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Global Futures Report 2013 - Great Debates and Topical Discussion Report

71 Annex 4 – GREAT DEBATES AND TOPICAL DISCUSSION REPORT Interviews conducted for this report (see Annex 1) revealed dif- ferences of opinion and points of uncertainty on issues related to renewable energy costs, policies, technologies, investment, and integration. These differences of opinion were framed into a series of “Great Debates” about the future of renewable energy, 30 of which are summarized here. For further reading on these subjects, see the cited cross-references and endnotes, and the listed topics from the online supplement, “Topical Discussion Report” (available at http://www.ren21.net/gfr). That report also contains many more “Great Debates” discussions. Great Debates (See endnotes for references and further reading) Topic number and name in “Topical Discussion Report” for further reading Cost comparisons Is renewable energy more expensive than conventional energy? Experts pointed out factors that skew cost comparisons, including existing subsidies to fossil fuels and nuclear power, future fuel price risk, environmental costs, social costs, and many other factors and risks.1 (See Great Debate 1, page 12.) 2. “Cost Comparisons” 3. “Key Variables” What is the right way to make economic decisions and comparisons between competing technology alternatives, such as between renewables and fossil fuels? Metrics include levelized cost of energy (LCOE), financial rate of return (IRR), and total future energy system cost. Experts advocated for decisions more strongly based on financial risk-return perspectives, including a “mathematics of diversification” to reduce energy system/portfolio risk.2 (See Great Debate 1, page 12.) 2. “Cost Comparisons” 3. “Key Variables” 4. “Energy Systems” How should fair economic comparisons incorporate conventional energy subsidies, recognize fossil fuel price risk, account for social costs, and include (internalize) environmental costs? Some advocated removing subsidies for fossil fuels, while others saw subsidies for renewable energy as “leveling the playing field.” Emissions policies are one method of partly including environmental costs, and experts called for new mechanisms to account for social costs.3 (See Great Debate 1, page 12.) 2. “Cost Comparisons” 3. “Key Variables” Policy evolution What is the future role of policy? At the national, state, provincial, and local/city levels, policies have played a major role in driving renew- able energy markets, investments, and industry growth in the past. Experts expected policies to remain a critical part of the future, and offered a range of views about the future role of policy.4 (See Great Debate 2, page 13, and national policy examples in Chapter 5.) 6. “Policies” 20. “Cities” 21–28. Country topics How will feed-in tariffs evolve? Given lower technology costs, higher support costs, and higher renewable power shares on grids, some experts questioned how long feed-in tariffs would be needed, in Europe in particular, or how long gov- ernments would maintain them. Some saw evolution during 2020–2030 to meet market conditions and power grid integration needs.5 (See Great Debate 9, page 45) 6. “Policies” 21. “Europe” What role should (or will) carbon-based policies have in promoting renewable energy? European experts debated the role of the Emissions Trading System (ETS). Some envisioned full-fledged currency-like markets, and one expert said, “the ETS could be the end of coal.” Others called the ETS ineffective, partly due to low carbon prices.6 6. “Policies”

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