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Initiating a sustained diffusion of wind power: The role of public-private partnerships in Spain

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  • Dinica, Valentina
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    Abstract

    The literature on policy approaches for the market support of renewable electricity is dominated by narrow conceptualizations of policy, referring mostly to direct instruments for economic feasibility. Such approaches often led to unsatisfactory explanations of diffusion results. This is the case of wind power diffusion in Spain, the success of which is typically credited to the 'feed-in-tariff' instrument. This paper offers an alternative explanatory account for wind power diffusion in Spain. It is argued that diffusion can be explained by a less obvious policy of stimulating investments by means of public-private partnerships (PPPs). The three legal frameworks for economic feasibility applicable up to 2004 harbored high economic risks. Although projects could have high profitability because of generous investment subsidies, up to mid 1990s most investments were based on PPPs, to address the risk perceptions of early investors. Fully-private partnerships now dominate investments, though PPPs have not disappeared. Next to winning investors' confidence, the PPP policy led to an investment culture whereby partnership investments dominate. By 2000, 95.7% of the installed wind capacity was owned by partnerships, and only 4.3% by individual companies. Partnerships invest in larger projects, have ambitious investment plans, and these lead to a high diffusion tempo.

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    File URL: http://www.sciencedirect.com/science/article/B6V2W-4T1SFRC-2/2/1ae15b3a154d8fc8ddf5b1c825adfe41
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    Bibliographic Info

    Article provided by Elsevier in its journal Energy Policy.

    Volume (Year): 36 (2008)
    Issue (Month): 9 (September)
    Pages: 3562-3571

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    Handle: RePEc:eee:enepol:v:36:y:2008:i:9:p:3562-3571

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    Web page: http://www.elsevier.com/locate/enpol

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    References

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    Cited by:
    1. Lüthi, Sonja & Prässler, Thomas, 2011. "Analyzing policy support instruments and regulatory risk factors for wind energy deployment--A developers' perspective," Energy Policy, Elsevier, vol. 39(9), pages 4876-4892, September.
    2. Boccard, Nicolas, 2010. "Economic properties of wind power: A European assessment," Energy Policy, Elsevier, vol. 38(7), pages 3232-3244, July.
    3. Boccard, Nicolas, 2009. "Capacity factor of wind power realized values vs. estimates," Energy Policy, Elsevier, vol. 37(7), pages 2679-2688, July.
    4. Walters, Ryan & Walsh, Philip R., 2011. "Examining the financial performance of micro-generation wind projects and the subsidy effect of feed-in tariffs for urban locations in the United Kingdom," Energy Policy, Elsevier, vol. 39(9), pages 5167-5181, September.

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