1. Risk Mitigation and Procurement Initiatives

Generally speaking, risk mitigation refers to measures to reduce the risk for investors in order to reduce the cost of capital and thus the power generation costs of renewable energies. Risk mitigation elements in the design of power purchase agreements (Indicator 1.1.) and procurement incentives for large-scale and small-scale renewables (Indicator 1.2 and 1.3). “Procurement incentives” cover all aspects that are often summarized under the header “support mechanisms” (e.g., auctions, feed-in tariffs, etc). Since the cost of renewables has decreased rapidly and procuring RE is frequently less expensive than new fossil fuel plants, “support mechanism” is no longer an appropriate terminology. Moreover, the existence of additional fiscal incentives (Indicator 1.4) and carbon pricing (Indicator 1.5) is assessed.