“LOW CARBON EMISSION AND RENEWABLE ENERGY”

Pengembangan Ekonomi dan Investasi dengan Memanfaatan

Wilayah Pesisir di Indonesia dengan Konsep Pembangunan Berkelanjutan/
Sustainable Development

Disusun untuk Memenuhi Tugas Mata Kuliah

Manajemen Pembangunan Perkotaan

Dosen Pengampu : Dr. -Ing. Wisnu Pradoto

Disusun Oleh :
Mery Monica
NIM : 21040119410027

MAGISTER PERENCANAAN WILAYAH DAN KOTA

FAKULTAS TEKNIK
UNIVERSITAS DIPONEGORO
SEMARANG
2019
1. Latar Belakang

Indonesia merupakan salah satu negara maritim yang terbesar di dunia, memiliki garis
pantai sepanjang 81.000 km. Wilayah nusantara indonesia selain meliputi wilayah daratan, juga
memiliki wilayah perairan yang sangat luas. Indonesia memiliki sumber daya alam yang sangat
potensial dan prospektif berupa lahan yang luas dan subur, berbagai jenis kekayaan tambang,
sumberdaya kehutanan yang sangat luas terutama dalam hal kuantitasnya, sedangkan secara
pemanfaatan potensi tersebut pada umumnya masih sangat kurang, sehingga perlu adanya
peningkatan dalam pengembangan dan pemanfaatan potensi tersebut.
Daerah pesisir pantai mempunyai peranan yang penting dalam perekonomian
masyarakat dan pembangunan karena merupakan ruang yang menjembatani antara wilayah
daratan dan wilayah perairan. Kawasan pesisir memiliki kekayaan dan kebhinekaan
sumberdaya alam. Pesisir pantai dan habitat (hutan bakau, estuaria, daerah tambak, terumbu
karang, rumput laut, delta dan lainnya) merupakan daerah yang produktif secara biologi tetapi
mudah mengalami degradasi karena dampak ulah manusia atau karena peristiwa alamiah.
Sehingga peranan dan pemanfaatan kawasan pesisir sangatlah berpengaruh terhadap bidang
ekonomi dan budaya di daerah pesisir itu sendiri.
Emisi karbon setiap tahunnya terus meningkat, hal ini berdampak pada perubahan iklim
yang menjadi penyebab pemanasan global dan berdampak pada cuaca yang tidak konsisten,
terjadinya banjir, kelaparan, serta gangguan ekonomi. Meningkatnya emisi karbon salahsatunya
disebabkan oleh pembangkit lisrik dengan menggunakan bahan bakar fosil. Bahan bakar fosil
digolongkan pada energi yang tidak dapat diperbaharui, karena sumbernya berasal dari
makhluk hidup dan mikroorganisme yang hidup selama jutaan tahun silam dan terkubur di
dalam perut bumi, proses pembentukannya membutuhkan waktu yang sangat lama bahkan
mencapai jutaan tahun.
Listrik merupakan sumber energi yang digunakan dalam kegiatan sehari-hari, sebagai
penggerak mesin dan sebagainya. Namun perlu diingat bahwa listrik yang digunakan
membutuhkan pembangkit dengan menggunakan bahan bakar yang berdampak buruk bagi
kesehatan serta lingkungan. Pembangkit listrik berasal dari berbagai sumber tenaga, yaitu
tenaga air, sinar matahari, angin serta bahan bakar fosil seperti batubara, gas alam, atau minyak
bumi, dan lain sebagainya. Meskipun banyak negara di dunia mengurangi penggunaan batu
bara, Asia Tenggara, termasuk Indonesia, justru menaikkan konsumsi batu bara. Alasan
pemerintah Indonesia tetap menggunakan batu bara terlepas dari dampak negatifnya tidak lain
adalah karena biayanya yang relatif murah. Bahan bakar fosil (batubara) yang digunakan

Low Carbon Emission and Renewable Energy 1

sebagai pembangkit listrik, berdampak langsung terhadap emisi gas rumah kaca yang
menyebabkan kenaikan suhu dan perubahan iklim, serta berdampak negatif bagi kesehatan dan
lingkungan.
Pengembangan Ekonomi dan Investasi dengan Memanfaatan Wilayah Pesisir tentunya
bertujuan untuk mebuat pusat aktivitas baru yang membutuhkan energi listrik untuk menunjang
kegiatannya. Pembangkit listrik di Indonesia masih menyumbang emisi karbon yang cukup
besar akibat bahan bakar fosil yang digunakannya. Emisi karbon ini harus dikurangi dengan
sangat cepat, dan harus ada penurunan emisi yang cepat agar terhindar dari perubahan iklim
yang berbahaya di seluruh dunia. Untuk mencapai hal tersebut perlu dilakukan Pengembangan
Ekonomi dan Investasi dengan Memanfaatan Wilayah Pesisir dengan konsep pembangunan
berkelanjutan / sustainable development.

2. Pembahasan Materi Dengan Fokus Tema Yang Dipilih

Indonesia merupakan Negara kepulauan dengan jumlah pulau pada tahun 2018
mencapai 16. 056 pulau dengan 4.108 pulau berada di Provinsi Papua Barat. Pada tahun 2018
jumlah desa/ kelurahan yang ada di Indonesia sebanyak 83.931, 15, 32 % dari jumlah tersebut
berada di tepi laut. Jumlah penduduk Indonesia pada tahun 2018 sebanyak 265. 015 juta jiwa
dengan luas wilayah adalah 1. 916. 862, 20 km2. (BPS dalam Statistik Indonesia dalam
Infografis 2019). Indonesia merupakan negara yang memiliki luas wilayah terbesar di Asia
Tenggara dengan sistem pemerintahan Presidensial, yaitu Presiden adalah kepala negara
sekaligus kepala pemerintahan.
Pemanfaatan wilayah pesisir Indonesia untuk pengembangan ekonomi dan investasi,
haruslah mepertimbangkan dampak yang akan ditimbulkan, terutama dampak kesehatan dan
lingkungan. Manusia membutuhkan listrik untuk menunjang aktivitasnya sehari-hari,
kebutuhan listrik di Indonesia sampai saat ini masih dilayani oleh PLN yang sebagian besar
menggunakan bahan bakar fosil (batubara) sebagai pembangkit listrik.
Batubara adalah energi yang tidak terbarukan dan menimbulkan dampak buruk bagi
kesehatan serta lingkungan akibat emisi karbon yang ditimbulkannya. Aktivitas manusia yang
selalu menghasilkan sampah juga akan berdampak buruk terhadap lingkungan dan memicu
terjadinya banjir serta masalah lingkungan lainnya. Untuk itu perlu dibuat perencanaan
mengenai manajemen lingkungan agar tercapai pembangunan yang berkelanjutan.
Keberhasilan Negara Taiwan dalam menurunkan emisi karbonnya dengan
menggunakan energi yang terbarukan dipilih menjadi best practice dalam pengembangan
ekonomi dan investasi di wilayah pesisir Indonesia. Chen. Falin, et al (2010) mengungkapkan

Low Carbon Emission and Renewable Energy 2

bahwa Negara Taiwan adalah Negara yang merupakan sebuah pulau subtropis yang dikelilingi
samudra pasifik, tingkat kepadatan penduduk yang tinggi dengan sumber daya alam yang
terbatas. Sebelumya, Negara Taiwan mengimpor lebih dari 99% kebutuhan energinya dari luar
negeri, kebanyakan dari Timur Tengah. Negara Taiwan memiliki potensi besar untuk
mengembangkan berbagai energi terbarukan, seperti energi matahari, tenaga angin, energi
panas bumi, tenaga air, dan lain sebagainya, hal ini menjadi prioritas utama bagi Pemerintah
Negara Taiwan saat ini. Berikut adalah diagram perbandingan potensi energi panas bumi
(Geothermal) dan energi air (Hydro) sebagai pembangkit listrik yang terbarukan di beberapa
Negara di Asia tahun 2006.

Gambar 1. Diagram Perbandingan Potensi Energi Panas Bumi (Geothermal)

dan Energi Air (Hydro)

Dari diagram diatas dapat dilihat bahwa Indonesia juga punya potensi besar untuk
mengembangkan energi terbarukan yaitu geothermal (energi panas bumi) dan Hydro (energi
air), tetapi potensi ini tidak di manfaatkan secara optimal oleh pemerintah Indonesia karena
biaya eksplorasi dan juga biaya modal pembangkit listrik dengan energi panas bumi dan energi
air lebih mahal dibandingkan pembangkit listrik yang menggunakan bahan bakar fosil.
Saat ini, Negara Taiwan sudah berhasil mengembangkan beberapa energi terbarukan
sebagai pembangkit listrik, yaitu:
1. Energi sinar matahari untuk perusahahaan-perusahaan dengan menggunakan PV
(Photovoltaics) atau panel surya yang mengubah sinar matahari menjadi listrik,
dipasang pada atap bangunan perusahaan dan rumah. Berikut ini adalah diagram
statistik area yang telah terpasang Photovoltaics di Negara Taiwan.

Low Carbon Emission and Renewable Energy 3

Gambar 2. Diagram Statistik Area Yang Telah Terpasang Photovoltaics di Negara Taiwan

Gambar 2. PV (Photovoltaics) di Taiwan

2. Energi angin dengan memasang kincir angin di beberapa area wilayah pesisir atau
pantai. Berikut ini adalah gambar area kincir angin terbesar di Asia yang dipasang
di pantai barat Kabupaten Miaoli, Negara Taiwan

Gambar 3. Area Kincir Angin Terbesar di Asia yang dipasang di

Pantai Barat Kabupaten Miaoli

3. Energi sampah yang mengubah limbah di Tempat Pembuangan Akhir (TPA)

menjadi gas melalui pembakaran sebagai bahan bakar untuk generator yang akan

Low Carbon Emission and Renewable Energy 4

 menghasilkan uap dan menjadi listrik. Berikut adalah gambar pembangkit listrik
tenaga sampah.

Gambar 4. Pembangkit Listrik Tenaga Sampah

4. Energi panas bumi, tidak seperti energi matahari dan tenaga angin, penerapan energi
panas bumi tidak dipengaruhi oleh kondisi cuaca. Setelah cukup untuk pembangkit
listrik, sisa air panas dapat dimanfaatkan lebih lanjut untuk fungsi lain, seperti spa
rekreasi, kolam renang, sebagainya. Berikut ini adalah gambar pembangkit listrik
energi panas bumi/ geothermal.

Gambar 5. Pembangkit Listrik Energi Panas Bumi/ Geothermal

5. Energi air, dengan bendungan air besar yang dioperasikan oleh Perusahaan Listrik
Negara Taiwan, tetapi sering menimbukan masalah ekologis dan lingkungan akibat
pembanguan bendungan besar. Berikut ini adalah gambar pembangkit listrik tenaga
air.

Low Carbon Emission and Renewable Energy 5

 Gambar 6. Pembangkit Listrik Tenaga Air

Sama dengan Negara Taiwan, Negara tetangga yaitu Cina atau Tiongkok juga mulai
menerapkan pembangkit listrik dengan menggunkan energi terbarukan dengan tujuan
mengurangi emisi karbon, hal ini didukung oleh pendapat Dong. Fugui, et al (2019),
Pemanfaatan energi terbarukan untuk pembangkit listrik dilakukan dengan tujuan untuk
pengurangan emisi yang akan menjadikan lingkungan yang lebih sehat. Transformasi energi
yang rendah karbon ini telah untuk menghasilkan listrik skala besar.
Namun, karena biaya yang mahal menyebabkan masih banyak negaracyang
menggunakan pembangkit listrik energi fosil. Karena alasan ini, negara-negara di dunia
membuat kebijakan untuk mendukung pembangkit listrik dengan menggunkan energi
terbarukan. Sesuai dengan "Pemberitahuan tentang Implementasi Standar Portofolio
Terbarukan" yang dikeluarkan oleh Administrasi Energi Nasional, Cina secara resmi
mengimplementasikan RPS (Renewable Portfolio Standard) pada 1 Januari 2019. Setelah
kebijakan RPS ditetapkan dan diimplementasikan di Cina untuk jangka waktu tertentu,
selanjutnya akan fokus pada mengukur perubahan dari dampak yang ditimbulkan oleh
pengembangan pembangkit listrik energi terbarukan.
Menurut Washburna. C., dan M. Pablo-Romero (2019), dengan tujuan mengurangi
peningkatan emisi, 195 negara di seluruh dunia membuat komitmen melalui perjanjian paris,
untuk mengurangi emisi dan menghindari peningkatan suhu lebih dari 2°C, negara-negara di
Amerika Latin sebagai negara yang ikut dalam perjanjian paris tersebut menyadari dibutuhkan
komitmen untuk mengurangi emisi karbon. Amerika Latin telah mengalami pertumbuhan yang
luar biasa untuk pembangkit listrik dengan energi yang terbarukan. Penggunaan pembangkit
listrik tenaga air mengalami penurunan dalam beberapa tahun terakhir. Namun, sejauh ini
pembangkit listrik tenaga air adalah energi terbarukan yang paling banyak digunakan di wilayah
tersebut, untuk penggunaan nenergi biomassa, angin, dan sinar matahari sebagai bahan bakar

Low Carbon Emission and Renewable Energy 6

pembangkit listrik telah mengalami pertumbuhan. Secara keseluruhan, perlu dicatat bahwa 18
negara di Amerika Latin telah menetapkan target untuk energi terbarukan, 15 negara di
antaranya negara telah merancang strategi, program atau undang-undang untuk
penggunaannya. Pengembangan energi terbarukan yang telah direncanakan dan mendapatkan
hasil yang sangat positif, terutama pada tenaga surya dan energi angin.

3. Konsep Pengembangan yang Bisa Diusulkan Bagi Indonesia

Pemanasan global dan perubahan iklim merupakan permasalahan global karena

dampaknya yang dirasakan di seluruh permukaan bumi. Hal ini disebabkan oleh emisi karbon
yang terus meningkat setiap tahunnya. Untuk mengurangi peningkatan emisi karbon pada
Wilayah Pesisir di Indonesia dalam pengembangan Ekonomi dan investasi, maka konsep
pengembangan yang akan diusulkan adalah konsep pembangunan berkelanjutan/ sustainable
development. Justifikasi dalam pemilihan konsep adalah mengacu kepada tujuan SDGs
(Sustainable Development Goals) yang ke 7 yaitu Afdorable and Clean Energy yang memastikan
akses pada energi yang terjangkau, bisa diandalkan, berkelanjutan dan modern untuk semua.
Untari. D. Tyas (2013) mengungkapkan bahwa konsep pembangunan berkelanjutan/
sustainable development pada hakekatnya adalah bertujuan untuk pemanfaatan sumber daya
alam dan sumber daya manusia secara optimal untuk pembangunan tetapi dengan tetap
mempertimbnagkan nilai-nilai keserasian dan seimbang dalam pemanfaatannya. Secara ideal
keberlanjutan pembangunan membutuhkan pendekatan pencapaian terhadap keberlanjutan
ataupun kesinambungan berbagai aspek kehidupan yang mencakup keberlanjutan ekologis,
ekonomi dan sosial. Pembangunan yang berkelanjutan adalah proses pembangunan termasuk
didalamnya pembangunan lahan, kota, bisnis, masyarakat dan sebagainya yang berprinsip
memahami kebutuhan sekarang tanpa mengorbankan pemenuhan kebutuhan generasi masa
depan.
Negosiasi internasional telah memberikan beberapa alternatif untuk mencegah
terjadinya peningkatan dampak ini. Salah satunya adalah dengan mengurangi emisi karbon.
Emisi karbon dapat dikurangi dengan mengganti penggunaan energi yang tidak terbarukan
dengan energi yang terbarukan. Energi fosil merupakan energi yang tidak terbarukan, energi
fosil di Indonesia telah dieksplorasi dan diadopsi dalam jumlah besar, sehingga secara bertahap
akan mengalami kelangkaan. Sementara itu, dampak lingkungan yang ditimbulkan akibat
penggunaan energi fosil adalah meningkatnya emisi karbon dan pencemaran lingkungan.

Low Carbon Emission and Renewable Energy 7

 Pengembangan ekonomi dan investasi dengan memanfaatan wilayah pesisir di
Indonesia tentunya akan meningkatkan produksi sampah di Indonesia sendiri, sampah yang
dihasilkan tidak didaur ulang dan mengakibatkan penumpukan sampah di TPA. Meningkatnya
perekonomian juga mengakibatkan bertambahnya kebutuhan akan listrik untuk menunjang
setiap kegiatannya, sedangkan bahan bakar pembangkit listrik di Indonesia masih
menggunakan batubara. Untuk itu, Pengembangan ekonomi dan investasi dengan memanfaatan
wilayah pesisir di Indonesia perlu dilakukan dengan konsep pembangunan berkelanjutan/
sustainable development dengan mengembangkan beberapa energi terbarukan yaitu
menggunakan pembangkit listrik tenaga angin, sinar matahari, air, panas bumi dan sampah
sebagai pengganti dari energi yang menggunakan bahan bakar fosil.
Dengan lokasi pengembangan ekonomi dan investasi yang berada di pesisir, sangat
memungkinkan untuk membangun pembangkit listrik tenaga angin, gedung-gedung yang akan
dibangun harus memasang Photovoltaics atau panel surya pada atapnya, dan sampah yang
dihasilkan oleh kegiatan ekonomi menjadikan sebagai pembangkit listrik. Pembangjit lisrik
tenaga sampah adalah sebuah peluang di balik masalah, dengan mengubah limbah atau sampah
di Tempat Pembuangan Akhir (TPA) menjadi gas melalui pembakaran, sebagai bahan bakar
untuk generator yang akan menghasilkan uap dan menjadi listrik.
Dengan demikian, pengembangan ekonomi dan investasi dengan memanfaatan wilayah
pesisir di Indonesia yang menerapkan pembangunan berkelanjutan, tidak akan menimbulkan
ampak negative terhadap lingkungan. Tetapi, untuk menerapkan rencana diatas tidaklah
mudah, perlu peran pemerintah untuk membuat peraturan yang mengharuskan setiap
pengembangan dan pembangunan kawasan harus sesuai dengan standar energi terbarukan,
sehinggga pengembangan dan pembangunan yang dilakukan mampu menjamin kelangsungan
hidup manusia tanpa mengorbankan kelestarian sumberdaya alam. Pengelolaan wilayah pesisir
tidak cukup jika hanya dikembangkan dengan konsep dan strategi yang baik, namun juga perlu
adanya partisipasi masyarakat sehingga program dapat terintegrasi dan pengelolaannya dapat
lebih efektif dan tepat sasaran.

4. Bibliography

Chen. Falin, et al. 2010. Renewable energy in Taiwan. Elsevier: Renewable and Sustainable
Energy Reviews 14 (2010) 2029-2038
Dong. Fugui, et al. 2019. Study on China’s Renewable Energy Policy Reform and Improved
Design of Renewable Portfolio Standard. MDPI: Energies 2019, 12, 2147

Low Carbon Emission and Renewable Energy 8

Subdirektorat publikasi dan kompilasi Statistik. 2019. Statistik Indonesia dalam Infografis.
Badan Pusat Statistik, Jakarta
Untari. D. Tyas .2013. Ecopreneurship dalam Konsep Pembangunan yang Berkelanjutan.
Universitas Indraprasta PGRI Jakarta. Jurnal Universitas Jendral Soedirman: Vol 3, No 1
(2013)
Washburna. C dan M. Pablo-Romerob, 2019. Measures to promote renewable energies for
electricity generation in Latin American countries. Elsevier: energy Policy 128 (2019)
212-222

Low Carbon Emission and Renewable Energy 9

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Renewable and Sustainable Energy Reviews 14 (2010) 2029–2038

Contents lists available at ScienceDirect

Renewable and Sustainable Energy Reviews

journal homepage: www.elsevier.com/locate/rser

Renewable energy in Taiwan

Falin Chen, Shyi-Min Lu *, Eric Wang, Kuo-Tung Tseng
Institute of Applied Mechanics, National Taiwan University, Taipei 10617, Taiwan, ROC

A R T I C L E I N F O A B S T R A C T

Article history: With limited indigenous conventional energy resources, Taiwan imports over 99% of its energy supply
Received 22 December 2009 from foreign countries, mostly from the Middle East. Developing independent renewable energy
Accepted 1 March 2010 resources is thus of priority concern for the Taiwanese government. A medium subtropical island
surrounded by the Pacific Ocean, Taiwan has enormous potential to develop various renewable energies,
Keywords: such as solar energy, biomass energy, wind power, geothermal energy, hydropower, etc. However, owing
Renewable energy to the importance of conventional fossil energy in generating exceptionally cheap electricity, renewable
Taiwan
energy has not yet fully developed in Taiwan, resulting from a lack of market competition. Consequently,
Development status
Development strategy
numerous promotional and subsidy programs have recently been proclaimed by the Taiwanese
government, focused on the development of various renewables. This study reviews the achievements,
polices and future plans in this area.
ß 2010 Elsevier Ltd. All rights reserved.

Contents

1. Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2029
2. Energy situation in Taiwan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2030
3. Renewable energy in Taiwan [13]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2030
4. Solar thermal energy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2031
5. Photovoltaics [19] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2032
6. Wind energy [13]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2033
7. Biomass energy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2033
8. Geothermal energy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2034
9. Hydropower . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2035
10. Strategy developed and future perspectives. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2036
11. Summary and conclusions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2037
Acknowledgements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2037
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2037

1. Introduction key goal for entire human being. Renewable energies by definition
sustainable and clean, which offer the potential to overcome the
Since the industrial revolution, traditional fossil energy has gradual depletion of traditional fossil energies and their associated
been explored and adopted in great amount, so it is gradually environmental impacts, while simultaneously solving the issues of
depleting (Table 1 [1] shows global reserves and projected years of energy sustainability, economic development, and environmental
supply remaining for major fossil energies). In the meantime, protection; consequently, the development and application of
owing to the environmental impacts caused by the application of renewable energies have accelerated during the last decade.
traditional energies, for example the greenhouse effect and International oil and coal prices, respectively, surged over 80 US
environmental pollution, reducing dependence on traditional dollars per barrel [2] and 70 US dollars per ton [3] this year, and
energy sources and the associated environmental damage is a these prices are expected to continue rising in the future as buyers
compete for finite reserves. These high energy prices have an
enormous impact on Taiwan, which imports over 99% of its energy
* Corresponding author. Tel.: +886 910 354 790; fax: +886 2 2363 9290. supply, and thus the development of renewable energy has become
E-mail address: accklk@yahoo.com.tw (S.-M. Lu). a strategy essential to Taiwan’s continued economic health.

1364-0321/$ – see front matter ß 2010 Elsevier Ltd. All rights reserved.
doi:10.1016/j.rser.2010.03.009
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2030 F. Chen et al. / Renewable and Sustainable Energy Reviews 14 (2010) 2029–2038

Table 1
Global reserves and availability of major fossil energy resources [1].

Category item Oil (+oil sands) Natural gas Coal

Total reserves (end of 2008) 1408 billion barrels 185 trillion cubic meters 826 billion tons
Yield (2008) 29.9 billion barrels 3.1 trillion cubic meters 6.28 billion tons
Available years 47 years 60 years 131 years

Renewable energy is generally considered to include natural 2. Energy situation in Taiwan

energy resources coming from the sun or possessed by earth,
such as solar energy (further including solar photovoltaics and
solar thermal energy), wind energy, hydropower, geothermal
energy, ocean energy (i.e. ocean thermal energy conversion, tidal
power, wave energy, etc.), as well as renewable biomass
energies, such as waste energy, biogas generation, biofuel and
so on [4].
A significant body of literature has recently emerged on the
subject considered in this study. For example, Wu and Huang [5]
reviewed current measures and addressed the perspectives and
support mechanisms related to renewable energy in Taiwan;
however, this study did not deal with the overall status of
renewable energy development in Taiwan. As suggested by its
title, the content of Tsai and Chou [6] is concentrated on one
field of biomass energy, namely, municipal solid waste (MSW).
In fact, considerable potentials do exist for biomass energy
development in Taiwan, for example RDF and biofuel. In another
study, Chang et al. [7] detailed the development story and
installment status of solar water heater (SWH) in Taiwan, but
neglected to also provide an international perspective. Yue and
Wang [8] assessed wind, solar, and biomass energy sources in
rural areas of Chigu in southwestern Taiwan using GIS, a
scientific technique that can be extensively applied to investi-
gate the entire Taiwan area, while Tsai [9] reviewed Taiwanese
policy regarding renewable energy in several years ago, when
the Energy Commission of the Ministry of Economic Affairs did
not become the Energy Bureau of the Ministry of Economic
Affairs (EBMOEA). Tsai and Chou [10], as its title suggests,
reviewed the utilization and development of renewable energy
in Taiwan from the perspective of environmental impact, but did
not consider the perspective of economic benefit covered in the
present study. In another paper, Tsai et al. [11] focused on
agrowastes, which are only a minor part of biomass energy
development in Taiwan. Finally, Yue et al. [12] examined
strategies for increasing the market penetration of wind power
in Taiwan. Notably, wind power is the most promising one
among the various potential avenues for developing renewable
energy in Taiwan.
Taiwan is a densely populated island with limited natural
resources. Energy supply has increased considerably during the
past decade of rapid economic development (Table 2). Total energy
supply has increased from 83 million tons of oil equivalent (Mtoe)
in 1998 to 128.2 Mtoe in 2008, at an average annual growth rate of
4.5%. Furthermore, Taiwan is highly dependent on coal and
petroleum in its energy mix (Table 3), with these energy forms
together accounting for 81.9% of total energy supply in 2008.
Natural gas and nuclear energy contributed 9.4% and 8.3%,
respectively, to total energy supply in 2008, with the remaining
0.4% being supplied by hydropower and renewable energy.
Average annual growth in total energy supply is projected to
reduce to 2.1% during the next two decades.
Table 2 shows that Taiwan’s energy self-sufficiency ratio has
reduced from 1.5% in 1998 to just 0.7% in 2008. Taiwan thus
confronts an increasingly serious challenge in terms of security of
energy supply. Notably, Third National Energy Conference was
convened in 2009 to formulate strategies and measures in
response to the impact of the United Nations Framework
Convention on Climate Change and to seek a balance among
economic development, energy supply, and environmental pro-
tection in Taiwan. The development and application of renewable
energy resources and technologies are becoming vital in the
management of energy supply and demand. The Bureau of Energy
under the Ministry of Economic Affairs (BEMOEA), which aims to
formulate and implement the national energy policy, has been
positively promoting research and development on renewable
energy. Wind power generation, solar photovoltaic energy, solar
thermal energy, geothermal utilization, ocean energy and biomass
energy are the main focus of development. As a result of these
efforts, Taiwan’s energy self-sufficiency is expected to increase
from 1% in 2003 to 4% in 2020.
3. Renewable energy in Taiwan [13]
Compared the rest of Southeast Asia, Taiwan equals Southeast
Asian nations in terms of developing biomass energy and

Table 2
Energy supply [13].

