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Promoting Renewable Electricity Generation in Imperfect Markets: Price vs. Quantity Policies

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  • Madlener, Reinhard

    ()
    (E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN))

  • Neustadt, Ilja

    ()
    (Socioeconomic Institute, University of Zurich)

  • Zweifel, Peter

    ()
    (Socioeconomic Institute, University of Zurich)

Abstract

The search for economically efficient policy instruments designed to promote the diffusion of renewable energy technologies in liberalized markets has led to the introduction of quota-based tradable 'green' certificate (TGC) schemes for renewable electricity. However, there is a debate about the pros and cons of TGC, a quantity control policy, compared to guaranteed feed-in tariffs, a price control policy. In this paper we contrast these two alternatives in terms of social welfare, taking into account that electricity markets are not perfectly competitive, and show that the price control policy dominates the quantity control policy in terms of social welfare.

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Bibliographic Info

Paper provided by E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN) in its series FCN Working Papers with number 1/2008.

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Length: 34 pages
Date of creation: Jul 2008
Date of revision: May 2009
Handle: RePEc:ris:fcnwpa:2008_001

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Keywords: Green certifcates; Renewable portfolio standard; Feed-in tarif;

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References

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Citations

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Cited by:
  1. Andreas Polk & Armin Schmutzler & Adrian Muller, 2010. "Lobbying and the Power of Multinational Firms," SOI - Working Papers 1008, Socioeconomic Institute - University of Zurich.
  2. Silvia Banfi & Massimo Filippini & Andrea Horehájová, 2007. "Hedonic Price Functions for Zurich and Lugano with Special Focus on Electrosmog," CEPE Working paper series 07-57, CEPE Center for Energy Policy and Economics, ETH Zurich.
  3. Maurus Rischatsch, 2009. "Simulating WTP Values from Random-Coefficient Models," SOI - Working Papers 0912, Socioeconomic Institute - University of Zurich.
  4. Maurus Rischatsch & Maria Trottmann, 2009. "Physician dispensing and the choice between generic and brand-name drugs – Do margins affect choice?," SOI - Working Papers 0911, Socioeconomic Institute - University of Zurich.
  5. Silvia Banfi & Massimo Filippini & Andrea Horeh�jov�, 2012. "Using a choice experiment to estimate the benefits of a reduction of externalities in urban areas with special focus on electrosmog," Applied Economics, Taylor & Francis Journals, vol. 44(3), pages 387-397, January.
  6. Omann, Ines & Kowalski, Katharina & Bohunovsky, Lisa & Madlener, Reinhard & Stagl, Sigrid, 2008. "The Influence of Social Preferences on Multi-Criteria Evaluation of Energy Scenarios," FCN Working Papers 3/2008, E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN).
  7. Georg Erber & Reinhard Madlener, 2009. "Impact of ICT and Human Skills on the European Financial Intermediation Sector," Chapters in SUERF Studies, SUERF - The European Money and Finance Forum.
  8. Reinhard Madlener & Carlos Henggeler Antunes & Luis C. Dias, 2006. "Multi-Criteria versus Data Envelopment Analysis for Assessing the Performance of Biogas Plants," CEPE Working paper series 06-49, CEPE Center for Energy Policy and Economics, ETH Zurich.
  9. Reinhard Madlener & Stefan Vögtli, 2006. "Diffusion of bioenergy in urban areas: socio-economic analysis of the planned Swiss wood-fired cogeneration plant in Basel," CEPE Working paper series 06-53, CEPE Center for Energy Policy and Economics, ETH Zurich.
  10. Ilja Neustadt & Peter Zweifel, 2009. "Economic Well-Being, Social Mobility, and Preferences for Income Redistribution: Evidence from a Discrete Choice Experiment," SOI - Working Papers 0909, Socioeconomic Institute - University of Zurich, revised Jan 2010.
  11. Reinhard Madlener & Martin Koller, 2006. "Economic and CO2 mitigation impacts of promoting biomass heating systems: an input-output study for Vorarlberg, Austria," CEPE Working paper series 06-50, CEPE Center for Energy Policy and Economics, ETH Zurich.
  12. Michele Sennhauser, 2009. "Why the Linear Utility Function is a Risky Choice in Discrete-Choice Experiments," SOI - Working Papers 1014, Socioeconomic Institute - University of Zurich.

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