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Comparison of feed-in tariff, quota and auction mechanisms to support wind power development

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  • Butler, Lucy
  • Neuhoff, Karsten

Abstract

A comparison of support schemes for market-based deployment of renewable energy in the UK and Germany shows that the feed-in tariff reduces costs to consumers and results in larger deployment. A survey among project developers suggests two explanations: (1) Site selection presents the biggest obstacle under the feed-in tariff. Uncertain financing of other schemes reduces efforts at initial project stages and planning permits become a major obstacle. (2) Project developers do not compete in price but for good sites under the feed-in tariff. Most importantly, turbine producers and construction services contribute to most of the costs, and face at least equal levels of competition under the feed-in tariff.

Suggested Citation

  • Butler, Lucy & Neuhoff, Karsten, 2008. "Comparison of feed-in tariff, quota and auction mechanisms to support wind power development," Renewable Energy, Elsevier, vol. 33(8), pages 1854-1867.
  • Handle: RePEc:eee:renene:v:33:y:2008:i:8:p:1854-1867
    DOI: 10.1016/j.renene.2007.10.008
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    References listed on IDEAS

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    More about this item

    Keywords

    Renewable deployment; Instrument comparison; Barriers; Level of competition;

    JEL classification:

    • Q28 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - 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

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