In the first semester of 2016 a survey was conducted to holistically evaluate the effectiveness of the existing wind power regulatory framework and the related supporting mechanisms performance. The investigation included respondents from around the world spanning a broad range of stakeholders, wind power professionals, insurance providers and policy makers. The survey conducted to assess the strengths and weaknesses of the existing regulatory framework for the wind energy (particularly offshore) and provide an indicative picture of the pragmatic needs and improvements in the path to a more sustainable energy system and democratic control over renewable energy.

1. 1
Assessing the EU Wind Power Regulatory and Support Mechanisms For
Technically- Feasible and Economically-Viable Alternative Directions
Stavros Philippou Thomas
European Commission, Anemorphosis Research Group - Intcompas, Institute for Energy and Sustainability, Natura 2000 Network
A r t i c l e I n f o
Article History:
Survey conducted: September-June 2016
Report produced on July 2016
Keywords:
Regulatory Barriers
Guarantees of Origin
Regulatory Framework
Wind Energy Development
Natura 2000
Wind Power Policies
A b s t r a c t
This document is a part of comprehensive and systematic analysis on the technical, commercial, social
and economic value of the wind energy that the Anemorphosis Research Group carried out on behalf of
a wind power developer-investor to assess the economic viability, technical feasibility and supporting
schemes currently available. The main objective of this report is to provide an updated and well
informed overview of the EU wind energy regulatory framework that promotes the development of a
pan-European renewable electricity market. Several key aspects are evaluated and analyzed in this
report: market recession concerns (political uncertainties), support schemes, supply chain issues, grid
infrastructure issues and wind energy deployment barriers including the Not in My Backyard
Syndrome.
However, the main scope of this work is not just to monitor the regulatory development and energy
policies or analyze the existing (summer-2016) policies variations consequences, but also to scrutinize
and assess the development-investment tactics and identify the most critical wind power market trends
for further market growth and prosperity. Each member state in the EU implements a specific
regulatory framework driven by a plethora of complicated or less complicated parameters and factors
such as the existing renewable energy infrastructure, local availability, grid strength (smart grid
infrastructures availability), hybrid renewable energy technologies, as well as other factors such as
geographical distribution of the renewable energy plants and consumption points, transmission
reliability and availability or even the potential risks and uncertainties because of the unstable taxation
systems, environmental policies and permit regulations.
The outcomes presented in this document demonstrate the crucial need for regulatory stabilization and
(why not) the standardization of the regulatory framework to establish a reliable, sustainable and
intelligent supporting scheme. Guarantees of Origin could be an effective option for a greener and more
transparent energy economy. The author concludes that both, policy development and regulations
sustainability involve a continuous and systematically organized learning process to effectively deal
with and exploit such market dynamics. Thus, rather than seeking to implement successful policies or
regulations from other markets or sectors, each country needs to design and establish a progressive
development framework to foster innovation and efficient operative policies or promote the synergies
between neighboring countries. Lessons learned from the past could also help to accelerate wind power
market growth, but the learning process remains an imperative factor of success. Each country is unique
and needs to find its own way.
This is an open access article under the CC BY-NC-ND license.
(http://creativecommons.org/licenses/by-nc-nd/4.0/).
Contents
1. Introduction........................................................................................................................................................................................................................................ 2
2. Renewable Energy Action Plans ...................................................................................................................................................................................................... 2
3. Support Schemes Research ................................................................................................................................................................................................................3
4. Social and Democratic Implications ………………………………………………………………………………………………………………………………..3
5. Survey Questions and Outcomes …………………………………………………………………………………………………………………………………..3
6. Regulatory Risk Management Strategies ………………………………………………………………………………………………………………………….6
7. The Paradigm of Sweden and Norway ……………………………………………………………………………………………………………………………6
8. The Case Of Germany And The Netherlands …………………………………………………………………………………………………………………….7
9. Guarantees of Origin ………………………………………………………………………………………………………………………………………………...7
10. Conclusions ........................................................................................................................................................................................................................................ 8
References ................................................................................................................................................................................................................................................... 9
n
Corresponding author Tel.: +306976001665.
E-mail addresses: stavros.thomas@anemorphosis.com (Stavros Phil. Thomas)
Contents lists available at Anemorphosis Research Group
Wind Power Regulatory Survey
Homepage: www.anemorphosis.com/ - www.intcompas.com

2. 2 A Wind Power Regulation Framework Evaluation (2016) * 1st Report Review
1. Introduction
Wind energy industry is one of the fastest growing segments of the
world economy and has a mandate to continue growing for the next
decades. The wind energy market is expected to increase further
following the technology innovations and cost of energy reduction
in terms of supply chain, operation and maintenance strategies,
siting methodologies, weather prognostic models and project
management. With the enormous growth in offshore wind energy
installations, there will be hundreds of billions spent worldwide not
only to develop and improve the massive wind energy turbines and
their associated ancillary infrastructure but also to design, transfer,
operate and maintain these sophisticated systems deployed in
shallow-water environments around the world.
