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Optimal policy supports for renewable energy technology development: A dynamic programming model

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  • Ding, Hao
  • Zhou, Dequn
  • Zhou, P.

Abstract

Policy support has played a significant role in driving the rapid development of renewable energy technologies (RETs). This study constructed a dynamic programming model to derive the optimal policy supports for RETs, integrating both supply and demand sides. The sensitivity of policy performance on the cost and price elasticities of RET diffusion was also analyzed. The results show that policy supports could be a main force for RET development in their initial periods. In the long run, policy makers need to decrease the support level faster than the decrease in RET cost to maintain a high policy efficiency. Further improving the efficiency of policy is possible considering the influences of technical change on RET development.

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  • Ding, Hao & Zhou, Dequn & Zhou, P., 2020. "Optimal policy supports for renewable energy technology development: A dynamic programming model," Energy Economics, Elsevier, vol. 92(C).
    • Handle: RePEc:eee:eneeco:v:92:y:2020:i:c:s0140988320301055
    DOI: 10.1016/j.eneco.2020.104765
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    Keywords

    Renewable energy technology; Dynamic optimization; Energy system optimization;
    All these keywords.

    JEL classification:

    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
    • C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games
    • D04 - Microeconomics - - General - - - Microeconomic Policy: Formulation; Implementation; Evaluation
    • K32 - Law and Economics - - Other Substantive Areas of Law - - - Energy, Environmental, Health, and Safety Law
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • L52 - Industrial Organization - - Regulation and Industrial Policy - - - Industrial Policy; Sectoral Planning Methods

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