Renewable energy sources must play an important role in meeting our future demands - but policy interventions are essential if renewables are ever to make a significant contribution.

That was the crux of the message delivered by the IEA's Executive Director Robert Priddle, to the Grand Solar Challenge in Tokyo, Japan last October. 'Energy Security & Demand in the 21st Century and the Role of Renewable Energy' was the first keynote address on Renewables by and Executive Director of the IEA for many years. Excerpts from Mr Priddle's speech are presented below.

"At the Berlin Meeting of the Parties to the Climate Convention I stated, on behalf of the IEA, that we must decouple economic growth from the intensive fossil fuel dependency we have today. New and renewable source of energy offer us one of the few practicable ways forward towards meeting our climate change commitments. But there are a number of barriers, which stand in the way. The key barrier is still cost."

"But there are policy instruments available, which can support use of renewable energy in the market place: these include regulations and traditional economic instruments, but also more flexible policy tools, such as voluntary agreements. These are more in tune with the desire of many governments today, to leave as much freedom of choice as possible to those who have to operate in the market."

"The IEA would recommend removing government interventions that distort markets in favour of fossil fuels; steps towards internalising environmental costs in energy pries; and allocation of public and private capital to research, development and deployment of renewable energy technologies."

"These three types of efforts are appropriate to compensate for the handicap that new and renewable sources of energy have in comparison to well-established and well-developed conventional technologies. Such forms of intervention are unlikely, though, to be sufficient to enable renewables to make a major contribution to meeting environmental commitments."

"We believe that utilities must either have an economic incentive, or undertake an obligation, to increase the use of non-fossil new renewable energy resources. Unless unexpected increases occur in the prices of conventional fuel, this will continue to be the case, at least until the full internalisation of external costs in energy prices has been realized."

"For many countries, market interventions have succeeded in securing markets for renewable energy technologies and have demonstrated the economic and environmental benefits that can be realized. Nudging along the market has encouraged improvements in technology, increased economies of scale, and growing confidence amongst the financial community."

"This though is only a beginning. We have to go on monitoring and analyzing the developments of renewable sources of energy and spreading knowledge of the experience gained. The Grand Solar Challenge is addressing this."

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