One of the major challenges for the wind power industry is to
continue to bring down the cost faster without compromising plant
reliability, performance, safety or quality. However, this could not
be achieved without a stable and innovative regulation and state-of-
the art policies framework. New technologies and techniques have
already enormously contributed to mitigate the related costs of the
industry but uncertainty on the regulation and policies reliability
remains. Sustainable energy structures, technologies and
progressive regulation practices are considered to be the
fundamental cornerstone for enabling research and development
and establish industry’s prosperity. [1]
The pace of technological advancement and innovations in this
sector is far too rapid for even a cursory review of the technology in
this report. Perhaps the biggest hurdle to overcome, before
deploying wind power technologies, is an innovative regulatory
framework for the sustainable development of Europe’s renewable
energy resources. This report identifies and analyses the most
significant policy and regulatory measures that have contributed to
the development of wind energy investments across the EU market,
the barriers related to this technology and the potential
improvements.
This document does not provide a thorough overview of the
renewable energy legislation in each of the EU countries it analyses.
It does not aim to benchmark national regulations against each
other, or to evaluate their implementation success, but rather to
highlight the major steps in the development of an innovative and
reliable regulatory framework that led to the formation of a
technical feasible and economically viable wind power market. The
EU markets studied are of various sizes; display a plethora of policy
opportunities and diverse market dynamics. All demonstrated
extraordinary market dynamism and represent interesting
regulation formation case studies.
A wide range of support mechanisms and schemes have been
developed and implemented to stimulate the integration of wind
energy technologies since the late 1970s. These include tax
incentives, privileged tariff regimes-criteria and flexible trading
structures. Even though most EU countries share similar renewable
energy policy objectives – reducing dependence on fossil fuels – in
particular oil and gas- , improving energy supply (energy security)
by the concept of diversification, reducing the environmental risks
and encouraging the development and integration of low carbon
footprint technologies (wind power, solar power, hydroelectric
power, ocean energy, geothermal energy, biomass and biofuels).
The EU is a pioneer in renewable energy technologies. It holds
approximately 44% of the world’s renewable energy patents (the
Intellectual Standards Framework is still problematic) and due to
the development of massive offshore wind energy installations this
percentage should be significantly increased. The renewable energy
industry in the EU currently employs approximately 1.4 million
people and because of the EU legislation on the promotion of
renewables the employment rates should be also increased in the
coming years.
2. Renewable Energy Action Plans
On 1997, the EU with the release of the White Paper on renewable
energy sources set itself the targets of generating 12% of energy
consumption and 22.1% of electricity consumption from
renewable energy sources by 2010. Directive 2001/77/EC on the
promotion of electricity from renewable energy sources in the
domestic electricity market set out indicative targets for each
member state. After the members’ state expansion in 2004, a new
target was set for the EU-25 to generate 21% of electricity from
renewable energy sources. However, the lack of progress towards
achieving the 2010 targets led to the adoption of a more analytical
legislative framework.
On January 2007 the EU commission with the development and
release of a promising Road Map entitled ‘Renewable Energy
Road Map — Renewable energies in the 21st century: building a
more sustainable future’ [3] established a long-term strategy for
the renewables sources of energy until 2020. The Commission
proposed a mandatory goal of generating 20% of EU energy
consumption from renewable energy sources by 2020, an
obligatory target for biofuels of 10% of transport fuel
consumption by 2020, and the formation of a new legislative
framework.
The new Renewable Energy Directive, adopted on 23 April 2009
(Directive 2009/28/EC, repealing Directives 2001/77/EC and
2003/30/EC), established that a mandatory 20% share of EU
energy consumption must come from renewable energy sources
by 2020, broken down into nationally binding sub-targets and by
taking account of the Member States’ different starting points. In
addition, all Member States are required to obtain 10% of their
transport fuels from renewable sources by 2020. The directive
also mapped out various mechanisms that Member States can
apply in order to reach their targets (support schemes, guarantees
of origin, joint projects, cooperation between Member States and
third countries), as well as sustainability criteria for biofuels.
The Renewable Energy Directive 2009/28/EC [2] by taking into
account the different starting points of each member state setting
mandatory national targets in order to achieve at least a 20%
renewable energy share in final energy by 2020. Each member
state was required, by June 2010, to set out the sectoral targets by
their National Renewable Energy Action Plans (NREAPs). The
directive also mapped out various mechanisms that member
states can apply in order to reach their targets (support schemes,
guarantees of origin, joint projects, cooperation between industry
and academia), as well as sustainability criteria for the associated
infrastructure design..
Each member state plan defined the technology combination
scenario, the route to be followed and the measures and
modifications to overcome economic, social, environmental and
political barriers and ensure the integration of renewable energy
technologies in their domestic energy market. According to the
plan defined in the NREAPs, wind energy has a very important
role in order to achieve the 2020 renewable energy targets:
expected installed capacity by 2020 in the European Union (EU) is
209.6 GW (165.6 GW onshore and 43.9 GW offshore). These figures
would account for a 43.1% of renewable electricity technologies
installed by 2020 [3] (34.0% corresponds to onshore and 9.1% to
offshore wind energy).