Item 1998 2003 2008 1998, 2008

Mtoe % Mtoe % Mtoe % Growth rate %

Total 83.0 100 110 100 128.2 100 4.5

Indigenous 1.5 1.8 1.1 1.0 0.8 0.7 4.1
Imported 81.5 98.2 108.9 99.0 127.4 99.3 4.6

Table 3
Energy supply by resources [13].

Item 1998 2003 2008 1998,2008

Mtoe % Mtoe % Mtoe % Growth rate %

Coal 24.5 29.6 35.8 32.5 41.6 32.4 5.2

Petroleum 42.4 51.1 55.8 50.8 62.5 49.5 4.2
Natural gas 5.8 7.0 8.0 7.2 12.1 9.4 8.6
Hydropower 0.5 0.7 0.3 0.2 0.4 0.3 0.3
Nuclear 9.6 11.6 10.1 9.2 10.6 8.3 1.2
RE (excluding hydropower) – – 0.1 0.1 0.2 0.1 109
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F. Chen et al. / Renewable and Sustainable Energy Reviews 14 (2010) 2029–2038
Fig. 1. Comparison of RE gross electricity generation among countries of Southeast
Asian for 2006 [14].
hydropower, as shown in Fig. 1. Notably, hydropower is the most
popular renewable energy in the region. Geothermal energy enjoys
high application in certain countries as well, such as the
Philippines, Indonesia, and Japan (not shown in the table), all of
which are located at fault-lines along the Pacific Rim, Taiwan
should share the same geographic advantage in terms of
developing geothermal energy. Furthermore, significant potential
also exists in Taiwan to develop solar energy and wind power,
respectively, given that it is a subtropical island adjacent to a
famous ‘‘wind tunnel’’ in the form of the Taiwan Strait.
Production cost analyses of various renewable energies in
Taiwan are listed in Table 4. In this table, solar water heater has the
highest economic efficiency, followed by biomass and wind power,
and finally PV is the least efficient. These economic realities are
reflected in the status of different development strategies in
Taiwan. For example, solar water heater has enjoyed successful
development and achieved a strong international reputation, yet
the development of PV remains very limited. On the other hand,
wind power and biomass energy have been prioritized in
government planning. Finally, owing to environmental considera-
tions and the relatively high production costs, small hydro power
and geothermal power projects have received little development
attention.
To encourage people to use renewable energy, the Ministry of
Economic Affairs (MOEA) promulgated three incentive measures
for three RE applications in 2000, which including solar hot-water
system, solar PV demonstration system, and wind power
demonstration system. Additionally, the Taiwan Power Company
issued interim measures regarding the purchase of electricity
generated from renewable energy sources in November 2003.
After implementing these measures and subsidies, the promo-
tional status of renewable energy at the end of November 2009
was as follows. Please also see Table 5, which illustrates the
targets and strategies for each kind of renewable energy in terms
of near future.
Table 4
Production cost analysis of renewable energy resources in Taiwan [15].
Solar Solar
water heater photovoltaics
Conversion efficiency (%) 50 10–20
Energy production costa (US $/kWh) 2.0 14.1
a
Methodology of energy production cost: (1) Interest rate = Ir. (2) Depreciation years = n. (3) Capital recovery factor (CRF) = Ir(1 + Ir)n/((1 + Ir)n 1). (4) Annual amortization
cost (AC) = Co (total cost)  CRF. (5) Annual maintenance/operation fee (AF) = total cost (Co)  annual maintenance and operation cost ratio (AR). (6) Energy production
cost = (AC + AF)/energy production = Co(CRF + AR)/energy production.
2031
 For solar water heater (SWH), the total area of solar collectors
installed nationwide reached 1.78 million m2 at the end of 2008.
 Currently, the total installed capacity of solar photovoltaic
systems is 6.7 MWp. Capacity is expected to increase to over
21 MW by the end of 2010.
 Total installed capacity of wind power systems is 353 MW, with a
projected target of 2159 MW by the end of 2010.
 Regarding geothermal energy, the Bureau of Energy (BOE) is
working with local governments to develop geothermal power
generation projects with multi-purpose utilization. The target for
the geothermal power generation is 50 MW by 2010.
 Regarding small hydropower, total installed capacity is around
166 MW. It is estimated that another 200 MW will be economic-
ally feasible in the future.
 Regarding biomass power generation, total installed capacity is
approximately 814.5 MW.
To establish a legal basis for promoting renewable energy and
to foster its sustainable utilization, the ‘‘Renewable Energy
Development Bill’’ has been approved by the Legislative Yuan in
June 2009.
4. Solar thermal energy
In Taiwan, the only commercially available solar thermal product
is solar water heater (SWH), of which 98% is used for domestic
purpose. Taiwan is a subtropical island located between the
latitudes of 228 and 258 North and the longitudes of 1208 and
1218 East. Annual sunshine is in the range of 1500–2200 h for most
parts of the island, and even reaching 2500 h in the southernmost
region. As illustrated in Fig. 2, the average solar irradiance in Taiwan
is 716–1027 kcal/day m2, and thus solar energy resources in Taiwan
are so abundant as to make the development of solar energy
extremely practical compared to most location around the world.
To encourage more people to install solar water systems, the
BEMOEA has implemented ‘‘Measures for Promoting Solar Hot-
Water Systems-2nd phase’’ since 2000. The subsidizing rate is
based upon type and area of collectors installed in a solar hot-
water system, as follows [16]:
 Glazed Flat-Plate Collector: 2250 NT dollars per square meter;
 Evacuated-Tube Collector: 2250 NT dollars per square meter;
 Unglazed Flat-Plate Collector: 1500 NT dollars per square meter.
These rates are applicable to users on the main island of Taiwan.
On the smaller islands there is an additional subsidy of 2250 NT
dollars per square meter owing to the additional transportation
expenses. Generally, the subsidy covers 20–30% of the total cost of
a solar hot-water system (including installation cost). Since the
launch of this incentive scheme, the number of SWHs installed has
increased markedly. From Fig. 3, the accumulated area of solar
collectors installed reached 1.78 million square meters at the end
of 2008. Currently, approximately 433 thousand families have
Wind power Small Geothermal Combustible
hydro power power biomass power
20–40 90 6–12 (binary) 30–34
15 (flash)
5.0 5.3 6.3 Biogas: 3.9
Incineration: 4.2
Gasification: 6.1
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Table 5
Current status, future targets and promoting strategies for RE in Taiwan.

Year 2009 2010 Promotional strategies for achieving Targets Set for each RE by 2010
Current status [13] Future targets

Renewables Installed Share of Installed Share of

capacity total capacity total
(MW) (%) (MW) (%)

1 Hydropower 1937 3.9 2168 4.22 To promote five hydropower generation projects by Taiwan Power Company,
with total installed capacity of 171 MW
To promote six hydropower generation projects by private sector, with total
installed capacity of 72 MW
To provide the private sector with information for small hydropower
generation in situations where there is no impact on the ecological
environment

2 Wind Power 353 0.7 2,159 4.20 To remove obstacles for projects in progress
To identify potential wind sites
To review incentive measures for enhancing the development of wind energy

3 Solar Photovoltaics 6.7 0.00 21 0.04 To promote demonstration projects, including the ‘‘Solar City’’, and public
buildings
To establish solar PV systems for remote areas
To develop PV industries

4 Geothermal – – 50 0.10 To assist local government in exploring geothermal energy

To assist local government in developing the geothermal project in the
aspects of finance and technology

5 Biomass 814 1.65 741 1.44 To promote the district RDF (Refuse Derived Fuel) system for waste
treatment and power generation
To promote sales of biogas power at premium rates
To assist private enterprises in establishing power plants fueled by agricultural
waste such as rice husks
To promote industrial waste RDF-fueled power generation, especially
in paper mills

Total 3110.7 6.25 5139 10.0

Target share for renewable energy 6.25% 10.0%
in terms of installed capacity
of the total

installed SWH in Taiwan, representing an installation rate of
around 5%; that is, 5% of families have installed SWH. Solar water
heaters thus are the most notable success story in RE development
in Taiwan.
Currently, Taiwan has a sophisticated SHW industry, comprising:
52 manufactures, 519 retailers, and 2500 employees, with annual
sales of 120 thousand square meters, equivalent to 20–40 million US
dollars or ten thousand new users. Notably, 96% of qualified
installers/dealers are located in western Taiwan. Metallic (stainless
or copper) flat-plate solar collectors account for 78% of SWHs, with
the remaining 22% being evacuated-tube collectors. Almost all
metallic flat-plate solar collectors are produced domestically, while
some evacuated-tube absorbers are imported. Most SWHs are
permanently connected to an auxiliary electric heater.
5. Photovoltaics [19]
BEMOEA initiated the practice of ‘‘Measures for Subsidizing
Photovoltaic Demonstration Systems’’ in 2000. Besides offering
qualified applicants subsidized rate of 150 thousand NT dollars per

Fig. 2. Comparison of solar radiation among major cities in Taiwan, the U.S.A., and Japan [17,18].
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F. Chen et al. / Renewable and Sustainable Energy Reviews 14 (2010) 2029–2038
Fig. 3. Statistical diagram of installed area of solar thermal collector in Taiwan
(1978–2008) [18].
kWp (providing the subsidy does not exceed 50% of the total
installation cost), the government further provides full subsidy (up
to 10 kWp in each case) to juridical persons, who are selected from
public organizations, schools, or hospitals, etc. Most domestic PV
systems are focused on power supply, testing, and research. Over
400 demonstration systems have been built in Taiwan as a result of
this government incentive program, the total capacity of which has
exceeded 6.7 MWp to date.
Regarding the PV industry, there are several internationally
famous companies focused on different products in Taiwan,
including Sino-American Silicon Products Inc. for silicon wafer,
Motech and E-Ton Dynamics for solar cell, and Photonic Energy
Semiconductor Co. Ltd. for modular package. Notably, Motech
ranks sixth manufacturer of solar cell/module in the world, with
annual yield of 176.4 MWp in 2007 [20]. Statistically, there are 7
manufacturers of silicon-crystal in upstream, 45 manufacturers of
cell-module in middle stream, and 29 manufacturers of system
application in downstream. These companies have constructed a
complete manufacturing chain for the PV industry in Taiwan. The
totally annual yield is 3.1 billion US dollars, ranked fourth in the
world. However, since PV electricity generation is more costly than
traditional power generation, PV application currently remains in
the demonstration stage in Taiwan, even though a fixed feed-in
tariff of 2 NT dollars per kWh has already been implemented by
government.
In terms of R&D, government goals for PV during the next
decade are as follows:
(1) Developing mass production technology with high efficiency
and reliability to reduce PV production cost.
(2) Combining PV module with construction materials to enhance
its market application.
(3) Promoting the combination of new technology and architec-
ture design to merge PV systems into real living circumstances.
6. Wind energy [13]
Taiwan is estimated to have wind power potential of 1000
megawatts on land and 2000 megawatts at sea. To promote wind
power generation, the Taiwanese government initiated a 5-year
wind energy demonstration project in 2000 and simultaneously
provided a technical support to domestic industry via specific
research organizations, for example, EEL (Energy and Environment
Laboratories) of ITRI (Industrial Technology Research Institute). In
March 2000, the BOE announced ‘‘Measures for Subsidizing Wind
Power Demonstration Systems’’, which regulates that all candi-
dates must be reviewed for possible subsidy eligibility at a rate of
no more than 16,000 NT dollars per kWp, with the subsidies
2033
Fig. 4. Asia’s biggest wind farm, with 49.8 MW, installed on the western coast of
Miaoli County, Taiwan [21].
received not to exceed 50% of the total cost of each wind farm
project. Currently, three demonstration wind driven generation
systems have been set up under this program:
(1) The first one is ‘‘Mai-Liao Wind Power Demonstration System’’,
located in Mai-Liao, Yunlin County, operated by Formosa Heavy
Industries Company, completed in November 2000, with
capacity of 2640 kW.
(2) The second one is ‘‘Chungtun, Penghu Wind Power Demonstra-
tion System’’, located in Chungtun, Penghu County, operated by
Taiwan Power Company, which was completed in October
2001 and has capacity of 2400 kW.
(3) The third one is ‘‘Springwind Wind Power Demonstration
System’’, located in Chupei, Hsinchu County, operated by Tien
Long Paper Mfg. Co., with capacity of 3500 kW.
The total capacity of above three wind power systems is
8540 kW, which is equivalent to the utility usage of 3000 families.
As shown in Table 5, wind power has been prioritized in the
efforts to achieve projected targets of renewable energy
nationally, because it comprises a major share of total target
capacity. Numerous related projects are being implemented by
domestic and international companies. For example, cooperated
with InfraVest GmbH, Taiwan Power Company just finished a
wind power project of 49.8 MW along the coast of Miaoli County
in June 2006, which is the biggest single wind farm in Asia so far
[21] (see Fig. 4). Wind farms of more than 600 MW will be
further erected along the western coast of Taiwan during the
next 3 years in accordance with the plans scheduled by BOE
[22]. Therefore, it seems likely that existing targets for wind
power electricity development, and by extension renewable
power generation, that is, 2159 and 5139 MW, respectively, will
be achieved by 2010.
The international development trend in the area of wind
power systems, namely towards the development of off-shore
wind farms comprising large-scale wind turbines, which mini-
mizes land utilization and maximizes economy is one potential
direction for the development of wind energy applications in
Taiwan, an island nation surrounded by the Pacific Ocean that
has excellent potential for off-shore wind farm construction. In
the near future, the Taiwan Power Company will install 100
large-scale off-shore wind turbines along the western coast of
Taiwan and on remote islands, where the wind speed frequently
exceeds 5 m/s.
7. Biomass energy
Biomass energy is widely used in Taiwan, including biogas
(methane) from animal waste and fuel energy from the burial,
gasification, breaking-down, and fermentation of household,
industrial and agricultural garbage. Since biomass energy makes
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2034 F. Chen et al. / Renewable and Sustainable Energy Reviews 14 (2010) 2029–2038

Table 6
Developing status of biomass energy in Taiwan (2009).

Item Installed capacity (kW) Energy value (million ton oil equivalent (Mtoe))
a
Power Generation Application
Garbage Incinerationb 450,000 0.086
Waste Plastic and Rubber 33,700 0.059
Paper Industry Waste 8,000 0.001
Sugar Cane Bagasse 27,500 0.049
Methanec 22,900 0.031
Sludge 1,400 0.003
Others 58,700 0.046
Summation 602,200 0.275

Item Processing capacity Energy value (million ton oil equivalent (Mtoe))

Thermal Application
Black Liquid/Paper Industry Waste 0.600 million tons/year 0.195
Waste Tire 0.015 million tons/year 0.012
Sugar Cane Bagasse 0.527 million tons/year 0.068
Rice Husk 0.045 million tons/year 0.014
Methane 3.160 million m3/year 0.005
Petroleum Cokes 0.030 million tons/year 0.022
Refuse Derived Fuel (RDF) 0.020 million tons/year 0.008
Waste Solvent 0.020 million tons/year 0.016

Summation 1.257 million tons/year 0.340

3.160 million m3/year
a
According to the data from 2009.
b
Currently, there are 21 large-scale garbage incinerators in Taiwan.
c
There are four garbage burial fields, 30 small-and-medium pig farms, one large-scale pig farm and three industrial wastewater processing factories.

