Academic journal article Management & Marketing

Factors of Impact on the Evolution of Electricity Markets from Renewable Energy Sources: A Comparison between Romania and Germany

Academic journal article Management & Marketing

Factors of Impact on the Evolution of Electricity Markets from Renewable Energy Sources: A Comparison between Romania and Germany

Article excerpt

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Introduction

Scarcity of resources and climate change are more visible than ever today. The decreasing levels of fossil energy sources are a global concern, affecting developed and developing countries as well. Governments have realized that a stimulating legislative framework is crucial in order to promote alternative energy sources and a sustainable development.

In January 2007, the European Commission presented the Renewable Energy Roadmap, which set as objectives to reduce gas emissions by at least 20% until 2020, compared to 1990 levels (by 30% if possible), to increase the share of renewable energy in final energy consumption to 20%, and to achieve a 20% increase in energy efficiency. It is estimated that meeting the 20% renewable energy target could have a net effect of creating over 400.000 additional jobs (European Commission, 2014). In order to reach the ambitious target of a 20% share of energy from renewable sources in the overall energy mix, the European Union focused its efforts on the electricity, heating and cooling sectors and on biofuels. This paper addresses mainly the issue of electricity gained from renewable energy sources.

Prior studies have not identified significant correlations between the share of renewable energy in the gross energy consumption of a country and its level of greenhouse gas emissions, its GDP or its energy intensity (Nichifor et al., 2013). The low level of this correlation is attributed to the existence of other factors that influence the decision of using renewable energy at a large scale. Within this scientific approach we intend to analyse the main political factors influencing the development of renewable energy markets.

The Member States have taken on binding national targets for raising the share of renewable energy in their energy consumption depending on their different current conditions and potential for increasing renewables production. These goals range from 10% in Malta to 49% in Sweden. Germany, Europe's greatest energy producer and consumer, set its target to 18%, while Romania, a traditional producer of energy from renewable sources in South East Europe, set its target at 24% (European Commission, 2014). Since electricity does not generate CO2-emissions at end use, is available in almost all stages of its production, transmission, and consumption and is also an efficiently transformable energy carrier, many support schemes focus on the electricity production from renewable energy sources. This also constitutes the subject of our study.

Member States further on individually decided on how to transpose the Renewable Energy Directive into national laws, including the choice of the support system for electricity generated from renewable sources. This study aims to explore the different support schemes and to show that market development for electricity from renewable sources depends on the support scheme chosen by the Member State. A secondary goal is to determine which type of support scheme will better serve the goals in the long run: Does the EU encourage the best type of support schemes? Is the scheme preferred by investors also the most effective one?

Next to the chosen support system, arises the question of an appropriate infrastructure. Is the electricity grid - transport and distribution - adequate for the development of renewable sources? Can a renewable energy producer get connected easily to the grid and at what cost? Also it is important to note in what degree the framework conditions are constant. In this assessment the feedback of the business community is taken into account, by using structured and unstructured interviews, as well as findings of a prior study conducted by Bürer and Wüstenhagen in 2007 (Bürer and Wüstenhagen, 2009). In order to gain perspective of the development of the European market, the study explores statistical data provided by the European Statistical Office but also by EUobserver and by national profile associations correlated with the specific support schemes. …

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