The latest available reports from Eurostat show that renewable
energy accounted for 14% of energy consumption in the EU-28.
The Commission also draws attention to a number of factors of
concern regarding future progress such as the failure to address
administrative and grid-related barriers, environmental
compatibility concerns to the uptake of renewable energy;
disruptive changes to national support schemes for renewable
energy; and, finally, the slow transposition of the directive into
national law (Poland and Cyprus).

3. A Wind Power Regulation Framework Survey (2016) * 1st Report Review
3
The EU has started preparing for the period beyond 2020, in order
to provide policy simplicity on the post-2020 regime for investors.
Renewable energy and especially wind power plays an extremely
important role in the Commission’s long-term strategy as outlined
in its ‘Energy Roadmap 2050’ (COM(2011) 0885) [4]. The de-
carbonization scenarios for the energy sector proposed in the
roadmap point to a renewable energy share of at least 30% by 2030.
Nevertheless, the roadmap also suggests that the growth of
renewable energy should face a dramatic increase after 2020 if there
is further intervention.
Following the publication in March 2013 of a EU Green Paper
entitled ‘A 2030 framework for climate and energy policies’
(COM(2013) 0169), [5] the Commission, in its statement of 22 January
2014 entitled ‘A policy framework for climate and energy in the
period from 2020 to 2030’ (COM(2014) 0015), proposed not to renew
binding national targets for renewable energy after 2020. A
mandatory target — 27% of energy consumption to come from
renewable sources — is provided for only at EU level. The
Commission assumes nationally binding greenhouse gas emission
targets to spur growth in the energy sector. This change of direction
has led to intense discussions with the Council and European
Parliament.
The development and integration of new-generation, low-cost high-
reliable, renewable technologies is also one of the critical Strategic
Energy Technology Plan elements. In the framework of the second
strategic energy review carried out from the EU Commission in
November 2008, entitled ‘Offshore Wind Energy: Action needed to
deliver on the Energy Policy Objectives for 2020 and beyond’
(COM(2008) 0768) [6], the development of maritime and offshore
wind was the most important objective.
Under these circumstances the regulatory framework plays a
criticality important role in order to attract new investors and
accomplish a proper level of deployment. Indeed, the additional
income provided from the support schemes is important but also
other parameters — as regulatory stability, permitting and
connection procedures simplicity, environmental compatibility,
energy market structure, transparency, supply chain, Operation and
Maintenance strategies — are also vital drivers to stimulate and
accelerate the installation of new wind farms.
3. Support Schemes Research
The existing literature contains much research that provides
qualitative guidance and extensive knowledge about the renewable
energy sources regulatory framework. Back in 2012, Couture and
Gagnon [7] in their research paper discussed the advantages and
disadvantages of different design options for the wind power
related feed-in tariffs (FiTs) and FiPs as a part of a holistically
evaluation of the inflation adjustment, tariff degression, price floors
and ceilings. They concluded that a feed-in premium (FiP) scheme
should be the most economically viable option, since the associated
risks and uncertainties for producers are efficiently controlled to
some extent and the overall cost of renewable energy deployment
can be predicted to some extent also.
A holistic evaluation and analysis of the support schemes and
tradable Green Certificates mechanisms from 2000 to 2011 was
conducted by Kitzing et al. [8] and Lemming [9] , concluding that a
slight tendency is observed for a bottom-up convergence of
regulatory frameworks in the member states while risk exposure
seems to be higher to tradable green certificates (TGCs) markets
compared with FiTs (higher ROI for the wind power investments).
An interesting research paper from Klessmann et al [10] focused on
the influence of the existing regulatory framework on Germany,
Spain and the United Kingdom - and the risks associated from
mainly economic and financing obstacles - from the investors’ point
of view. The report concludes that it is essential to take into
account several factors other than economic support schemes when
the development of wind energy investments come to the radar of
the investors.
4. Social and Democratic Implications
Anemorphosis Research Group conducted a two years survey to
scrutinize and prioritize the factors that influence the Cost of
Energy mitigation and the required mechanisms that improve
wind power investments viability. Stavros Thomas on a report
entitled “Offshore Wind Power Roadmap For South Eastern
European Economies — Key Steps To Reduce Identified Project
Development Risks”[11] concluded that risk-sensitive policies and
technology improvements are crucial for attracting investors. He
mentioned five critical parameters to generate positive effects
from a macro-economic point of view: (i) reducing financing costs,
(ii) decreasing project development costs, (iii) improving the
Operation and Maintenance Strategies, (iv) improving the
collaboration between industry and academia and (v) establishing
an innovative, flexible and reliable Intellectual Property Right
framework. However, we should also bear in mind that
advancements and progressions in renewables are not only a
technical matter - they also have considerable social and
democratic implications. Methodical advancements in
renewables will revolutionize the way we consume and produce
energy, radically transforming our daily lives.
