Arbeitspapier
Quantities vs. capacities: Minimizing the social cost of renewable energy promotion
In this article we show how different promotion schemes for renewables affect economic welfare. Our starting point is that external benefits of renewable electricity supply besides the abatement of greenhouse gases are not related to actual electricity generation but to producing and installing capacity. We argue that generation based subsidies such as feed-in tariffs and bonus payments can only be a second-best solution. Our model framework allows us to explain how these second-best instruments cause welfare losses in an environment of volatile demand. We postulate that capacity payments for renewables should be implemented in order to avoid unnecessary social costs.
- Language
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Englisch
- Bibliographic citation
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Series: CAWM Discussion Paper ; No. 59
- Classification
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Wirtschaft
Energy: Demand and Supply; Prices
Energy: Government Policy
Taxation and Subsidies: Externalities; Redistributive Effects; Environmental Taxes and Subsidies
- Subject
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Renewable Energy Sources
Energy Policy
Promotion Instruments
- Event
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Geistige Schöpfung
- (who)
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Andor, Mark
Flinkerbusch, Kai
Voß, Achim
- Event
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Veröffentlichung
- (who)
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Westfälische Wilhelms-Universität Münster, Centrum für Angewandte Wirtschaftsforschung (CAWM)
- (where)
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Münster
- (when)
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2012
- Handle
- Last update
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10.03.2025, 11:42 AM CET
Data provider
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Arbeitspapier
Associated
- Andor, Mark
- Flinkerbusch, Kai
- Voß, Achim
- Westfälische Wilhelms-Universität Münster, Centrum für Angewandte Wirtschaftsforschung (CAWM)
Time of origin
- 2012