Energy Policy and development of Renewable Energy Sources for Electricity: A comparative analysis of the Swedish and Greek cases

Abstract: Before electricity liberalization was implemented in the EU, national utilities controlled energy planningand technology choices and were basically the only ones with access to energy infrastructure finance.Liberalization came to change that. One of the goals of EU policies today is to create a level playing fieldfor power production based on new technologies and decentralized supply. However, institutional,structural and other barriers hinder further RES diffusion. Such barriers need to be alleviated to acceleratethe diffusion of RES technologies. This study analyses the Swedish and Greek experiences and actions inthe energy policy area between 2003 and 2008. I identify actions and evaluate their effects highlightingsimilarities and differences between the two cases, as well as remaining challenges. I find that EU policywas a decisive national policy driver in both cases. In Greece, feed-in-tariffs created a more secureinvestment environment and a more level playing field for producers and technologies. In Sweden, thegreen certificates served to promote RES but could not avoid market control by larger players. In bothcases, rent extraction mechanisms hindering competition were found along administrative and networkaccess barriers affecting mostly wind power. In Greece, adjustments are needed to further promote PVand better manage public funds and excess profits. Market liberalization is also necessary. In Sweden, thecertificates market expansion created a more competitive environment but some technologies still needmore support. At EU level, further harmonization of rules concerning unbundling and the setting ofbinding RES targets and infringement procedures should reduce national policy risks and contribute toreduce costs for new technologies. Plurality of markets and support schemes should be pursued in orderto create a large base of technologies while international markets for more mature technologies should beestablished. A more transparent process in achieving and revising targets at national levels should also beestablished while measures to avoid lock-ins should be pursued.