To achieve this goal, public participation and collaboration
between industries and Academia in the development of
renewable energy plans and projects is necessary. The
involvement of social partners and community stakeholders will
be crucial for the green era but the vitally important factor for
pragmatic sustainable technology integration should be
accompanied by adequate training and high safety standards,
without lowering the rights of renewable energy workers.
Moreover, any development and technology improvement for
renewables should also take into account consumer’s
vulnerability. According to Bermejo [12] an EU Parliament's
rapporteur on the renewable energy, the Energy poverty already
affects approximately 11 per cent of the EU population. Reducing
consumer’s exposure to energy prices volatility and improving
their energy efficiency are significant steps forward, and this is
not a utopian research result.
Today, more than ever before there is an urgent need to balance
centralized models of energy production, and establish a
sustainable, affordable and reliable supply that generates greater
flexibility and security. However, consumers should be
incentivized to recognize the importance of renewables in their
lives while any potential changes of the regulatory framework
should not be sound like consumers or even investors are being
penalized.
The survey conducted to assess the strengths and weaknesses of
the existing regulatory framework for the wind energy
(particularly offshore) and provide an indicative picture of the
pragmatic needs and improvements in the path to a more
sustainable energy system and democratic control over renewable
energy.
5. Survey Questions and Outcomes
In the first semester of 2016 a survey was conducted to holistically
evaluate the effectiveness of the existing wind power regulatory
framework and the related supporting mechanisms performance.
The investigation included respondents from around the world
spanning a broad range of stakeholders, wind power
professionals, insurance providers and policy makers with over
62 percent of respondents from companies with more than $1
billion in revenue.

4. 4 A Wind Power Regulation Framework Evaluation (2016) * 1st Report Review
Of the companies-developers surveyed, 65.2 percent agreed that
further improvements are needed to better capture the regulatory
framework effectiveness and sustainability while the percentage of
respondents who replied that no further improvement or
modification is necessary was in the order of 33 percent. Even though
these respondents have already involved in the environmental review
and permitting (consenting) of renewable energy plants (specifically
wind and tidal) not surprisingly, only 31.4 percent say that the
regulatory framework is effective enough to transform the renewable
energy systems intelligently and cost-effectively.
The survey also lists four specific areas where respondents have
raised particular concerns and where further improvements could be
explored. Continuous research, development and testing of new
technological solutions are needed for mitigating significant barriers
on the Strategic Environmental Assessment, improving Energy
Agreement risks, optimize assets integrity and Transmission
Infrastructure, implementing innovative methodologies and
techniques to assess and monitoring Energy Market performance and
holistically evaluate the associated uncertainties. This will ensure
consistent licensing practices while enhancing the transparency of
planning and licensing processes to establish - in an accurate and
reliable way - the economic viability and technical feasibility of the
renewable energy industry.
Given the tumultuous markets of the past few months (BREXIT,
GREXIT, ITEXIT) and the market recession because of the economic
crisis in EU, it is not surprising that financial professionals
identified market risk as one the most difficult area of risk to
quantify and evaluate in an attempt to assess the effectiveness of a
strategic regulatory framework.
A possible contributing factor is that most respondents from the
wind power industry view their positions retrospectively rather
than in real time. Almost sixty-four percent stated that they viewed
their positions retrospectively, while 25.3 percent of respondents
monitor market positions in real time and 11.0 percent are unable to
monitor positions.
Do you monitor exposure in real time or
Do you view your positions retrospectively?
11.0% Unable to monitor
25.3% Real-time
63.7% Retrospectively
The institutional role of the EU Commission has two main
objectives: i) to enforce EU competition rules and initiate legislative
actions when the regulatory framework is violated. Developing a
proper understanding of the energy market dynamics is not a
simple task. When estimating the effect of significant regulatory,
technological, and governmental changes, approximately 60.0
percent of respondents view the effect on their entire portfolio,
while 17.4 percent focus on individual derivatives.
Over a quarter of respondents – 15.2 percent – stated that they
cannot estimate the effect of regulatory changes pushed by the
European Commission on their companies’ portfolios while 7.2
percent stated that MI sources like the one used by the EWEA can
provide them with a qualitative information. After two decades of
continuous regulatory and administrative changes, both, markets
and stakeholders started to embrace the changes and the
opportunities associated with a new regulatory scheme. However,
to establish an innovative regulatory framework and
improve market policies the polemics and secrecy between the
market and institutions should be eliminated as soon as possible.
65,2
33,2
1,6
Do you think that the regulatory framewrork for the
wind energy industry needs improvements?
Yes
No
Do Not Know
8,6
13,2
31,4
11,2
35,6
How effective do you think that the existing
regulatory framework is?
Not Effective
Bellow Average
Very Effective
Average
Somewhat Effective
0 2 4 6
Transparency
Proper Market Monitoring
Sophisticated Forecast Methods
Transmission Infrastructure
Procurement Rules
Energy Agreement
Strategic Environmental Assessment
How difficult is to surpass these barriers when
defining the regulatory framework?