a dual contribution to energy supply and environmental protec-
tion, it is generally recognized as one of the most popular
renewable energies in the world, comprising approximately two
thirds of total renewable energy use. The development potential of
biomass energy in Taiwan is approximately 3 Mtoe, representing
approximately 40% of total RE potential.
According to statistical analysis conducted in 2009, the
electricity generation and thermal application potentials from
domestic waste are approximately 28.6 TWh and 15 million tons/
year, respectively. Both energy productions account most supply
of the national renewables. As shown in Table 6, the main
biomass energy resources are landfill gas and waste incineration,
which have total electricity generation capacity of 602,200 kW
(at the end of 2009) in more than 70 installed sites. Furthermore,
a ‘‘Waste Energy Application Technology Development and
Promotion Project’’ was initiated from 1999, in which the
priorities of RD&D are waste energy applications, such as landfill
gas, gasification, liquefaction and refuse derived fuel (RDF). In the
factory of President Enterprises in Southern Taiwan, there are two
electricity generation systems that utilize industrial wastewater
(methane), and the installed capacity of each system is 80 kW.
Meanwhile, the technical development of RDF is gradually
matured. Solid RDF made from waste has the following
advantages: high thermal value, uniform-and-stable property,
ease of control and low pollution when burning, ease of
transportation and storage, able to be used in boilers of power
generation and co-generation, small environmental impact, high
energy recycling efficiency, etc. RDF technology currently has
been transferred from EEL to industry to establish factories to
convert ordinary waste into useful fuel. Furthermore, a demon-
stration urban RDF system was established in EEL for the
purposes of research and promotion. On the other hand,
technologies of waste liquefaction and gasification have also
been developed to convert waste into compound fuel or syngas
(e.g., H2, CO, and CH4, etc.) that may be provided as the fuels of
boiler and generator to generate steam and electricity, such that
the goals of environmental protection, waste self-management
and clean production may be fulfilled. Presently, specific
technologies of solid waste energy have been developed
successfully in EEL, for example rice husk gasification and waste
Styrofoam liquefaction, which have been granted as patents and
transferred to industry.
Regarding biodiesel, Taiwanese government has continuously
pushed several promotion projects of biodiesel application since
2006, for example, Green Bus Project and Green County Project.
Implementation of B1 was initiated since 2008, encouraging
industry to invest the establishment of biodiesel factories.
Currently, MOEA has approved 10 manufacturers annually
producing 105,000 kl of biodiesel mostly from waste cooking oil.
In the future, more aggressive promotion of goals will focus on
developing more advanced technologies, including alcohol gaso-
line, organic hydrogen production, energy crop, forest resource,
biodiesel, etc.
8. Geothermal energy
Taiwan lies on a major geological fault-line along the Pacific
Rim, and has abundant geothermal resources, as shown in Fig. 5.
A comprehensive exploration estimates that Taiwan has total
geothermal potential of up to 1000 MW. However, most of the
geothermal resources in Taiwan are located in remote areas,
making their exploitation difficult. The economically and techni-
cally feasible exploitation potential is only about 150 MW. The
target for geothermal utilization is 50 MW by 2010.
Unlike solar energy and wind power, the application of
geothermal energy is not influenced by weather conditions and
its stable output can provide a base load for power generation.
Nowadays, the main application of geothermal energy is electricity
generation, the cost of which is still higher than that of traditional
generation methods. However, following electricity generation,
the remaining hot water may be further utilized for multiple
functions, including recreational spas, swimming pool, greenhouse
horticulture and agriculture, air conditioning and so on, thus
extracting additional economic value from the process. On the
other hand, to avoid the gradual depletion of geothermal resources
due to excessive extraction, most hot water after being used may
be injected back to geothermal reservoirs, thus prolonging the
operating life of the resource.
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F. Chen et al. / Renewable and Sustainable Energy Reviews 14 (2010) 2029–2038
Fig. 5. Geographical distribution and exploitation potential of geothermal resources in Taiwan [5].
Geothermal resources can be classified into volcanic and non-
volcanic types, with the former being hotter but more acid than the
latter. Domestic geothermal resources are mostly non-volcanic,
and are located in mountains and on small islands, making access
difficult. Geothermal resources with easy access and high potential
will be prioritized for development. The most promising one is the
Chin-Suei geothermal energy project (located at Yi-Lan County, as
shown in Fig. 5), which will be developed by the local government
using a BOT (Build, Operate, and Transfer) method, and for which
technical planning and research will be provided by experienced
R&D groups authorized by BEMOEA. Besides electricity generation,
the hot water will be further utilized to make the project become a
demonstration system with multiple functions.
9. Hydropower
Presently, most hydropower plants with large water dams are
operated by the Taiwan Power Company. At the end of November
2009, the total installed capacity of hydropower in Taiwan was
approximately 1937 MW, of which 1745 MW is contributed by
plants with capacity exceeding 20 MW (excluding 2600 MW
pump storage hydropower). According to a survey, Taiwan has
about 5000 MW of technically feasible hydropower potential,
about half of which is considered economically viable. Hopefully
around 2500 MW can be exploited by 2020, with approximately
300 MW being small hydropower (SHP) plants, each with capacity
of less than 20 MW; that is, they can be considered renewable
energy, for example, flow-through type hydropower. Currently,
2035
the total installed capacity of operational SHP plants is around
166 MW.
In Taiwan, the application of large-scale dam is concentrated in
agricultural irrigation and domestic water supply, with electricity
generation generally regarded as an auxiliary use. For example,
during 2008, the total generation output of hydropower in Taiwan
was just 7772 million kWhs, equivalent to 1772 h of full-loading
time. That is, the full-loading efficiency of hydropower in Taiwan is
only 20.2%, much lower than the 60–70% average efficiency of
nuclear or fossil fuel electrification. Most of the cost of hydro plant
establishment goes to civil engineering for dam construction.
Furthermore, most plants are located in remote mountain areas,
which have high development costs and investment risks.
However, a large-scale hydropower plant may have a useful
lifetime of over 30 years, something unachievable by other
generation methods. Considering the benefits in terms of both
water supply and electricity generation, large-scale hydropower
plants are actually the cheapest renewable energy option.
Hydropower is a clean, indigenous energy resource. However,
due to disputes involving the ecological and environmental issues
created by large-scale dam construction, the development of large-
scale hydropower is inevitably difficult. However, SHP plants are
also worth developing, and besides having less environmental
impact also offer such advantages as short set-up time, easy
maintenance, and low investment and operational costs. In
Taiwan, most SHP resources are located in national parks, so
careful evaluation is necessary and solutions must be sophisti-
catedly prepared before exploring and exploiting these resources.
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2036 F. Chen et al. / Renewable and Sustainable Energy Reviews 14 (2010) 2029–2038
Table 7
Current incentive measures for the promotion of renewable energy in Taiwan.
Type Incentives
Solar Water Heater (SWH) Solar water heater (system) subsidy program
Subsidy: NT$ 2250/m2, based upon collector
installed area
Solar PV Solar PV System Demonstration Program
Subsidy: NT$ 150,000/kWp
Subsidy ceiling: 50% of installation cost
Geothermal Geothermal Energy Demonstration Program
Subsidy ceiling: 50% of exploration costs
Electricity Purchase Tai-power Renewable Energy Premium
Program Purchase Program
Tax Incentives Statute for Upgrading Industries
Business Entities Purchasing Energy Saving Equipment
or Using New Energy Equipment or Technology
Investment Tax Credits
Customs Duty
Note: 1 USD = 32.5 NTD.
10. Strategy developed and future perspectives
The current promotional measures are summarized in Table 7.
Notably, the fixed feed-in tariff adopted by the Taiwan govern-
ment is NT$ 2/kWh (equivalent to EUR 0.04/kWh), which is well
below the average level in the EU [23], because the domestic
electricity rate is only approximately EUR 0.05/kWh, making it
extremely cheap internationally, which may be why relatively
expensive RE electrification apparatus, especially solar PV
system, is difficult to deploy in Taiwan, while cost-competitive
wind power is relatively popular.
The backbone of the strategy for promotion of renewable
energy formulated by the BOE is to create a favorable develop-
mental environment to achieve the scheduled targets, and to
facilitate the deployment of renewable energy apparatus in Taiwan
while foster the establishment of local related industries. In
addition, in order to iron-out and remove non-technical barriers,
the ‘‘Renewable Energy Promotion Plan’’ (REPP) was drafted and
approved by the Executive Yuan in January 2002. There are eight
guiding strategies:
(1) to establish a higher level inter-ministerial coordinating
mechanism,
(2) to draft and push for the passage of ‘‘Renewable Energy
Development Bill’’ (REDB) and related regulations,
(3) to set up a favorable fixed feed-in tariff for renewable
powers,
(4) to provide tax and investment incentives,
(5) to provide sufficient interim budget and funding,
(6) to increase demonstrations and promotional activities,
(7) to establish renewable energy database, and
(8) to enhance RD&D in renewable technology and products.
Being coupled with these strategies are 24 promotional
measures. The REPP coordinates actions by 13 central government
Current status [13,18]
Total accumulated area of solar collector installed: 1,780,000 m2
Energy saving: 0.086 Mtoe/year
Industrial annual yield: NT$ 1.2 billion/year
Total cumulated industrial yield: NT$ 18 billion
CO2 emission reduction: 0.62 million tons/year
There are over 400 demonstration projects with installed capacity
of 6.7 MW (November, 2009)
MOEA is currently sponsoring Ilan County to build a geothermal
plant. Preliminary planning shall be a 5000 kW demo project
(depending on exploration outcome)
Fixed feed-in tariff is NT$ 2/kWh
The approved capacity has reached 99 MW
Total purchase capacity will be 600 MW
Business entities investing in new and clean energy can enjoy tax
credit no more than 11% of equipment costs
Investing in new and clean industry energy can enjoy income tax
credit, ranging from 10% to 20% of stock purchase price
Two-year’s accelerated depreciation
Low interest rate loans: no more than 2-year postal floating saving
interest rate, plus 2.45%
Duty Exemption for imported equipment without manufacturing
domestically
ministries and local government agencies, with the following five
main focal points:
(1) Demonstrations and promotional measures: several incentive
measures have been instituted as interim means to subsidize
renewable energies (see Table 7).
(2) Tax and investment incentives: according to ‘‘Statute for
Upgrading Industries’’, the business entity that invests RE
apparatus is preferentially provided with tax credit no more
than 11% of equipment costs, income tax credit ranging from 10
to 20% of stock purchase price, low interest rate loans and 2-
year’s accelerated depreciation.
(3) R&D for renewable energies: to develop highly efficient, low
cost and mass-producible renewable energy application
technologies and products.
(4) Coordinating mechanism: through a high-level inter-minister-
ial coordinating mechanism, all institutional non-technical
barriers encountered by renewable energy developers are
facilitated and resolved in a systematic manner.
(5) A fixed feed-in tariff: an interim measure to purchase
renewable power at NT$ 2/kWh (EUR 0.04/kWh) has been
approved by state-owned Tai-Power company up to 600 MW.
As shown in Fig. 6, according to the framework and contents of
‘‘Renewable Energy Development Bill’’ drafted by Executive Yuan,
the essence of promotion strategies for renewable energies in
Taiwan can be summarized as follows.
(1) In the medium term, the renewable energies shall contribute
10%, in terms of installed capacity by 2010.
(2) Wind technology is relatively mature and will be the major
renewable energy in the near term. Meanwhile, the govern-
ment shall continue to promote other renewable energies such
as geothermal, biomass and hydropower to utilize renewable
resources in all aspects.
 Author's personal copy
F. Chen et al. / Renewable and Sustainable Energy Reviews 14 (2010) 2029–2038
Fig. 6. Framework and contents of renewable energy development bill [13].
(3) Solar photovoltaic (PV) product is booming in current energy
market worldwide. The promotion of PV shall focus on
strengthening R&D capability and developing related indus-
tries for cost reduction.
(4) In the long term, the ratio of renewable energy to total energy
supply is projected to increase from 1% in 2003 to 4% in 2020.
Developing renewable energy in Taiwan not only can secure
national energy supply but also can achieve environmental
protection and sustainable management objectives. Planning of
domestic renewable energy development follows four stages:
research, demonstration, promotion, and prevalence. To summar-
ize, current strategies for developing major renewable energies in
Taiwan are as follows.
(1) Solar thermal energy – incentive and promotional phase;
(2) Photovoltaics – incentive and demonstration phase;
(3) Wind energy – promotional phase;
(4) Biomass energy – researching and demonstration; and
(5) Geothermal energy – promotional phase.
Furthermore, through the ‘‘Renewable Energy Development
Plan’’, a negotiating mechanism is established among higher
governmental levels, and it is expected that non-technical barriers
will be removed, leading to the creation of a more advantageous
circumstance. In the future, according to the ‘‘Renewable Energy
Development Bill’’, regulations and legislation will be introduced
regarding related issues, including fixed feed-in tariffs, grid
connection standards and subsidy systems.
11. Summary and conclusions
Taiwan is an island nation with limited indigenous conven-
tional energy resources, but enjoys abundant resources of
renewable energy as described above. Developing renewable
energy not only can enhance energy supply security, while
simultaneously promoting environmental protection values, but
also can boost economic development. Following the global
trend towards sustainable development, developing renewable
can help Taiwan succeed in three aspects, namely, energy
supply, economic progress, and environmental protection.
2037
Currently, Taiwan has begun pursuing renewable energy
development, whether in terms of domestic implementation
or relative industry. However, the share of renewable energy of
total energy supply remains minor, and considerable room
remains for development. The key issue in RE strategy is the
passage of ‘‘Renewable Energy Development Bill’’, which had
just been approved by the Legislative Yuan in June 2009. In the
near future, it is expected that renewable energy will be
competitive in the Taiwanese market. However, from another
perspective, implementing RE may not be totally appropriate
in Taiwan, but the related industrial development offers
positive economic benefits, which has been described in the
forgoing, such as solar thermal energy, photovoltaics, and
wind energy, all of which have formatively industrial bases in
Taiwan already.
Acknowledgement
The authors thank the National Science Council of the Republic
of China, Taiwan, for sponsoring this work.
References
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eia.doe.gov/emeu/international/stmforind.html.
[4] Boyle G. Renewable energy: power for a sustainable future, 2nd ed., Oxford:
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[9] Tsai WT. Current status and development policies on renewable energy
technology research in Taiwan. Renewable & Sustainable Energy Reviews
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[10] Tsai WT, Chou YH. Overview of environmental impacts, prospects and policies
for renewable energy in Taiwan. Renewable & Sustainable Energy Reviews
2005;9(2):119–47.
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[11] Tsai WT, Chou YH, Chang YM. Progress in energy utilization from agrowastes
in Taiwan. Renewable & Sustainable Energy Reviews 2004;8(5): 461–81.
[12] Yue CD, Liu CM, Liou EML. A transition toward a sustainable energy future:
feasibility assessment and development strategies of wind power in Taiwan.
Energy Policy 2001;29(12):951–63.
[13] Bureau of Energy of Ministry of Economic Affairs (BEMOEA). Taiwan, ROC. See
also: http://www.moeaboe.gov.tw/ [in Chinese].
[14] IEA Energy Statistics.
[15] Energy Commission of Ministry of Economic Affairs (ECMOEC). General plan-
ning report of research and development of new and clean energy. Taiwan,
ROC; 1999. p. 13 [in Chinese].
[16] NCKU Research and Development Foundation, Executive Organization for the
Promotion and Subsidization of Solar Hot-Water System. Tainan, Taiwan 701.
See also: http://solar.rsh.ncku.edu.tw/ [in Chinese].
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[17] Energy Information Administration, Washington, US.
[18] Yan W., Manager, Wind and Solar Energy Laboratory, New Energy Technology
Division, Energy and Environment Research Laboratories, Industrial Technol-
ogy Research Institute. Chutung, Hsinchu, Taiwan 310, ROC. See also: http://
www.netd.itri.org.tw/index.htm.
[19] PV Technology Center, Industrial Technology Research Institute. Chutung,
Hsinchu, Taiwan 310, ROC. See also: http://solarpv.itri.org.tw/memb/main.
aspx [in Chinese].
[20] Photon International; SolarBuzz.
[21] Miaoli County Government, Taiwan.
[22] Chiang W. Surging installation of wind power electrification in Taiwan.
Engineering 2005;78(1):97 [in Chinese].
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markets and capacity. London, UK: James & James Ltd; 2004.
 energies
Article
Study on China’s Renewable Energy Policy Reform
and Improved Design of Renewable
Portfolio Standard
Fugui Dong, Lei Shi * , Xiaohui Ding, Yuan Li and Yongpeng Shi
School of Economics and Management, North China Electric Power University, Beijing 102206, China;
dfg@yeah.net (F.D.); susan1221@ncepu.edu.cn (X.D.); liyuan@ncepu.edu.cn (Y.L.);
shiyongpeng1109@ncepu.edu.cn (Y.S.)
* Correspondence: shilei0317@ncepu.edu.cn




Received: 22 April 2019; Accepted: 30 May 2019; Published: 4 June 2019


Abstract: China officially implemented the renewable portfolio standard (RPS) on 1 January 2019,
and it remains uncertain as to whether this can effectively solve the problem of renewable energy
consumption in China and ease the pressure of government subsidies. In order to study the impact
of this policy on China’s renewable energy power generation and explore RPS policy that is more
suitable for the characteristics of China’s renewable energy, we first develop a revenue function
model based on the just released RPS policy to explore the effectiveness of the policy, the feasibility
conditions for successful implementation, and the problems that may be encountered during the
implementation process. Then, we propose policy recommendations based on the possible problems
of the current policy and design an “incremental electricity price” supplementary policy to improve
the possibility of successful implementation of the RPS policy. Finally, an evolutionary game model is
established to simulate and verify the possibility of successful implementation of the supplementary
policy. The main research results are: (1) the essence of the current RPS policy is the comprehensive
implementation policy of the RPS and feed-in-tariff (FiT); (2) because of the characteristics of China’s
energy structure, the implementation of this policy reform is more resistant; (3) the quantitative
research on the revenue function model shows that the current transaction price of the green certificate
market is very low, which is not conducive to alleviating the state’s subsidy pressure on renewable
energy power generation; and (4) analysis of empirical data shows that the successful implementation
of the “incremental electricity price” policy relies on the initial strategies of grid companies and users.

Keywords: renewable portfolio standard (RPS); evolutionary game; green certificates; consumption
of renewable energy; subsidies for renewable energy power generation

1. Introduction

1.1. Research Background

Renewable energy utilization is closely related to energy security and climate change issues,
thus affecting human society [1]. The promotion of renewable energy power generation is conducive
to emission reduction and environmental protection, and is an important way to achieve low-carbon
energy transformation [2]. Many countries have already developed plans to use renewable energy
to generate electricity for the large-scale utilization of renewable resources in the next few years [3].
However, due to the high cost and instability of renewable energy power generation, it is less
competitive than traditional fossil energy power generation [4,5]. For this reason, countries around
the world have implemented different renewable energy power generation support policies to solve
the problem. Feed-in-tariff (FiT) and renewable portfolio standard (RPS) are the two most important

Energies 2019, 12, 2147; doi:10.3390/en12112147 www.mdpi.com/journal/energies

Energies 2019, 12, 2147 2 of 23

renewable energy development support policies implemented in countries around the world at
present [6–8]. However, from the current problems encountered in China’s renewable energy power
generation, the FiT policy is no longer applicable to China [9,10]. As of the end of November 2018,
according to the “Notice on Implementation of the Renewable Portfolio Standard” issued by the
National Energy Administration, China will officially implement the RPS on 1 January 2019. Since the
RPS policy has just been implemented in China, it is impossible to determine whether it can solve the
problems encountered in the development of renewable energy power generation in China.
The purpose of this paper is to study the effectiveness of the policy, the feasibility of successful
implementation, and the problems that may be encountered during implementation. Then, based on
the above analysis, a policy more suitable for the development of China’s renewable energy power
generation is designed to improve the possibility of successful implementation of the RPS mechanism
in China.

1.2. Review of the Literatures

1.2.1. Research on Renewable Portfolio Standard Policy Application

The number of FiT adopters increased from 2 in 1990 to approximately 70 in 2018, while RPS
adopters increased from 1 in 1999 to approximately 15 in 2018. Countries from every geographic
region and income level have adopted these policies. Contrary to what rational self-interested actors
would do based on costs, benefits, and utility maximization, some of the top oil exporters in the world
have adopted RPS or FiT. These countries include Iran and the United Arab Emirates in the Middle
East, Kazakhstan in Asia, Nigeria and Algeria in Africa, Norway and the United Kingdom in Europe,
and Brazil in the Americas and so on [11–13].
The analysis of an effective support policy is the basis for promoting the development of renewable
energy. Like China, several other countries have also experienced policy reforms from RPS to FiT
or from FiT to RPS. According to the experience of Korea’s transition from the implementation of
FiT to RPS in 2012, in addition to the temporary decline of the input-output efficiency of renewable
energy development in 2012, its efficiency has consistently risen, and with the policy reform, various
renewable energy utilization technologies have been improved to some extent [14,15]. In contrast,
due to the difficulty in achieving the renewable energy quota target, Japan changed from implementing
RPS to implementing FiT in 2009 [16]. RPS and FiT are the two most widely used renewable energy
power generation support policies. Their role and influence in the development of renewable energy
has always been the research focus of domestic and foreign experts, especially comparative analysis of
the two policies. Yin and Powers [17] proposed a new way to measure the effectiveness of the RPS
mechanism, and found that the implementation of the RPS mechanism can not only promote the
development of renewable energy, but also affect the electricity market and even the entire economic
market to a certain extent. Erdong and Liu [18] and Wang et al. [19], respectively, concluded that the
use of both RPS and FiT policy increases the proportion of renewable energy power generation within
the total energy consumption. However, Wang [18] believed that the RPS mechanism can bring more
social benefits than the FiT mechanism. Qian [20] concluded that the RPS system is superior to the
FiT system in the reduction of traditional energy power generation and carbon dioxide emissions,
while the FiT system can promote the development of renewable energy power generation and increase
the enthusiasm of power producers more than the RPS system. According to Choi et al. [21], from the
perspective of government departments, RPS is more efficient in promoting the development of
photovoltaic energy, while FiT was more effective in the development of non-photovoltaic renewable
energy, and this conclusion was the opposite of that given from the perspective of energy producers.
Sun and Nie [22] concluded that FiT is more effective than the RPS in increasing the installed capacity
of renewable energy, promoting investment of research and development to reduce costs, while RPS
policy reduces carbon emissions more effectively. From this we can infer that there is no perfect
Energies 2019, 12, 2147 3 of 23

relationship between FiT and RPS mechanisms. The RPS mechanism should be based on the problems
and characteristics of China’s renewable energy development [23].
In summary, the current application research on RPS and FiT in different countries has been
relatively mature, but the application effects of the two policies in different countries are different.
Therefore, based on the knowledge of RPS and the special needs of China’s renewable energy
development, it is of great significance to explore the application effect and possible problems of RPS
policy in China.

1.2.2. Research on China’s Renewable Portfolio Standard Policy Design

According to the international implementation experiences of FiT and RPS, relevant scholars
have designed and made recommendations on the RPS policy suitable for China’s renewable energy
development. Zhao et al. [24] combined with the specific national conditions from the system design,
departmental coordination, quota target setting, and implementation plan, proposed countermeasures
and suggestions for the implementation of RPS policy. Feng et al. [25] and Zhao et al. [26] respectively
specifically proposed an RPS mechanism, quota indicators, green certificates, trading mechanisms,
and fines on the electricity sales side (the quota obligation bearers are the power grid companies),
and gave a theoretical basis. Related scholars have also designed the RPS mechanism from the power
generation side (the quota obligation bearers are fossil energy power producers) [27–29]. Among them,
Zhao et al. [28] and Zuo et al. [29] set green certificate trading parties as renewable energy producers
and fossil energy power producers. Based on this, an evolutionary game model was established to
analyze their strategic behaviors. Although it has a strong theoretical significance, this RPS policy will
not be implemented in China. Since FiT can promote renewable energy investment in the primary stage
of the renewable energy power generation industry, and RPS can effectively reduce the pressure of the
national renewable energy fund subsidy, some scholars believe that in the current stage, China should
implement FiT and RPS comprehensively, and gradually shift from the complete FiT scheme to the
RPS [20,24,30]. Wang et al. [31] designed an RPS implementation mechanism in line with China’s
renewable energy development. It mainly investigated how renewable energy quotas are distributed in
different provinces, and provided very important recommendations for the implementation of China’s
RPS policy. However, it did not provide a clear explanation for the subject of quota obligation bearers.
Although the above research on the design of RPS policy in China has important practical
guiding significance, the various schemes that have been designed are different from the RPS policy
implemented in China. In this paper, the design study of this policy is based on the problems that
may be encountered in the RPS policy that has just been implemented. The purpose is to improve the
possibility of successful implementation of the policy and to better solve the problem of renewable
energy development in China.

1.3. Structure of This Paper

The rest of the paper is structured as follows. In Section 2, first, we analyze the need for policy
reform. Second, the revenue function model and evolutionary game model needed for the research of
this paper are developed. In Section 3, we first analyze the validity, feasibility conditions, and possible
problems of the RPS policy based on the results of the revenue function model. Then, based on
this, the “incremental electricity price” policy is designed to improve the possibility of successful
implementation of RPS policy in China. Finally, the evolutionary game model is used to analyze
the evolution process of power grid enterprises and users under the auxiliary policy. In Section 4,
we summarize the research process and conclusions of the article, and put forward the existing
limitations and future research directions.

2. Materials and Methods

The research process of this paper is as follows: Firstly, the reasons and necessity of the
implementation of renewable energy policy reform in China are analyzed. Secondly, this paper
Energies 2019, 12, 2147 4 of 23
Energies 2019, 12, x 4 of 23

takes the RPS

the new new RPS
policypolicy
as aasresearch
a research object,
object, andand explores
explores thefeasibility
the feasibilityconditions
conditionsof of its
its successful
successful
implementation, predicts its effect on renewable energy development, and seeks
implementation, predicts its effect on renewable energy development, and seeks possible problemspossible problems in
the process
in the of implementation
process of implementation by building a revenue
by building function
a revenue model. model.
function Finally,Finally,
based onbased the possible
on the
problems in the implementation of the RPS mechanism, this paper proposes
possible problems in the implementation of the RPS mechanism, this paper proposes a policy a policy improvement
plan and establishes
improvement an evolutionary
plan and establishes an game model to simulate
evolutionary game model the evolution
to simulateof the
the decision-making
evolution of the
behaviors of various
decision-making stakeholders
behaviors in different
of various scenarios, in
stakeholders so as to verifyscenarios,
different the feasibility
so asof to
theverify
improved
the
RPS policy. A flowchart of the research is shown in Figure 1.
feasibility of the improved RPS policy. A flowchart of the research is shown in Figure 1.

Necessity and purpose analysis of the reform

Renewable energy Insufficient government

consumption problem funding

Analysis of RPS Policy Implementation in China

Feasibility Effect Problem

RPS Improvement Design

Evolutionary process of
Incremental Electricity Price
player decision

Figure 1. Flowchart of the research. RPS: renewable portfolio standard.

2.1. Necessity and

2.1. Necessity and Purpose
Purpose Analysis
Analysis of
of Policy
Policy Shift
Shift
In China, with
In China, with the
theintroduction
introductionofofrenewable
renewable energy
energy power
power generation
generation support
support policies,
policies, the
the
installed capacity of renewable energy power generation has increased rapidly, while the ability to
installed capacity of renewable energy power generation has increased rapidly, while the ability to
consume renewable energy has not met the speed at which renewable energy
consume renewable energy has not met the speed at which renewable energy has developed, has developed, resulting
in the problem
resulting in theofproblem
renewable energy consumption,
of renewable which has which
energy consumption, becomehasonebecome
of the main reasons
one of the mainfor
restricting
reasons forthe development
restricting of renewable energy
the development in Chinaenergy
of renewable at this in
stage. In addition,
China underInthe
at this stage. feed-in
addition,
tariff system implemented in China, it is difficult for the additional tariff levy standard
under the feed-in tariff system implemented in China, it is difficult for the additional tariff levy to meet the
development speed of renewable energy, leading to a gradual expansion of the
standard to meet the development speed of renewable energy, leading to a gradual expansion of the subsidy funding
gap [32].funding gap [32].
subsidy
2.1.1. Renewable Energy Consumption Problem
2.1.1. Renewable Energy Consumption Problem
One of the special characteristics regarding China’s energy utilization consists in the fact that it
One of the special characteristics regarding China’s energy utilization consists in the fact that it
frequently uses renewable resources, mainly based on wind, light, and water. Moreover, in recent
frequently uses renewable resources, mainly based on wind, light, and water. Moreover, in recent
years, the installed capacity of renewable energy has increased rapidly. As of April 2018, the installed
years, the installed capacity of renewable energy has increased rapidly. As of April 2018, the
capacity of wind power, which over 6000 kW, reached 164.46 million kW, that is nearly 9.85% of the
installed capacity of wind power, which over 6000 kW, reached 164.46 million kW, that is nearly
total energy consumption in the country. However, from January 2017 to April 2018, the monthly
9.85% of the total energy consumption in the country. However, from January 2017 to April 2018,
average ratio of wind power generation to total power generation was 5.28%, which means that nearly
the monthly average ratio of wind power generation to total power generation was 5.28%, which
half of the wind power units were not functioning, and this phenomenon was found to be even more
means that nearly half of the wind power units were not functioning, and this phenomenon was
serious in some major wind power generation areas [33,34]. Table 1 shows the wind power generation
found to be even more serious in some major wind power generation areas [33,34]. Table 1 shows the
in some provinces.
wind power generation in some provinces.
As can be seen from Table 1, in these provinces, the installed capacity of wind power accounts for
As can be seen from Table 1, in these provinces, the installed capacity of wind power accounts
about 20% of the total installed capacity, while the wind power generation accounts for only about
for about 20% of the total installed capacity, while the wind power generation accounts for only
10% of the total local power generation. So, it can be concluded that the issue of renewable energy
about 10% of the total local power generation. So, it can be concluded that the issue of renewable
development in China, at this stage, is not an insufficient installed capacity for renewable energy power
energy development in China, at this stage, is not an insufficient installed capacity for renewable
energy power generation. On the contrary, for China, which has just begun to implement the RPS
policy, the installed capacity of renewable energy power generation can basically meet the current
Energies 2019, 12, 2147 5 of 23

generation. On the contrary, for China, which has just begun to implement the RPS policy, the installed
capacity of renewable energy power generation can basically meet the current quota target. Therefore,
how to solve the problem of renewable energy consumption is the key issue to be considered by China
in implementing RPS.

Table 1. Application of wind power in some provinces, data sourced from [35].

Installed Generation Ratio of Installed Abandoned Wind Rate (in

Province
Capacity (GW) Ratio (%) Capacity (%) the First Quarter of 2018) (%)
Hebei 12.16 9.3 18.2 2.6
Inner Mongolia 27.37 11.6 23.0 21.3
Heilongjiang 5.70 11.2 19.3 8.5
Gansu 12.82 16.0 26.3 19.5
Ningxia 9.76 11.2 22.8 2.5
Xinjiang 18.06 10.1 21.3 21.6

2.1.2. Insufficient Subsidies for Renewable Energy Power Generation

According to the renewable energy law, China’s FiT mechanism is composed of the local
desulfurization coal-fired unit’s benchmark on-grid price and the subsidized electricity price (see
Equation (1) for details). The subsidy fee corresponding to the renewable energy power generation
subsidy price is derived from the electricity price additional charge levied by the governments to the
power consumers. In order to adapt to the rapid development of renewable energy power generation
in China, the additional price levy standard has been raised six times in 2006 from 0.001 RMB/kWh,
and finally raised to 0.019 RMB/kWh in 2016. At the same time, in response to the continuous
improvement of renewable energy power generation technology, the gradual reduction of power
generation costs, and the increasing funding gap for renewable energy power generation subsidies,
China has frequently reduced the feed-in tariff of renewable energy power generation, while Table 2
shows the specific feed-in tariff for wind power and photovoltaics in a different category. The upward
adjustment of the additional price levy standard and the reduction of the renewable energy benchmark
FiT have not slowed down the trend of the gradually increasing subsidy funding gap. By the end of
2017, the subsidy funding gap accumulated more than 110 billion RMB. The ever-expanding subsidy
funding gap is the direct cause of implementing renewable energy policy reform.

pr = pb + ps, f (1)

where pr represents the FiT of renewable energy power generation; pb represents the benchmark FiT of
local desulfurized coal unit power generation; and ps,f represents the subsidized electricity price for
renewable energy power generation under the FiT policy.

Table 2. The feed-in tariff of wind power and photovoltaic, data sourced from [36].

