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Efficient strategy to support renewable energy

Integration in overall climate and energy security policies

image of Efficient strategy to support renewable energy

This report reviews how the Nordic countries can develop a strategy for renewable energy that delivers efficiently on the two underlying policy objectives of climate change and energy security challenges. The overarching elements in the evaluation of existing polices and the policy recommendations that follows from the analysis falls into three main parts:• Expanding renewable energy is not an end in itself, but a tool to deliver on the two real policy targets: climate change and energy security. • Too much policy focus at the Nordic and EU level is dedicated to boost renewable energy share of energy production in the near term, and insufficient resources are allocated to develop future low carbon technologies, which are required when CO2 abatement targets become more ambitious.• The long term nature of the challenges and huge investments in low carbon technologies required to deliver on long term targets puts a very high premium on policies that reduces policy risks as perceived by investors. The report was commissioned by the Nordic Council of Ministers and written by Copenhagen Economics.

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Main findings

Dealing with the two policy objectives: the risk of climate change from greenhouse gas emissions and the risk to energy security require two outcomes: 1) a transformation towards a low carbon economy, and 2) more stable/local energy sources. At the same time we have as a policy objective that the two targets should be reached in a cost-efficient way. Deployment of renewable energy can potentially deliver on both objectives, and is therefore a mean to an end, not a policy objective per se. Some of the same benefits can e.g. also be derived from enhanced energy efficiency as well as other technology solutions such as Carbon Capture and Storage (CCS) in coal and gas based generators, and atomic power as well as efforts to diversify the source countries of energy import.

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