(1 = not difficult; 2 = somewhat difficult; 3 = difficult; 4 = very
difficult)
60,215,2
17,4
7,2
How do you estimate the effect of major market
events?
Entire Portfolio
Can't Estimate
Individual Derivatives
EWEA Database

5. A Wind Power Regulation Framework Survey (2016) * 1st Report Review
5
Feed-in Premium was identified as the one among other supporting
schemes that requires a strategic improvement or a numerous of
improvements. A significant numbers of respondents (14.3 percent)
denoted that the present investments grants framework needs
extensive and diverse funding improvements including national
and landmark priorities, flexible funding requirements and
government backing practices that should guarantee investors’
confidence.
Tradable green certificate (TGC) schemes have been developed and
introduced during recent years in Italy (2002), the UK (2002),
Belgium (2002) and Sweden to improve competitiveness and
increase energy efficiency. However, a percentage of 13.4 suggest
further improvements on this sophisticated policy instruments to
achieve its pragmatic goal; Improving energy efficiency and
reducing energy intensity in the economy.
Which of The Following Support Schemes For Wind Energy Promotion
Need Further Improvements?
Feed-in tariffs 10.8%
Feed-in premium 23.3%
Tenders 12.0%
Quota system 5.4%
Tradable green certificates 13.4%
Tax incentives or exemptions 10.0%
Investment grants 14.3%
Financing incentives 10.8%
A significant number of respondents utilize value engineering as
the primary risk measurement to support the deployment and
integration of an innovative and reliable renewable energy risk
management for the development of wind energy projects. The
Value Analysis technique was developed after the Second
World War in America at General Electric during the late 1940s.
Nowadays, VA is enjoying a renewed popularity as competitive
pressures are forcing wind energy companies to re-examine their
risk management methods in an attempt to offer higher levels of
customization without incurring high degree of hazards and risks.
Sensitivity analysis, is the preferable method by 54.1 percent of the
respondents, to detect and identify the potential effects of risk
deviation in any variable, such as an increase in maintenance
strategy, budgeting or weather conditions. Other measures utilized
by respondents include Value at Risk (28.3 percent), Regulatory at
Risk (27.6 percent), Market and Operational risks (23 percent), and
technological risks (17.8 percent).
What risk analysis measures are you using
To support risk management decisions?
Value Engineering revaluation 58.6%
Sensitivity analysis 54.1%
Value at risk (VAR) 28.3%
Regulatory at Risk 27.6%
Market and Operational risks 23.0%
Technological Risks 17.8%
Other 3.9%
The percentage of the regulatory risk is also high because obviously,
any change in regulations significantly affect an industry and its
business structure with considerable implications for the related
business models, cost-structure and strategic objectives. Rathmann
et al. [15] analyzed the levelised cost of renewable energy (LCOE)
and concluded that the overall costs could be reduced by up to 10%
if market players do not expect sudden policy and regulatory
changes.
Renewable energy regulations are becoming ever more detailed,
extra-territorial reach is increasing, and the consequences of non-
compliance are more severe than ever. As a result, many wind
power companies are reviewing their overall approach toward
achieving compliance. They reorganize their lines of defense;
implement monitoring models to estimate the potential effects of
the sudden changes and developing flexible business processes to
eliminate compliance risk “at source”. Often, this approach needs
to go hand in hand with an organizational transformation that
changes mindsets, behaviors and decision making as a whole.
Wind power companies and organizations are navigating a
proliferation of innovative regulatory requirements and
stakeholder prospects, and are challenged to do so in a way that
supports performance excellence, sustains value, increases ROI,
and protects their reputation. Critical compliance and regulatory
issues include:
• Meeting the demands and expectations of investors,
legislators, regulators, customers, employees and other key
stakeholders
• Driving value and managing performance expectations
for resources governance, ethics, risk management and compliance
• Dealing with crisis and re-mediation phenomena while
defending the organization against legal enforcement and the
rising impact of fines, penalties and business disruption.
• Protecting brand reputation and assets integrity
A flexible support mechanisms structure would provide added
clarity for investors in the wind industry and should additionally
reinforce the problematic parameters of the existing regulatory
frameworks, which are of paramount importance. Support
mechanisms need dynamic continuity to ensure that the legitimate
expectations of investors are guaranteed in order to foster
economically viable investments in wind energy.
EU Commission states that drastically support the production of
green energy from renewable energy resources, such as wind and
solar power, through subsidies or incentives but the survey results
show that there is an urgent need for re-organizing the
mechanisms and practises of the existing regulatory framework to
make the European Union more competitive and the energy
market much more transparent and reliable. Such a process is
systemic in nature and requires a radical shift from the status quo.
However, the existing regulatory framework for the renewables
has its own logic, forming a barrier to sustainable regulatory
innovation [13], [14]. Therefore, a niche approach is needed as a
nurturing place, from where new innovations can scale up and
alter the existing regulatory structure.
