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What drives renewable energy development?

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Author Info

  • Alagappan, L.
  • Orans, R.
  • Woo, C.K.

Abstract

This viewpoint reviews renewable energy development in 14 markets that differ in market structure (restructured vs. not restructured), use of feed-in-tariff (FIT) (yes vs. no), transmission planning (anticipatory vs. reactive), and transmission interconnection cost allocated to a renewable generator (high vs. low). We find that market restructuring is not a primary driver of renewable energy development. Renewable generation has the highest percent of total installed capacity in markets that use a FIT, employ anticipatory transmission planning, and have loads or end-users paying for most, if not all, of the transmission interconnection costs. In contrast, renewable developers have been less successful in markets that do not use a FIT, employ reactive transmission planning, and have generators paying for most, if not all, of the transmission interconnection costs. While these policies can lead to higher penetration of renewable energy in the short run, their high cost to ratepayers can threaten the economic sustainability of renewable energy in the long-run.

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Bibliographic Info

Article provided by Elsevier in its journal Energy Policy.

Volume (Year): 39 (2011)
Issue (Month): 9 (September)
Pages: 5099-5104

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Handle: RePEc:eee:enepol:v:39:y:2011:i:9:p:5099-5104

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

Related research

Keywords: Renewable energy development Transmission planning Interconnection cost;

References

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Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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  1. Olson, Arne & Orans, Ren & Allen, Doug & Moore, Jack & Woo, C.K., 2009. "Renewable Portfolio Standards, Greenhouse Gas Reduction, and Long-Line Transmission Investments in the WECC," The Electricity Journal, Elsevier, vol. 22(9), pages 38-46, November.
  2. Woo, C.K. & Lloyd, D. & Borden, M. & Warrington, R. & Baskette, C., 2004. "A robust internet-based auction to procure electricity forwards," Energy, Elsevier, vol. 29(1), pages 1-11.
  3. Wu, F.F & Zheng, F.L. & Wen, F.S., 2006. "Transmission investment and expansion planning in a restructured electricity market," Energy, Elsevier, vol. 31(6), pages 954-966.
  4. Thure Traber & Claudia Kemfert, 2009. "Gone with the Wind?: Electricity Market Prices and Incentives to Invest in Thermal Power Plants under Increasing Wind Energy Supply," Discussion Papers of DIW Berlin 852, DIW Berlin, German Institute for Economic Research.
  5. Woo, Chi-Keung & Horowitz, Ira & Martin, Jennifer, 1998. "Reliability Differentiation of Electricity Transmission," Journal of Regulatory Economics, Springer, vol. 13(3), pages 277-92, May.
  6. Lusztig, C. & Feldberg, P. & Orans, R. & Olson, A., 2006. "A survey of transmission tariffs in North America," Energy, Elsevier, vol. 31(6), pages 1017-1039.
  7. Woo, Chi-Keung & Chow, Larry C.H. & Owen, Anthony, 2011. "Guest editors' introduction," Energy Policy, Elsevier, vol. 39(7), pages 3883-3884, July.
  8. Vincent Rious & Jean-Michel Glachant & Yannick Perez & Philippe Dessante, 2008. "Anticipation for Efficient Electricity Transmission Network Investments," Post-Print hal-00339254, HAL.
  9. L. Sleuwaegen, 2011. "Introduction," Review of Business and Economic Literature, Intersentia, vol. 56(2), pages 106-110, June.
  10. Woo, C.K. & Horowitz, I. & Moore, J. & Pacheco, A., 2011. "The impact of wind generation on the electricity spot-market price level and variance: The Texas experience," Energy Policy, Elsevier, vol. 39(7), pages 3939-3944, July.
  11. Woo, Chi-Keung & Lloyd, Debra & Tishler, Asher, 2003. "Electricity market reform failures: UK, Norway, Alberta and California," Energy Policy, Elsevier, vol. 31(11), pages 1103-1115, September.
  12. SensfuĂź, Frank & Ragwitz, Mario & Genoese, Massimo, 2008. "The merit-order effect: A detailed analysis of the price effect of renewable electricity generation on spot market prices in Germany," Energy Policy, Elsevier, vol. 36(8), pages 3076-3084, August.
  13. Newbery, David, 2010. "Market design for a large share of wind power," Energy Policy, Elsevier, vol. 38(7), pages 3131-3134, July.
  14. Zarnikau, Jay, 2011. "Successful renewable energy development in a competitive electricity market: A Texas case study," Energy Policy, Elsevier, vol. 39(7), pages 3906-3913, July.
  15. Sioshansi, Ramteen & Hurlbut, David, 2010. "Market protocols in ERCOT and their effect on wind generation," Energy Policy, Elsevier, vol. 38(7), pages 3192-3197, July.
  16. H. Dewachter & R. Houssa & P.R. Kaltwasser, 2011. "Introduction," Review of Business and Economic Literature, Intersentia, vol. 56(4), pages 378-382, December.
  17. Steggals, Will & Gross, Robert & Heptonstall, Philip, 2011. "Winds of change: How high wind penetrations will affect investment incentives in the GB electricity sector," Energy Policy, Elsevier, vol. 39(3), pages 1389-1396, March.
  18. Yatchew, Adonis & Baziliauskas, Andy, 2011. "Ontario feed-in-tariff programs," Energy Policy, Elsevier, vol. 39(7), pages 3885-3893, July.
  19. Hoogwijk, Monique & de Vries, Bert & Turkenburg, Wim, 2004. "Assessment of the global and regional geographical, technical and economic potential of onshore wind energy," Energy Economics, Elsevier, vol. 26(5), pages 889-919, September.
  20. Mitchell, C. & Bauknecht, D. & Connor, P.M., 2006. "Effectiveness through risk reduction: a comparison of the renewable obligation in England and Wales and the feed-in system in Germany," Energy Policy, Elsevier, vol. 34(3), pages 297-305, February.
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Citations