Power Generation Resource Area 2014 2015 2016 2017 2018

Categories Categories (RMB/kWh) (RMB/kWh) (RMB/kWh) (RMB/kWh) (RMB/kWh)
Category I 0.51 0.49 0.47 0.47 0.44
Category II 0.54 0.52 0.50 0.50 0.47
Wind
Category III 0.58 0.56 0.54 0.54 0.51
Category IV 0.61 0.61 0.60 0.60 0.58
Category I 0.90 0.90 0.80 0.65 0.55
Photoelectric Category II 0.95 0.95 0.88 0.75 0.65
Category III 1.00 1.00 0.98 0.85 0.75

On the one hand, the implementation of the RPS policy can directly reduce the government’s
subsidy pressure on renewable energy generation, while on the other hand, green certificate transactions
based on market functioning can not only promote the development of renewable energy, but also
Energies 2019, 12, 2147 6 of 23

avoid the problem of abandoned wind and light caused by power generation enterprises’ blind
development of renewable resources in pursuit of the benefits. The implementation of China’s RPS
policy should aim at promoting the consumption of renewable energy and alleviating the pressure on
government subsidies.

2.2. Revenue Function Model

In order to study the feasibility conditions of the successful implementation of the RPS policy in
China and to explore the problems that may be encountered in the implementation process, this paper
proposes a research method based on the benefit function of stakeholders. Since the RPS policy has just
been implemented in China, there is currently insufficient empirical data to support the research on
the impact of RPS on the development of renewable energy. The revenue function model is proposed
to study the interaction relationship between different stakeholders’ revenue functions under the
RPS policy from the perspective of a game, and to determine the relationship between variables
representing different practical meanings in the revenue function of each stakeholder under the
successful implementation of the policy, thereby obtaining the feasibility conditions for the successful
implementation of the policy. Then, by analyzing the current status of China’s renewable energy power
generation to judge the possibility of the establishment of this condition, we can identify the problems
that may be encountered in the implementation of China’s RPS policy. This method ensures that the
research results are objective and scientific, and avoids the shortcoming of insufficient theoretical
support of subjective research due to a lack of data. The specific research steps are described below.

2.2.1. China’s Renewable Portfolio Standard Policy

According to the “Renewable Energy Power Quota and Assessment Method” promulgated
by the National Development and Reform Commission on 13 September 2018 and the “Notice on
Implementing the Renewable Portfolio Standard System” issued on 15 November 2018, China’s RPS
mechanism’s quota bearers are mainly power grid enterprises, whose annual quota should be the
product of their electricity sales and quota proportion. The price of green certificates is determined by
the green certificates market, but it shall not be higher than the original subsidy price of renewable
energy power generation, pg < ps,f . Different from the RPS policy implemented in other countries,
on the one hand, China’s power generation companies can compensate for the high cost of renewable
energy power generation by selling green certificates. On the other hand, as shown in Equation (3),
the loss due to the price of green certificates that are lower than the subsidized electricity price can still
be compensated for by the national renewable energy development fund. The new renewable energy
power generation price consists of three parts:

pr = pb + ps,r + p g (2)

ps,r + p g = ps, f (3)

where pg represents the average price of green certificates transactions; and ps,r is the average subsidized
electricity price for renewable energy power generation under the RPS policy.
From this, it can be concluded that the essence of the RPS to be implemented in China is actually a
comprehensive implementation plan of RPS and FiT, and the ratio of the support effect of RPS and FiT
on renewable energy power generation is pg :ps,r . This policy reform is moderate, and we believe that it
is caused by the following reasons:
(1) Under the FiT policy, China’s renewable energy installed capacity and generation capacity
have increased rapidly in recent years. The FiT still has a significant effect on improving renewable
energy power generation investment.
(2) At present, the cost of renewable energy power generation in China is still much higher than
that of fossil energy power generation. If the high cost of renewable energy power generation can only
Energies 2019, 12, 2147 7 of 23

be compensated for by selling green certificates, the profit of renewable energy power generation will
inevitably be affected, thus restricting the development of renewable energy in China to a certain extent.
(3) Although the RPS policy has been successfully applied to many countries in the world,
China’s renewable energy development has certain special characteristics, like renewable energy
consumption problems, government funding subsidy pressure, and an energy structure with a very
high proportion of fossil energy power generation. Whether the RPS policy can fully adapt to the
characteristics of China’s renewable energy development remains uncertain.

2.2.2. Determination of Stakeholders and Revenue Functions

This paper divides stakeholders into power generation companies, power grid companies, and
government departments. From the perspective of interests, it explores the role of the RPS policy in
promoting the consumption of renewable energy and alleviating the government’s subsidy pressure
on renewable energy power generation.
(1) In order to make the revenue function of power generation companies applicable to various
power generation companies, this was set as follows:
   
πp = Q f p f + Qr pr − Q f C f ,g + C f ,m − Qr Cr,g + Cr,m (4)

where πp represents the total revenue of power generation companies; Qf represents the fossil energy
power output, and for a pure renewable energy power generation company, its fossil energy power
output is 0; pf represents the average feed-in tariff of fossil energy power; Qr represents the renewable
energy power output, and for a pure fossil energy power generation company, its renewable energy
power output is 0; pr is the average feed-in tariff of renewable energy power and pr = pb + ps,r + p g ;
Cf,g and Cf,m represent the average unit power generation cost and average unit management cost of
fossil energy; and Cr,g and Cr,m represent the average unit power generation cost and average unit
management cost of renewable energy.
(2) Since this article explores the interest relationship between power generation companies,
power grid companies, and government departments from a macro perspective, green certificate
transactions between different grid companies are no longer considered. The power grid enterprises’
revenue function is:
  h  i
πn = (ps − pb )Qr + ps − p f Q f − Cn,m,r Qr − Cn,m, f Q f − Qr p g − Q f + Qr A − Qr pp (5)

where πn represents the total revenue of the power grid enterprises; ps is the average selling price
of the power grid enterprises to the consumers; Cn,m,r and Cn,m, f represent the average operation
and maintenance cost of a unit of renewable energy power transmission and fossil energy power
transmission; A is the renewable energy power generation quota target undertaken by the power
grid enterprises (0 ≤ A ≤ 1); pp is the average unit penalty price, and the penalty expense is
h  i
Q f + Qr A − Qr pp ; and the expense of purchasing green certificates is Qr p g .
(3) The revenue function of government departments is:
h  i
π g = Qr pe + Q f + Qr A − Qr pp − Qr ps,r (6)

where pe is the average environmental income obtained by the government for a unithof renewable
 energy
i
power generation, and the environmental benefit is Qr pe ; the penalty income is Q f + Qr A − Qr pp ;
and the subsidy expenditure is Qr ps,r .

2.2.3. Determination of the Conditions for Successful Implementation of Renewable Portfolio Standard
Policy effectiveness means that under this policy, power generation companies, power grid
enterprises, and government departments will jointly solve the problem of renewable energy
Energies 2019, 12, 2147 8 of 23

consumption and insufficient government subsidy funds through mutual cooperation in the perspective
of economic interests.
∂πp /∂Qr ≥ 0, ∂πn /∂Qr ≥ 0, and ∂π g /∂Qr ≥ 0 are the necessary conditions for promoting
the consumption of renewable energy by power generation companies, power grid companies,
and government departments, respectively, that is, the following conditions are established:

pb + ps,r + p g − Cr,g − Cr,m = pb + ps, f − Cr,g − Cr,m ≥ 0 (7)

ps − pb − Cn,m,r − p g − pp (A − 1) ≥ 0 (8)

pe + pp (A − 1) − ps,r ≥ 0 (9)

The role of promoting renewable energy is manifested in the simultaneous formulation of

Equations (7)–(9), and the role of the RPS mechanism in mitigating the pressure on financial subsidies
can be measured by the income generated by power generation companies selling green certificates
(Qr pg ). On the basis that Equations (7)–(9) are simultaneously established, the green certificate
transaction price greater than 0, p g > 0, can be used as a criterion for judging whether the mechanism
can alleviate the pressure of government subsidies.

2.3. Policy Improvement Design

Through the discussion and analysis of the revenue function model results, the feasibility
conditions for the successful implementation of the RPS policy and the problems that the policy may
encounter in China can be identified. Next, we propose policy recommendations for these issues,
and based on this policy, theoretically design an improved RPS policy that is more suitable for the
development of renewable energy power generation in China.

2.4. Evolutionary Game Model

In order to explore the feasibility of the improved RPS policy proposed in this paper, an evolutionary
game model is established to simulate and analyze the evolutionary process of trading behaviors
between grid enterprises and users.
Evolutionary game theory is a research method that is very suitable for simulating the evolution
process of players, which is based on the viewpoint of biological evolution theory. It is considered
that the players are bounded and rational, and the decision-making behaviors of individuals are
realized through dynamic processes, such as imitation, learning, and mutation. According to the idea
of biological evolution, when the fitness of a certain strategy is better than the average fitness of the
ethnic groups, the strategy is gradually adopted by more individuals, and eventually developed, or it
will gradually decay. Finally, the system reaches an evolutionary stable state [37–39].

3. Research Process and Discussion

3.1. Discussion on Results Based on Revenue Function Model

3.1.1. Policy Feasibility and Effectiveness Analysis

In Equation (7), pb + ps,r + p g − Cr,g − Cr,m ≥ 0 is the necessary condition for power generation
enterprises to promote renewable energy consumption under the RPS mechanism, while pb + ps, f −
Cr,g − Cr,m ≥ 0 is the necessary condition for power generation enterprises to promote renewable
energy consumption under the FiT mechanism. It can be concluded that a policy shift will not change
the enthusiasm of power generation companies to promote renewable energy consumption. According
to the implementation of FiT in China, although the problem of renewable energy consumption
has become more and more serious in recent years, the amount of renewable energy power on-grid
is also increasing rapidly, thus the condition, pb + ps,r + p g − Cr,g − Cr,m ≥ 0, is constant under the
RPS mechanism.
Energies 2019, 12, 2147 9 of 23

Through the further processing of Equations (8) and (9), the necessary conditions for the green
certificate price, penalty price, and quota target to be feasible on the basis of the effectiveness of the
mechanism are obtained as follows:

pp (1 − A) + ps, f − pe ≤ p g ≤ ps − pb − Cn,m,r + pp (1 − A) (10)

p g + Cn,m,r − (ps − pb ) pe − ps, f + p g

≤ pp ≤ (11)
1−A 1−A
pe − ps, f + p g p g + Cn,m,r − (ps − pb )
1− ≤ A ≤ 1− (12)
pp pp
(1) In order to make the green certificate price, penalty price, and quota target exist, the value at
the right end of the inequality must be greater than the value at the left end, which results in:

ps − pb − Cn,m,r + pe − ps, f ≥ 0 (13)

where ps − pb − Cn,m,r represents the income of the power grid companies consuming a unit of renewable
energy power, and pe − ps, f is the government departments’ revenue from the consumption of per
unit of renewable energy power. This formula represents the internal principle that government
departments hope to promote power grid enterprises to actively absorb renewable energy through
renewable energy support policies due to their environmental protection obligations. It is a necessary
condition for the FiT policy to effectively promote the consumption of renewable energy, so the
effectiveness of the RPS mechanism is based on the effectiveness of the FiT policy.
(2) If the RPS mechanism can alleviate the subsidy pressure of renewable energy power generation,
there would be p g > 0, and Equation (10) must have the right end value greater than or equal to 0.

ps − pb − Cn,m,r + pp (1 − A) ≥ 0 (14)

where ps − pb − Cn,m,r ≥ 0 is the necessary condition for a grid company to actively promote renewable
energy consumption without renewable energy support policies. However, at the current level
of China’s renewable energy power generation technology, compared to fossil energy generation,
the instability of renewable energy generation will bring more safety risks to the power grid, resulting
in high costs of operation and maintenance of the power transmission process. In addition, the average
on-grid price of renewable energy is too high at present, and the consumption of renewable energy by the
power grid is almost entirely dependent on the relevant renewable energy support policies, which makes
this condition difficult to achieve. Therefore, in order to make Equation (14) exist, the penalty price
and quota targets should be set according to the renewable energy resource endowment, the technical
level of power generation, and the benchmark FiT of a local desulfurized coal unit of power generation
in the region where power grid enterprises are located. For power grid companies with high operating
and maintenance costs of renewable energy power transmission and high benchmark FiT values of a
local desulfurized coal unit of power generation, they should appropriately use higher penalty prices
or lower quota targets to restrain or motivate the behaviors of power grid companies to promote the
consumption of renewable energy and ease the pressure of government subsidies.

3.1.2. Possible Problems with Renewable Portfolio Standard Policy Implementation

(1) Under the RPS policy, there is ps,r + p g = ps, f , and a loss due to the price of green certificates
being lower than the subsidized electricity price can still be compensated by the national renewable
energy development fund, so there is ∂πp /∂p g = 0, which means the green certificate price will
not affect the revenue of the power generation enterprises, while for green certificate purchasers
and power grid enterprises, the green certificate price growth would reduce their income that is,
∂πn /∂p g < 0. It is easy to conclude that under the market effect, the game equilibrium price of the green
Energies 2019, 12, 2147 10 of 23

certificates is zero. On the one hand, this makes the RPS mechanism theoretically unable to alleviate
the pressure on government funding subsidies. On the other hand, if the green certificates price is zero,
the green certificates trading mechanism would lose its meaning of existence. Therefore, government
departments should set a lower limit on the price of green certificates to ensure the effectiveness of the
green certificates trading mechanism.
(2) The RPS policy is implemented to promote grid companies accepting more renewable energy
power by setting renewable energy consumption targets for grid companies, which requires power
plants giving up a certain amount of fossil energy power generation space to increase the proportion
of renewable energy power generation. At this stage, China’s main power generation method is
thermal power generation. Large-scale renewable energy power generation and connection to power
gird will inevitably change the power market structure mainly based on thermal power generation,
which would result in a large resistance of implementation. In this regard, the government should
introduce more flexible policy mechanism to regulate and guide the active cooperation of stakeholders
in the RPS mechanism, so as to realize the policy transformation from FiT to RPS.
(3) On one hand, under the current renewable energy power generation technology level,
power grid enterprises are faced with the safe operation risk brought by the high proportion of
renewable energy power access to the power grid. On the other hand, due to the obvious regional
differences in China’s renewable energy resource endowment and renewable energy development,
some power grid enterprises in China have reached a saturated state for absorbing renewable
energy power, while some regional power grid enterprises still have a large renewable energy power
consumption space. Therefore, under the current stage, the state should adjust and adopt a new strategic
plan for renewable energy development with more regional characteristics to achieve coordinated
development of renewable energy power generation in China.

3.2. Improvement Design of Renewable Portfolio Standard Policy

In view of the possible problems in the implementation of the RPS mechanism, the article proposes
two specific improvements to its implementation: (1) set the minimum trading price of green certificates;
and (2) adopt a more flexible way of selling electricity prices.

3.2.1. Minimum Trading Price of Green Certificates

The minimum trading price of green certificates (p g,min ) is the minimum standard for RPS
mechanism to relieve the pressure of renewable energy generation subsidy. The setting of this value
should take into account the endowment of renewable energy resources, and dynamically adjust
according to the renewable energy power generation subsidy funding gaps and the change of the
technology of renewable energy power generation, which will be issued and implemented by the
energy authorities at the beginning of each trading period.

3.2.2. “Incremental Electricity Price” Policy

Flexible sales price policy is an effective way to regulate users’ electricity consumption
behaviors [40–42]. This paper proposes an “Incremental Electricity Price” policy on the power
grids-users side, and designs a green certificates trading mechanism between the power grid companies
and users to stimulate the growth of demand for renewable energy. On the one hand, it can promote the
increase of demand for renewable energy while ensure the benefits of fossil energy power generation
to a certain extent, so as to reduce the resistance of RPS policy implementation. On the other hand,
it redistributes the renewable energy consumption obligations of power grid companies and users in a
more effective way. The following is the specific design of the policy:
The green certificates obtained by power grid companies from renewable energy consumption in a
trading cycle, on the one hand, which can be submitted to energy authorities to complete the renewable
energy quota assessment at the end of the trading period, on the other hand, which can be sold to the
power consumers to transfer a part of renewable energy consumption obligations, wherein the green
 On the other hand, it redistributes the renewable energy consumption obligations of power grid
companies and users in a more effective way. The following is the specific design of the policy:
The green certificates obtained by power grid companies from renewable energy consumption
in a trading cycle, on the one hand, which can be submitted to energy authorities to complete the
Energies 2019, 12,
renewable 2147 quota assessment at the end of the trading period, on the other hand, which
energy 11 ofcan
23

be sold to the power consumers to transfer a part of renewable energy consumption obligations,
wherein the green certificates sold to the users can still be used for the grid companies to complete
certificates sold to the users can still be used for the grid companies to complete quota assessment,
quota assessment, and a green certificate cannot be resold.
and a green certificate cannot be resold.
In order to encourage users to increase power consumption, power grid companies that
In order to encourage users to increase power consumption, power grid companies that decided
decided to adopt this supplementary policy, set and release the “Incremental Electricity Price”
to adopt this supplementary policy, set and release the “Incremental Electricity Price” standard at
standard at the beginning of a trading cycle, that is, compared with the previous trading cycle,
the beginning of a trading cycle, that is, compared with the previous trading cycle, consumers can
consumers can enjoy the “Incremental Electricity Price” policy for increased power consumption in
enjoy the “Incremental Electricity Price” policy for increased power consumption in the current period,
the current period, and on the premise of ensuring the profitability of power grid companies, the
and on the premise of ensuring the profitability of power grid companies, the price concession is
price concession is proportional to user’s power consumption increment, and the “Incremental
proportional to user’s power consumption increment, and the “Incremental Electricity Price” standard
Electricity
curve, ps =Price”
f (Q), standard as Figureps2.= f ( Q) , is shown as Figure 2.
is shown curve,

ps

ps ,0

ps = f ( Q )
ps ,min

Q0 Q0 (1 + α ) Q

Figure 2. The
Figure 2. The “incremental
“incremental electricity
electricity price”
price” standard.
standard.

pps,0 and Q0 are respectively the average selling price of the last trading cycle and the electricity
s ,0 and Q0 are respectively the average selling price of the last trading cycle and the
consumption of the user. ps,min is the average lowest selling price that the power grid companies
electricity consumption of the user. p is the average lowest selling price that the power grid
can use to ensure profitability, which iss ,min calculated by the power grid companies according to their
companies can use to ensure profitability,
profitability and operating cost. For different customer which is groups,calculated powerby grid
the power
companies gridcan companies
adopt a
according to their profitability and operating cost. For different
unified adjustment parameter, α, or adopt a different parameter, α, according to customer groups customer groups, power grid
companies can adopt a unified adjustment parameter, α , or adopt
with different characteristics of electricity consumption behaviors. The standard of the “incremental a different parameter, α ,
accordingprice”
electricity to customer
is shown groups with different
in Equation (15): characteristics of electricity consumption behaviors.
The standard of the "incremental electricity price" is shown in Equation (15):
0 ≤ Q < Q0

psp,0s,0
 0 ≤ Q < Q0


 ps,0 −ps,min (1+α)ps,0 −ps,min
ps = f (Q) = − αQ0 Q + Q0 ≤ Q < ( 1 + α ) Q0 (15)
 ps ,0 − ps ,min


(1 + α ) ps ,0 − ps ,min
α
ps = f ( Q ) = − ps,min
 Q+ (1 + αQ)0Q≤0 Q≤ <Q(1 + α ) Q0 (15)
 α Q0 α
At the beginning of the trading p cycle, power users comprehensively (1 + α consider
) Q0 ≤ Q their own electricity
 s,min
demand, the “incremental electricity price” standard, and the green certificate price (the market price
of theAtgreen the certificates
beginningsold of the trading
by the powercycle, power users
grid companies comprehensively
to users) to decide whether consider their own
to participate in
electricity
the “incrementaldemand, the “incremental
electricity price” policy. electricity price” to
If users decide standard,
participate andinthethegreen
policy,certificate
they will price (the
negotiate
market
with the price
powerofgridthe companies
green certificates sold bythe
to determine the powerof
number grid
greencompanies
certificatesto (Q
users) to green
g ) and decidecertificate
whether
to participate
transaction in the
price 0
(p g “incremental
), and sign a powerelectricity price”The
contract. policy.
numberIf users decidecertificates,
of green to participate
Qg ,in
is the
the policy,
actual
they will negotiate
maximum incremental with the power
power that the grid companies
user can enjoyto todetermine
achieve thethe number ofelectricity
preferential green certificates (Qg)
price. If the
and green certificate transaction price ( p ′ ), and sign a power
actual power consumption of users is greaterg than the number of green certificates, the excess power contract. The number of green
will not enjoyQthe
certificates, g, ispreferential
the actual electricity
maximumprice anymore,power
incremental becausethat it cannot reflect
the user canthe effecttoofachieve
enjoy renewable the
energy consumption. If the actual power consumption of the users
preferential electricity price. If the actual power consumption of users is greater than the number is less than the number of green of
certificates, the feethe
green certificates, of purchasing
excess power greenwillcertificates
not enjoy the willpreferential
not be returned. The actual
electricity fee, Ce ,
electricitybecause
price anymore,
paid by the users under the “incremental electricity price” is:
 R
Q
 R0 f (Q)dQ 0 ≤ Q < Q0 + Q g



Ce =  Q0 + Q g RQ (16)


 0 f (Q)dQ + Q +Q ps,0 dQ Q0 + Q g ≤ Q
0 g
Energies 2019, 12, 2147 12 of 23

3.3. Evolution Analysis of Decision-Making Behaviors of Players under the “Incremental Electricity
Price” Policy

3.3.1. Assumptions of the Evolutionary Game Model

H1: Transactions under this policy only occur between grid companies and users.
H2: Grid companies and users have the right to choose whether to adopt this policy or not.
H3: Users will predict their power needs as accurately as possible. Electricity demand is an
important factor affecting its decision-making. Users should comprehensively consider their own
development needs and the cost of electricity, and scientifically judge their own electricity demand in
the future to achieve maximum benefits.
H4: According to the principles of microeconomics, we know that goods have elasticity due
to price-demand. For the convenience of this research, we assume that when users participate in
the “incremental electricity price” policy, the electricity demand increase is Qg , and when users do
not participate in the “incremental electricity price” policy, the electricity demand increase is kQg ,
and 0 ≤ k ≤ 1.

3.3.2. The Players’ Payoff Functions

In this paper, we believe that under the “incremental electricity price” policy, there are only two
pure strategies for grid companies: Adopt or not adopt, and the proportion of grid enterprises adopting
this policy is x, and the ratio of not adopting this policy is 1 − x. There are only two pure strategies for
users: participating in or not participating in, and the proportion of users participating in this policy is
y, and the proportion of users not participating in this policy is 1 − y. When the grid enterprises choose
to adopt and the users choose to participate in the policy, the green certificate transaction between the
grid enterprises and users is successfully completed, and the “incremental electricity price” policy is an
effective policy. In other cases, the policy is an invalid policy. The following is a detailed description of
the payoff functions under different strategies of grid companies and users.
(1) When grid enterprises choose to adopt and users choose to participate in this policy, the revenue
of the grid enterprises is f 1 , and the revenue of the users is π1 , as follows:
Z Q0 + Q g  
f1 = f (Q)dQ + p g 0 Q g − Cn Q0 + Q g − β1 CTGC (17)
0

  Z Q0 + Q g
π1 = p1 Q0 + Q g − f (Q)dQ − p g 0 Q g − β2 CTGC (18)
0
where:
Cn is the average unit cost of the grid enterprises, including the cost of purchasing electricity, the cost
of maintenance and management in the process of power transmission, and the cost of purchasing
green certificates due to undertaking the quotas and the cost of fines due to uncompleted quotas.
CTGC is the fixed cost of the green certificate transaction between power grid companies and users
due to information asymmetry, and it is jointly undertaken by the grid enterprises and the users, and its
commitment ratio is β1 : β2 (β1 + β2 = 1, 0 < β1 , β2 < 1) [28].
p1 is the average revenue from the user’s unit of electricity consumption.
(2) When grid enterprises choose to adopt and users choose not to participate in this policy,
the revenue of the grid enterprises is f 2 , and the revenue of the users is π2 , as follows:
   
f2 = ps,0 Q0 + kQ g − Cn Q0 + kQ g − β1 CTGC (19)
   
π2 = p1 Q0 + kQ g − ps,0 Q0 + kQ g (20)
Energies 2019, 12, 2147 13 of 23

(3) When grid enterprises choose not to adopt and users choose to participate in this policy,
the revenue of the grid enterprises is f 3 , and the revenue of the users is π3 , as follows:
   
f3 = ps,0 Q0 + kQ g − Cn Q0 + kQ g (21)
   
π3 = p1 Q0 + kQ g − ps,0 Q0 + kQ g − β2 CTGC (22)

(4) When grid enterprises choose not to adopt and users choose not to participate in this policy,
the revenue of the grid enterprises is f 4 , and the revenue of the users is π4 , as follows:
   
f4 = ps,0 Q0 + kQ g − Cn Q0 + kQ g (23)
   
π4 = p1 Q0 + kQ g − ps,0 Q0 + kQ g (24)

The payoff matrix of the power grid companies and the users under different strategy combinations
is showed in Table 3.

Table 3. Payoff matrix.