New schemes should be introduced to avoid overcompensation
and unwarranted demand for new installations and since the
economic crisis influences and neglects national budgets the level
of support should also be improved or modified accordingly.
Policymakers need to deal with these challenges and prioritize the
necessary changes to establish a continuous and reliable support
with lower or no economic backing. For this reason, stability and
administrative procedures transparency can influence significantly
the development of renewable energy projects and increase the
confidence of the investors.
The renewable energy regulation policies and mechanisms in place
transfer the idea of a sustainable and effective - in terms of
transparency and reliability - support. The development of this
framework is emblematic, since it is associated with the future
generations’ quality of life and energy security.
The survey shows that 26 percent of the respondents are either
somewhat concerned or very concerned about grid accessibility,
and 20 percent somewhat concerned or very concerned about the
transparency in administrative and permitting processes. The
results of the survey also show that 17 percent of the respondents
reported that a functioning finance sector is of concern while a
percentage of 19.8 indicates that an effective and clear pricing

6. 6 A Wind Power Regulation Framework Evaluation (2016) * 1st Report Review
structure is significantly important.
Surprisingly, approximately 14 percent of the responders answered
that they do not monitor the effects of the regular changes on the
wind power supporting mechanisms while almost 16.2 percent
answered “Do not Know-or Other”). Survey analysis shows that,
majority of the respondents use hazard or risk management systems
to predict the influence of the regulatory changes on their portfolio.
Which one of the following is your biggest concern?
Effective rule and transparency in
administrative and permitting processes 20.0%
A clear and effective pricing structure 19.8%
Provisions for access to the grid (incentives
and penalties for grid operators) 26.0%
An industrial development strategy 4.4%
A functioning finance sector 17.4%
Expression of political commitment from
government (e.g., targets) 4.3%
A government and/or industry-led strategy for
public & community buy-in 3.3%
An employment development strategy 4.8%
Are you currently monitoring how regulatory changes affect your
renewable energy (wind) portfolio?
16.2% Do not know(other)
13.7%
Don’t monitor regulatory
changes
17.7%
Design risks database
(forecasting changes effects)
52.4%
Risks and hazards regulatory
Portfolio management
6. Regulatory Risk Management Strategies
Overall, only 7.0 percent of respondents felt their regulatory risk
management systems were below average. While the study turned
up some indications that there may be room for further
improvements, the overall sense was that their systems and internal
business structures were deemed reasonable enough to handle the
risks associated with regulatory changes.
When asked specifically how they felt regarding the reliability of
their forecast as a support basis for either investment viability or
decision making, most indicated some degree of reliability:
How reliable is your risk forecast as a support basis either
facilitating design making or investment viability?
85% to 100% reliable 32.4%
70% to 84% reliable 30.5%
55% to 69% reliable 22.0%
Below 55% reliable 15.1%
Given the concern made obvious in the study regarding regulatory
risk management, it is not surprising that responders identified
political and economic framework transparency as the most
challenged factor in the coming two years. The next greatest
concern was the grid regulation and infrastructure, followed by the
market structure design, transparency of the connection procedure,
and the related administrative process effectiveness.
How challenging are the following for your
organization in the next 12-24 months?
(1 = not a challenge; 2 = somewhat challenging; 3 = challenging; 4 = very
challenging)
0.00 0.50 1.00 1.50 2.00 2.50 3.00
Political and economic framework stability
Market structure
Transparency of the connection procedure
Grid regulation and infrastructure
Administrative process
7. The Paradigm of Sweden and Norway
The results of the survey indicate that there is a surprisingly low
level of awareness and collaboration amongst renewable energy
policymakers within European Union governments. The
member states already possess the power to establish
transnational supporting schemes and mechanisms that would
support further growth in energy production from renewable-
energy resources.
The cooperation mechanisms that accompany the 2009 EU
renewable-energy directive are available but their pragmatic
usage and implementation remains extremely challenging. Even
the new mechanisms and methods implemented and integrated
during the past four years from policymakers are also
problematic.
Back on 2012 Norway and Sweden implemented an innovative
approach with the joint goal of adding 28.4 terawatt-hours of
renewable generation by 2020. Since then, the two countries
harmonized their financial support structure and systems for
renewable energy. By developing a hybrid two-nation scheme,
Sweden and Norway have taken an important first step toward
international rather than national support framework for
renewables. According to Bloomberg [16] since 2012 an
enormous renewable energy infrastructure with an average
annual production of almost 14 terawatt-hours has been built in
the two countries, 84 percent of them in Sweden.
Norway’s electricity mix is made up of 96 percent hydro and
approximately 3 percent wind, while Sweden got about 47
percent of its energy production from hydro plants last year, 34
percent from nuclear and just 10 percent from wind energy
(mainly offshore).
