Cooperation mechanisms to achieve EU renewable targets
AbstractThere are considerable benefits from cooperating among member states on meeting the 2020 RES targets. Today countries are supporting investments in renewable energy by many different types of support schemes and with different levels of support. The EU has opened for cooperation mechanisms such as joint support schemes for promoting renewable energy to meet the 2020 targets. The potential coordination benefits, with more efficient localisation and composition of renewable investment, can be achieved by creating new areas/sub-segments of renewable technologies where support costs are shared and credits are transferred between countries. Countries that are not coordinating support for renewable energy might induce inefficient investment in new capacity that would have been more beneficial elsewhere and still have provided the same contribution to meeting the 2020 RES targets. Furthermore, countries might find themselves competing for investment in a market with limited capital available. In both cases, the cost-efficiency of the renewable support policies is reduced compared to a coordinated solution. Barriers for joint support such as network regulation regarding connection of new capacity to the electricity grid and cost sharing rules for electricity transmission expansion are examined and solutions are suggested. The influence of additional renewable capacity on domestic/regional power market prices can be a barrier. The market will be influenced by for example an expansion of the wind capacity resulting in lower prices, which will affect existing conventional producers. This development will be opposed by conventional producers whereas consumers will support such a strategy. A major barrier is the timing of RES targets and the uncertainty regarding future targets. We illustrate the importance of different assumptions on future targets and the implied value of RES credits. The effect on the credit price for 2020 is presented in an exemplary case study of 200MW wind capacity.
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.
Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 41400.
Date of creation: Sep 2012
Date of revision:
RES target; cooperation mechanisms; policy coordination; renewables; European energy policy;
Find related papers by JEL classification:
- Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy
- Q01 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General - - - Sustainable Development
- Q20 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - General
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-10-06 (All new papers)
- NEP-ENE-2012-10-06 (Energy Economics)
- NEP-ENV-2012-10-06 (Environmental Economics)
- NEP-EUR-2012-10-06 (Microeconomic European Issues)
- NEP-REG-2012-10-06 (Regulation)
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.:
- Lehr, Ulrike & Nitsch, Joachim & Kratzat, Marlene & Lutz, Christian & Edler, Dietmar, 2008. "Renewable energy and employment in Germany," Energy Policy, Elsevier, vol. 36(1), pages 108-117, January.
- Klinge Jacobsen, Henrik & Schröder, Sascha Thorsten, 2012. "Curtailment of renewable generation: Economic optimality and incentives," Energy Policy, Elsevier, vol. 49(C), pages 663-675.
- Hanley, Nick & Nevin, Ceara, 1999. "Appraising renewable energy developments in remote communities: the case of the North Assynt Estate, Scotland," Energy Policy, Elsevier, vol. 27(9), pages 527-547, September.
- Klessmann, Corinna & Lamers, Patrick & Ragwitz, Mario & Resch, Gustav, 2010. "Design options for cooperation mechanisms under the new European renewable energy directive," Energy Policy, Elsevier, vol. 38(8), pages 4679-4691, August.
- Klessmann, Corinna, 2009. "The evolution of flexibility mechanisms for achieving European renewable energy targets 2020--ex-ante evaluation of the principle mechanisms," Energy Policy, Elsevier, vol. 37(11), pages 4966-4979, November.
- Hillebrand, Bernhard & Buttermann, Hans Georg & Behringer, Jean Marc & Bleuel, Michaela, 2006. "The expansion of renewable energies and employment effects in Germany," Energy Policy, Elsevier, vol. 34(18), pages 3484-3494, December.
- Mathiesen, Brian Vad & Lund, Henrik & Karlsson, Kenneth, 2011. "100% Renewable energy systems, climate mitigation and economic growth," Applied Energy, Elsevier, vol. 88(2), pages 488-501, February.
- Blanco, Maria Isabel & Rodrigues, Glória, 2009. "Direct employment in the wind energy sector: An EU study," Energy Policy, Elsevier, vol. 37(8), pages 2847-2857, August.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Ekkehart Schlicht).
If references are entirely missing, you can add them using this form.