Users
Payoff of Players
Participating in (y) Not Participating in (1 − y)
Adopting (x) f 1 , π1 f 2 , π2
Power grid companies
Not adopting (1 − x) f 3 , π3 f 4 , π4

3.3.3. Replicator Dynamic Equations

The theory of the replicator dynamic equation proposed by Taylor and Jonker is the first and
most successful method to describe the dynamic mechanical behavior in an evolutionary game [43].
The replicator dynamic equation is defined as the growth rate of individuals using a strategy
proportional to the difference between the fitness from using the strategy and the average fitness of
the population.
The average fitness for grid companies to adopt and not adopt this policy are W 1 and W 2 ,
respectively, and the average fitness of the population is W, as follows:

W1 = y f1 + (1 − y) f2 (25)

W2 = y f3 + (1 − y) f4 (26)

W = xW1 + (1 − x)W2 (27)

The average fitness for users to participate and not participate is U1 and U2 , respectively, and the
average fitness of the population is U, as follows:

U1 = xπ1 + (1 − x)π3 (28)

U2 = xπ2 + (1 − x)π4 (29)

U = yU1 + (1 − y)U2 (30)

Therefore, the replicator dynamic equation representing that the grid enterprises choose to adopt
this policy is:

dx  
F(x) = = x W1 − W = x(1 − x)[ y( f1 − f2 − f3 + f4 ) + ( f2 − f4 )] (31)
dt
Energies 2019, 12, 2147 14 of 23

Similarly, the replicator dynamic equation that the users choose to participate in the policy can be
obtained as follows:
dy  
G( y) = = y U1 − U = y(1 − y)[x(π1 − π2 − π3 + π4 ) + (π3 − π4 )] (32)
dt

When the growth rate of individuals using a certain strategy is 0, F(x0 ) = 0, G( y0 ) = 0, the state
is likely to become stable. Here, we can obtain four solutions: x1 = 0, x2 = 1, y1 = 0, y2 = 1. There are
four points, (0,0), (0,1), (1,0), (1,1), that may become an evolutionary stable strategy (ESS).

3.3.4. Evolutionary Stable Strategy Analysis

According to the theory of the replicator dynamic equation, on the basis of F(x0 ) = 0 and
G( y0 ) = 0, when F0 (x0 ) < 0 and G0 ( y0 ) < 0, the system reaches the evolutionary stable state; that is,
any change in the system state during the current time period will cause the system state to change in
the opposite direction in the next time period, thereby achieving a steady state.
By calculation, we can get the following equations as shown:

F0 (0) = y( f1 − f2 ) + ( f2 − f4 )
F0 (1) = −y( f1 − f2 ) − ( f2 − f4 )
(33)
G0 (0) = x(π1 − π3 ) + (π3 − π4 )
G0 (1) = −x(π1 − π3 ) − (π3 − π4 )

By analyzing the players’ payoff functions, it is easy to get the following relationship:

f3 = f4 > f2 , π2 = π4 > π3 (34)

In order to comprehensively explore the stability of the above four points and the evolution of the
system state in different situations, we analyzed it in four cases: (1) f1 > f3 , π1 > π4 ; (2) f1 > f3 , π1 < π4 ;
(3) f1 < f3 , π1 > π4 ; and (4) f1 < f3 , π1 < π4 .
Case 1: f1 > f3 , π1 > π4 , that is, f1 > f3 = f4 > f2 and π1 > π2 = π4 > π3 .
f −f
Evolution process analysis of power grid enterprises’ strategy: Let k = f4 − f2 , then 0 < k < 1 is
1 2
established. When y > k, F0 (0) > 0 and F0 (1) < 0, so x1 = 0 is not ESS, and x2 = 1 is ESS. The power
grid enterprises will gradually evolve from choosing not to adopt this policy to adopting it. When y < k,
F0 (0) < 0 and F0 (1) > 0, so x1 = 0 is ESS, and x2 = 1 is not ESS. The power grid enterprises will
gradually
Energies 2019,evolve
12, x from choosing to adopt this policy to not. The evolution process is shown in Figure
15 of 3a.
23

t t
（0，1） （1，1） （0，1） （1，1） C （0，1） （1，1） B

k k

O（0，0） A
（0，0） （1，0） （0，0） （1，0） （1，0）
3a 3b 3c

Figure 3. Analysis
Figure 3. Analysisofofthe
theevolution
evolution process
process in Case
in Case 1. Power
1. (a) (a) Power
grid grid companies;
companies; (b) users;
(b) users; and (c)and (c)
power
power grid companies
grid companies and users.
and users.

The empirical data is introduced below to verify the evolution of this process. Let
X = f1 − f 3 = 100 ; Y = π 1 − π 4 = 100 ; Z = f 4 − f 2 = 50 ; and W = π 4 − π 3 = 50 . Then, the replicator
dynamic equations can be expressed as follows:
dx
F ( x) =
dt
( )
= x W1 − W = x (1 − x )  y ( X + Z ) − Z  (35)
 （0，1） （1，1） （0，1） （1，1） C （0，1） （1，1） B

Energies 2019, 12, 2147 D 15 of 23

k k
π −π
Evolution process analysis of users’ strategy: let t = π41 −π33 , then 0 < t < 1 is established.
When x > t, there are G0 (0) > 0 and G0 (1) < 0, so y1 = 0 is not ESS, and y2 = 1 is ESS. The users will
gradually evolve from（1，0） choosing not to participate in（1，0）this policy toO（0，0）participating in it.（1，0）
When A x < t,
（0，0） （0，0）
there are G0 (0) 3a < 0 and G0 (1) > 0, so y1 = 0 is3bESS, and y2 = 1 is not ESS. The users 3c will gradually
evolve from
Figure choosingoftothe
3. Analysis participate in this policy
evolution process in Caseto1.not
(a) choosing.
Power gridThe evolution
companies; (b)process is shown
users; and (c) in
Figure
power3b.grid companies and users.
Then, the final evolution process of the power grid enterprises and users in this case can be
obtained, as shown data
The empirical in Figure 3c.
is introduced below to verify the evolution of this process. Let
X = f1The
− f 3 empirical
= 100 ; Ydata= π 1is− introduced
π 4 = 100 ; below Z = f 4 to 2 = 50 ; and W = π 4 − π 3 = 50 . Then, the 1replicator
− fverify the evolution of this process. Let X = f − f3 = 100;
Y = π − π
dynamic1 equations
4 = 100; Z = f −
can be expressed
4 f 2 = 50;as follows: 4 π3 = 50. Then, the replicator dynamic equations
and W = π −
can be expressed as follows:
dx
F ( x) =
dt
dx (=x W )
 1 − W = x (1 − x )  y ( X + Z ) − Z  (35)
F(x) = = x W1 − W = x(1 − x)[ y(X + Z) − Z] (35)
dt
dy
G ( y) =
ddy
t
( )
= y U 1 − U = y (1 − y )  x ( B + D ) − D  (36)
G( y) = = y U1 − U = y(1 − y)[x(B + D) − D] (36)
dt
{
In the two-dimensional plane formed by the point set, ( x, y )⏐0 < x < 1,0 < y < 1 , 19 ×19 points }
In the two-dimensional plane formed by the point set, {(x, y)|0 < x < 1, 0 < y < 1}, 19 × 19 points are
are uniformly
uniformly selected
selected as initial
as the the initial strategies
strategies in thein the system,
system, and theand the numerical
numerical solution
solution of of the
the differential
differential
equations isequations
obtained by is using
obtained by function
the ode45 using the ode45 function
in MATLAB2016 in MATLAB2016
software software
(MathWorks, Natick, MA,
(MathWorks,
USA). Finally,Natick, MA, strategies
the different USA). Finally, the different
are obtained. strategies
The strategies’ are obtained.
evolutions Thecompany
of the grid strategies'
and
evolutions
user over of timetheare
grid company
shown and user
in Figure 4. over time are shown in Figure 4.

Figure
Figure 4. 4. Strategies’
Strategies’ evolutions
evolutions ofof
thethe grid
grid company
company and
and user
user over
over time
time inin Case
Case 1. 1.

Theevolution
The evolution of of
thethe integrated
integrated strategies
strategies of the
of the gridgrid company
company andand the user
the user canobtained,
can be be obtained,
as
as
shownshown in 12,
in2019,
Energies Figure
Figure x5. 5. 16 of 23
As shown in Figures 3 and 5, in this case, points (0,0) and (1,1) are both ESS. The final
evolutionary stable state of the system depends on the initial strategies of the players. When the
initial strategy of the players is in regional OADCO, see Figure 3, with the evolution process, the
power grid enterprises choosing not to adopt and the users choosing not to participate in the policy
will become the final evolution result. When the initial strategy of the player is in the regional
ADCBA, see Figure 3, with the evolution process, the grid enterprises choosing to adopt and the
users choosing to participate in the policy will become the final evolution result.

Figure5.5.Evolution
Figure Evolutionof
ofthe
theintegrated
integratedstrategy
strategyin
inCase
Case1.1.

Case 2: f1 > f 3 , π 1 < π 4 , that is, f1 > f 3 = f 4 > f 2 and π 2 =π 4 > π 1 > π 3 or π 2 =π 4 > π 3 > π 1 .
The evolution process of the power grid enterprises’ strategy is the same as in case 1, so no
further discussion is repeated here. The evolution process is shown in Figure 6a.
π −π3
Analysis of the evolution process of users’ strategy: Let t = 4 .
π1 − π 3
 Case 2: f1 > f 3 , π 1 < π 4 , that is, f1 > f 3 = f 4 > f 2 and π 2 =π 4 > π 1 > π 3 or π 2 =π 4 > π 3 > π 1 .
The evolution process of the power grid enterprises’ strategy is the same as in case 1, so no
further discussion is repeated here. The evolution process is shown in Figure 6a.
π −π3
Analysis of the evolution process of users’ strategy: Let t = 4 .
Energies 2019, 12, 2147 π1 − π 3 16 of 23

π −π3
1) When π 2 =π 4 > π 1 > π 3 , t = 4 > 1 does not exist. G′ ( 0) < 0 and G′ (1) > 0 , so y1 = 0
As shown in Figures 3 and 5, in this π 1 −case,
π 3 points (0,0) and (1,1) are both ESS. The final evolutionary
stable 2 = 1system
and ofythe
is ESS,state is notdepends
ESS; on the initial strategies of the players. When the initial strategy of
the players is in regional OADCO, seeπ 4Figure − π 3 3, with the evolution process, the power grid enterprises
2) When π 2 =π 4 > π 3 > π 1 , t = < 0 does not exist. G′ ( 0) < 0 and G′ (1) > 0 , so y1 = 0
and the usersπchoosing
1 − π3
choosing not to adopt not to participate in the policy will become the final
evolution result. When the
is ESS, and y2 = 1 is not ESS. initial strategy of the player is in the regional ADCBA, see Figure 3, with the
evolution process, the grid enterprises choosing to adopt and the users choosing to participate in the
policyThus,
will become
the users the final
will evolution
gradually result.
evolve from choosing to participate in this policy to not
Case 2:
choosing. The > f3 , π1 <process
f1 evolution π4 , thatisis,shown
f1 > f3in=Figure
f4 > f26b.
and π2 = π4 > π1 > π3 or π2 = π4 > π3 > π1 .
The
Then,evolution
the final process of theprocess
evolution power grid of theenterprises’
power grid strategy is the same
enterprises as in case
and users 1, socase
in this no further
can be
discussion is repeated here.
obtained, as shown in Figure 6c. The evolution process is shown in Figure 6a.

（0，1） （1，1） （0，1） （1，1） C （0，1） （1，1） B

k k

O（0，0） A
（0，0） （1，0） （0，0） （1，0） （1，0）
6a 6b 6c

Figure6.6.Analysis
Figure Analysisofofthe evolution
the process
evolution in Case
process 2. (a)2.Power
in Case grid companies;
(a) Power (b) users;
grid companies; (b) and (c) and
users; power
(c)
grid
powercompanies and users.
grid companies and users.
π −π 4 3
Analysis
The empiricalof the evolution
data is process
introducedof users’belowstrategy: Let t =the
to verify .
evolution
π1 −π 3 of this process. Let
π4 −π3
X = (1)
f1 −When π2; =Yπ=4 π>1 −ππ1 4>=π−3100
f 3 = 100 = 3f 4>− 1f 2does
, t =; πZ1 −π = 50 not
; and W =Gπ(40−) π<3 0=and
exist. 0
50 . G 0 (1) > 0, so y = 0 is
Then, same sampling
1
ESS, and y = 1 is not ESS;
and calculation method as in case 1 is used to solve the evolution process of the strategies of the
2
grid (2) When πand
company π4 >with
2 =user π3 >time = ππ14 −π
π1 , tunder
−π3
< 0 does
different
3 initial ) <shown
exist. G0 (0as
notstrategies, 0 andin (1) > 0,7.so y1 = 0 is
G0Figure
ESS, and y2 = 1 is not ESS.
Thus, the users will gradually evolve from choosing to participate in this policy to not choosing.
The evolution process is shown in Figure 6b.
Then, the final evolution process of the power grid enterprises and users in this case can be
obtained, as shown in Figure 6c.
The empirical data is introduced below to verify the evolution of this process. Let X = f1 − f3 = 100;
Y = π1 − π4 = −100; Z = f4 − f2 = 50; and W = π4 − π3 = 50. Then, same sampling and calculation
method as in case 1 is used to solve the evolution process of the strategies of the grid company and
user with
Energies time
2019, 12, xunder different initial strategies, as shown in Figure 7. 17 of 23

Figure7.7.Strategies’
Figure Strategies’evolutions
evolutionsof
ofthe
thegrid
gridcompany
companyand
anduser
userover
overtime
timein
inCase
Case2.2.

The evolution of the integrated strategies of the grid company and the user can be obtained, as
shown in Figure 8.
Energies 2019, 12, 2147 17 of 23
Figure 7. Strategies’ evolutions of the grid company and user over time in Case 2.

The evolution
The evolution ofof the
the integrated
integrated strategies
strategiesof
ofthe
thegrid
gridcompany
companyand
andthe user
the can
user bebe
can obtained, as
obtained,
shown
as in in
shown Figure 8. 8.
Figure

Figure 8. Evolution
Figure8. Evolution of
of the
the integrated
integrated strategy
strategy in
in Case
Case 2.
2.

As
Asshown
shownininFigures
Figures 6 and
6 and 8, in
8, this case,
in this point
case, (0, 0)(0,
point is 0)
ESS.
is With
ESS. the
With evolution process,
the evolution the power
process, the
grid enterprises choosing not to adopt and the users choosing not to participate
power grid enterprises choosing not to adopt and the users choosing not to participate in the policy in the policy will
become the final
will become evolution
the final result.
evolution result.
Case 3: f 1 < f 3 , π1 > π4 , that is, π1 > π2 = π4 > π3 and f3 = f4 > f1 > f2 or f3 = f4 > f2 > f1 .
Case 3: of
Analysis f1 <the π 1 > π 4 , that
f 3 ,evolution is, πof
process π 2 =π 4 grid
1 >power > π 3 enterprises’
and f 3 = f 4strategy:
> f1 > f 2 Let f 3 =f4 −f 4f2>. f 2 > f1 .
or k =
f1 − f2
f − f2 4 − f2
0 (1) k>=0, fso
Analysis
(1) When of f3 the > f1 > f2 ,process
= f4evolution k = f4 −of >
power grid
1 does notenterprises’ < 0 and FLet
exist. F0 (0) strategy: x1 =. 0 is ESS,
1 f2 f1 − f 2
and x2 = 1 is not ESS.
f −f
(2) When f3 = f4 > f2 > f1 , k = f4f− f−2 < 0 does not exist. F0 (0) < 0 and F0 (1) > 0, so x1 = 0 is ESS,
1 4 2 f2
and x1) When f = f > f1 > f 2 , k =
2 = 1 is not 3ESS.4
> 1 does not exist. F′ ( 0 ) < 0 and F′ (1) > 0 , so x1 = 0
f1 − f 2
Thus, the power grid enterprises will gradually evolve from choosing to adopt this policy to not
is ESS, and x2 = 1 is not ESS.
choosing.
Energies 2019,The
12, xevolution process is shown in Figure 9a. 18 of 23
f4 − f2
2) When f 3 = f 4 > f 2 > f1 , k = < 0 does not exist. F′ ( 0 ) < 0 and F′ (1) > 0 , so x1 = 0
f1 − f 2 t t
ESS, and x2 = 1 is（1，1）
is（0，1） not ESS. （0，1） （1，1） C（0，1） （1，1） B

Thus, the power grid enterprises will gradually evolve from choosing to adopt this policy to
not choosing. The evolution process is shown in Figure 9a.
The evolution process of the users’ strategy is the same as in Case 1, so no further discussion is
repeated here. The evolution process is shown in Figure 9b.
Then, the final evolution process of the power grid enterprises and users in this case can be
obtained, as shown in Figure 9c.

O（0，0） （1，0）
A
（0，0） （1，0） （0，0） （1，0）
9a 9b 9c

Figure 9.9. Analysis

Figure Analysisofofthe
the evolution
evolution process
process in Case
in Case 3. (a)3.Power
(a) Power grid companies;
grid companies; (b) and
(b) users; users;
(c)and (c)
power
power
grid grid companies
companies and users.
and users.

The
The evolution
empiricalprocess of the
data is users’ strategy
introduced belowis to
the verify
same asthe
in Case 1, so nooffurther
evolution this discussion
process. Letis
X = f1 − f 3 = −100 ; Y = π 1 − π 4 = 100 ; Z = f 4 − f 2 = 50 ; and W = π 4 − π 3 = 50 . Then, the same
repeated here. The evolution process is shown in Figure 9b.
Then,and
sampling thecalculation
final evolution
method process
as in of the1 power
Case is usedgrid enterprises
to solve and users
the evolution in this
process case
of the can be
strategies
obtained, as shown in Figure 9c.
of the grid company and user with time under different initial strategies, as shown in Figure 10.
The empirical data is introduced below to verify the evolution of this process. Let X = f1 − f3 =
−100; Y = π1 − π4 = 100; Z = f4 − f2 = 50; and W = π4 − π3 = 50. Then, the same sampling and
calculation method as in Case 1 is used to solve the evolution process of the strategies of the grid
company and user with time under different initial strategies, as shown in Figure 10.
 power
power grid
grid companies
companies and
and users.
users.

The
The empirical
empirical data
data isis introduced
introduced below
below to to verify
verify thethe evolution
evolution of of this
this process.
process. LetLet
X = f − f = −
X = f1 − f 3 = −100
1 3 100 ;; Y = π − π = 100
Y = π 1 − π 4 = 100
1 4 ;; Z = f − f =
Z = f 4 − f 2 = 50
4 2 50 ;
; and
and W = π 4 − π 3 = 50
W = π 4 − π 3 = 50 .
. Then,
Then, the
the same
same
sampling
sampling and
and calculation
calculation method
method as
as in
in Case
Case 11 isis used
used to
to solve
solve the
the evolution
evolution process
process of
of the
the strategies
strategies
Energies 2019, 12, 2147 18 of 23
of
of the grid company and user with time under different initial strategies, as shown in Figure 10.
the grid company and user with time under different initial strategies, as shown in Figure 10.

Figure
Figure 10. Strategies’
10. Strategies’
Figure10. evolutions
Strategies’ evolutions of
evolutions of the
of the grid
the grid company
grid company and
companyand user
anduser over
userover time
overtime in
timein Case
inCase 3.
Case3.
3.

The
The evolution of
The evolution of the
the integrated
the integratedstrategies
integrated strategiesof
strategies ofthe
of thegrid
the gridcompany
grid companyand
company and
and the user
the
the can
user
user be
can
can obtained,
bebe as
obtained,
obtained, as
shown
as in
shown Figure
in 11.
Figure
shown in Figure 11. 11.

Figure 11. Evolution

Figure11.
Figure 11. Evolution of
of the
the integrated
the integratedstrategy
integrated strategyin
strategy inCase
in Case3.
Case 3.
3.

As
As shown ininFigures 9 and 11,11,in thisthis
case, point (0,0) is ESS. With With
the evolution process, the power
As shown
shown in FiguresFigures 99 andand 11, inin this case,
case, point
point (0,0)
(0,0) isis ESS.
ESS. With the the evolution
evolution process,
process, thethe
grid
power enterprises
Energies 2019, 12, x choosing not to adopt and the users choosing not to participate in the policy
grid enterprises choosing not to adopt and the users choosing not to participate in the will
19 of 23
policy
power grid enterprises choosing not to adopt and the users choosing not to participate in the policy
become
will the final evolution result.
will become
become the final
Case 4:4: fthe f <final
evolution result.
f , πevolution
< π , thatresult.
Case is, f 3 =f f 4>>f f1>> ff22 ororf3 =
1 1< f3 ,3 π11 < π44 , that is, f3 = 4 1
f 3 =f f> > f 2 >f f1and
4 4 f2 > 1 π2 π=2 =ππ4 4>> π
and π11 >
> ππ33 or
or
ππ22 =
=ππ π 3π>3 π>1 π
4 4> > . 1.
The
The evolution
evolutionprocess processof ofthe
thepower
powergridgridenterprises’
enterprises’ strategy
strategy is is the
the same
same as as in
in Case
Case 3, 3, and
and the
the
evolution
evolution process
process is is shown
shown in in Figure
Figure 12a.
12a. The evolution process of the users’ users’ strategy is the the same
same asas
that of Case 2, and the evolution process is shown
that of Case 2, and the evolution process is shown in Figure 12b. in Figure 12b. Then, the final evolution process
final evolution process of of
the
the power
power gridgrid enterprises
enterprises and and users
users in
in this
this case
case can
can bebe obtained,
obtained,as asshown
shownin inFigure
Figure12c.
12c.

（0，1） （1，1） （0，1） （1，1） D（0，1） （1，1） B

（0，0） （1，0） （0，0） （1，0）

O A
（0，0） （1，0）
12a 12b 12c

Figure Analysisofofthethe
Figure 12. Analysis evolution
evolution process
process in Case
in Case 4. (a)4.Power
(a) Power grid companies;
grid companies; (b)and
(b) users; users;
(c)
and (c) power grid companies
power grid companies and users. and users.

The empirical data is introduced below to verify the evolution of this process. Let
X = f1 − f 3 = −100 ; Y = π 1 − π 4 = −100 ; Z = f 4 − f 2 = 50 ; and W = π 4 − π 3 = 50 . Then, the same
sampling and calculation method as in case 1 is used to solve the evolution process of the strategies
of the grid company and user with time under different initial strategies, as shown in Figure 13.
 （0，0） （1，0） （0，0） （1，0）
O
O（0，0） A A
（0，0） （1，0） （0，0） （1，0） （0，0） （1，0）
（1，0）
12a
12a 12b
12b 12c
12c
Figure
Figure 12.
12. Analysis
Analysis of
of the
the evolution
evolution process
process in
in Case
Case 4.
4. (a)
(a) Power
Power grid
grid companies;
companies; (b)
(b) users;
users; and
and (c)
(c)
Energies 2019, 12, 2147 19 of 23
power grid companies and users.
power grid companies and users.

The
The empirical
The empirical
empiricaldata data
data is
is introduced
introduced
is introduced belowbelow
below
to verify to verify
tothe
verify the
the of
evolution evolution
evolution
this process. of
of this
Let Xprocess.
this = f1 − f3Let
process. Let
=
X = f
X = f1Y
−100; −
1 −=
f = − 100
f33 π=1 −−100 ; Y = π
π4 ;= Y−100; − π
= π11 −Zπ= = −
44 =f −−100
100f ;
;= Z
Z =
=
50; f
f −
44 − W
and f
f =
22 ==50
50π ;
; −and
and
π =WW =
=
50. π
π −
Then, π =
= 50
44 − π 33 the
50 .
.
sameThen,
Then, the
the
sampling same
same
and
4 2 4 3
sampling
sampling and
calculation and calculation
calculation
method method
method
as in case 1 is as
as in
in case
used case 11 is
is used
to solve used to
to solve
solve the
the evolution the evolution
evolution
process of the process
process of
of the
strategies ofstrategies
the strategies
the grid
of the grid
of the gridand
company company
company and user
andtime
user with userunderwith time
with time under
under
different different
different
initial initial strategies,
initialasstrategies,
strategies, shown inas as shown
shown
Figure 13.in Figure 13.
in Figure 13.

Figure
Figure 13.
13. Strategies’
Figure 13. evolutions
Strategies’ evolutions of
evolutions of the
of the grid
the grid company
grid company and
company and user
and user over
user over time
overtime in
timein Case
inCase 4.
Case4.
4.

The
The evolution
The evolution of the integrated
of the
the integrated strategies
integrated strategiesof
strategies ofthe
of thegrid
the gridcompany
grid companyand
company andthe
and the
the user
user
user can
can
can bebe
be obtained,
obtained,
obtained, as
as
as shown
shown in in Figure
Figure 14.
shown in Figure 14. 14.

Figure
Figure 14. Evolution
Figure14.
14. Evolution of
Evolution of the
of the integrated
the integrated strategy
integrated strategy in
strategy in Case
in Case 4.
Case 4.
4.

