The incubation of new technologies

One of the notable elements of NFFO that differed from the Renewable Portfolio Standards and similar competitive market-based schemes was the inclusion of technology banding. This was very deliberately intended to ensure that the resources produced targeted industry development and did not lead to the least-cost technologies taking all of the resources.

An interesting example ofthis was the identification ofwave power for development. Although it can be argued that many of the other technologies had been

NFFO2 (if 15 year contracts)

NFFO3

(weighted average, large projects) 1994

NFFO3

(weighted average, large projects) 1994

SRO1 NFFO4 SRO2

(average) (average, (average)

1994 large projects) 1997 1997

NFFO5

(average large projects) 1998

SRO1 NFFO4 SRO2

(average) (average, (average)

1994 large projects) 1997 1997

Order

NFFO5

(average large projects) 1998

Source: DTI

Figure 6.2 NFFO benefited from industry development money spent in Germany and Denmark which, for example, resulted in falling prices for wind power developed to a greater or lesser extent with other countries, wave energy was one source that, despite its significant potential as an energy to be harnessed, has languished beyond the interest of governments throughout Europe. By bringing wave into the rounds, the government hauled the wave industry onto the fast track of technology and industry development.

Although we are now used to seeing feed-in law-type systems using technology definitions to set prices for power, the NFFO family of schemes is a rare example of a competitive market-based system using such specificity. The fashion for competitive systems is now trending instead to quite a different approach of technology neutrality where price alone dictates the technology mix.

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Renewable Energy 101

Renewable Energy 101

Renewable energy is energy that is generated from sunlight, rain, tides, geothermal heat and wind. These sources are naturally and constantly replenished, which is why they are deemed as renewable. The usage of renewable energy sources is very important when considering the sustainability of the existing energy usage of the world. While there is currently an abundance of non-renewable energy sources, such as nuclear fuels, these energy sources are depleting. In addition to being a non-renewable supply, the non-renewable energy sources release emissions into the air, which has an adverse effect on the environment.

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