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The Global Surge in Renewable Energy Policies


Summary


  • Worldwide surge driven by environmental concerns and economic potential. Countries set ambitious targets; EU aims for 42.5% renewables by 2030, China eyes carbon neutrality by 2060.


  • Read more about leaders in the renewable energy space, including Iceland, Europe, United States, China, and Morocco.


 

Picture of white wind turbines in a green grass and tree-filled landscape.

In the face of an escalating climate crisis, renewable energy stands as a beacon of hope, offering a sustainable and environmentally friendly alternative to traditional fossil fuels. The global landscape is witnessing a surge in the adoption of renewable energy technologies, driven by a dual impetus of environmental concerns and economic opportunities.


Overview of Global Renewable Energy Policies


Around the world, countries are setting ambitious renewable energy targets, exemplified by the European Union's commitment to a 42.5% renewable energy share by 2030 and China's aspiration to achieve carbon neutrality by 2060. International organizations like the International Renewable Energy Agency (IRENA) play a pivotal role in facilitating the development and implementation of effective renewable energy strategies globally.


Renewable Energy Policies in Different Regions


Iceland


Arguably the most successful renewable energy policy is found in Iceland. No other country on our planet has a bigger share of renewable energy in its total energy budget. Iceland began making the switch to renewables relatively early, in the 1960s. Today, 73% of Iceland’s electricity comes from hydropower plants and 26.8% from geothermal energy, meaning that over 99% of Iceland’s total energy consumption is from a renewable source. According to Iceland’s current ‘Energy Policy’, Iceland “is a leader in sustainable energy production, energy transition, energy efficiency and efficient multiuse of energy sources.” Its policy is therefore mostly built around these pillars, supplemented by societal and economic guidelines.


Europe


The European Union (EU), with its Renewable Energy Directive (RED), serves as a guiding light for many nations. The RED establishes binding targets for renewable energy use and promotes the development of renewable energy markets. It sets the standard for all EU countries to adhere to. The RED came into force in December 2018, in order to assist EU countries with meeting their commitments under the Paris Agreement.


At first, the EU’s target was set at a 32% renewable energy share by 2030. However, the Directive also included the possibility for upwards revision of this target by 2023. Indeed, in 2023, the target was adjusted to 42.5%. Further updates to the RED included more streamlined permitting procedures to make it easier to deploy renewables. It also strengthens regulations in the transport sector, introducing new targets for greenhouse gas reduction and renewable energy use. A final interesting update involves the inclusion of enhanced criteria for bioenergy sustainability.


United States


In the United States (US), renewable energy policies are mostly implemented on state-level, but with federal guidance provided by the US Environmental Protection Agency (EPA). The EPA emphasises that renewable energy, generated by self-restoring fuel sources, is environmentally preferable, offering significant potential to reduce greenhouse gas emissions when replacing fossil fuels. It furthermore suggests options such as on-site generation, purchasing through renewable energy certificates, and participation in green pricing programs.


Federal regulation also exists in the form of the Energy Policy Act of 2005, which offers tax incentives and loan guarantees for the use of various energy sources. Key provisions include tax credits for hybrid vehicle owners, mandates for federal facilities to use a percentage of renewable energy, and loan guarantees for innovative technologies reducing greenhouse gas emissions. The National Environmental Policy Act (NEPA) also partly concerns renewable energy, in that it ensures that federal agencies are obliged to consider environmental impact in any proposal for agency action.


China


China, as the world's largest producer and consumer of renewable energy, is rapidly deploying wind and solar power capacity. Ambitious goals in the country’s total energy consumption, are reshaping the global energy landscape. Currently, China is well underway to meet its target to have 18% of its total power demand be supplied through non-hydro renewable power.


In 2021, China invested over $380 billion in green finance in order to increase renewables. It also outlined its ‘14th Five Year Plan for a Modern Energy System’, which outlines its energy sector plans until 2025. Despite being dated before Russia’s invasion of Ukraine, the document highlights concerns about energy security. The plan removes limits on total coal consumption, stresses the importance of clean coal use, and calls for flexibility refits for coal power generators to accommodate renewables. Xi Jinping also committed to achieve carbon peaking by 2030 and carbon neutrality by 2060.


Morocco


Morocco is a regional leader in renewable energy. It is aiming to be among the top five green hydrogen producers in the world by 2050. It has also implemented an upward adjustment of its ambition to increase the share of total installed renewable energy capacity to more than 52% by 2030. Francesco La Camera, Director General of IRENA confirmed Morocco’s leadership position, stating: “Morocco has shown great leadership in advancing the deployment of renewable energy to meet growing energy demand while creating new industrial opportunities across the country.”


The Moroccan legal framework governing renewable energy can be found in law no. 40-19, which amended law no. 13-09 on renewable energy and law no. 48-15 on the regulation of the electricity sector. This constitutes a very recent reform (February 2023), which introduces several of the following key changes: (i) National Grid Carrying Capacity: A defined maximum capacity from renewable sources that the national grid can handle without constraints. (ii) Electricity Sale to Distribution Network Operators: Distribution network operators can acquire up to 40% of electricity from renewable sources annually, with terms outlined in implementing regulations. (iii) National Preference Requirement: Renewable energy operators must prioritise national suppliers, contractors, and services, details to be provided in implementing regulation. (iv) Change of Control: Any transfer of shares leading to a change of control requires prior approval from the Ministry of Energy Transition and Sustainable Development. (v) Certificate of Origin: Operators can obtain a certificate confirming electricity from renewable sources.


The implementation of effective renewable energy policy is essential for meeting the world's climate change and energy security goals. There are a number of challenges to be overcome, but there are also significant opportunities. Governments, businesses, and individuals all have a role to play in supporting the transition to a renewable energy future.


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