How to overcome?. In the context of addressing the externality of low fossil fuel prices (that weakens the competitiveness of low-carbon options including innovative investments in smart grids), the Dutch government should continue their efforts in assessing and communicating the potential costs and benefits of introducing the Carbon Price Floor (CPF) option especially to the market actors directly affected by its introduction. The CPF will most likely succeed in increasing generation costs from fossil fuel generation in the Netherlands. In fact, it will lift generation costs for the remaining coal plants more than for the gas-fired ones due to their higher carbon intensity eventually leading to an increase in the coal-to-gas switching in the Dutch market. Yet, the increase in generation costs for coal and gas is not expected to have a direct effect on smart-grid deployment. Essentially, carbon pricing policies can only significantly steer industry towards innovative low-GHG technology development if allowance prices are sufficiently high or if allowance auctioning revenues can be channelled directly to promote innovative technologies (Clochard and Alberola 2017). With regard to fossil fuel subsidy reforms, the Dutch government should proceed with coherent actions to reduce the reliance on fossil fuel through a more robust subsidy reform for coal-generation, accounting for the resources that would be required to support many of the essential elements of such a reform in the sector. In addition, political interventions into the energy market (e.g. such as the coal-phase out mandate or the CPF introduction) should be continuously monitored. Most importantly during such a market reform, new policy mechanisms should be implemented in co-operation with the industry and other market stakeholders to raise trust among them and increase the potential for effective implementation. Last but not least, one of the main implications of introducing a CPF also relates to indirect costs borne by consumers. This may create an implicit drive for end-users to search for alternative options to decrease their energy costs and thus potentially boost engagement in smart-grids. Nevertheless, the Dutch government should closely monitor the operation of the CPF and the related costs burdening consumers and consider the potential adoption of cost-containment measures to offset excessive costs. In the European Union, negative power prices have been allowed in countries participating in the European Pow...
How to overcome?. The case has served to highlight barriers to effective policymaking and implementation at both national and supra-national levels, and as the focus was on RES development over time, has allowed for observation of how those barriers were addressed (or not). In the following section, we provide a snapshot of how these barriers were mitigated in the Croatian case, as well as examples from literature of similar effects seen elsewhere, and the recommended actions needed to overcome them. As time and experience of policymakers wore on, we found that to a large extent, consideration of and addressing contextual barriers increased in the country, particularly in regard to institutional coordination. While initially two separate ministries (Environment and Energy) were relevant authorities involved with RES development, the inefficiencies involved in having two separate bodies was made apparent and as a solution, the Ministries were merged. While this may seem like a simple solution to a simple problem, it does warrant mentioning, and can serve also as a positive example of Similarly to institutional complexity and resulting barrier above, the market framework in Croatia was consistently cited as a limiting factor for policy success. Indeed, these findings aren’t an outlier or particularly new; (XXXXX 2013) in a study on barriers to RES in south-eastern Europe find many of the same conclusions as we do here. They pinpoint four barriers related to the energy market relevant for the region, two of which interviewees feel are adequately addressed (administrative and legal barriers; lack of awareness, capacity, and skills), and two not (market, technical and regulatory barriers; economic barriers):
(i) Market, technical and regulatory barriers – e.g. insufficiently competitive regulatory environments for private companies which restricts market access for new entrants due to administrative and institutional complexities.
(ii) Economic barriers – e.g. lack of bank experience with RES development, and lack of public funding, restricts development to incumbent utilities with access to state aid, limiting the participation of independent investors
(iii) Administrative and legal barriers – e.
