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Rationales for technology-specific RES support and their relevance for German policy

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  • Gawel, Erik
  • Lehmann, Paul
  • Purkus, Alexandra
  • Söderholm, Patrik
  • Witte, Katherina

Abstract

In order to achieve cost-effective RES-E deployment it is often argued that technology-neutral support schemes for renewables are indispensable. Against this background, RES-E support policies making widely use of technology differentiation in remuneration settings, e.g. across the EU, are frequently criticized from a theoretical point of view. However, in this paper we provide a systematic critique of the technology neutrality concept as a foundation for designing policy support schemes in the RES-E technology field. Specifically, the main objective of the paper is to scrutinize the arguments for technology-neutrality, and discuss three conceptual arguments for why technology-specific support schemes could in fact help minimize the societal costs of reaching future RES-E targets. We also briefly address different political economy concerns, which could constrain the choice of cost-effective policy support schemes, and that have to be taken into account for economic policy advice. For empirical illustration of the key arguments we refer to the case of German RES-E policy-making. The central conclusion from this paper is that technology-specific RES-E support schemes may generate significant economic benefits, particularly if technology markets work imperfectly and in second-best policy settings with additional non-internalized market failures.

Suggested Citation

  • Gawel, Erik & Lehmann, Paul & Purkus, Alexandra & Söderholm, Patrik & Witte, Katherina, 2017. "Rationales for technology-specific RES support and their relevance for German policy," Energy Policy, Elsevier, vol. 102(C), pages 16-26.
  • Handle: RePEc:eee:enepol:v:102:y:2017:i:c:p:16-26
    DOI: 10.1016/j.enpol.2016.12.007
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    Cited by:

    1. repec:eee:enepol:v:114:y:2018:i:c:p:465-481 is not listed on IDEAS
    2. Paul Lehmann & Patrik Söderholm, 2018. "Can Technology-Specific Deployment Policies Be Cost-Effective? The Case of Renewable Energy Support Schemes," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 71(2), pages 475-505, October.
    3. repec:eee:enepol:v:123:y:2018:i:c:p:443-449 is not listed on IDEAS

    More about this item

    Keywords

    Renewable energy technologies; Technology-specific support; Market failures; Germany;

    JEL classification:

    • O38 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Government Policy
    • Q42 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Alternative Energy Sources
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy
    • Q55 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Technological Innovation

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