A fundamental objective of any green growth programmes is about energy and industrialisation objectives trying to maximize positive macroeconomic impacts in the country’s or the region’s economy…
A fundamental objective of any green growth programmes is about energy and industrialisation objectives trying to maximize positive macroeconomic impacts in the country’s or the region’s economy.
The first objective for policy-makers remains to unlock the investment needed to achieve a transition to “green growth”.
However, governments face significant challenges in securing the level of investment needed due to real and perceived investment risks, insufficient returns on investment for some green technologies and practices, competing subsidies and policies, insufficient capacity, information gaps, competing development priorities and other adoption, and regulatory and institutional barriers.
Government financing strategies for green growth should therefore seek to encourage green investment opportunities by combining effective use of government policy and funding arrangements with financial risk mitigation instruments.
Governments are supposed to decide on energy policies that address investment needs for the transformation of the whole economy and in specific priority sectors at both national and regional levels. The role of governments is absolutely prominent in the early stages of any green market development or relaunch so to unlock substantial pools of private capital and defining from the outset a clear exit or diminished role over time.
Governments can play three primary roles in mobilizing green growth investment:
Governments have the greatest success with public finance measures which are integrated if possible, with other national development programs, developed in consultation with the business and finance communities, and tailored to address local investment risks and market constraints.
TSOs have no responsibility for system adequacy, i.e. that there is enough capacity on the market to allow them to do their job properly. The TSO role about system adequacy is a role of whistle blowers, no more.
Modify the type and volumes of electricity generation in a system is essentially a matter of investors
TSO do have and will keep supra national and supra regional operational responsibility (i.e. the task of real-time balancing generation and demand) in power systems. In their role of managing the increase amounts of intermittent generation sources, TSOs will no doubt need to better cooperate with DSOs and new agents (independent power producers, “prosumers”, etc.).
But political authorities bear in fact the responsibility for the adequacy of the system and the policy framework they provide to markets should be highly efficient to correct shortcomings of strategies considering electricity just as a commodity.
The political decision-makers should be aware of the need for a long-term planning strategy that should include the sooner or later unavoidable dismanteling of conventional generation that is today taking up most of the system back-up.
This may soon put the whole energy transition at threat instead of supporting it. Why?
In both cases,