However, with prices in the green energy certificates market
training

7. A Wind Power Regulation Framework Survey (2016) * 1st Report Review
7
sinking to a record low earlier this year (2016) and power prices
falling approximately 60 percent below 20 euros per megawatt-
hour since 2012, renewable energy investors are facing dramatic
and destabilizing changes in Norway. As a paradigm, Statkraft,
the Nordic Power giant, will not invest in new offshore wind
power projects, and might scale down some hydropower
projects abroad after the change in dividend policy. The
renewable energy subsidies terminated and the administration
procedures framework was simplified in an attempt from the
governmental authorities to mitigate the consequences and
severity of this phenomenon and to improve market conditions
for all producers-investors.
Sweden’s scope is to continue to subsidize growth of renewable
generation beyond 2020 and has requested its energy agency to
look into if it can extend the current system without Norway.
Compared with Norway’s power system dominated by hydro
generation, Sweden is in a different situation with 40 percent of
nuclear plants which should be replaced as soon as possible.
Norway plans to build electricity cables to Great Britain and
Germany but because of the contradictory energy policies may
not go ahead with these projects. This is another sign that
Europe's energy and climate policies are failing and the
national schemes in general lead to gross inefficiencies.
The development of multinational support schemes to surpass
the regulatory framework inconsistencies and limitations should
be a priority for the establishment of a pan-European renewable
electricity market. Current regulatory framework for
incentivizing renewables is generally national and the support
schemes are financially inefficient, contradictory, conflicted, or
ambivalent as the paradigm of the co-operation between Norway
and Sweden illustrates. The EU renewable support schemes are
on the edge of a major overhaul.
Almost two thirds (67%) declared that the key factor in the
failure of the EU internal energy market is that each EU Member
State runs its own national support program for renewable
energy. 14.2 percent of the responders said that grid
infrastructure is a considerable barrier to the EU energy market
framework integration while 9.4 and 9.2 stated that
administration transparency (State Intervention) and market
recession are among the most important barriers for an effective
renewables energy regulatory framework.
A significant amount of respondents felt the existing regulatory
framework for renewables is flexible and encouraging
innovation (35.7%) or certain and clear but not flexible (28.4%).
31.5 percent of the respondents have a neutral opinion about the
regulatory framework flexibility and the innovation
encouragement.
8. The Case Of Germany And The Netherlands
Launched in the 1990s, the Energiewende - an integrated policy
framework - contains ambitious goals and policy measures for CO₂
emissions mitigation, the abolition of coal, renewable energy
development and improvement of energy efficiency reaching a
greener and sustainable economy as far forward as 2050. During
the initial phase of the Energiewende implementation much
controversy has arisen in regard to the efficiency and viability of
the scheme in German politics. However, this supporting
mechanism has gained broad political consensus across all political
parties since the 2011 nuclear accident in Fukushima. Since then,
the main scope remains the same: to fight climate change, avoid
nuclear risks, establish energy security, and guarantee
competitiveness and growth through sustainable development
technologies and practices.
Nevertheless, the associated costs of the Energiewende are already
very high and this is because a numerous of foreign renewable
energy producers (especially from the offshore wind power
industry) already making use of the generous German subsidies.
Thus, the scheme structure is becoming too burdensome. German
consumers are also not very positive to pay for subsidies to, say,
Italian (ENEL Green Power) or Spanish (Iberdrola, Gamesa,
Acciona, etc) Danish (Dong Energy) wind power producers.
Other countries, The Netherlands, for example will face similar
problems. The Dutch government has set up an €18 billion support
scheme for offshore wind projects but if an offshore wind power
producer from Denmark or Great Britain exports its generated
power to the Netherlands, it may have an equal right to receive
government support as a part of the green energy supporting
scheme currently available. One may wonder if this practice is
economically viable and feasible enough not only from the
investors and consumers point of view but from everyone else who
wants to see an integrated European energy market come into
existence.
9. Guarantees of Origin
RECS International a Dutch foundation, which is supported by
wind power leaders such as Acciona, Eon, RWE, Vattenfall, GDF
Suez, Enel Green Power, Dong Energy and several smaller energy
companies, energy producers, traders, wholesalers, suppliers has
worked for almost a decade to develop a pan-European electricity
tracking structure based on Guarantees of Origin [17] .
67,2
9,2
9,4
14,2
EU ENERGY MARKET FAILURE FACTORS
National Support
Schemes
Market Recession
Transparency
Grid Infrastructure
35,7
31,5
28,4
4,4
0
10
20
30
40
REGULATORY FRAMEWORK FLEXIBILITY AND
ENCOURAGING OF INNOVATION VERSUS CLARITY
AND CONSISTENCY OF THE REGULATORY
FRAMEWORK
Total flexible and
encouraging of
innovation but may be
uncertain
Neutral
Total certain and clear
but may be inflexible
No Answer

8. 8 A Wind Power Regulation Framework Evaluation (2016) * 1st Report Review
The Guarantees of Origin scheme is based on the transformation of
the current producer-driven subsidy schemes into consumer-based
platforms. Since the national support mechanisms are basically
arrangements between governments and producers, governmental
authorities decide who gets finically supported and who does not.
The Guarantees of Origin scheme has as a main scope to place
consumers in the driver’s seat for a more efficient, transparent and
consumer-oriented energy trading system.
