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Mandatory renewable energy targets are part of government legislated schemes which require electricity retailers to source specific proportions of total electricity sales from renewable energy sources according to a fixed time frame. The purpose of these schemes is to promote renewable energy and reduce dependency on fossil fuels. If this results in an additional cost of electricity, the additional cost is distributed across most customers by increases in other tariffs. The cost of this measure is therefore not funded by government budgets, except for costs of establishing and monitoring the scheme and any audit and enforcement actions. As the cost of renewable energy has become cheaper than other sources, meeting and exceeding a renewable energy target will also reduce the cost of electricity to consumers.
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At least 67 countries have renewable energy policy targets of some type. In Europe, 28 European Union members states and 8 Energy Community Contracting Parties have legally binding renewable energy targets. The EU baseline target is 20% by 2020, while the United States also has a national RET of 20%. Similarly, Canada has 9 provincial RETs but no national target. Targets are typically for shares of electricity production, but some are defined as by primary energy supply, installed capacity, or otherwise. While some targets are based on 2010-2012 data, many are now for 2020, which ties in with the IPCC suggested greenhouse gas emission cuts of 25 to 40% by Annex I countries by 2020, although some are for 2025.
Overview
Renewable energy technologies are essential contributors to the energy supply portfolio, as they contribute to world energy security, reduce dependency on fossil fuels, and provide opportunities for mitigating greenhouse gases. The International Energy Agency has defined three generations of renewable energy technologies, reaching back over 100 years:
First-generation technologies are well established. However, second-generation technologies and third-generation technologies depend on further promotion by the public sector. The introduction of mandatory renewable energy targets is one important way in which governments can encourage the wider use of renewables.
Renewable energy targets exist in at least 66 countries around the world, including the 27 European Union countries, 29 U.S. states, and 9 Canadian provinces. Most targets are for shares of electricity production, primary energy, and/or final energy for a future year. Most targets aim for the 2010–2012 timeframe, although an increasing number of targets aim for 2020, and there is now an EU-wide target of 20% of final energy by 2020, and a Chinese target of 15% of primary energy by 2020.
Australia
In 2001 the Australian Government introduced a Mandatory Renewable Energy Target of 9,500 GWh of new generation, with the scheme running until at least 2020. This represents an increase of new renewable electricity generation of about 4% of Australia's total electricity generation and a doubling of renewable generation from 1997 levels. Australia's renewable energy target does not cover heating or transport energy like Europe's or China's, Australia's target is therefore equivalent of approximately 5% of all energy from renewable sources.
An Expanded Renewable Energy Target was passed on 20 August 2009, to ensure that renewable energy obtains a 20% share of electricity supply in Australia by 2020. To ensure this the Labor government committed that the MRET will increase from 9,500 gigawatt-hours to 45,000 gigawatt-hours by 2020. The scheme lasts until 2030. After 2020, the proposed Emissions Trading Scheme and improved efficiencies from innovation and manufacture are expected to allow the MRET to be phased out by 2030. The target has been criticised as unambitious and ineffective in reducing Australia's fossil fuel dependency, as it only applies to generated electricity, but not to the 77% of energy production exported, nor to energy sources which are not used for electricity generation, such as the oil used in transportation. Thus 20% renewable energy in electricity generation will represent less than 2% of total energy production in Australia.
In May 2008, the Labor Government's independent research and advisory body on a range of economic, social and environmental issues, the Productivity Commission, claimed the MRET would drive up energy prices and would do nothing to cut greenhouse gas emissions. The Productivity Commission submission to the climate change review, stated that energy generators have warned that big coal-fired power stations are at of risk "crashing out of the system", and leaving huge supply gaps and price spikes if the transition is not carefully managed.. This forecast has been described as a joke because up to AUD 20 billion compensation is proposed to be paid under the Carbon Pollution Reduction Scheme. In addition, in Victoria where the highest emitting power stations are located, the State Government has emergency powers enabling it to take over and run the generating assets.
Computer modelling by the National Generators Forum has signalled the price on greenhouse emissions will need to rise from $20 a tonne in 2010 to $150 a tonne by 2050 if the Federal Government is to deliver its promised cuts. Generators of Australia's electricity warned of blackouts and power price spikes if the Federal Government moved too aggressively to put a price on greenhouse emissions.
The Commonwealth and the states agreed in December 2007, at a Council of Australian Governments (COAG) meeting, to work together from 2008, to combine the Commonwealth scheme with the disparate state schemes, into a single national scheme. The initial report on progress and an implementation plan are expected to be considered at a March 2008 COAG meeting with a final design to be presented for consideration at the September 2008 COAG meeting.
The state of South Australia has set a target of 33% renewable energy by 2020.
United States
As at July 2010, 30 US states and DC have established mandatory renewable energy targets, and a further 6 have voluntary targets. The Energy Independence and Security Act of 2007 has set a target for 36 billion US gallons (140,000,000 m3) of biofuel produced annually by 2022. Of that, 21 billion US gallons (79,000,000 m3) shall be advanced biofuels (derived from feedstock other than corn starch). Of the 21 billion US gallons (79,000,000 m3), 16 billion shall come from cellulosic ethanol. The remaining 5 billion US gallons (19,000,000 m3) shall come from biomass-based diesel and other advanced biofuels. For sources other than biofuels, The United States carries no mandatory renewable energy targets although they do support the growth of renewable energy industries with subsidies, feed-in tariffs, tax exemptions, and other financial support measures.