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Initiating a sustained diffusion of wind power: The role of public-private partnerships in Spain

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  • Dinica, Valentina

Abstract

The literature on policy approaches for the market support of renewable electricity is dominated by narrow conceptualizations of policy, referring mostly to direct instruments for economic feasibility. Such approaches often led to unsatisfactory explanations of diffusion results. This is the case of wind power diffusion in Spain, the success of which is typically credited to the 'feed-in-tariff' instrument. This paper offers an alternative explanatory account for wind power diffusion in Spain. It is argued that diffusion can be explained by a less obvious policy of stimulating investments by means of public-private partnerships (PPPs). The three legal frameworks for economic feasibility applicable up to 2004 harbored high economic risks. Although projects could have high profitability because of generous investment subsidies, up to mid 1990s most investments were based on PPPs, to address the risk perceptions of early investors. Fully-private partnerships now dominate investments, though PPPs have not disappeared. Next to winning investors' confidence, the PPP policy led to an investment culture whereby partnership investments dominate. By 2000, 95.7% of the installed wind capacity was owned by partnerships, and only 4.3% by individual companies. Partnerships invest in larger projects, have ambitious investment plans, and these lead to a high diffusion tempo.

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  • Dinica, Valentina, 2008. "Initiating a sustained diffusion of wind power: The role of public-private partnerships in Spain," Energy Policy, Elsevier, vol. 36(9), pages 3562-3571, September.
  • Handle: RePEc:eee:enepol:v:36:y:2008:i:9:p:3562-3571
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    Cited by:

    1. Friebe, Christian A. & von Flotow, Paschen & Täube, Florian A., 2014. "Exploring technology diffusion in emerging markets – the role of public policy for wind energy," Energy Policy, Elsevier, vol. 70(C), pages 217-226.
    2. Alonso, Patricia Martínez & Hewitt, Richard & Pacheco, Jaime Díaz & Bermejo, Lara Román & Jiménez, Verónica Hernández & Guillén, Jara Vicente & Bressers, Hans & de Boer, Cheryl, 2016. "Losing the roadmap: Renewable energy paralysis in Spain and its implications for the EU low carbon economy," Renewable Energy, Elsevier, vol. 89(C), pages 680-694.
    3. Songsore, Emmanuel & Buzzelli, Michael, 2014. "Social responses to wind energy development in Ontario: The influence of health risk perceptions and associated concerns," Energy Policy, Elsevier, vol. 69(C), pages 285-296.
    4. Boccard, Nicolas, 2010. "Economic properties of wind power: A European assessment," Energy Policy, Elsevier, vol. 38(7), pages 3232-3244, July.
    5. Gabriel, Cle-Anne, 2016. "What is challenging renewable energy entrepreneurs in developing countries?," Renewable and Sustainable Energy Reviews, Elsevier, vol. 64(C), pages 362-371.
    6. Curran, Louise & Lv, Ping & Spigarelli, Francesca, 2017. "Chinese investment in the EU renewable energy sector: Motives, synergies and policy implications," Energy Policy, Elsevier, vol. 101(C), pages 670-682.
    7. Huh, Sung-Yoon & Lee, Chul-Yong, 2014. "Diffusion of renewable energy technologies in South Korea on incorporating their competitive interrelationships," Energy Policy, Elsevier, vol. 69(C), pages 248-257.
    8. Zubi, Ghassan & Bernal-Agustín, José L. & Fandos Marín, Ana B., 2009. "Wind energy (30%) in the Spanish power mix--technically feasible and economically reasonable," Energy Policy, Elsevier, vol. 37(8), pages 3221-3226, August.
    9. repec:eee:rensus:v:81:y:2018:i:p2:p:2019-2027 is not listed on IDEAS
    10. repec:eee:rensus:v:77:y:2017:i:c:p:525-535 is not listed on IDEAS
    11. de la Hoz, Jordi & Boix, Oriol & Martín, Helena & Martins, Blanca & Graells, Moisès, 2010. "Promotion of grid-connected photovoltaic systems in Spain: Performance analysis of the period 1998-2008," Renewable and Sustainable Energy Reviews, Elsevier, vol. 14(9), pages 2547-2563, December.
    12. Walters, Ryan & Walsh, Philip R., 2011. "Examining the financial performance of micro-generation wind projects and the subsidy effect of feed-in tariffs for urban locations in the United Kingdom," Energy Policy, Elsevier, vol. 39(9), pages 5167-5181, September.
    13. Boccard, Nicolas, 2009. "Capacity factor of wind power realized values vs. estimates," Energy Policy, Elsevier, vol. 37(7), pages 2679-2688, July.
    14. Lüthi, Sonja & Prässler, Thomas, 2011. "Analyzing policy support instruments and regulatory risk factors for wind energy deployment--A developers' perspective," Energy Policy, Elsevier, vol. 39(9), pages 4876-4892, September.

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