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Promotion of Market Access for Renewable Energy in the Nordic Power Markets

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  • Maria Kopsakangas-Savolainen
  • Rauli Svento

Abstract

This study investigates how renewable targets for the Nordic power market might be achieved at the lowest costs. The instruments investigated are fixed Feed-In Tariff, economically sound premium based Feed-In Tariff and shadow-prices for CO 2 emissions. We utilize a Real-Time Price based simulation model in the analysis. We show that even with strong assumptions regarding the Emission Permit Price the targeted level of wind power is not reached without Feed-In Tariffs. Emission Trading produces the lowest total emissions but with the highest total costs. From the studied instruments the most cost-efficient way to reach the targets for wind energy market shares is the premium based Feed-In Tariff. This tariff is also the most cost-efficient way to reduce CO 2 emissions. Copyright Springer Science+Business Media B.V. 2013

Suggested Citation

  • Maria Kopsakangas-Savolainen & Rauli Svento, 2013. "Promotion of Market Access for Renewable Energy in the Nordic Power Markets," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 54(4), pages 549-569, April.
    • Handle: RePEc:kap:enreec:v:54:y:2013:i:4:p:549-569
    DOI: 10.1007/s10640-012-9605-z
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    References listed on IDEAS

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    Cited by:

    1. Maria Kopsakangas-Savolainen & Rauli Svento, 2013. "Economic Value Approach to Intermittent Power Generation in the Nordic Power Markets," Energy and Environment Research, Canadian Center of Science and Education, vol. 3(2), pages 139-139, December.
    2. Mulder, Machiel & Scholtens, Bert, 2016. "A plant-level analysis of the spill-over effects of the German Energiewende," Applied Energy, Elsevier, vol. 183(C), pages 1259-1271.
    3. Niall Farrell, Mel T. Devine, William T. Lee, James P. Gleeson, and Sean Lyons, 2017. "Specifying An Efficient Renewable Energy Feed-in Tariff," The Energy Journal, International Association for Energy Economics, vol. 0(Number 2).
    4. Kühnlenz, Florian & Nardelli, Pedro H.J. & Karhinen, Santtu & Svento, Rauli, 2018. "Implementing flexible demand: Real-time price vs. market integration," Energy, Elsevier, vol. 149(C), pages 550-565.
    5. Kitzing, Lena, 2014. "Risk implications of renewable support instruments: Comparative analysis of feed-in tariffs and premiums using a mean–variance approach," Energy, Elsevier, vol. 64(C), pages 495-505.

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    More about this item

    Keywords

    Feed-In Tariff; Real-Time Pricing; Renewable energy; D24; D50; L11; Q28; Q41; Q52; Q53;
    All these keywords.

    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • D50 - Microeconomics - - General Equilibrium and Disequilibrium - - - General
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • Q28 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Government Policy
    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices
    • Q52 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Pollution Control Adoption and Costs; Distributional Effects; Employment Effects
    • Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling

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