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Optimal policy of energy innovation in developing countries: Development of solar PV in Iran

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  • Shafiei, Ehsan
  • Saboohi, Yadollah
  • Ghofrani, Mohammad B.

Abstract

The purpose of this study is to apply managerial economics and methods of decision analysis to study the optimal pattern of innovation activities for development of new energy technologies in developing countries. For this purpose, a model of energy research and development (R&D) planning is developed and it is then linked to a bottom-up energy-systems model. The set of interlinked models provide a comprehensive analytical tool for assessment of energy technologies and innovation planning taking into account the specific conditions of developing countries. An energy-system model is used as a tool for the assessment and prioritization of new energy technologies. Based on the results of the technology assessment model, the optimal R&D resources allocation for new energy technologies is estimated with the help of the R&D planning model. The R&D planning model is based on maximization of the total net present value of resulting R&D benefits taking into account the dynamics of technological progress, knowledge and experience spillovers from advanced economies, technology adoption and R&D constraints. Application of the set of interlinked models is explained through the analysis of the development of solar PV in Iranian electricity supply system and then some important policy insights are concluded.

Suggested Citation

  • Shafiei, Ehsan & Saboohi, Yadollah & Ghofrani, Mohammad B., 2009. "Optimal policy of energy innovation in developing countries: Development of solar PV in Iran," Energy Policy, Elsevier, vol. 37(3), pages 1116-1127, March.
    • Handle: RePEc:eee:enepol:v:37:y:2009:i:3:p:1116-1127
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    1. Aryanpur, V. & Ghahremani, M. & Mamipour, S. & Fattahi, M. & Ó Gallachóir, B. & Bazilian, M.D. & Glynn, J., 2022. "Ex-post analysis of energy subsidy removal through integrated energy systems modelling," Renewable and Sustainable Energy Reviews, Elsevier, vol. 158(C).
    2. Hossein Heirani & Naser Bagheri Moghaddam & Sina Labbafi & Seyedali Sina, 2022. "A Business Model for Developing Distributed Photovoltaic Systems in Iran," Sustainability, MDPI, vol. 14(18), pages 1-21, September.
    3. Shafiei, Ehsan & Saboohi, Yadollah & Ghofrani, Mohammad B., 2009. "Impact of innovation programs on development of energy system: Case of Iranian electricity-supply system," Energy Policy, Elsevier, vol. 37(6), pages 2221-2230, June.
    4. Gorjian, Shiva & Zadeh, Babak Nemat & Eltrop, Ludger & Shamshiri, Redmond R. & Amanlou, Yasaman, 2019. "Solar photovoltaic power generation in Iran: Development, policies, and barriers," Renewable and Sustainable Energy Reviews, Elsevier, vol. 106(C), pages 110-123.
    5. Kyunam Kim & Eunnyeong Heo & Yeonbae Kim, 2017. "Dynamic Policy Impacts on a Technological-Change System of Renewable Energy: An Empirical Analysis," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 66(2), pages 205-236, February.
    6. Iman Miremadi & Yadollah Saboohi, 2018. "Planning for Investment in Energy Innovation: Developing an Analytical Tool to Explore the Impact of Knowledge Flow," International Journal of Energy Economics and Policy, Econjournals, vol. 8(2), pages 7-19.
    7. Cowan, Kelly R. & Daim, Tugrul U., 2011. "Review of technology acquisition and adoption research in the energy sector," Technology in Society, Elsevier, vol. 33(3), pages 183-199.
    8. Najafi, G. & Ghobadian, B. & Mamat, R. & Yusaf, T. & Azmi, W.H., 2015. "Solar energy in Iran: Current state and outlook," Renewable and Sustainable Energy Reviews, Elsevier, vol. 49(C), pages 931-942.
    9. Aryanpur, Vahid & Shafiei, Ehsan, 2015. "Optimal deployment of renewable electricity technologies in Iran and implications for emissions reductions," Energy, Elsevier, vol. 91(C), pages 882-893.
    10. Sun, Honghang & Zhi, Qiang & Wang, Yibo & Yao, Qiang & Su, Jun, 2014. "China’s solar photovoltaic industry development: The status quo, problems and approaches," Applied Energy, Elsevier, vol. 118(C), pages 221-230.
    11. Miremadi, I. & Saboohi, Y. & Arasti, M., 2019. "The influence of public R&D and knowledge spillovers on the development of renewable energy sources: The case of the Nordic countries," Technological Forecasting and Social Change, Elsevier, vol. 146(C), pages 450-463.
    12. Chen, Weidong & Han, Mingzhe, 2025. "Quantifying the cost savings of global solar PV and onshore wind markets," Energy Policy, Elsevier, vol. 199(C).
    13. Castrejon-Campos, Omar & Aye, Lu & Hui, Felix Kin Peng, 2022. "Effects of learning curve models on onshore wind and solar PV cost developments in the USA," Renewable and Sustainable Energy Reviews, Elsevier, vol. 160(C).
    14. John Foster & Liam Wagner & Phil Wild & Junhua Zhao & Lucas Skoofa & Craig Froome & Ariel Liebman, 2011. "Market and Economic Modelling of the Intelligent Grid: End of Year Report 2010," Energy Economics and Management Group Working Papers 10, School of Economics, University of Queensland, Australia.
    15. Aryanpur, Vahid & Fattahi, Mahshid & Mamipour, Siab & Ghahremani, Mahsa & Gallachóir, Brian Ó & Bazilian, Morgan D. & Glynn, James, 2022. "How energy subsidy reform can drive the Iranian power sector towards a low-carbon future," Energy Policy, Elsevier, vol. 169(C).

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