Discussion Paper

Promoting renewable electricity generation in emerging economies

Becker, Bastian / Doris Fischer
Discussion Paper (9/2012)

Bonn: German Development Institute / Deutsches Institut für Entwicklungspolitik (DIE)

ISBN: 978-3-88985-552-7
Price: 6 €

China, India, and South Africa have recognized the importance of renewable electricity for their future development. In this paper, we investigate the experience of the three countries in applying generation-based policies to promote renewable electricity. In contrast to the European experience, which proposes feed-in tariffs as the most successful policy to promote renewable electricity generation, emerging economies show strong interest in little acknowledged auction-based tariffs. We explore how and why different generation-based policies for solar photovoltaic (PV) are applied, as well as what their prospects are. Our comparison highlights the importance of policy objectives on policy choice and design. All three emerging economies need to promote electricity from renewables while keeping electricity prices low. Hence, they are experimenting with policies and design options and arriving at country specific solutions. Despite applying different policy instruments and designs that put strong emphasis on low-cost solutions, all three countries seem able to reach their ambitious deployment targets.