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Transparent and predictable renewable energy policies that take into account changing market conditions and technology cost development are essential to keeping renewables on track, said International Energy Agency (IEA) Executive Director Maria van der Hoeven.
Speaking at the 4th Clean Energy Ministerial here, she said the 2012 slowdown in renewable investment globally highlighted the direct link between effective policy design and private sector investment.
On the revolution in unconventional gas, she said, switching from coal to gas was a key measure to reduce emissions in the short term, but it was not a panacea.
“We have to look at the global picture,” she added.
So far the coal-to-gas switch has happened largely in the US. From 2011 to 2012, gas-fired generation increased 24 per cent, while coal-fired generation decreased by 14 per cent, driven by low gas price.
But, in Europe, over the same period – partly as a result of cheap US coal exports, but also thanks to relatively expensive European gas – coal-fired generation followed the 2011 trend, when coal demand grew at a rate surpassed only by China, at the expense of gas.
“If we do not get prices and policies right, the transition to a clean energy system simply will not happen,” she said.
There is a need to create a meaningful carbon price and phasing out fuel subsidies, which may not happen overnight, van der Hoeven said.
Also, Governments must think beyond individual technologies and electoral cycles – an accelerated and more strategic support for research and innovation, she said.
Later, when asked by Business Line , about her views on what Prime Minister Manmohan Singh said on industrialised countries equally shouldering the burden of mitigating carbon emissions, she said developed countries had to own up and help emerging countries in cutting emissions.
“There are two things I would like to say here, the first is that the Government is responsible for regulation and it is responsible for the investment climate. Second, that the industry is responsible to use these technologies in coherence with the Government policy,” she added.
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