Renewable Energy Policies in the EU: a Critical Evaluation of the Incentive Schemes of Two Member States

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School of Business | Bachelor's thesis
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Degree programme
(Mikkeli) Bachelor’s Program in International Business
Objectives The main objectives of this study were to outline the EU-level renewable energy (RE) regulations and find how they are applied in Member States (MS). To understand why some MS have succeeded to meet their RE targets and others not, a high and a low performer are analysed and compared. Sweden was chosen as it is the most ahead of the 2020 targets, while France is among countries that are alarmingly behind their trajectories. Furthermore, an objective was to analyse the application and effectiveness of economic incentive schemes of the MS. As the geographic, technological and social premises to utilise RE sources are not similar between the EU countries, this study looked at how country-specific factors affect economic incentives. Summary The EU has set RE targets for 2020 and 2030. In the latest Directive it was outlined that each MS can contribute their part as best suits their progress prospects. Taxation and subsidies are named the key incentive instruments. On one hand, tax schemes can be compared as percentages and at the targets of taxation. Subsidies, on the other hand, opened a wider discussion with the number of possible approaches. This research focussed on feed-in tariffs (FITs), feed-in premiums, quotas, tradable green certificates and funding and grants. FITs and the quota system are the biggest instruments in France and Sweden respectively, and were thus discussed to a greater extent. The geographic, demographic and legislative environments were outlined to show the role they play as reasons and origins for the incentive structures. Conclusions The successful RE incentive schemes are those that are supported by the public and that in turn support the technological possibilities of the country. For the EU to reach the 2030 and further RE targets, many MS need more EU-level guidance to meet their individual contributions.
Thesis advisor
Ranta, Tapio
renewable energy incentive, feed-in tariff, renewable energy quota, tradable green certificate, renewable energy grant
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