Arbeitspapier
Can technology-specific deployment policies be cost-effective? The case of renewable energy support schemes
While there is relatively limited disagreement on the general need for supporting the deployment of renewable energy sources for electricity generation (RES-E), there are diverging views on whether the granted support levels should be technology-neutral or technology-specific. In this paper we question the frequently stressed argument that technology-neutral schemes will promote RES-E deployment cost-effectively. A simple partial equilibrium model of the electricity sector with one representative investor is developed to illustrate how the cost-effective support levels to different RES-E technologies will be influenced when selected market failures are introduced. We address market failures associated with technological development, long-term risk taking, path dependencies as well as various external costs, all of which drive a wedge between the private and the social costs of RES-E deployment. Based on these analytical findings and a review of empirical literature, we conclude that the relevance of these market failures is typically heterogeneous across different RES-E technologies. The paper ends by discussing a number of possible caveats to implementing cost-effective technology-specific support schemes in practice, including the role of various information and political economy constraints. While these considerations involve important challenges, neither of them suggests an unambiguous plea for technology-neutral RES support policies either.
- Sprache
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Englisch
- Erschienen in
-
Series: UFZ Discussion Paper ; No. 1/2016
- Klassifikation
-
Wirtschaft
Taxation and Subsidies: Externalities; Redistributive Effects; Environmental Taxes and Subsidies
Technological Change: Choices and Consequences; Diffusion Processes
Alternative Energy Sources
- Thema
-
technology deployment
renewable energy sources
support schemes
cost-effectiveness
- Ereignis
-
Geistige Schöpfung
- (wer)
-
Lehmann, Paul
Söderholm, Patrik
- Ereignis
-
Veröffentlichung
- (wer)
-
Helmholtz-Zentrum für Umweltforschung (UFZ)
- (wo)
-
Leipzig
- (wann)
-
2016
- Handle
- Letzte Aktualisierung
-
20.09.2024, 08:24 MESZ
Datenpartner
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Objekttyp
- Arbeitspapier
Beteiligte
- Lehmann, Paul
- Söderholm, Patrik
- Helmholtz-Zentrum für Umweltforschung (UFZ)
Entstanden
- 2016