Pathways, risks, and uncertainties 251
scaling up deployment. During the implementation of policies, monitoring and
enforcement are identified as important elements that could create or enable
barriers against supporting the innovation. Additionally, policies and politics
are often intertwined. If a technological innovation is essential to the current
political agenda, policies are often advanced to support it.
Policy instruments to encourage private investments for
technological deployment
We highlighted that most stakeholders emphasised the need for substantial
public and/or private investments. Investors are known to be keen on stable
markets with reliable revenue streams, while renewable energy options are characterised as unstable or unreliable in terms of revenue. Policy instruments and
initiatives backed by government provide an indication for the longer- term
market potential of a specific technological option; for example, governmental
guarantees about project- level revenue streams can reduce financial implementation risks.
Policy instruments discussed in our case studies include economic incentives
to support low- carbon technologies such as: subsidies for renewable energy (the
Netherlands, Indonesia); feed- in tariffs (FITs) for renewable electricity generation (Spain, Greece, Switzerland) or other price guarantees (UK nuclear power)
backed by government- endorsed policies. There are also policy disincentives
such as carbon or energy taxes (Chile and Canadian carbon tax), which are used
as a means of penalising high- carbon emitters. While economic policies are
widely applied across case study countries, there are also non- economic policy
instruments that can drive forward a transition. These include high- level energy
plans, for example Kenya’s national and sectoral acts and plans and EU
renewable energy targets impacting the Austrian steel sector. They also include
standards and performance requirements for individual technologies or sectors
(building codes and standards for energy efficiency in China and Greece).
Across our case studies, stakeholders identified a set of risks in the
implementation of different policy instruments. While the aim of policies was
to reduce financial barriers, the policies themselves can lead to negative
consequences, which illustrates the need for selecting and fine- tuning policy
instruments for preventing and overcoming barriers. There are still uncertainties in how policies can effectively support the scaling up of renewable technologies in different country contexts. As can be observed from previous trends,
such as the renewable energy sector in Spain, economic incentives such as feedin tariffs and premium tariffs can significantly boost renewable energy generation. However, in Spain the overheated market significantly increased regulatory
costs and retroactive measures were put in place on renewables to cut existing
subsidies. The absence of continued policy support for renewable energy caused
a market collapse, an unanticipated consequential risk in the Spanish renewable
energy sector. Hence, the case provided a clear example of the need for carefully
selecting instruments for effective policymaking and coherent policy mixes.
scaling up deployment. During the implementation of policies, monitoring and
enforcement are identified as important elements that could create or enable
barriers against supporting the innovation. Additionally, policies and politics
are often intertwined. If a technological innovation is essential to the current
political agenda, policies are often advanced to support it.
Policy instruments to encourage private investments for
technological deployment
We highlighted that most stakeholders emphasised the need for substantial
public and/or private investments. Investors are known to be keen on stable
markets with reliable revenue streams, while renewable energy options are characterised as unstable or unreliable in terms of revenue. Policy instruments and
initiatives backed by government provide an indication for the longer- term
market potential of a specific technological option; for example, governmental
guarantees about project- level revenue streams can reduce financial implementation risks.
Policy instruments discussed in our case studies include economic incentives
to support low- carbon technologies such as: subsidies for renewable energy (the
Netherlands, Indonesia); feed- in tariffs (FITs) for renewable electricity generation (Spain, Greece, Switzerland) or other price guarantees (UK nuclear power)
backed by government- endorsed policies. There are also policy disincentives
such as carbon or energy taxes (Chile and Canadian carbon tax), which are used
as a means of penalising high- carbon emitters. While economic policies are
widely applied across case study countries, there are also non- economic policy
instruments that can drive forward a transition. These include high- level energy
plans, for example Kenya’s national and sectoral acts and plans and EU
renewable energy targets impacting the Austrian steel sector. They also include
standards and performance requirements for individual technologies or sectors
(building codes and standards for energy efficiency in China and Greece).
Across our case studies, stakeholders identified a set of risks in the
implementation of different policy instruments. While the aim of policies was
to reduce financial barriers, the policies themselves can lead to negative
consequences, which illustrates the need for selecting and fine- tuning policy
instruments for preventing and overcoming barriers. There are still uncertainties in how policies can effectively support the scaling up of renewable technologies in different country contexts. As can be observed from previous trends,
such as the renewable energy sector in Spain, economic incentives such as feedin tariffs and premium tariffs can significantly boost renewable energy generation. However, in Spain the overheated market significantly increased regulatory
costs and retroactive measures were put in place on renewables to cut existing
subsidies. The absence of continued policy support for renewable energy caused
a market collapse, an unanticipated consequential risk in the Spanish renewable
energy sector. Hence, the case provided a clear example of the need for carefully
selecting instruments for effective policymaking and coherent policy mixes.