Impacts of the German Support for Renewable Energy on Electricity Prices, Emissions, and Firms
AbstractMost 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 InfoIf 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.
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 InfoArticle provided by International Association for Energy Economics in its journal The Energy Journal.
Volume (Year): Volume 30 (2009)
Issue (Month): Number 3 ()
Find related papers by JEL classification:
- F0 - International Economics - - General
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Manuel Frondel & Nolan Ritter & Christoph M. Schmidt & Colin Vance, 2009.
"Economic Impacts from the Promotion of Renewable Energy Technologies - The German Experience,"
Ruhr Economic Papers
0156, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
- 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.
- Oskar Lecuyer & Ruben Bibas, 2012.
"Combining climate and energy policies : synergies or antagonism ? Modeling interactions with energy efficiency instruments,"
CIRED Working Papers
- 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.
- Hessler, Markus A. & Loebert, Ina, 2013. "Zu Risiken und Nebenwirkungen des Erneuerbare-Energien-Gesetzes," EconStor Preprints 76784, ZBW - German National Library of Economics.
- 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.
- 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.
- 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.
- 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.
- Oskar Lecuyer & Ruben Bibas, 2011. "Combining climate and energy policies: synergies or antagonisms?," Post-Print hal-00801917, HAL.
- 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.
- Traber, Thure & Kemfert, Claudia, 2011. "Refunding ETS proceeds to spur the diffusion of renewable energies: An analysis based on the dynamic oligopolistic electricity market model EMELIE," Utilities Policy, Elsevier, vol. 19(1), pages 33-41, January.
- 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.
- Wolf-Peter, Schill, 2011. "Electric vehicles in imperfect electricity markets: The case of Germany," Energy Policy, Elsevier, vol. 39(10), pages 6178-6189, October.
- Oskar Lecuyer & Ruben Bibas, 2012. "Combining climate and energy policies : synergies or antagonism ? Modeling interactions with energy efficiency instruments," Working Papers hal-00866439, HAL.
- 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.
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.