Norway for example, has a well-established system of issuing GOs
to Norwegian renewable energy producers. These producers can
sell these GOs overseas to suppliers in the Netherlands who can
then, funded by these GOs, provide “green electricity” to customers
who ask for it. In this way, consumers can stimulate the power
production from renewable energy sources. However, when a
Norwegian renewable energy producer sells its GOs to a supplier
from the Netherlands, the transaction as a whole is not green any
more.
From the assessment of the survey results becomes clear that there
are three major tendencies. On the one hand, the Guarantees of
Origin scheme has be rated as an advanced structure, if
implemented in the way it is suggested. Other responders
mentioned the necessity on improvements and modifications of the
system, while their expectations for the future of GoOs in Europe
seem quite positive.
10. Conclusion
Red warning lights are once again flashing on the dashboard of the
European Commission. Renewable energy investments, which are
the driver of growth in the early stages of the recovery from the
economic crisis, are now facing significant issues because of the
regulatory framework inconsistencies.
The survey results of the wind power regulatory framework
analysis indicate that the current structure is problematic.
Furthermore, access to finance is difficult because of the various
regulatory and market uncertainties that could negatively affect
renewable energy producer’s profitability. The study evaluated and
assessed the deployment of wind energy investments revealing
significant differences, conflicts and inconsistencies in the
regulatory aspects.
In some member states, recent wind power developments and
regulatory changes are harmonized with the Commission's
Guidelines on environmental protection, energy decentralization
and security of supply. However, we should also bear in mind that
advancements and progressions in renewables are not only a
technical or a theoretical matter - they also have considerable social
and democratic implications. Methodical advancements in
renewables will revolutionize the way we consume and produce
energy, radically transforming our daily lives.
Therefore, we recommend the collaboration between producers,
investors, policymakers, traders and academia to monitor and
assess the regulatory framework and its supporting mechanisms to
establish transparent and economically viable structures.
Of the companies-investors surveyed, 65.2 percent agreed that
further improvements are needed to better capture the regulatory
framework effectiveness and sustainability while the percentage of
respondents who replied that no further improvement or
modification is necessary was in the order of 33 percent. Besides
that, only 31.4 percent say that the regulatory framework is
effective enough to transform the renewable energy systems
intelligently and cost-effectively to a greener economy.
The survey also lists four specific areas where respondents have
raised particular concerns and where further improvements could
be explored. Continuous research, development and testing of new
technological solutions are needed for mitigating significant
barriers on the Strategic Environmental Assessment, improving
Energy Agreement risks, optimize assets integrity and
Transmission Infrastructure, implementing innovative
methodologies and techniques to assess and monitoring Energy
Market performance and holistically evaluate the associated
uncertainties. This will ensure consistent licensing practices while
enhancing the transparency of planning and licensing processes to
establish - in an accurate and reliable way - the economic viability
and technical feasibility of the renewable energy industry.
Over a quarter of respondents – 15.2 percent – stated that they
cannot estimate the effect of regulatory changes pushed by the
European Commission on their companies’ portfolios while 7.2
percent stated that MI sources like the one used by the EWEA can
provide them with a qualitative information.
The survey also shows that 26 percent of the respondents are either
somewhat concerned or very concerned about grid accessibility,
and 20 percent somewhat concerned or very concerned about the
transparency in administrative and permitting processes. The
results of the survey also show that 17 percent of the respondents
reported that a functioning finance sector is of concern while a
percentage of 19.8 indicates that an effective and clear pricing
structure is significantly important.
Surprisingly, approximately 14 percent of the responders answered
that they do not monitor the effects of the regular changes on the
wind power supporting mechanisms while almost 16.2 percent
answered “Do not Know-or Other”). Survey analysis shows that,
majority of the respondents use hazard or risk management
systems to predict the influence of the regulatory changes on their
portfolio. Overall, only 7.0 percent of respondents felt their
regulatory risk management systems were below average.
Almost two thirds (67%) declared that the key factor in the failure
of the EU internal energy market is that each EU Member State
runs its own national support program for renewable energy. 14.2
percent of the responders said that grid infrastructure is a
considerable barrier to the EU energy market framework
integration while 9.4 and 9.2 stated that administration
transparency (State Intervention) and market recession are among
the most important barriers for an effective renewables energy
regulatory framework.
A market oriented and transparent approach that would establish
fair remuneration, consumers participation, grid infrastructure
accessibility and environmental compatibility should provide clear
prospects of the renewable energy investments profitability, as the
survey results confirm. The re-evaluation and implementation of
an innovative energy regulatory scheme with reliable and feasible
support mechanisms could provide immediate and economically
feasible results not only for the European energy market but
additionally for the investor’s confidence and consumers
prosperity.
36,5
28,8
34,7
Assessment of the GoO scheme from wind
power producers and stakeholders
Fair
Advanced
Needs
Improvements

9. J.S. González, R. Lacal-Arántegui / Renewable and Sustainable Energy Reviews 56 (2016) 588–602 9
9
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