As shown in Figures 12 and 14, in this case, point (0,0) is ESS. With the evolution process, the power
grid enterprises choosing not to adopt and the users choosing not to participate in the policy will
become the final evolution result.

3.3.5. Application Analysis of the “Incremental Electricity Price” Policy

Through the above analysis, we can obtain the following conclusions: (1) the “incremental
electricity price” policy is feasible under certain conditions; (2) whether the policy is feasible depends on
the inherent attributes of the power grid enterprises and users ( f1 − f3 > 0, π1 − π4 > 0); and (3) whether
the policy is feasible depends on the initial strategies of power grid enterprises and users.
From the results of the empirical data analysis of Case 1, a very important factor for the successful
implementation of this policy is the initial strategies of grid companies and users. When the policy
is implemented, if more grid companies are willing to adopt the policy and more users choose to
participate in the policy, the initial strategies of the player is in the ADCBA area, and the possibility
of successful implementation of the policy will become greater. To this end, before the formal
implementation of the policy, government departments need to strengthen the promotion of the policy,
understand the electricity demand of users in the area under their jurisdiction, and grasp in advance the
intention of the grid enterprises and users to adopt the policy. When a sufficient number of users and
Energies 2019, 12, 2147 20 of 23

grid companies in the area under their jurisdiction are willing to adopt this policy, the implementation
of this policy can effectively improve the possibility of successful implementation of the policy.
The “incremental electricity price” policy proposed in this paper is a supplementary policy
mechanism aiming to resolve the problems the RPS policy may face at the present stage. On the one
hand, its successful implementation (the evolutionary stability strategy is (1.1)) can further improve the
RPS policy, so that RPS can fully play its role in solving the problems faced by China’s renewable energy
development. On the other hand, if the policy fails, the evolutionary stability strategy is (0.0), which will
not affect the implementation of the original RPS policy. In general, the introduction of “incremental
electricity price” policy can effectively increase the possibility of successfully implementation of the
RPS mechanism in China.

4. Conclusions
Taking the RPS policy as the research object, this paper explored the effectiveness, feasibility
conditions, and possible problems of the RPS policy in promoting renewable energy consumption and
alleviating the government’s pressure on renewable energy power generation subsidies by establishing
a revenue function model. Then, aiming at resolving the possible problems in the implementation of
the RPS policy, specific suggestions and an improvement scheme were proposed, and the possibility
of implementing the improved scheme was verified by establishing an evolutionary game model.
The specific research findings are as follows:
(1) The RPS mechanism in China is essentially a comprehensive implementation policy of FiT
and RPS, and whether the new RPS mechanism is effective depends on whether the original FiT can
effectively promote the development of renewable energy; that is, the original FiT policy can effectively
promote the development of renewable energy and is the basic condition for the effectiveness of the
RPS policy.
(2) Under the current RPS policy, there will be a phenomenon that the price of green certificates
is too low, which may result in the RPS mechanism being ineffective in alleviating the pressure on
government funding subsidies. Therefore, energy authorities should set a lower limit on the price of a
green certificate transaction.
(3) Due to the characteristics of China’s energy structure, the implementation of the reform plan
from FiT to RPS is facing great resistance. Based on this, the “incremental electricity price” policy
proposed by this article from the demand side can improve the possibility of successful implementation
of the RPS mechanism in China.
Although this paper has obtained some very meaningful conclusions through the study of China’s
RPS policy, there are still limits.
(1) Use of the income function model to explore the validity, feasibility conditions, and possible
problems of the RPS policy avoids the shortcomings of insufficient theoretical support of subjective
research due to a lack of data. However, the best way to study the impact of policy reforms on
renewable energy development is through the use of empirical data. After the RPS policy has been
implemented in China for a period of time, our future study will focus on quantifying the impact of
policy changes on the development of renewable energy power generation.
(2) We put forward policy recommendations for the problems that may be encountered in the RPS
policy and designed the “incremental electricity price” supplementary policy to increase the possibility
of successful implementation of RPS in China. However, as mentioned in the article, the setting of the
green certificate lower limit price needs to consider many factors, which makes it difficult to set an
appropriate value. In addition, in recent years, with the rapid development of the energy internet in
China, implementation of the “incremental electricity price” policy based on the characteristics of users’
electricity usage has become possible. However, as stated in the article, the successful implementation
of this policy can only occur under certain conditions, relying on the government’s early promotion of
the policy and the intention of grid companies and users to adopt the policy.
Energies 2019, 12, 2147 21 of 23

Author Contributions: Methodology, L.S. and F.D.; validation, F.D. and L.S.; writing—original draft preparation,
F.D., L.S., X.D., Y.L., and Y.S.
Funding: This research was funded by the Fundamental Research Funds for the Central Universities
(No. 2019FR003) and the Social Science Foundation of Ministry of Education of China (No. 15YJA630011).
Acknowledgments: The authors would like to thank editors and reviewers for critically reviewing the manuscript.
Conflicts of Interest: The authors declare no conflict of interest.

Nomenclature
pr Feed-in-tariff of renewable energy power generation
pb Benchmark feed-in-tariff of local desulfurized coal unit power generation
ps, f Subsidized electricity price for renewable energy power generation under the FiT policy
Average price of green certificates transactions between power generation companies and grid
pg
companies
ps,r Average subsidized electricity price for renewable energy power generation under the RPS policy
πp Revenue of power generation company
pf Average feed-in tariff of fossil energy power
pr Average feed-in tariff of renewable energy power and pr = pb + ps,r + p g
C f ,g Average unit power generation cost of fossil energy
Cr,m Average unit management cost of renewable energy
Cr,g Average unit power generation cost of renewable energy
Cr,m Average unit management cost of renewable energy
πn Revenue of the power grid companies
ps Average selling price of the power grid enterprises to the consumers
Cn,m,r Average operation and maintenance cost of unit renewable energy power transmission
Cn,m, f Average operation and maintenance cost of unit fossil energy power transmission
Renewable energy power generation quota target undertaken by the power grid enterprises
A
(0 ≤ A ≤ 1)
pp Average unit penalty price
Average environmental income obtained by the governments for unit renewable energy power
pe
generation
pg 0 Average price of green certificate transactions between grid companies and users

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 Energy Policy 128 (2019) 212–222

Contents lists available at ScienceDirect

Energy Policy
journal homepage: www.elsevier.com/locate/enpol

Measures to promote renewable energies for electricity generation in Latin T

American countries
⁎
C. Washburna, M. Pablo-Romerob,
a
University of Guayaquil, Faculty of Economic Science, Guayaquil, Ecuador
b
Department of Economic Analysis and Political Economy, Universidad de Sevilla, Spain

A R T I C LE I N FO A B S T R A C T

Keywords: This study analyses the measures used to promote renewable energy for electricity generation in the 18 Latin
Latin America American countries that signed the Paris Agreement, in an electricity demand growth context. The Latin
Renewable energy American countries have had a remarkable growth in the use of renewable energy for electricity generation.
Electricity generation Biomass, wind and solar energy have experienced strong growth, however, their participation in the energy mix
Promotion measures
remains small. All the studied countries have established renewable energy targets, 16 having adopted at least
one promotion measure. The most used measures are tax incentives, mainly through exemptions in income tax,
value added or sales tax and on tariffs. Also, most countries are using auction systems, which are replacing the
Feed-In Tariff system. The net metering system adoption is also growing in the region. The results of the study
show a positive relationship between the most active countries in renewable energy promotion and the per-
formance achieved in the studied years. Therefore active policies are considered necessary for the future de-
velopment of renewable energies.

1. Introduction renewables for energy production.

According to the International Energy Agency (IEA, 2018), the in-
crease in CO2 emissions between the five-year periods, 2006–2010 and
2011–2017, amounted, in per capita terms, to 3.72% worldwide. De-
spite the lower CO2 emission levels in Latin America, these are growing
at a faster pace than in the rest of the world, with its increase between
the periods mentioned being 10.06%, much higher than the worldwide
figure (see Fig. 1).
With the aim of reducing the increase in emissions, 195 countries
around the world committed themselves, through the Paris Agreement,
to reduce emissions and avoid the increase in temperature by more than
2 °C, compared to pre-industrial values. Among these countries, 18
Latin American (LA) countries signed the agreement, aware of the need
to reduce emissions.
In signing the agreement in 2015, the signatory countries in-
dividually sent their Intended Nationally Determined Contributions
(INDCs), in which the specific objectives for the reduction of
Greenhouse Gases (GHG) were established. Table 1 summarizes the
commitments acquired by LA countries in their respective INDCs. The
commitments may be summarized in the reduction of emissions in
various percentages, for which countries propose and commit to adopt
various measures, such as percentage increases in the participation of
In this sense, the CO2 emissions growth has been linked, among
other factors, to energy consumption and its evolution over time
(Kasman and Duman, 2015; Omri, 2013; Robledo and Olivares, 2013;
Saboori and Sulaiman, 2013). Thus, according to BP Global (2017),
primary energy consumption went from 58,448.6 to 64,049.0 Mtoe
worldwide, between 2006 and 2015, increasing by 9.58%. This growth
was exceeded in the Latin American region during the same period,
which could explain its higher emissions growth.
The energy consumption growth in LA countries has been associated
with their economic expansion. Pablo-Romero and De Jesús (2016)
indicate that these countries experience an exponentially growing en-
ergy consumption trend as their GDP per capita increases. Therefore,
they need to apply active energy policies to meet the objectives of their
INDCs. Pablo-Romero and De Jesús (2016) and Zilio and Recalde
(2011) point out the need to promote measures to diversify the energy
mix, promoting the use of renewable energies (REs). In this same line,
Hanif (2017) indicates that economic growth and increasing urbani-
zation are generating greater consumption of fossil fuels, contributing
to environmental deterioration. In addition, the author also considers
that the use of renewable energy (RE) can help to meet the growing
demand for energy with less environment damage.
Despite the impulse to use fossil energies, the Latin American region

⁎
Corresponding author.
E-mail address: mpablorom@us.es (M. Pablo-Romero).

https://doi.org/10.1016/j.enpol.2018.12.059
Received 18 June 2018; Received in revised form 28 December 2018; Accepted 30 December 2018
0301-4215/ © 2018 Elsevier Ltd. All rights reserved.
C. Washburn, M. Pablo-Romero
Fig. 1. CO2 emissions in per capita: worldwide and LA region (2006–2010 and
2011–2017 average values).
continues to maintain a level of clean energy use, superior to other
regions of the world. Thus, according to the CEPAL (2018), the region
was considered a world leader in RE, since it reached almost 28% of
total energy consumption, while the world average remained at 18%. In
addition, it is worth highlighting the high presence of REs in electricity
generation, with the average, through the period 2011–2015, being
equal to 58.66% of total electricity production, while the world average
stood at 22.15%. This is due, according to Vergara et al. (2013), to the
high use of hydroelectric energy. However, it is important to note that
its use has tended to decrease in recent years. For this reason, a greater
promotion of REs may be considered appropriate in order to meet the
targets of the INDCs. In addition to the use of hydroelectric energy, it is
also worth highlighting the high potential for use of Non-Conventional
Renewable Energies (NCRE), such as solar, biomass or wind energy.
The aim of this paper is to thoroughly analyze what measures Latin
American countries are currently using, to promote the use of RE in
generating electricity, in a demand growth context. Similar analyses
have been undertaken for other economies, such as the European
Countries. For example, Cansino et al. (2010), analyze the fiscal in-
centives to promote green electricity. Additionally, Pablo-Romero et al.
(2017a), offer an overview of feed-in tariffs, premiums and tenders to
promote electricity from biogas.
Likewise, the report by IRENA (2015) includes a section related to
the policies implemented in order to promote the use of RE in gen-
erating electricity, up to 2015, in the LA countries.
Following these studies, this paper also focuses on the electricity
sector, comparing and detailing the promotion measures established
within the sector in the 18 LA countries analyzed up to 2018, thereby
updating the IRENA (2015) report. This update is relevant as it can take
into account the measures implemented since the Paris Agreement was
signed, with the commitment to new objectives. Likewise, the study
goes beyond the IRENA (2015) report as it details, to a greater extent,
many of the measures established, especially those related to taxation,
subsidies and funds. Additionally, it highlights the relationship between
the established measures and the RE achievements in the sector.
The paper is structured as follows. After this introduction, Section 2
shows the evolution of the electricity consumption and the role of REs
in electricity generation. Section 3 analyzes the objectives and measures
established to promote the use of REs in electricity generation. Section
4 discusses the use of current policies and, finally, Section 5 concludes.
2. Electricity consumption and participation of REs in electricity
production in LA countries
2.1. Electricity production and consumption trend in LA countries
Columns 2, 3 and 4 in Table 2 show the per capita electricity con-
sumption trend worldwide, in the LA region and in the LA signatories of
213
Energy Policy 128 (2019) 212–222
INDCs. The last row of the afore-mentioned columns shows that the
average consumption of electricity per capita worldwide was
2.77 MWh, in the period 2006–2010, and 3 MWh in the subsequent five
years, the growth rate being 8.30%. In the LA region, the per capita
electricity consumption was 1.63 MWh and 1.88 MWh, in the first and
second periods, respectively, the growth rate being equal to 15.40%.
Thus, although the Latin American region had lower per capita con-
sumption than the global level, the percentage increase between the
periods was almost double that recorded worldwide. It should also be
noted that, according to KPMG (2016), the demand for electricity in the
region will grow by 91% in 2040, due to industrialization and the
improvement of the middle class. Table 2 also shows that the LA
country with the highest electricity consumption per capita increase
was Paraguay, followed at a certain distance by Ecuador, Bolivia, Pa-
nama, Peru, Nicaragua, Colombia and Suriname. Among the countries
with the lowest growth rates are Mexico, Guatemala and Costa Rica.
The only country that registered a negative growth rate was Venezuela.
It should also be noted that the only two countries with per capita
electricity consumption values higher than the world level, in the
second period, were Chile and Suriname.
In terms of electricity production, columns 5, 6 and 7 in Table 2
show that the LA growth rate was higher than that worldwide. Bolivia,
Ecuador, Panama, Peru and Uruguay stand out in this growth, which
presented higher rates than those registered both worldwide and in the
LA region.
In terms of the participation of REs in electricity generation, the
previous pattern in the LA region, with respect to the world, changes
radically. Thus, although the share of REs in electricity generation in
both periods was higher in the LA region, the share of RE in the Latin
American energy mix has increased at a slower pace in the latter 5 year-
period, as opposed to the world average. Accordingly, while the last
row of columns 8 and 9 in Table 2 show that the world average was
19.28% during 2006–2010, and 22.18% during 2011–2015, the LA
average values significantly surpassed those percentages, being 59.55%
and 58.66%, respectively. However, when comparing the participation
of REs in the electricity generation growth rate, the worldwide value
was 15.01%, while the LA region had a negative value. Thus, although
the production of REs increased in the LA region, it did so at a rate
lower than that of electricity production. Finally, it should be noted that
the countries with the greatest decrease in participation were Bolivia,
Chile, Peru and Suriname, due to the increase in fossil fuel use, and the
increase in the use of gas for electricity generation in Bolivia and Peru.
The increase in the use of oil and coal in Chile and Suriname, should be
highlighted.
2.2. RE use for electricity generation in LA countries
The electricity consumption and production growth trend, together
with the relative weight loss of the REs in the production of electricity
in the LA countries, makes the analysis of the evolution of the use of REs
in the region interesting. Fig. 2 shows the changes in the share of RE
sources in electricity generation, between the 2006–2010 and
2011–2015 periods, worldwide and in the LA region. It can be seen that
hydroelectric energy is the main source of renewable electricity gen-
eration for all periods and in both areas. In LA countries, however, its
percentage and its decrease between periods are significantly higher. It
also highlights the significant increase in the share of wind and pho-
tovoltaic energy worldwide, which contrasts with the low value and
lower growth in Latin America.
The participation of REs in electricity generation also has notable
differences between countries, which have been accentuated in recent
years, as several of these countries have begun investing in technologies
such as solar and wind. Fig. 3 shows the evolution of the participation
of the main sources of RE production in the LA region. Firstly, the high
weight of hydroelectric energy in electricity generation in the region
should be highlighted. Paraguay stands out notably with a 100% weight
C. Washburn, M. Pablo-Romero Energy Policy 128 (2019) 212–222

Table 1
Main targets in the INDCs: LA Countries.
Source: own elaboration from UNFCCC (2018).
Argentina Reduction of GHG emissions: 15% in 2030. With international financing, there could be a 30% reduction in 2030.
Bolivia Targets related to three areas: water, energy and forests and agriculture. In terms of energy, it is set to reduce CO2 emissions in energy production to 0.04 MT /
MWH. The time horizon is 2030.
Brazil Reduction of GHG emissions by 37% below 2005 levels in 2025.
Chile Reduction of CO2 emissions per unit of GDP by 30% compared to the 2007 level, in the year 2030. Additionally, with international financing, the country commits
to increase its reduction to 35–45%.
Colombia Reduction of GHG emissions by 20% with respect to projected emissions for 2030. With international financing, the country commits to increase its reduction to
20–30%.
Costa Rica Absolute maximum emissions of 9374000 net tCO2eq in 2030, with a proposed trajectory of per capita emissions of 1.73, 1.19 and 0.27 net tons per capita in 2030,
2050 and 2100, respectively.
Ecuador Reduction of emissions by 20.4–25% in 2030. With international financing, the country commits to increase its reduction to 37.5–45.8%.
El Salvador Renewable energy increase in electricity production of not less than 12% compared to total electric power generated in 2014, by the year 2025. It will also define
GHG emissions reduction goals, without concrete mitigation actions.
Guatemala Reduction of up to 22.6% of its total GHG emissions in the base year 2005 in 2030. This reduction implies that the emissions will be reduced to 41.66 Mtoe in 2030.
Honduras Emission reduction by 15% in 2030. Includes: CO2, CH4 and N2O.
Mexico Reduction of between 25% and 30% of GHG and short-term climate pollutants emissions by 2030 and reduction of black carbon by 51%.
Nicaragua Officially joined the agreement on October 23, 2017.
Panama Participation of renewable energies in electricity generation of 15% in 2015 and 30% in 2050. It establishes a reforestation program for degraded areas to increase
carbon absorption by 10%. With international financing of up to 80%.
Paraguay A 20% reduction based on the performance of projected emissions by 2030. Unilateral Target: 10% reduction in projected emissions by 2030. Conditional Target:
10% reduction in projected emissions by 2030.
Peru Reduction of CO2 emissions of 20% in 2030. With international financing up to 30%.
Suriname Reduction of emissions through anti-deforestation projects and renewable energy production. Biofuels and renewables may contribute 25% of the energy generation
in 2025.
Uruguay Reduction of emissions per unit of GDP by 25% in 2030, with international financing up to 40%. In addition, it expects to become a net sink of CO2 by 2030.
Venezuela Reduction of CO2 emissions by at least 20% in 2030.

throughout the period, except in the last year, which had a 0.01% fossil
fuels use. Other countries such as Brazil, Colombia, Costa Rica, Panama,
Suriname, Uruguay and Venezuela also stand out for high percentages
(over 60%), although their values fall through time (except Panama).
On the other hand, the countries that show hydroelectric energy growth
from 2006 to 2015 are Panama and Ecuador. In the case of the latter
country, eight hydroelectric projects were executed, which generated a
power of 2848.9 MW (Climatescope, 2017).
Secondly, Fig. 3 also shows the relevant weight of biofuel and waste
in electricity generation. Guatemala stands out, exceeding 20% at the
end of the period, with important growth since 2006. Additionally,
Nicaragua and Uruguay also have a high biofuel and waste share, ex-
ceeding 10% at the end of the period, while Honduras, Uruguay, El
Salvador, Chile, Brazil, and to a lesser extent Bolivia, show high growth
rates throughout the period. It is worth noting that although biofuel and
waste energy are renewable energies, this may not always be adequate
for sustainability. For example, Pablo-Romero et al. (2017b) pointed
out that this kind of renewable energy includes charcoal, which may
have implications for health when used in cities. In addition, this kind
of energy is not adequate for sustainability as it tends to provoke ne-
gative impacts, such as deforestation.
Thirdly, it is also worth highlighting the geothermal energy share in
El Salvador (above 25%), and in other Central American countries, such
as Costa Rica, Nicaragua, and Guatemala, the share in Mexico is also
noticeable. Among these countries, Nicaragua stands out due to its
substantial growth.

Table 2
Electricity consumption per capita, electricity production and participation of RE in the electricity production.
Source: own elaboration from IEA (2018).
Electricity Electricity Growth Average Average Growth Renewable Renewable Growth
consumption per consumption per rate (%) electricity electricity rate (%) energy energy rate (%)
capita 2006–2010 capita 2011–2015 production production participation participation
(MWh/pc) (MWh/pc) 2006–2010 2011–2015 2006–2010 (%) 2011–2015 (%)
(GWh) (GWh)

Argentina 2.63 2.99 13.69 116,940.0 137,888.0 17.91 30.36 30.76 1.32
Bolivia 0.55 0.70 27.27 5949.8 8045.8 35.23 39.68 31.62 −20.31
Brazil 2.18 2.50 14.68 461,883.4 565,556.0 22.45 86.74 79.76 −8.05
Chile 3.29 3.80 15.50 58,937.8 71,096.4 20.63 46.91 39.67 −15.43
Colombia 1.00 1.22 22.00 56,300.0 66,385.8 17.91 78.42 75.86 −3.26
Costa Rica 1.88 1.95 3.72 9222.8 10,254.0 11.18 93.44 92.03 −1.51
Ecuador 1.03 1.33 29.13 17,468.4 23,357.8 33.71 53.14 52.28 −1.62
El Salvador 0.87 0.96 10.34 5842.0 6160.8 5.6 59.49 60.23 1.24
Guatemala 0.53 0.56 5.66 8716.0 10,060.2 15.42 53.59 65.48 22.19
Honduras 0.68 0.77 13.24 6455.2 8094.0 25.39 41.02 45.79 11.63
Mexico 2.02 2.21 9.55 267,136.0 303,987.8 13.80 15.31 15.02 −1.89
Nicaragua 0.47 0.58 23.40 3363.0 4209.2 25.16 32.50 46.61 43.42
Panama 1.62 2.03 25.31 6633.6 8993.2 35.57 58.75 58.93 0.31
Paraguay 1.04 1.47 41.35 54,399.6 57,853.4 6.35 100.00 99.99 −0.01
Peru 1.01 1.26 24.75 31,707.6 43,335.0 36.67 63.69 54.21 −14.88
Suriname 2.97 3.58 20.54 1655.2 2109.0 27.42 73.19 61.24 −16.33
Uruguay 2.54 3.00 18.11 8734.8 11,871.6 35.91 73.84 78.78 6.69
Venezuela 3.05 2.96 −2.95 115,455.6 121,619.4 5.34 71.76 67.63 −5.76
LA 1.63 1.88 15.40 1236,800.8 1,460,877.4 18.12 59.55 58.66 −1.49
Worldwide 2.77 3.00 8.30 20,238,859.4 23,360,836.4 15.43 19.26 22.15 15.01

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C. Washburn, M. Pablo-Romero Energy Policy 128 (2019) 212–222

Fig. 2. Share of REs in electricity generation: worldwide and LA region. Note: Hydroelectric energy represents the potential and kinetic energy of water converted
into electricity in all hydroelectric plants. Biofuel includes industrial and municipal waste, primary solid biofuels, biogases, biofuels and charcoal.
Source: Own elaboration from IEA (2018).

Finally, there is scarce use of wind and solar PV in the generation of
electricity. However, higher growth has occurred since 2010. The lar-
gest wind share is observed in Nicaragua, Uruguay and Costa Rica,
while El Salvador, Paraguay, Suriname and Venezuela had no share. In
terms of solar PV, Chile stands out, followed by Guatemala, Peru and
Uruguay, although their share values still remain very small. In this
regard, it should to be taken into account that many countries only
started using photovoltaic energy from 2010.
3. Policies and targets related to the use of REs for electricity
generation in LA countries
3.1. National targets on REs for electricity generation in LA countries
According to IRENA (2015), the role played by policies to promote
REs in the LA countries has been crucial for their deployment. These
policies have been developed within the framework of specific RE use
targets and the development of global or specific programs or strategies.
In this regard, it should be noted that most of them have focused on the
electricity sector and, in this sector, on hydroelectric power.
Table 3 shows the LA countries that have designed strategies, pro-
grams and laws, or have set targets to encourage the use of REs. The
countries with the largest number of strategies, laws or programs af-
fecting solar thermal and photovoltaic, wind, geothermal, biomass and
biofuels, are Panama, Chile, Mexico and Nicaragua. In contrast, Bolivia,
Suriname and Venezuela did not present any strategy, law or program.
On type of RE, it should be noted that the least regulatory development
is related to wind energy, as only Argentina and Panama have specific
programs or laws related to it. On the contrary, the greatest regulatory
development is observed in biofuels, being adopted by 11 countries.
Finally, it should be noted that all countries have some established
targets regarding renewable energy.
Table 4 shows the RE targets established for the region. Different
targets and timeframes may be observed between countries. Most of
these targets are related to electricity generation. It is worth noting that
the use of renewable energy has important benefits, such as the re-
duction of greenhouse gas emissions. Therefore, the increase of the
participation of this type of energy in the generation of electricity may
have notable benefits. However, it should be noted that focusing ex-
clusively on electricity may not be sufficient, since the use of polluting
energies in the transport and heating sector is notable worldwide.
3.2. Measures to promote RE use for electricity in LA countries
The greatest incentives to promote REs in LA countries are related to
the electricity sector. These incentives are analyzed below, divided
according to their typology.

