An energy pricing scheme for the diffusion of decentralized renewable technology investment in developing countries
The purpose of this paper is to investigate price support for market penetration of renewable energy in developing nations through a decentralized supply process. We integrate the new decentralized energy support: renewable premium tariff, to analyze impacts of tariff incentives on the diffusion of renewable technology in Senegal. Based on photovoltaic and wind technologies and an assessment of renewable energy resources in Senegal, an optimization technique is combined with a cash flow analysis to investigate investment decisions in renewable energy sector. Our findings indicate that this support mechanism could strengthen the sustainable deployment of renewable energy in remote areas of Senegal. Although different payoffs emerged, profits associated with a renewable premium tariff are the highest among the set of existing payoffs. Moreover in analyzing impacts of price incentives on social welfare, we show that price tariffing schemes must be strategically scrutinized in order to minimize welfare loss associated with price incentives. Finally we argue that a sustainable promotion of incentive mechanisms supporting deployment of renewable technology in developing nations should be carried out under reliable institutional structures. The additional advantage of the proposed methodology is its ability to integrate different stakeholders (producers, investors and consumers) in the planning process.
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.:
- Rasmus Heltberg & Thomas Channing Arndt & Nagothu Udaya Sekhar, 2000. "Fuelwood Consumption and Forest Degradation: A Household Model for Domestic Energy Substitution in Rural India," Land Economics, University of Wisconsin Press, vol. 76(2), pages 213-232.
- Thiam, Djiby-Racine, 2010. "Renewable decentralized in developing countries: Appraisal from microgrids project in Senegal," Renewable Energy, Elsevier, vol. 35(8), pages 1615-1623.
- M. L. Weitzman, 1973.
"Prices vs. Quantities,"
106, Massachusetts Institute of Technology (MIT), Department of Economics.
- Owen, Anthony D., 2006. "Renewable energy: Externality costs as market barriers," Energy Policy, Elsevier, vol. 34(5), pages 632-642, March.
- D. Finon, 2006. "Incentives to invest in liberalised electricity industries in the North and South. Differences in the need for suitable institutional arrangements," Post-Print hal-00716553, HAL.
- Nguyen, Khanh Q., 2007. "Alternatives to grid extension for rural electrification: Decentralized renewable energy technologies in Vietnam," Energy Policy, Elsevier, vol. 35(4), pages 2579-2589, April.
- Dominique Foray, 1996. "Diversité, sélection et standardisation : les nouveaux modes de gestion du changement technique," Revue d'Économie Industrielle, Programme National Persée, vol. 75(1), pages 257-274.
- Winkler, Harald, 2005. "Renewable energy policy in South Africa: policy options for renewable electricity," Energy Policy, Elsevier, vol. 33(1), pages 27-38, January.
- Karekezi, Stephen & Kithyoma, Waeni, 2002. "Renewable energy strategies for rural Africa: is a PV-led renewable energy strategy the right approach for providing modern energy to the rural poor of sub-Saharan Africa?," Energy Policy, Elsevier, vol. 30(11-12), pages 1071-1086, September.
- Unruh, Gregory C., 2002. "Escaping carbon lock-in," Energy Policy, Elsevier, vol. 30(4), pages 317-325, March.
- Butler, Lucy & Neuhoff, Karsten, 2008.
"Comparison of feed-in tariff, quota and auction mechanisms to support wind power development,"
Elsevier, vol. 33(8), pages 1854-1867.
- Butler, L. & Neuhoff, K., 2005. "Comparison of Feed in Tariff, Quota and Auction Mechanisms to Support Wind Power Development," Cambridge Working Papers in Economics 0503, Faculty of Economics, University of Cambridge.
- Dinica, Valentina, 2006. "Support systems for the diffusion of renewable energy technologies--an investor perspective," Energy Policy, Elsevier, vol. 34(4), pages 461-480, March.
- de Araújo, Maria Silvia Muylaert & de Freitas, Marcos Aurélio Vasconcelos, 2008. "Acceptance of renewable energy innovation in Brazil--case study of wind energy," Renewable and Sustainable Energy Reviews, Elsevier, vol. 12(2), pages 584-591, February.
- Steyn, Grove, 1995. "Restructuring the South African electricity supply industry : Appropriate governance in a newly democratized South Africa," Utilities Policy, Elsevier, vol. 5(2), pages 95-108, April.
- Moner-Girona, Magda, 2009. "A new tailored scheme for the support of renewable energies in developing countries," Energy Policy, Elsevier, vol. 37(5), pages 2037-2041, May.
- Meyer, Niels I., 2003. "European schemes for promoting renewables in liberalised markets," Energy Policy, Elsevier, vol. 31(7), pages 665-676, June.
- Howells, M. I. & Alfstad, T. & Victor, D. G. & Goldstein, G. & Remme, U., 2005. "A model of household energy services in a low-income rural African village," Energy Policy, Elsevier, vol. 33(14), pages 1833-1851, September.
- Maiga, A.S. & Chen, G.M. & Wang, Q. & Xu, J.Y., 2008. "Renewable energy options for a Sahel country: Mali," Renewable and Sustainable Energy Reviews, Elsevier, vol. 12(2), pages 564-574, February.
