Advanced Search
MyIDEAS: Login to save this article or follow this journal

Impacts of the German Support for Renewable Energy on Electricity Prices, Emissions, and Firms

Contents:

Author Info

  • Thure Traber
  • Claudia Kemfert

Abstract

Most models that are used to analyze support policies for renewable electricity neglect important market features like oligopolistic behavior, emission trading, and restricted cross-border transmission capacities. We use a quantitative electricity market model that accounts for these aspects and decompose the impact of the German Feed-in tariff (FIT) into two frequently counteracting effects: a substitution effect and a permit price effect. We find that the total effect of the policy increases the German consumer price slightly by three percent, while the producer price decreases by eight percent. In addition, emissions from electricity generation in Germany are reduced by eleven percent but are hardly altered on the European scale. Finally, it turns out that price-cost margins of almost all firms are increased by the FIT, while nonetheless, the profits of firms are significantly lowered unless the firms combine relatively carbon-intensive production with a weak connection to the German grid.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://www.iaee.org/en/publications/ejarticle.aspx?id=2333
Download Restriction: Access to full text is restricted to IAEE members and subscribers.

As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

Bibliographic Info

Article provided by International Association for Energy Economics in its journal The Energy Journal.

Volume (Year): Volume 30 (2009)
Issue (Month): Number 3 ()
Pages: 155-178

as in new window
Handle: RePEc:aen:journl:2009v30-03-a08

Contact details of provider:
Postal: 28790 Chagrin Blvd Ste 350, Cleveland, OH 44122, USA
Phone: 216-464-5365
Fax: 216-464-2737
Email:
Web page: http://www.iaee.org
More information through EDIRC

Order Information:
Web: http://www.iaee.org/en/publications/ejsearch.aspx

Related research

Keywords:

Find related papers by JEL classification:

References

No references listed on IDEAS
You can help add them by filling out this form.

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Wolf-Peter Schill & Claudia Kemfert, 2009. "The Effect of Market Power on Electricity Storage Utilization: The Case of Pumped Hydro Storage in Germany," Discussion Papers of DIW Berlin 947, DIW Berlin, German Institute for Economic Research.
  2. repec:hal:wpaper:hal-00866439 is not listed on IDEAS
  3. Manuel Frondel & Christoph M. Schmidt & Nils aus dem Moore, 2010. "Eine unbequeme Wahrheit – Die frappierend hohen Kosten der Förderung von Solarstrom durch das Erneuerbare-Energien-Gesetz," RWI Positionen, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, pages 24, December.
  4. Lehmann, Paul, 2013. "Supplementing an emissions tax by a feed-in tariff for renewable electricity to address learning spillovers," Energy Policy, Elsevier, vol. 61(C), pages 635-641.
  5. Thure Traber & Claudia Kemfert, 2009. "Refunding ETS-Proceeds to Spur the Diffusion of Renewable Energies: An Analysis Based on the Dynamic Oligopolistic Electricity Market Model EMELIE," Discussion Papers of DIW Berlin 951, DIW Berlin, German Institute for Economic Research.
  6. Oskar Lecuyer & Ruben Bibas, 2011. "Combining climate and energy policies: synergies or antagonisms?," Post-Print hal-00801917, HAL.
  7. Jürgen Blazejczak & Frauke G. Braun & Dietmar Edler & Wolf-Peter Schill, 2011. "Economic Effects of Renewable Energy Expansion: A Model-Based Analysis for Germany," Discussion Papers of DIW Berlin 1156, DIW Berlin, German Institute for Economic Research.
  8. Grossi, Luigi & Heim, Sven & Waterson, Michael, 2014. "A vision of the European energy future? The impact of the German response to the Fukushima earthquake," The Warwick Economics Research Paper Series (TWERPS) 1047, University of Warwick, Department of Economics.
  9. GARCIA-ALVAREZ, María Teresa & VARELA-CANDAMIO, Laura & NOVO-CORTI, Isabel, 2013. "Renewable Energy, Electricity Market And Employment: The Case Of Spain," Regional and Sectoral Economic Studies, Euro-American Association of Economic Development, vol. 13(1), pages 131-142.
  10. Hitaj, Claudia & Schymura, Michael & Löschel, Andreas, 2014. "The impact of a feed-in tariff on wind power development in Germany," ZEW Discussion Papers 14-035, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  11. Maria Kopsakangas-Savolainen & Rauli Svento, 2013. "Promotion of Market Access for Renewable Energy in the Nordic Power Markets," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 54(4), pages 549-569, April.
  12. Hessler, Markus A. & Loebert, Ina, 2013. "Zu Risiken und Nebenwirkungen des Erneuerbare-Energien-Gesetzes," EconStor Preprints 76784, ZBW - German National Library of Economics.
  13. Frondel, Manuel & Ritter, Nolan & Schmidt, Christoph M. & Vance, Colin, 2010. "Economic impacts from the promotion of renewable energy technologies: The German experience," Energy Policy, Elsevier, vol. 38(8), pages 4048-4056, August.
  14. Thure Traber & Claudia Kemfert, 2012. "German Nuclear Phase-out Policy: Effects on European Electricity Wholesale Prices, Emission Prices, Conventional Power Plant Investments and Eletricity Trade," Discussion Papers of DIW Berlin 1219, DIW Berlin, German Institute for Economic Research.
  15. repec:hal:ciredw:hal-00866439 is not listed on IDEAS
  16. Tveten, Åsa Grytli & Bolkesjø, Torjus Folsland & Martinsen, Thomas & Hvarnes, Håvard, 2013. "Solar feed-in tariffs and the merit order effect: A study of the German electricity market," Energy Policy, Elsevier, vol. 61(C), pages 761-770.
  17. Wolf-Peter, Schill, 2011. "Electric vehicles in imperfect electricity markets: The case of Germany," Energy Policy, Elsevier, vol. 39(10), pages 6178-6189, October.
  18. Leo Wangler, 2010. "Renewables and Innovation - Empirical Assessment and Theoretical Considerations," Jena Economic Research Papers 2010-002, Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics.
  19. Fischer, Carolyn & Preonas, Louis, 2010. "Combining Policies for Renewable Energy: Is the Whole Less than the Sum of Its Parts?," Discussion Papers dp-10-19, Resources For the Future.
  20. Oskar Lecuyer & Ruben Bibas, 2011. "Combining Climate and Energy Policies: Synergies or Antagonism? Modeling Interactions With Energy Efficiency Instruments," Working Papers 2011.98, Fondazione Eni Enrico Mattei.
  21. Würzburg, Klaas & Labandeira, Xavier & Linares, Pedro, 2013. "Renewable generation and electricity prices: Taking stock and new evidence for Germany and Austria," Energy Economics, Elsevier, vol. 40(S1), pages S159-S171.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:aen:journl:2009v30-03-a08. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (David Williams).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.