European renewable energy policy at crossroads--Focus on electricity support mechanisms
The European Union has adopted targets for the expanded use of renewable energies (REs) as one mean to achieve improved energy security, reduced greenhouse gas (GHG) emissions, and improved competitiveness of the European economies. Realising that rapid expansion of RE will not happen in the energy market place, as it now exists, various support mechanisms are under consideration, most prominently these may be grouped into two major categories, tradable green certificates (TGC) and feed-in tariffs (FiT). Experiences from a number of countries in Europe suggest that FiT deliver larger and faster penetration of RE than TGC, at lower cost. The two major systems are compared in overall terms. In a TGC system, a target for RE penetration is set by public authorities seeking to minimise cost for achieving this target. The certificate price is set by the market. In a FiT system, public authorities set an effective price but are not limiting the quantity installed. This has led to impressive growth rates, particularly in Denmark, Germany, and Spain. It is found that investor risks are much lower in a FiT system, and that innovation incentives are larger. Against this background, the European Commission proposal for an EU-wide TGC system is discussed. It is found that such a system is likely to be less effective and less efficient than maintaining national FiT systems, and that it also risks time-consuming legal processes during which investor uncertainties would risk a marked slow-down in investments. Given the underlying objective of addressing security, climate change and competitiveness, it therefore appears that, at least for the time being, continued reliance on national systems, especially FiT would be preferred.
If 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.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
References listed on IDEAS
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.:
- Volkmar Lauber & Lutz Mez, 2004. "Three Decades of Renewable Electricity Policies in Germany," Energy & Environment, , vol. 15(4), pages 599-623, July.
- Meyer, Niels I., 2003. "European schemes for promoting renewables in liberalised markets," Energy Policy, Elsevier, vol. 31(7), pages 665-676, June.
- Tomas KÃ¥berger & Thomas Sterner & Max Zamanian & Anna JÃ¼rgensen, 2004. "Economic Efficiency of Compulsory Green Electricity Quotas in Sweden," Energy & Environment, , vol. 15(4), pages 675-697, July.
- Angus Johnston, 2006. "Free allocation of allowances under the EU emissions trading scheme: legal issues," Climate Policy, Taylor & Francis Journals, vol. 6(1), pages 115-136, January.
- Lipp, Judith, 2007. "Lessons for effective renewable electricity policy from Denmark, Germany and the United Kingdom," Energy Policy, Elsevier, vol. 35(11), pages 5481-5495, November.
- Ragwitz, Mario & Resch, Gustav & Schleich, Joachim, 2007. "Increased auctioning in the EU ETS and trade in guarantees of origin for renewables: a comparison of the impact on power sector producer rents," Working Papers "Sustainability and Innovation" S8/2007, Fraunhofer Institute for Systems and Innovation Research (ISI).
When requesting a correction, please mention this item's handle: RePEc:eee:enepol:v:36:y:2008:i:11:p:4079-4092. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Dana Niculescu)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.