Region: Global
Country: Global / Non-Specific
Keywords: Knowledge Lab, Renewable Energy
Document Link(s):
Document(s):
- Wheeling and Banking Strategies for Optimal Renewable Energy Deployment: International Experiences1005.71 KB
Document Summary:
This paper defines the principles of wheeling (i.e., transmission) tariffs and renewable energy (RE) banking provisions and their role in RE deployment in countries with plans for large-scale RE. It reviews experiences to date in the United States, Mexico, and India and discusses key policy and regulatory considerations for devising more effective wheeling and/or banking provisions for countries with ambitious RE deployment targets. The paper addresses the challenges of competing needs of stakeholders, especially those of RE generators, distribution utilities, and transmission network owners and operators. The importance of wheeling and banking and their effectiveness for financial viability of RE deployment is also explored. This paper aims to benefit policymakers and regulators as well as key renewable energy stakeholders. Key lessons for regulators include: creating long-term wheeling and banking policy certainty, considering incentivizing RE through discounted transmission access, and assessing the cost implications of such discounts, as well as expanding access to renewable energy customers.
Document Details:
This paper presents the case examples of wheeling and banking of renewable energy in the United States, Mexico, and India. Policymakers and regulators can use the lessons learned from these three major markets to enable or revise wheeling and banking policies to achieve more cost-effective deployment of renewable energy in their markets. These countries were selected based on their long histories (over 10 years) of diverse perspectives on wheeling and banking policies. After highlighting U.S. market experience in Section 2, Mexico and India case studies are presented in Sections 3 and 4, respectively.
Section 5 provides a synthesis of lessons learned for regulators. Key lessons for regulators include: creating long-term wheeling and banking policy certainty, considering incentivizing RE through discounted transmission access, assessing the cost implications of such discounts, as well as expanding access to renewable energy customers.
Updated: April 12, 2022