2.21 - Wind Energy Policy

Energy systems around the world are in a riveting development. A significant increase of wind energy is expected globally, and the technology will start to play a new role—that of a dominant market player as a backbone of the overall energy system. Wind energy development has always been strongly policy-driven, and we expect this to continue in the future. Policies employed for wind energy range from basic R&D to direct investment support, and include fiscal incentives, production-based support, public finance mechanisms and regulations. Sharp cost declines will diminish the need for production-based support payments for wind energy in some countries, but this does not mean that policy challenges around wind energy will disappear or even reduce—they merely change their nature as compared to the earlier days of technology introduction. Long-term, adequate and consistent policies that flexibly adjust to new circumstances will be crucial to attract future private investment in the technology. Policy frameworks need to be systematically developed to reduce risks and enable stable returns. A mix of policy instruments will be required, targeting not only the deployment of wind energy itself, but also the whole energy system and market designs, supplementary technologies and infrastructure, as well as an enabling environment.