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C. Washburn, M. Pablo-Romero Energy Policy 128 (2019) 212–222

Fig. 3. Share of REs in the electricity generation: LA countries (2006–2015). Note: Hydroelectric energy represents the potential and kinetic energy of water
converted into electricity in all hydroelectric plants. Biofuel includes industrial and municipal waste, primary solid biofuels, biogases, biofuels and charcoal.
Source: Own elaboration from IEA (2018).

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Table 3
Strategies, programs, laws and targets to promote REs in LA countries.
Source: Own elaboration from IRENA (2015), Climatescope (2017) and IEA (2018).
REs Target Renewable energy Law/solar thermal Law/solar PV Law/wind Law/geothermal Law/biomass Law/biofuels
strategy program program program program program program

Argentina ✓ ✓ ✓ ✓
Bolivia ✓
Brazil ✓ ✓
Chile ✓ ✓ ✓ ✓ ✓ ✓
Colombia ✓ ✓
Costa Rica ✓ ✓ ✓ ✓
Ecuador ✓ ✓ ✓ ✓
El Salvador ✓ ✓
Guatemala ✓ ✓
Honduras ✓ ✓ ✓
Mexico ✓ ✓ ✓ ✓ ✓ ✓
Nicaragua ✓ ✓ ✓ ✓ ✓
Panama ✓ ✓ ✓ ✓ ✓ ✓ ✓
Paraguay ✓ ✓
Peru ✓ ✓ ✓ ✓ ✓
Suriname ✓
Uruguay ✓ ✓ ✓ ✓ ✓
Venezuela ✓

3.2.1. Feed-In Tariff
The Feed-In Tariff system was implemented by six of the eighteen
countries in the region: Argentina, Brazil, Costa Rica, Ecuador,
Honduras and Panama. According to Aravena et al. (2012), and Geller
et al. (2004), this mechanism allowed the growth of the RE market, due
to the long duration of the contracts, including terms of between ten to
twenty-five years. However, some of these countries have not main-
tained these systems, and the new contracts are regulated by different
laws.
In Argentina, from 2006 to 2016, the RE trust fund has rewarded
solar photovoltaic energy by up to 0.9 Argentine Pesos for each kWh
over the price of electricity, with a 15-year term. Likewise, it had si-
milar remuneration for geothermal energy, biomass and biogas of up to
0.015 Argentine Pesos per kWh (Sauma, 2012). However, the new Law
27191 of 2016 eliminated this mechanism.
Likewise, in Brazil, a Feed-In Tariff system was applied from 2004 to
2011. From 2011, this mechanism was replaced by auction systems that
have reduced the level of economic support (AURES, 2016). The me-
chanism established guaranteed a feed rate that covered the electricity
generation costs from biomass, small hydroelectric and wind power
plants fed into the grid.
Similarly, Ecuador has been applying FIT systems that have finally
expired. The first program ended in December 2012, and the second at
the end of 2016. The mechanism established in the first program af-
fected the electricity generated from biomass and waste, geothermal,
small hydroelectric plants, solar and wind sources. Photovoltaic solar
energy was omitted from the second program. Differentiated prices
were established for technologies used and size or capacity. In addition,
higher values were established for projects located in the Galapagos
Islands (IEA, 2018).
The countries in which the FIT system is still in force are currently,
Honduras and Panama. Honduras has had a generous system. On the
one hand, Decree 70 of 2007 established a preferential price of 10% in
RE projects for 15 years. Additionally, photovoltaic solar projects, in-
stalled before July 31, 2015, were granted a price equal to the short-
term marginal cost, plus US$ 0.03/kWh. This system has recently ex-
perienced payment difficulties, although it can be said that it has had
great success, making the country the leader of the solar park in the
Central America region (Climatescope, 2017). In the case of Panama,
Law 6 of 1997 established 5% premiums for the generation of elec-
tricity by biomass and waste, geothermal, mini-hydroelectric, wind and
solar (Proinvex Panamá, 2017).

Table 4
RE electricity targets in LA Countries.
Source: Own elaboration from IRENA (2015), Climatescope (2017), IEA (2018).
Argentina 8% of electricity generation in 2018 and 20% in 2025.
Bolivia 183 MW of renewable capacity in 2025. 10% increase in renewable energy in the energy mix in 2020. 120 MW in geothermal.
Brazil 42.5% of the primary energy supply in 2023. 86.1% of the electricity generation matrix in 2023.
Chile 20% of the electricity generation in 2025. 45% of the new capacity until 2025.
Colombia 6.5% of electricity by 2020, excluding large hydropower.
Costa Rica 28.2% of primary energy in 2020. 97% of electricity in 2018.
Ecuador 90% of electricity in 2017. 4.2 GW in hydroelectric power in 2022. 277 MW from sources other than hydroelectric in 2022.
El Salvador In 2026: wind 60 MW, solar PV 90 MW, solar thermal 200 MW, geothermal 60–89 MW, small hydroelectric (< 20 MW) 162.7 MW, biomass 45 MW and biogas
35 MW.
Guatemala 60% of electricity in 2022. 80% in the long term.
Honduras 60% of electricity in 2022. 80% of electricity in 2034. 25% hydro increase in 2034.
Mexico Clean energy: 24.9% in 2018, 35% in 2024, 40% in 2035 and 50% in 2050. In 2018: 13,030 MW in hydroelectric, 8922 MW in wind, 1018 MW in geothermal,
748 MW in bioenergy and 627 MW on site.
Nicaragua 73% of electricity in 2028.
Panama 706 MW in hydroelectric power in 2023.
Paraguay 60% increase in renewable energy in the annual energy consumption for the year 2030.
Peru 6% of electricity generation in 2018 (excluding hydroelectric plants). 60% of electricity generation in 2018 (including hydroelectric plants).
Suriname 20%, 28% and 47% of renewable electricity for the years 2017, 2022 and 2027 respectively.
Uruguay 38% of its electricity needs from wind energy alone by 2017.
Venezuela 613 additional MW of renewable electricity capacity in 2019, of which 500 MW are wind energy.

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C. Washburn, M. Pablo-Romero
3.2.2. Net-metering
Net-metering is a system that has been used to a large extent in LA
countries. This system is used in Argentina, Brazil, Chile, Colombia,
Costa Rica, Guatemala, Mexico, Nicaragua, Panama, Suriname and
Uruguay. In general, these policies focus particularly on the residential
and small-scale sectors, but in some cases they also include programs on
an industrial scale (Coviello and Ruchansky, 2017).
At the end of 2017, Argentina approved Law 27427 which regulated
the distributed generation of RE. This law establishes that users of the
electricity network can install photovoltaic systems, or others, that use
RE sources to generate electricity for their use, so that surplus energy
can be injected into the country's electricity grid. It should be noted that
the Law establishes that, if the installation has a capacity greater than
self-consumption needs, users must request special authorization from
the energy distributor. The law is ambitious because it forces all public
building construction projects to use distributed generation facilities
from renewable sources.
In Brazil, the net-metering system has been in force since 2012.
Retail electricity consumers can install hydroelectric (less than 3 MW),
solar, biomass, wind and cogeneration systems of up to 5 MW and de-
liver surplus energy to the network. Users get compensation in the form
of a later billing credit that must be used up to 60 months after the
billing date. Similar systems are used in Costa Rica, Guatemala,
Suriname and Uruguay. Nevertheless, in Costa Rica, the credit must be
used within a year. In Suriname, the credit cannot exceed the annual
consumption, and in Uruguay, it is compensated in the next month's
invoice (Climatescope, 2017).
Since 2014, retail electricity consumers in Chile have been able to
sell excess electricity to the grid if the RE cogeneration facilities are less
than 100 kW. In Panama, a similar system is used, so that they can sell
the excess electricity.
In Mexico, there are three categories of facilities that can be con-
nected to the network: small scale (residential 10 kW, or small busi-
nesses up to 30 kW power), medium scale (industries with capacity up
to 500 kW) and community generation (real estate of several houses or
commercial centers). In any case, the balance in favor of the user can be
recovered within 12 months, without being able to sell the excess
(Madrigal, 2017).
Finally, it should be noted that in Colombia and Nicaragua this
system has been approved during 2018. In March, the Colombian
Energy and Gas Regulatory Commission approved Resolution 030 on
distributed solar generation of up to 100 kW, and the distributed re-
newable sources generation of between 100 kW and 1 MW. The re-
solution includes a simple mechanism for residential, commercial and
small-scale energy consumers, who produce energy to meet their own
needs, to sell surplus electricity to the grid. In Nicaragua, in January,
new renewables distributed generation regulation for self-consumption
came into force, published on December 18, 2017, in the Official
Gazette of Nicaragua. According to this regulation, the owners of
electricity generators using renewables with up to 5 MW, are able to sell
the surplus energy to the distribution companies. The electricity sold is
paid at 80% of the lowest price of the reference band approved by the
Nicaraguan Ministry of Energy and Mines.
3.2.3. Tax incentives
This support measure is the most used by the LA countries. In fact,
15 of the 18 countries had different tax incentives, with the exceptions
of Bolivia, Suriname and Venezuela. Table 5 shows the tax incentives
used.
The most used tax measures are tax exemption. Firstly, there are
countries that apply an exemption or tariffs/taxes reduction on the
equipment, machinery and materials imports destined for RE projects.
This measure is applied in Colombia, Costa Rica, Ecuador, El Salvador,
Guatemala, Honduras, Nicaragua, Panama and Uruguay. The case of
Colombia may be highlighted as it applies an import duties exemption,
if an environmental incentive certificate is obtained from the Ministry
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Energy Policy 128 (2019) 212–222
of Environment and Sustainable Development (Moreno, 2017).
Secondly, exemptions and a Value Added Tax (or sales tax) re-
imbursement of up to 100% on the purchase of machinery, equipment,
materials and supplies, for investment and construction of specific RE
projects, are also applied. Specifically, this measure is applied in
Argentina, Colombia, Costa Rica, Guatemala, Honduras, Nicaragua,
Panama and Uruguay (IEA, 2018). It should also be noted that some
countries apply exemptions or rebates on specific sales taxes. Thus,
wind turbine components, whether domestic or imported, are exempt
from sales tax (PIS and COFINS) in Brazil. Likewise, there are also ex-
emptions on the value-added tax on services and circulation (ICMS) and
on industrialized goods (IPI), for equipment goods of mini-hydroelectric
installations, wind turbines and PV power generators (Climatescope,
2017; IRENA, 2015).
Thirdly, incentives on income tax are established in Argentina,
Colombia, Ecuador, El Salvador, Guatemala, Honduras, Nicaragua,
Panama and Uruguay. In Argentina, the affected assets are not included
on the Presumed Minimum Income Tax base until the eighth year from
the beginning of the project. This measure will be cancelled as of 2019.
Likewise, the project's financing interests can be deducted from the
company's losses. Finally, it should be noted that beneficiaries who
prove that 60% of the investment is made with national components are
entitled to receive a tax certificate for the payment of national taxes. Its
value is equal to 20% of the component value (PwC, 2017). In Co-
lombia, 50% of the total investment made in electricity generators from
biomass and wind power can be deducted annually, during the five
years following the year in which the investment was executed, pro-
vided that they comply with requirements related to carbon emissions
(Moreno, 2017). In Ecuador, the electricity generators from solar, wind,
geothermal and biomass energy are exempt from income tax for five
years, this is 10 years in Guatemala and Honduras (IEA, 2018). In Pa-
nama, there are several income tax exemptions that depend on the
technology used. In the case of biomass, there is a total exemption, in
other cases there are exemptions of up to 25% of the direct investment
in the project, which can be applied for 10 years. The tax relief value is
calculated using the tonnes of CO2 decreased as a reference. The relief
can reach 100% of income tax if the projects are less than 10 MW, and
up to 50%, if they are higher (Climatescope, 2017; Proinvex Panamá,
2017). Finally, in Uruguay, Decree 354/009 establishes two categories
for income tax reductions on energy cogeneration and for RE sources.
The percentage of tax reduction decreases with time, from the start of
the activity (Climatescope, 2017).
Another applied tax incentive is accelerated depreciation. It only
applies in five countries: Argentina, Colombia, Mexico, Panama and
Peru. In Argentina, the beneficiaries can choose to apply the linear
depreciation method, consisting of 3, 4 or 5 equal consecutive annual
installments in income tax (PwC, 2017). In Colombia and Mexico, ac-
celerated depreciation of 100% of investments in machinery and
equipment, used to generate RE, can be applied (Moreno, 2017). In
Panama, accelerated depreciation can only be applied on relevant
equipment of a special nature for wind and solar energy (Proinvex
Panamá, 2017). Finally, in Peru, accelerated depreciation only applies
in up to 20% of investments in machinery and equipment used for the
generation of RE.
Likewise, there is a transmission and distribution tax exemption on
RE projects in Argentina, Chile and Panama. In Argentina, it applies to
the distribution of dividends. In Chile, the exemption is 100% of the
transmission load for RE projects under 9 MW, and there is a partial
exemption for projects between 9 and 20 MW. In Panama, 100% ex-
emption is granted to RE projects with a capacity of less than 10 MW,
and to the first 10 MW generated for projects ranged between 10 and
20 MW (Climatescope, 2017; Proinvex Panamá, 2017).
Finally, it should be noted that two countries, Chile and Mexico,
have established carbon taxes. In Chile, it consists of US$ 5 on CO2
emissions, applied to thermal power generators with an input of 50
MWt, except for power plants that use biomass. In Mexico, it is imposed
C. Washburn, M. Pablo-Romero Energy Policy 128 (2019) 212–222

Table 5
Tax incentive to promote Res.
Source: Own elaboration from IEA (2018) and Climatescope (2017).
Exemptions on tariffs or Exemptions or refund on Exemptions and Accelerated Transmission and Carbon Tax
import taxes VAT or sales taxes deductions on income tax depreciation distribution tax Exemption

Argentina ✓ ✓ ✓ ✓
Bolivia
Brazil ✓
Chile ✓ ✓
Colombia ✓ ✓ ✓ ✓
Costa Rica ✓ ✓
Ecuador ✓ ✓
El Salvador ✓ ✓
Guatemala ✓ ✓ ✓
Honduras ✓ ✓ ✓
Mexico ✓ ✓
Nicaragua ✓ ✓ ✓
Panama ✓ ✓ ✓ ✓ ✓
Paraguay
Peru ✓
Suriname
Uruguay ✓ ✓ ✓
Venezuela

as an obligation on the carbon content of the fuel. These taxes can be
considered adequate, especially in a context of reduced oil prices.
According to Griffith-Jones et al. (2017), the decline in oil prices can
harm private investment in RE by making them less profitable. Thus,
the authors advise governments to reduce subsidies on the prices of
these fuels, or to increase taxes on them.
3.2.4. Auctions
The public auction system is the second most recurrent mechanism
among the LA countries to promote the use of REs for electricity gen-
eration. Table 6 summarizes that 13 of the 18 countries have organized
public auctions: Argentina, Brazil, Chile, Colombia, Costa Rica, El Sal-
vador, Guatemala, Honduras, Mexico, Panama, Peru, Suriname and
Uruguay. Likewise, it is worth highlighting the sustained growth of this
system (Coviello and Ruchansky, 2017). Brazil stands out with more
than 30 public auction processes, followed by Uruguay, Peru, Chile and
Argentina. In general, auctions of several technologies are established,
although it is also common to find ones that are renewables specific,
especially in countries with a greater number in total.
In Brazil, there have been RE auctions since 2007, reaching more
than 15 GW in a total of 600 projects. Throughout this time, two types
of auctions have been made, general and reserved for certain
technologies. In general, the wind and biomass projects contracted for a
period of 20 years, and mini-hydro projects of 30 years, have been the
most contracted (GlobalData, 2017). However, in the most recent
auctions, an effort has been made to develop PV solar energy. Ac-
cording to the AURES report (AURES, 2016), auctions in Brazil have
been able to significantly reduce support levels compared to FIT. This
has been partly due to the auction design, the final price guarantee for
companies, and the continuous decline in costs. Thus, the cost of wind
energy is between a third and a quarter less than 25 years ago, and that
of solar energy has fallen by almost half since 2010 (Netto et al., 2016).
Uruguay carried out 10 auctions, mostly related to wind power, and
this wind energy boost has determined its strong growth, becoming one
of the countries with the highest percentage of electricity produced
from this type of energy, more than 22% in 2015 (Ruiz Campillo, 2017).
In Peru, three of six renewables auctions implemented since 2008 were
of several technologies, this tool being considered key to increase the
participation of RE generation in the country's energy matrix (Mitma,
2010).
Other countries with a high number of auctions are Argentina,
Chile, Mexico and Panama. In Argentina, the auction process has in-
volved the reactivation of the Argentine electricity sector, previously
based on the FIT system. The auctions have been established in rounds.

Table 6
RE auctions.
Source: own elaboration from IEA (2018), Climatescope (2017) and IRENA (2015).
Total number Diverse technologies Solar PV Wind Solar and wind Mini hydro Biomass and waste

Argentina 4 3 1
Bolivia
Brazil 31 14 2 2 6 5 2
Chile 5 3 2
Colombia
Costa Rica 2 2 (without solar and biomass)
Ecuador
El Salvador 3 1 2
Guatemala 3 3
Honduras 2 2
Mexico 3 2 1
Nicaragua
Panama 5 2 3
Paraguay
Peru 6 3 1 1 1
Suriname 1 1
Uruguay 10 1 1 5 3
Venezuela

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C. Washburn, M. Pablo-Romero Energy Policy 128 (2019) 212–222

In October 2016, 117 offers were received, awarding 1.1 GW. Then in
January 2017, 1.3 GW were awarded, and in November 2017, projects
totaling 2 GW were awarded. The first two rounds were dominated by
wind and PV technologies, while the last one also awarded biomass and
mini-hydroelectric projects (PwC, 2017; Climatescope, 2017). In Chile
and Mexico, developers submit bids for a single project, or a portfolio of
projects, and companies do not need to disclose the specific plants
behind their bid submissions. In Mexico, offers are sent every Sep-
tember and, until 2016, more than 24 offers were received, totaling
20.7 TW. Purchase contracts are fixed in US$ ($/MWh) for a term of 20
years. Panama organized energy auctions in which developers offer
their price to secure energy purchase agreements of up to 20 years and
offers are accepted in order of the lowest price.
In El Salvador, Guatemala and Honduras, auctions have been car-
ried out in the hydroelectric, solar, biogas and wind sectors. In El
Salvador, the company “Del Sur”, together with the National Energy
Council, contracted up to 4 MW of small hydroelectric plants, and 6 MW
of photovoltaic solar energy, in a total of 35 projects. Through these
tenders, Guatemala signed energy purchase agreements with biomass
projects, large hydroelectric plants, small hydroelectric and solar power
plants, setting the price paid by electricity distributors to suppliers for
15 years. Likewise, Costa Rica held a tender process to contract up to
140 MW of RE capacity (wind and small hydro), with offers to contract
up to 100 MW of wind energy and 40 MW of small hydroelectric pro-
jects, with a maximum term of duration of 20 years (Climatescope,
2017). Likewise, since 2016, RE offers were submitted in Suriname. The
winners of the tenders obtain a permit from the Minister of Energy
Affairs to build, commission and operate their projects.
Likewise, it should be noted that Colombia is going to launch the
first auction in 2018 under the 0570 Decree. The auction would allow
all RE projects to participate.
Finally, it should be noted that most of the countries that have not
implemented RE auctions are members of the ALBA-TCP (Bolivarian
Alliance for the Peoples of Our America – Peoples' Trade Treaty), which
is formed by socialist governments that do not consider the promotion
of economic activity, through foreign investments, to be appropriate.
Therefore, the absence of auctions may be associated with this fact.
3.2.5. Other mechanisms (subsidies and funds)
In addition to the mechanisms discussed above, some countries have
also used other specific measures to encourage the use of RE. In Brazil,
the ERNC Incentive Program provides a subsidy of up to 75% of the
investment cost of electricity generation plants based on REs, to be used
in isolated areas. This is because several cities in the Amazon were not
connected to the main transmission network, which created a high
consumption of diesel with relatively low cost, but with high emissions
(Sauma, 2012).
In addition, Brazil and Mexico have created funds to stimulate the
use of REs. BNDES, ANEEL, and the financial development institution,
Finep, have jointly created a fund (inova energía) to finance grants and
loans for projects related to the intelligent network and the transmis-
sion of ultra-high voltage, solar and wind technology and energy effi-
ciency of vehicles (IRENA, 2015). In order to encourage research in the
field of sustainable energy, a fund was created in Mexico in 1982. This
fund receives 20% of its income from the 0.65% tax on the extraction of
crude oil and natural gas (Climatescope, 2017).
4. Discussion
Table 7 summarizes the LA countries that use some kind of in-
centive, measure or energy policy to encourage the use of RE in elec-
tricity generation, and the main performance indicators of their RE use.
The Table shows that, despite having specific RE targets, the only
countries that do not have any economic incentive for their promotion
were Bolivia and Venezuela. All the other countries have at least one
form of incentive. Subsequently, Venezuela did not have any increase in
the use of unconventional REs for the electricity generation although, in
the case of Bolivia, it did achieve a small increase in their use.
In the case of Bolivia, the Ministry of Energy intends to implement
incentives in the future, since they have the support of international
organizations, such as the Inter-American Development Bank, the
Danish International Development Agency (DANIDA), and the GIZ of
Germany. Venezuela presents a similar situation, although in this case it
is necessary to point out that it is a traditional oil power, so that pro-
ducing electricity from this non-renewable resource is of lower cost.
Likewise, it is worth noting that while, in 2015, the non-OECD
American countries had a level of CO2 emissions, in per capita terms,
equal to 2 t CO2/capita and, in GDPppp terms, equal to 0.18 kg CO2/
2010USD, in the case of Venezuela its values were equal to 5 t CO2/
capita and 0.31 kg CO2/2010USD, respectively. These were not only the
highest values in the LAC region (see the last column in Table 7), but
also higher than the world average (4 t CO2/capita 0.30 kg CO2/

Table 7
Measures to promote REs for electricity generation, main REs for electricity generation, energy intensity and CO2 emissions indicators.
Source: Own elaboration from IEA (2018), Climatescope (2017) and others.
Feed- Net-metering Tax incentives Subsidies Auctions REs for REs for Share of REs in TPES/GDPppp CO2/GDPppp
In and funds electricity electricity rate electricity 2015 (toe/ 2015 (kgCO2/
Tariff increase growth generation (%) thousand 2010 2010USD)
2010–2015 2010–2015 (%) USD)
(GWh)

Argentina ✓ ✓ ✓ 4 532 23.96 28.38 0.11 0.23

Bolivia 86 72.27 31.29 0.12 0.27
Brazil ✓ ✓ ✓ ✓ 31 36,825 109.40 73.97 0.10 0.15
Chile ✓ ✓ 5 6412 248.62 43.60 0.09 0.22
Colombia ✓ ✓ −194 −7.90 68.22 0.06 0.13
Costa Rica ✓ ✓ ✓ 2 956 56.90 98.99 0.07 0.10
Ecuador ✓ ✓ 304 127.20 52.80 0.09 0.22
El Salvador ✓ 3 302 16.70 57.82 0.09 0.13
Guatemala ✓ ✓ 3 974 53.25 60.39 0.11 0.13
Honduras ✓ ✓ 2 1290 806.25 42.28 0.15 0.24
Mexico ✓ ✓ ✓ 3 8466 98.26 15.96 0.09 0.22
Nicaragua ✓ ✓ 1147 134.94 50.05 0.13 0.17
Panama ✓ ✓ ✓ 5 447 2031.82 65.33 0.05 0.13
Paraguay ✓ 0 0.00 100.00 0.10 0.10
Peru ✓ 6 1058 156.97 52.73 0,06 0.13
Suriname ✓ 1 0 0.00 60.05 0.08 0.26
Uruguay ✓ ✓ 10 2934 303.10 88.56 0.08 0.10
Venezuela 0 0.00 63.70 0.13 0.31