- Lauber, Volkmar, 2004. "REFIT and RPS: options for a harmonised Community framework," Energy Policy, Elsevier, vol. 32(12), pages 1405-1414, August.
- Jackson, Tim & Oliver, Mark, 2000. "The viability of solar photovoltaics," Energy Policy, Elsevier, vol. 28(14), pages 983-988, November.
- Bhuiyan, M.M.H & Asgar, M.Ali & Mazumder, R.K & Hussain, M, 2000. "Economic evaluation of a stand-alone residential photovoltaic power system in Bangladesh," Renewable Energy, Elsevier, vol. 21(3), pages 403-410.
- Chineke, Theo Chidiezie & Ezike, Fabian M., 2010. "Political will and collaboration for electric power reform through renewable energy in Africa," Energy Policy, Elsevier, vol. 38(1), pages 678-684, January.
- Karsten Neuhoff, 2005.
"Large-Scale Deployment of Renewables for Electricity Generation,"
Oxford Review of Economic Policy,
Oxford University Press, vol. 21(1), pages 88-110, Spring.
- Neuhoff, K., 2004. "Large Scale Deployment of Renewables for Electricity Generation," Cambridge Working Papers in Economics 0460, Faculty of Economics, University of Cambridge.
- Finon, Dominique, 2006. "Incentives to invest in liberalised electricity industries in the North and South. Differences in the need for suitable institutional arrangements," Energy Policy, Elsevier, vol. 34(5), pages 601-618, March.
- Wustenhagen, Rolf & Wolsink, Maarten & Burer, Mary Jean, 2007. "Social acceptance of renewable energy innovation: An introduction to the concept," Energy Policy, Elsevier, vol. 35(5), pages 2683-2691, May.
- Jaffe, Adam B. & Newell, Richard G. & Stavins, Robert N., 2003. "Chapter 11 Technological change and the environment," Handbook of Environmental Economics, in: K. G. Mäler & J. R. Vincent (ed.), Handbook of Environmental Economics, edition 1, volume 1, chapter 11, pages 461-516 Elsevier.
- Michalena, Evanthie & Angeon, Valrie, 2009. "Local challenges in the promotion of renewable energy sources: The case of Crete," Energy Policy, Elsevier, vol. 37(5), pages 2018-2026, May.
- Verbruggen, Aviel & Fischedick, Manfred & Moomaw, William & Weir, Tony & Nadaï, Alain & Nilsson, Lars J. & Nyboer, John & Sathaye, Jayant, 2010. "Renewable energy costs, potentials, barriers: Conceptual issues," Energy Policy, Elsevier, vol. 38(2), pages 850-861, February.
- World Bank, 2003. "Kenya : A Policy Agenda to Restore Growth," World Bank Other Operational Studies 14363, The World Bank.
- Sauter, Raphael & Watson, Jim, 2007. "Strategies for the deployment of micro-generation: Implications for social acceptance," Energy Policy, Elsevier, vol. 35(5), pages 2770-2779, May.
- Dominique Finon, 2006. "The Social Efficiency Of Instruments For The Promotion Of Renewable Energies In The Liberalised Power Industry," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 77(3), pages 309-343, 09.
- Wolde-Ghiorgis, W., 2002. "Renewable energy for rural development in Ethiopia: the case for new energy policies and institutional reform," Energy Policy, Elsevier, vol. 30(11-12), pages 1095-1105, September.
- Menanteau, Philippe & Finon, Dominique & Lamy, Marie-Laure, 2003. "Prices versus quantities: choosing policies for promoting the development of renewable energy," Energy Policy, Elsevier, vol. 31(8), pages 799-812, June.
- Youm, I. & Sarr, J. & Sall, M. & Kane, M. M., 2000. "Renewable energy activities in Senegal: a review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 4(1), pages 75-89, March.
- Mallett, Alexandra, 2007. "Social acceptance of renewable energy innovations: The role of technology cooperation in urban Mexico," Energy Policy, Elsevier, vol. 35(5), pages 2790-2798, May.
- Martinot, Eric, 2001. "Renewable energy investment by the World Bank," Energy Policy, Elsevier, vol. 29(9), pages 689-699, July.
- Kolhe, Mohanlal & Kolhe, Sunita & Joshi, J. C., 2002. "Economic viability of stand-alone solar photovoltaic system in comparison with diesel-powered system for India," Energy Economics, Elsevier, vol. 24(2), pages 155-165, March.
- Bugaje, I.M, 1999. "Remote area power supply in Nigeria: the prospects of solar energy," Renewable Energy, Elsevier, vol. 18(4), pages 491-500.
- Chakrabarti, Snigdha & Chakrabarti, Subhendu, 2002. "Rural electrification programme with solar energy in remote region-a case study in an island," Energy Policy, Elsevier, vol. 30(1), pages 33-42, January.
When requesting a correction, please mention this item's handle: RePEc:eee:enepol:v:39:y:2011:i:7:p:4284-4297. 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: (Shamier, Wendy)
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.