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Cited by:
  1. Gillenwater, Michael, 2013. "Probabilistic decision model of wind power investment and influence of green power market," Energy Policy, Elsevier, vol. 63(C), pages 1111-1125.
  2. Jenner, Steffen & Groba, Felix & Indvik, Joe, 2013. "Assessing the strength and effectiveness of renewable electricity feed-in tariffs in European Union countries," Energy Policy, Elsevier, vol. 52(C), pages 385-401.
  3. Lam, J.C.K. & Woo, C.K. & Kahrl, F. & Yu, W.K., 2013. "What moves wind energy development in China? Show me the money!," Applied Energy, Elsevier, vol. 105(C), pages 423-429.
  4. Sung-Lin Hsueh, 2012. "A Fuzzy Utility-Based Multi-Criteria Model for Evaluating Households’ Energy Conservation Performance: A Taiwanese Case Study," Energies, MDPI, Open Access Journal, vol. 5(8), pages 2818-2834, August.
  5. Chi-Keung Woo, Ira Horowitz, Brian Horii, Ren Orans, and Jay Zarnikau, 2012. "Blowing in the Wind: Vanishing Payoffs of a Tolling Agreement for Natural-gas-fired Generation of Electricity in Texas," The Energy Journal, International Association for Energy Economics, vol. 0(Number 1).
  6. Gireesh Shrimali & Steffen Jenner & Felix Groba & Gabriel Chan & Joe Indvik, 2012. "Have State Renewable Portfolio Standards Really Worked?: Synthesizing Past Policy Assessments," Discussion Papers of DIW Berlin 1258, DIW Berlin, German Institute for Economic Research.
  7. Smith, William J., 2013. "Projecting EU demand for natural gas to 2030: A meta-analysis," Energy Policy, Elsevier, vol. 58(C), pages 163-176.
  8. Chmutina, Ksenia & Goodier, Chris I., 2014. "Alternative future energy pathways: Assessment of the potential of innovative decentralised energy systems in the UK," Energy Policy, Elsevier, vol. 66(C), pages 62-72.
  9. Woo, C.K. & Li, R. & Shiu, A. & Horowitz, I., 2013. "Residential winter kWh responsiveness under optional time-varying pricing in British Columbia," Applied Energy, Elsevier, vol. 108(C), pages 288-297.

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