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C. Washburn, M. Pablo-Romero
Table 8
Energy intensity and CO2 Emissions by world regions.
Source: Own elaboration from IEA (2018).
TPES/GDP PPP (toe/ CO2/GDPppp 2015 (kg
thousand 2010 USD) CO2/2010USD)
OECD Europe 0.09 0.18
OECD Americas 0.13 0.29
OECD Asia Oceanía 0.11 0.28
Non-OECD Europe and 0.20 0.43
Eurasia
Non-OECD Americas 0.10 0.18
Asia excluding China 0.10 0.23
China 0.16 0.49
Africa 0.15 0.21
Middle East 0.15 0.35
2010USD) and one of the highest values in the world (see Table 8). In
addition, the energy intensity of Venezuela was also the highest in the
LAC region in 2015 (see Table 7).
In general terms, it is difficult to measure the effectiveness of the
measures established to promote REs for electricity generation, al-
though a positive relationship may be perceived between those coun-
tries adopting more active policies, and those with higher use of REs for
electricity increase. The correlation coefficient between the number of
measures applied, and the increase in renewable energy used in the
production of electricity, is 0.94.
In general, it should be noted that the combination of auction sys-
tems with tax incentives is currently the most common way of pro-
moting REs for electricity generation, there having been a shift in the
use of FIT systems towards auctions. It can be noted that Brazil, the
country with the largest increase in GWh from 2010 to 2015, is also the
country with the highest number of organized auctions. These have
allowed an important deployment in wind energy and in the use of
biomass, although solar energy is lagging behind. It should be said that
these auctions have also been accompanied by the use of other me-
chanisms to encourage REs. In fact, according to Ruiz Campillo (2017),
Brazil is one of the countries that most invests in RE worldwide.
The auction system has also been very effective in other countries.
In fact, all the countries with the largest capacity increases (Chile,
Mexico and Uruguay) have had a significant number of organized
auctions. In addition, prices have been also reduced with this promo-
tion system. In Mexico, the third auction has significantly reduced
prices (from US$ 47.7 from the first auction to US$ 20.6 per MWh in the
last). Likewise, in Chile, the price of energy has also been reduced with
the use of auctions (Ruiz Campillo, 2017). These auctions are also very
competitive, Chile being considered the fourth most profitable country
for investments in renewables (EY, 2016). Uruguay has also had a
strong boost in the use of REs, due to the strong momentum of the
auctions established since 2008, which has allowed the development of
a public-private partnership model that has managed to invest, an-
nually, between 2010 and 2014, over 3% of GDP in energy infra-
structure (Uruguay XXI, 2014). It should also be noted that Panama,
which has organized numerous auctions, has presented the highest REs
growth rate from 2010 to 2015. In addition, notable increases have
been experienced by Honduras and Peru, which have also used this
system. These countries have had spectacular growth of their non-
conventional REs, taking into account that they were practically unused
in 2006.
On the other hand, it is worth noting the significant use of REs in
electricity generation in Paraguay, Costa Rica and Uruguay.
Nevertheless, it is relevant to point out that, in the first two countries,
the use is basically obtained from hydroelectric energy, however, Costa
Rica has notably promoted wind energy. Thus, their established auc-
tions have focused on both mini-hydroelectric and wind facilities
(Climatescope, 2017).
Finally, the circumstances of Argentina and Colombia are
221
Energy Policy 128 (2019) 212–222
highlighted. Argentina has not had significant results in terms of REs
growth from 2006 to 2015. However, legislative changes since 2016,
and recent auctions, may cause the country to change course in the
future, becoming the new focus of attraction for companies in the sector
(Ruiz Campillo, 2017). In the case of Colombia, its energy policy has
been based mainly on hydroelectric energy, but in the future, it is ex-
pected to develop wind energy due to its more competitive position in
the country (Vergara et al., 2010). In this regard, the government re-
cently announced that it will invest US$ 700 million in the infra-
structure needed to connect the wind projects (approximately 3 GW) of
the La Guajira region (located on the Caribbean Sea, with high wind
potential) to the grid. Additionally, future auctions may promote the
use of non-conventional REs.
5. Conclusions and policy implications
In this paper, an analysis is carried out of the use of REs for electric
energy generation, from 2006 to 2015, and the measures implemented
to promote them in the 18 LA countries that have signed the Paris
Agreement.
The results show that LA countries have had a remarkable growth in
the use of REs for electricity generation, although there are notable
differences between RE sources. The use of hydroelectric power has
decreased in recent years, reducing its share in the electricity genera-
tion mix. However, it is by far the most widely used RE in the region.
On the contrary, biomass, wind and solar energy have experienced
strong growth, which significantly outperform world growth. In total
terms, since 2010, the largest increases in non-conventional REs have
been observed in Brazil, Mexico, Chile and Uruguay.
Regarding the actions used to promote REs, it should be noted that
the 18 LA countries have established RE targets. Likewise, 15 of these
countries have designed strategies, programs or laws in order to en-
courage their use. The most used measures to promote the use of REs for
electricity generation are tax incentives, with the majority of countries
using the auction systems. This system is replacing the FIT system,
previously used in some countries, reducing energy prices and making
the energy promotion system more sustainable. The continuous and
recent expansion of the net metering system is also worth mentioning.
The results of the study show a positive relationship between the
countries most active in the promotion of REs and the performance
achieved in the years studied, with the correlation coefficient between
the number of measures applied, and the increase in renewable energy
used in the production of electricity, being equal to 0.94. In this regard,
it is worth highlighting the role of active policies for the future devel-
opment of these energies. The development of well-targeted auction
systems is having very positive results, especially in the field of solar
and wind energy. However, it is worth noting their organizational
differences. Studies that focus on the relationship between the design of
auctions and their success in the LA countries are necessary, since the
maintenance of auctions and tax incentives is essential for the growth of
these energies, whose share in the energy mix is still relatively low.
Likewise, studies focusing on the success of the net metering system
could also be recommended, in order to understand how differences
between countries’ measures could vary the benefits for solar customers
and, therefore, for the development of solar energy.
It is also worth highlighting the low growth of non-conventional REs
in Argentina and Colombia. These two countries have had little de-
velopment of measures to promote RE. However, it should be noted that
both countries have recently been showing a more active role in pro-
moting these policies, which is of great interest, due to the high parti-
cipation of its electrical production in the total of the LA region.
Therefore, developing studies focusing on their evolution could be ap-
propriate in the future.
C. Washburn, M. Pablo-Romero
Acknowledgements
The second author acknowledges the funding provided by the
Andalusian Regional Government (project SEJ-132) and the “Cátedra
de Economía de la Energía y del Medio Ambiente” sponsored by Red
Eléctrica de España at the University of Seville.
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 ECOPRENEURSHIP DALAM KONSEP PEMBANGUNAN YANG
BERKELANJUTAN

Oleh:
Dhian Tyas Untari1)
E-mail: tyas_un@yahoo.co.id
1)
Universitas Indraprasta PGRI Jakarta

ABSTRACT

One of the problems in some developing countries such as Indonesia is the growth of
population and the large number of people on high productivity who are not proportional to
the amount of labor absorption, while on the other hand the needs of life always increasing
time after time. The problem pursing the question of how people can get their needs but not
depend on the amount of absorption of labor and how people can create their own businesses
could even create jobs for other people.

Increasing of entrepreneur activity lead on the exploitation of existing resources and the
exploitation is likely damage the existing ecology. Thus there is a discrepancy between
entrepreneur activity and concept of sustainable development. That’s way we need a concept
that can bridge a gap between the entrepreneur activity with the concept of sustainable
development.

This is a conceptual paper that based on a literature review and assessment of secondary
data. And this paper is expected to recommend a concept of ecopreneurship and can form an
understanding that a entrepreneur activity should also pay attention to aspects of
sustainability both in terms of ecological, economic and social.

Keywords: Ecopreneurship, entrepreneur, sustainable development.

PENDAHULUAN

Entrepreneur merupakan sebuah jawaban terhadap semakin besarnya ketimpangan

antara pertumbuhan penduduk serta besarnya jumlah penduduk usia produktif yaitu sekitar 89
juta dengan besarnya serapan tenaga kerja. Jumlah angkatan kerja di Indonesia pada per
Februari tahun 2013 mencapai 175 juta bertambah dari tahun sebelumnya yaitu sebesar 172
juta. Jumlah penduduk yang bekerja per Februari tahun 2013 mencapai 114 juta meningkat
dari tahun sebelumnya yaitu 112 juta (BPS, 2013). Walaupun tingkat pengangguran terbuka
mengalami penurunan dari 7,6 juta bulan februari tahun 2012menjadi 7,1 juta pada bulan
Februari tahun 2013, tetapi hal ini menunjukan bahwa masih ada penduduk usia produktif
yang belum sepenuhnya terserap pada dunia kerja. Diakui memang akan sangat sulit untuk
menciptakan kondisi dimana semua penduduk usia produktif dapat 100 persen terserap di
dunia kerja. Dengan demikian mengembangkan enterprenurship merupakan sebuah peluang
pengembangan diri dan salah satu solusi dalam pemecahan masalah tersebut.
Semakin meningkatnya kegiatan enterprenur akan berakibat memberikan dampak
bagi banyak hal. Satu sisi perekonomian masyarakat akan meningkat seiring berkembangnya
dunia kewirausahaan. Tetapi hal ini berbanding terbalik dengan dampak lingkungan yang
dihasilkan dari kegiatan enterprenur khususnya kegiatan yang terkait dengan sektor industri.
Sebagian orang menganggap bahwa industri kecil adalah tidak berpotensi menimbulkan
kerusakan terhadap lingkungan, oleh sebab itu tanggungjawab untuk menjaga lingkungan
seringkali terabaikan. Padahal Hamzah dalam Hillary (2000) dalam studinya menyatakan
bahwa sebagian besar polusi di daerah perkotaan merupakan hasil dari penyebaran industri
kecil dan menengah. Perkembangan dunia enterprenuer mengarahkan pada eksploitasi sumber
daya yang ada dimana exploitasi tersebut cenderung merusak ekologi yang ada. Sedangkan
prilaku tersebut semakin menjauhkan makna pembangunan dari makna keberlanjutan. Oleh
sebab itu perlu sebuah kosep yang dapat menjembatani antara dunia enterprenuer dengan
konsep pembangunan yang berkelanjutan
Selain itu perkembangan kegiatan entrepreneur saat ini hanya berorientasi pada
besarnya profit yang dihasilkan. Sehingga sering kali etika baik dalam memproduksi ataupun
mendistribusikan produk menjadi kurang bahkan tidak bertanggungjawab. Penggunaan bahan-
bahan yang tidak layak untuk digunakan dalam pengolahan makanan adalah salah satu
gambaran kecurangan yang dilakukan oleh produsen makanan, hal itu dilakukan untuk
menekan biaya produksi dan memperbesar profit yang didapatkan. Tanpa disadari perilaku
curang tersebut akan berdampak terhadap kesehatan masyarakat secara global karena disadari
atau tidak produsen curang ini memberikan racun untuk dikonsumsi masyarakat, dan tanpa
disadari inipun akan berdampak bagi dirinya.
Kebutuhan mengembangkan entrepreneurship di Indonesia, kebutuhan untuk
mengembangkan prilaku yang etis sebagai seorang entrepreneur dan kebutuhan terhadap
perlindungan baik aspek sosial maupun lingkungan yang mengacu pada konsep pembangunan
yang berkelanjutan, maka perlu sebuah konsep entrepreneur yang berorientasi bukan hanya
pada profit, tapi juga secara etis dan moral bertanggungjawab secara sosial dan ekologi. Oleh
sebab itu tulisan ini merupakan sebuah konseptual paper yang mencoba memperkenalkan
konsep ecopreneurship sebagai konsep yang menjembatani antara entrepreneur dan
keberlanjutan pembangunan yang memperhatikan aspek ekonomi, sosial dan ekologi.
Penulisan konsep ecopreneurship merupakan sebuah kajian pustaka yang berawal
dari keprihatinan terhadap pelaksanaan kegiatan entrepreneur di Indonesia. Penulis
mengangkat isu-isu terkait kegiatan entrepreneur dan mencari solusi melalui kajian-kajian
literatur terkait permasalahan yang ada.

KAJIAN AKADEMIS

Entrepreneurship
Entrepreneurship atau dalam bahasa Indonesia diterjemahkan dengan kata
kewirausahaan, menurut Hisrich et al (2008) mendefiniskan kewirausahaan sebagai proses
penciptaan sesuatu yang baru, menggunakan waktu dan upaya yang diperlukan, berani
menanggung risiko baik keuangan, fisik, serta risiko sosial yang mengiring imbalan yang
diterima. Hal serupa dinyatakan oleh Sri Edi Swasono (1978) dalam Suryana (2003) bahwa
Wirausaha adalah pelopor dalam bisnis, inovator, penanggung risiko, yang mempunyai visi ke
depan, dan memiliki keunggulan dalam berprestasi di bidang usaha.
Dan lebih rinci Frederick (2006) dalam Wijatno (2009) mengatakan ada 17
karakteristik yang melekat pada diri enterpreneur yaitu: (1) komitmen, (2) dorongan kuat
untuk berprestasi, (3) berorientasi pada kesempatan dan tujuan, (4) inisiatif dan tanggung
jawab, (5) pengambilan keputusan, (6) mencari umpan balik, (7) internal focus control, (8)
toleransi terhadap ambiguitas, (9) pengambilan risiko yang terkalkulasi, (10) integritas dan
reliabilitas, (11) toleransi terhadap kegagalan, (12) energi tingkat tinggi, (13) kreatif dan
inovatif, (14) visi, (15) independen, (16) percaya diri dan optimis, (17) membangun tim.
Dengan demikian secara umum wirausaha atau orang yang memiliki jiwa wirausaha
adalah orang yang berani membuka sebuah peluang usaha yang mandiri serta mempunyi
kemampuan yang baik dalam menciptakan dan mengolah peluang yang ada. Perkembangan
dunia wirausaha dapat menghantarkan Indonesia menjadi sebuah negara yang maju. Karena
peningkatan jumlah wirausaha dapat memperkecil jumlah penggangguran melalui serapan
tenaga kerja yang dihasilkannya. Selain itu meningkatnya jumlah wirausaha akan
meningkatkan perekonomian lokal yang diikuti dengan meningkatnya perekonomian secara
makro.

Pembangunan yang Berkelanjutan

Konsep pembangunan berkelanjutan pada hakekatnya adalah bertujuan untuk
pemanfaatan sumber daya alam dan sumber daya manusia secara optimal untuk pembangunan
tetapi dengan tetap mempertimbnagkan nilai-nilai keserasian dan seimbang dalam
pemanfaatannya. Secara ideal keberlanjutan pembangunan membutuhkan pendekatan
pencapaian terhadap keberlanjutan ataupun kesinambungan berbagai aspek kehidupan yang
mencakup keberlanjutan ekologis, ekonomi, sosial (Untari; 2013). Pada tingkat lokal
pembangunan yang berkelanjutan menghendaki bahwa pengembangan ekonomi dapat
menopang kehidupan masyarakat melalui pemanfaatan sumber daya secara lokal. Jika hasil
pengembangan ekonomi (kesejahteraan) tersebut ingin didistribusikan dalam jangka panjang,
maka perlindungan lingkungan untuk mencegah kerusakan ekologi harus ditempuh (ICLEI
dalam Setiadi et al; 2008).
Konsep pembangunan yang berkelanjutan diperkenalkan dalam World Conservation
Strategy yang diterbitkan oleh United Nations Environment Programme (UNEP),
International Union for Conservation of Natural Resource (IUCN) dan World Wide Fund for
Natural (WWF). Menurut Brundland Report dari PBB pada tahun 1987 dinyatakan bahwa
pembangunan yang berkelanjutan adalah proses pembangunan termasuk didalamnya
pembangunan lahan, kota, bisnis, masyarakat dan sebagainya yang berprinsip memahami
kebutuhan sekarang tanpa mengorbankan pemenuhan kebutuhan generasi masa depan.

Indikator Pembangunan Yang Berkelanjutan

Implementasi konsep pembangunan yang berkelanjutan memerlukan indikator-
indikator untuk mengevaluasi efektifitas pelaksanaan konsep pembangunan yang
berkelanjutan tersebut. Warren (1997) dalam Seriadi et al (2008) menyatakan kriteria ideal
indikator pembangunan yang berkelanjutan adalah;
- Merealisasikan suatu dasar atau fundamental ekonomi dalam jangka panjang dan
sosial-lingkungan bagi generasi yang akan datang.
 - Mudah dipahami dan jelas, sederhana dan mdah untuk dimengerti dan diterima
masyarakat.
- Dapat dikuantitatifkan.
- Sensisitif terhadap perubahan lokal atau grup masyarakat.
- Prediktif dan antisipatif.
- Memiliki acuan atau nilai ambang relatif mudah untuk dikumpulkan dan digunakan.
- Aspek kualitas; metodologi yang digunakan untuk membangun indikator harus jelas
terdefinisikan dengan akurat, dapat diterima baik secara ilmiah maupun sosial.
- Sensitif terhadap waktu; jika diaplikasikan setiap tahun indikator dapat menunjukkan
trand yang representatif.

Djajadiningrat (2005) menyatakan bahwa dalam pembangunan yang berkelanjutan

terdapat aspek keberlanjutan yang perlu diperhatikan, yaitu keberlanjutan ecologis,
keberlanjutan bidang ekonomi, keberlanjutan sosial budaya, keberlanjutan politik dan
keberlanjutan ketahanan dan keamanan. Secara umum Brundland (1987) dan Hayati, et al
(2010) menyatakan indikator utama pelaksanaan pembangunan yang berkelanjutan adalah
aspek ekonomi, lingkungan dan sosial.

Konsep Triple Bottom Line Dalam Menjalankan Usaha

Dalam konsep triple bottom line yang di populerkan oleh John Elkington tahun 1997
dalam buku Cannibals with Forks, the Triple Bottom Line of Twentieth, yang dikutip dari
(Arafat ; 21) menyatakan bahwa sebuah menjalankan usaha harus memperhatikan 3P, yaitu
Profit, People dan Planet.

Gambar 3.1. Konsep Triple Botom Line

Social Lingkungan
(people) (Planet)

Ekonomi
(Profit)

( 1 ) People, masyarakat sebagai pemangku kepentingan. Dimana masyarakat berlaku

sebagai stakeholders yang juga merupakan satu bagian yang penting bagi masyarakat.
Dimana people dalam hal ini adalah masyarakat adalah lingkungan terdekat dari sebuah
usaha, memberi banyak kontribusi bagi berjalannya sebuah usaha, sehingga
pengusahapun sudah selayaknya memberikan kontribusi balik kepada masyarakat
disekitarnya.Menurut Prasetyantoko (2008) Di tengah dunia yang semakin dikuasai
materialisme dan hedonisme yang egoistic yang merapuhkan sendi – sendi kemanusian
dan menghancurkan pilar –pilar kemanusiaan kita, jelaslah bahwa etos melayani yang
berintikan sikap altruistic ini sangat penting bukan hanya sebagai strategi sukses sejati,
tetapi juga menjadi langkah penting untuk memanusiakan manusia kembali.
( 2 ) Profit, hal ini adalah merupakan tujuan dari semua usaha, dan ini adalah bentuk
tanggungjawab ekonomi yang paling esensial dalam usahanya menjaga eksistensi dan
keberlanjutan usaha.
( 3 ) Planet atau lingkungan. Lingkungan adalah hal yang selalu terkait dengan seluruh
kegiatan manusia. Hubungan manusia dengan lingkungan adalah hubungan sebab
akibat, sehingga sudah selayaknya agar dalam pelaksanaan usaha harus juga
memperhatikan aspek perlindungan terhadap lingkungan.Sejalan dengan pendapat
diatas tentang tanggungjawabterhadap lingkungan yang sudah seharusnya saling
memberikan kontribusi maka menurut Jansen yang dikutib dari Prasetyantoko (2008),
amanah adalah titipan berharga yang dipercayakan kepada kita atau asset penting yang
di pasrahkan kepada kita. Konsekuansinya sebagai penerima amanah, kita terkait secar
moral untuk melaksnakan amanah dengan baik dan benar.

Konsep Ecopreneurship
Merujuk pada keprihatinan terhadap perkembangan kewirausahaan di Indonesia yang
di warnai dengan kecurangan dan hanya memikikiran profit semata, maka diperlukan sebuah
konsep enterprenuer yang menekankan kepada tanggungjawab untuk turut melestarikan
keberlanjutan manusia secara umum dengan menggunakan bahan – bahan dasar produksi yang
layak dan distribusi produk yang baik, keberlanjutan ekologi dengan memperhatikan aspek
kelestarian lingkungan dalam proses produksinya serta menggunakan bahan – bahan ramah
lingkungan serta keberlanjutan ekonomi dengan memberdayakan masyarakat sekitar sehingga
kegiatan usaha yang dijalankan dapat ikut meningkatkan perekonomian masyarakat sekitar
dan dapat membantu pemerintah dalam hal penyerapan tenaga kerja.

Tantangan Dalam Implementasi Konsep Ecopreneurship

Penginformasikan, mengedukasi dan mengimplementasikan konsep ecoprenuership
membutuhkan kerjasama dari semua pihak. Ditengah-tengah perjalanan dunia usaha yang
sudah berjalan dengan “liar” maka tanpa kerjasama dan koordinasi dari masing-masing pihak
maka semakin sulit untuk mewujudkan dunia usaha yang memperhatikan aspek keberlanjutan
ekologi sosial dan ekonomi.
Terdapat beberapa pihak yang terlibat dan memiliki peranan penting dalam
mengedukasi dan menginformasikan konsep ecopreneurship kepada masyarakat sehingga
masyarakat dapat memahami pentingnya aspek-aspek keberlanjutan dalam menjalankan
sebuah usaha. Pihak-pihak tersebut adalah:
- Pendidik. Pendidik dalam lini manapun dapat berperan sebagai penyampai informasi
dan mengedukasi calon - calon enterprenuer untuk menjadi seorang entrprenuer yang
memegang prinsip keberlanjutan bagi ekologi, sosial masyarakat dan ekonomi. Dengan
peranannya tersebut pendidik mulai dapat memperkenalkan konsep ecopreneurship,
sehingga diharapkan kemajuan dunia entrprenuer di Indonesia akan memiliki arah
yang lebih baik.
- Akademisi, penulis dan peneliti. Akademisi, peneliti dan penulis dengan
kemampuannya mengangkat dan mengeksploitasi issue tentang pentingnya
memperhatikan aspek keberlanjutan ekologi, sosial dan ekonomi dalam
mengembangkan dunia enerprenuer. Dengan diangkatnya issue tentang pentingnya
konsep ecoprenuership diharapkan menjadi sebuah perhatian bagi pemerintah dalam
mengembangkan dunia entrprenuer di Indonesia.
 - NGO. NGO memiliki peranan yang hampir sama dengan peneliti, akademisi dan
penulis. Dimana NGO dengan peranannya diharapkan dapat menyuarakan pentingnya
aspek keberlanjutan dalam kegiatan kewirausahaan.
- Pemerintah. Pemerintah dengan hak dan peranannya sebagai pembuat kebijakan yang
nantinya akan menjadi dasar dari pelaksanaan kegiatan dan pengembanan dunia
wirausaha. Dengan pemahaman yang baik serta keberpihakan pemerintah terhadap
arah pembangunan dunia enterpreneur yang berkelanjutan terhadap aspek ekologi,
sosial dan ekonomi diharapkan arah pengembangan dunia enterprenuer dapat lebih
bertanggungjawab dan beretika.
Pemerintah memegang peranan penting dalam implementasi konsep ecoprenuership.
Melalui kebijakan yang ditetapkan terkait issue keberlanjutan dalam menjalankan sebuah
usaha diharapkan dapat memberikan garis batasan pengelolaan usaha yang beretika. Agenda
penetapan sebuah kebijakan merupakan sebuah fase dan proses yang sangat strategis dalam
penetapan kebijakan publik. Dalam proses inilah memiliki ruang untuk memaknai apa yang
disebut sebagai masalah publik dan prioritas dalam agenda publik dipertarungkan. Jika sebuah
isu berhasil mendapatkan perhatian publik dan di angkat sebagai problem maka isu tersebut
mendapatkan prioritas dalam agenda penyusunan kebijakan publik dan berhak mendapatkan
alokasi sumber daya publik yang lebih daripada isu lain (Dunn, 2003)

PENUTUP

Entrepreneur merupakan sebuah jawaban bagi ketimpanan yang terjadi antara

jumlah angkatan kerja dengan ketersediaan lapangan kerja. Pengembangan dunia wirausaha
dapat meningkatkan perekonomian masyarakat. Hanya saja perkembangan dunia entrepreneur
saat ini mengarah terhadap pengeksploitasian sumber daya yang berlebihan dan tidak
disesuaikan dengan kemampuan manusia untuk mengembalian sumberdaya yang telah
digunakan untuk menjaga keberlanjutan sumber daya bagi genersi berikutnya. Selain itu
praktek usaha yang tidak bertanggungjawab sering kali mewarnai perjalanan kegiatan
kewirausahaan. Aspek sosial sering kali bukan menjadi perhatian dalam kegiatan produksi
maupun distribusi. Kecuranan-kecuranan dilakukan karena berorientasi hanya kepada profit.
Ecopreneurship merupakan konsep pengembangan dunia entrepreneur di masa
depan dengan memperhatikan aspek keberlanjutan baik aspek ekologi, sosial maupun
ekonomi. Pengembangan konsep ecopreneurship membutuhkan kerjasama dari beberapa
pihak yang masing-masing memiliki peranan sendiri dalam mengembangkan konsep
ecopreneurship dalam masyarakat. Konsep ecopreneuership diharapkan dapat menjadi konsep
pengembangan dunia entrepreneur kearah yang lebih baik dimasa yang akan datang.

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