Market ReformsRE Policy Evolution and Power Market ReformsRE Policy Evolution and Power Market Reforms
In Europe,In Europe,In Europe,In Europe,
regulatory policies were introducedregulatory policies were introducedregulatory policies were introducedregulatory policies were introduced
when power industries werewhen power industries werewhen power industries werewhen power industries wereliberalizedliberalizedliberalizedliberalized
test
Obligations
TradableCertificates
Power SectorReforms
MonopolyPurchasingAgency
WholesaleCompetition
RetailCompetition
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Monopoly Purchasing
Agency
India Sri Lanka
Wholesale
Competition
Philippines
Sin apore
Retail
Competition
EUcountries
1. RE Promotion Policies1. RE Promotion Policies1. RE Promotion Policies1. RE Promotion Policies
Power Industry Market StructurePower Industry Market StructurePower Industry Market StructurePower Industry Market Structure
Malaysia Thailand China
R of Korea US Canada Japan
power market reforms are slow in Asiapower market reforms are slow in Asiapower market reforms are slow in Asiapower market reforms are slow in Asia various variants exist for purchasing agency modelvarious variants exist for purchasing agency modelvarious variants exist for purchasing agency modelvarious variants exist for purchasing agency model increasing role of the private sector in the generation segmentincreasing role of the private sector in the generation segmentincreasing role of the private sector in the generation segmentincreasing role of the private sector in the generation segment
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TRADABLECERTIFICATES
ITALY
SWEDEN
ROMANIA
POLAND
OBLIGATIONS
BELGIUMNETHERLANDS
1. RE Promotion Policies (1. RE Promotion Policies (1. RE Promotion Policies (1. RE Promotion Policies (DEVELOPED COUNTRIESDEVELOPED COUNTRIESDEVELOPED COUNTRIESDEVELOPED COUNTRIES))))
Combination of Regulatory Policies Consistent with Market StructuresCombination of Regulatory Policies Consistent with Market StructuresCombination of Regulatory Policies Consistent with Market StructuresCombination of Regulatory Policies Consistent with Market Structures
FEED-IN TARIFFS
JAPANAUSTRALIA
US UK
IRELAND SLOVENIA
SPAIN CZECH
DENMARK
BULGARIA GERMANY LATVIACYPRUS GREECE LITHUANIA
ESTONIA HUNGARY LUXEMBOURG
PORTUGAL SLOVAKIA
ComplexMarket-BasedMeasures
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TRADABLECERTIFICATES
INDIA
OBLIGATIONS
1. RE Promotion Policies (1. RE Promotion Policies (1. RE Promotion Policies (1. RE Promotion Policies (DEVELOPING COUNTRIESDEVELOPING COUNTRIESDEVELOPING COUNTRIESDEVELOPING COUNTRIES))))
Combination of Regulatory Policies Consistent with Market StructuresCombination of Regulatory Policies Consistent with Market StructuresCombination of Regulatory Policies Consistent with Market StructuresCombination of Regulatory Policies Consistent with Market Structures
CHILE
URUGUAY
FEED-IN TARIFFS
ALGERIA ARGENTINA DOMINICAN SOUTH AFRICA
ECUADOR INDONESIA KENYA UGANDA
MALAYSIA MONGOLIA NICARAGUA TURKEY
PAKISTAN SRI LANKA THAILAND
PHILIPPINES
SimplerMarket-BasedInstruments
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2. Feed2. Feed2. Feed2. Feed----in Tariff Design Optionsin Tariff Design Optionsin Tariff Design Optionsin Tariff Design Options
FeedFeedFeedFeed----in Tariff as Guaranteed Price over Fixed Period of Timein Tariff as Guaranteed Price over Fixed Period of Timein Tariff as Guaranteed Price over Fixed Period of Timein Tariff as Guaranteed Price over Fixed Period of Time
GuaranteedGuaranteedGuaranteedGuaranteed
Access toAccess toAccess toAccess to
the Gridthe Gridthe Gridthe Grid
Stable andStable andStable andStable and
LongLongLongLong----termtermtermterm
PurchasePurchasePurchasePurchase
Purchase ObligationPurchase ObligationPurchase ObligationPurchase Obligation
Clear Interconnection RulesClear Interconnection RulesClear Interconnection RulesClear Interconnection Rules
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2. Feed2. Feed2. Feed2. Feed----in Tariff Design Optionsin Tariff Design Optionsin Tariff Design Optionsin Tariff Design Options
Payment differentiation and supplementary design optionsPayment differentiation and supplementary design optionsPayment differentiation and supplementary design optionsPayment differentiation and supplementary design options
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2. Feed2. Feed2. Feed2. Feed----in Tariff Design Optionsin Tariff Design Optionsin Tariff Design Optionsin Tariff Design Options
Solar PV ProjectsSolar PV ProjectsSolar PV ProjectsSolar PV Projects
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2. Feed2. Feed2. Feed2. Feed----in Tariff Design Optionsin Tariff Design Optionsin Tariff Design Optionsin Tariff Design Options
Wind Power ProjectsWind Power ProjectsWind Power ProjectsWind Power Projects
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Power Pool Price + Premium
Renewable Portfolio Standard with RE Certificate
Merchant RE-plants selling into Pool
Degree ofconformity
High
2. Feed2. Feed2. Feed2. Feed----in Tariff Design Optionsin Tariff Design Optionsin Tariff Design Optionsin Tariff Design Options
Tariff Regime and Electricity Market CompatibilityTariff Regime and Electricity Market CompatibilityTariff Regime and Electricity Market CompatibilityTariff Regime and Electricity Market Compatibility
Fixed Feed-In Tariff /Lowest Tariff Tender for MW / Negotiated Tariff
Season Dependent Feed-In Tariff
Time of Day Dependent Feed-In Tariff
Feed-In Tariff Benchmarked Against Retail Price + Premium
- enera or e ng ec r c y o e a onsumers
Type of Tariff Setting Regime
marketrules forliberalizedelectricitymarket
Low
Source: kfW 2005
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RatepayerFunding
Thailand FT charge Philippines FIT All
Malaysia RE Fund
RatepayerFunding
Japan Solar Charge China RE Premium
Feed-in Tariff
3. Feed3. Feed3. Feed3. Feed----in Tariff Funding Optionsin Tariff Funding Optionsin Tariff Funding Optionsin Tariff Funding Options
FIT Funding in Asian CountriesFIT Funding in Asian CountriesFIT Funding in Asian CountriesFIT Funding in Asian Countries
Taxpayer Funding Republic of Korea
Government Budget
RatepayerFunding
Sri Lanka India
Funding
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4. Options for Asia4. Options for Asia4. Options for Asia4. Options for Asia
Combination of policy instruments
FIT supported with fiscal incentives
FIT policy combined with other regulatory measures
FIT policy design consistency with
Regulatory frameworks
FIT Funding
Long-term funding stability
Burden sharing and transparency Social and economic impacts considerations
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