380 E. MOE
are many different support systems, from production tax credits to RPS
to FITs to green certificates and tendering, but these are all reasonably uncomplicated in terms of their implementation. They to differing
degrees cost the state money in terms of subsidies, or they push the
burden onto the electricity consumer. Nonetheless, once the state has
decided on which type of support system to implement, beyond typically having to deal with concession applications, it can essentially lean
back and let the industrial actors make the rest of the decisions based on
their profit evaluations. The politics of grid-line expansion are however
more complicated. Grid enhancement involves the construction or the
significant upgrading (for instance, through smart grids for increased flexibility) of physical infrastructure, stretching over thousands of kilometers.
And it is expensive. Back in 2013, The Economist loosely estimated that
the European grid system required upgrades of around e1 trillion by
2020. It is hard to see this happening without any sustained government
effort. Thus, it is not difficult to see how grid-line expansion has lagged
renewable energy installations in so many countries, producing one of the
biggest bottlenecks to renewable expansion.
(And maybe third, since grid-line expansion has been slow, there has
not been as much to study.)
What we have however seen is that in those countries where renewable
energy has expanded the fastest, the mismatch between installations and
grid-line expansion is also the greatest. Germany for instance ended its
FIT for this reason (in addition to dramatic cost-reductions for both wind
and solar), and in several other countries, installations have been running
far ahead of the grid, resulting in curtailment problems (China at times
has been an extreme example of this), and in grid companies resisting
renewable energy (which we have described in detail with respect to Japan
both in this and the previous volume) (Moe 2014b, 2015, 2017).
This demonstrates the potential of renewable energy as a disruptive
technology. The rapid influx of renewable energy threatens the integrity
of the centralized electricity systems that most countries have spent the
best part of a century installing and jeopardizes the profits and the
entire business model of the traditionally most important actors of the
old and existing electricity system, namely the grid and electric utility
companies. These are however also exactly those actors that renewable
energy depends upon for a stronger and better grid, capable of accepting
renewable energy in quantities that would be unthinkable today. Joseph
are many different support systems, from production tax credits to RPS
to FITs to green certificates and tendering, but these are all reasonably uncomplicated in terms of their implementation. They to differing
degrees cost the state money in terms of subsidies, or they push the
burden onto the electricity consumer. Nonetheless, once the state has
decided on which type of support system to implement, beyond typically having to deal with concession applications, it can essentially lean
back and let the industrial actors make the rest of the decisions based on
their profit evaluations. The politics of grid-line expansion are however
more complicated. Grid enhancement involves the construction or the
significant upgrading (for instance, through smart grids for increased flexibility) of physical infrastructure, stretching over thousands of kilometers.
And it is expensive. Back in 2013, The Economist loosely estimated that
the European grid system required upgrades of around e1 trillion by
2020. It is hard to see this happening without any sustained government
effort. Thus, it is not difficult to see how grid-line expansion has lagged
renewable energy installations in so many countries, producing one of the
biggest bottlenecks to renewable expansion.
(And maybe third, since grid-line expansion has been slow, there has
not been as much to study.)
What we have however seen is that in those countries where renewable
energy has expanded the fastest, the mismatch between installations and
grid-line expansion is also the greatest. Germany for instance ended its
FIT for this reason (in addition to dramatic cost-reductions for both wind
and solar), and in several other countries, installations have been running
far ahead of the grid, resulting in curtailment problems (China at times
has been an extreme example of this), and in grid companies resisting
renewable energy (which we have described in detail with respect to Japan
both in this and the previous volume) (Moe 2014b, 2015, 2017).
This demonstrates the potential of renewable energy as a disruptive
technology. The rapid influx of renewable energy threatens the integrity
of the centralized electricity systems that most countries have spent the
best part of a century installing and jeopardizes the profits and the
entire business model of the traditionally most important actors of the
old and existing electricity system, namely the grid and electric utility
companies. These are however also exactly those actors that renewable
energy depends upon for a stronger and better grid, capable of accepting
renewable energy in quantities that would be unthinkable today. Joseph