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Coordination of Renewable Energy Remuneration Schemes through Information Exchange

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  • Thilo Grau
  • Karsten Neuhoff

Abstract

The increasing scale and dynamics of the global market for renewable energy technologies has often resulted in unexpected high deployment volumes in EU Member States. These deployment peaks were particularly strong for solar photovoltaic (PV) technologies in countries using feed-in tariff remuneration mechanisms. In this paper, we develop an analytic model to capture the interactions of national remuneration schemes with the global market. The model covers two countries and one global technology market. We calibrate the model for the impact of coordinated tariff adjustments based on the experience with PV in Germany and the UK. We then use the model to measure the impact of different global module supply functions, national installation price reductions, and specific shocks on deployment effectiveness in terms of reaching national or aggregated target corridors for separate and coordinated feed-in tariff adjustment mechanisms. The relevance of the insights for wind energy technologies is evaluated. Based on the results, we discuss the implications for the coordination of remuneration schemes.

Suggested Citation

  • Thilo Grau & Karsten Neuhoff, 2016. "Coordination of Renewable Energy Remuneration Schemes through Information Exchange," Discussion Papers of DIW Berlin 1574, DIW Berlin, German Institute for Economic Research.
    • Handle: RePEc:diw:diwwpp:dp1574
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    References listed on IDEAS

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    1. Grau, Thilo, 2014. "Responsive feed-in tariff adjustment to dynamic technology development," Energy Economics, Elsevier, vol. 44(C), pages 36-46.
    2. Seel, Joachim & Barbose, Galen L. & Wiser, Ryan H., 2014. "An analysis of residential PV system price differences between the United States and Germany," Energy Policy, Elsevier, vol. 69(C), pages 216-226.
    3. Kitzing, Lena & Mitchell, Catherine & Morthorst, Poul Erik, 2012. "Renewable energy policies in Europe: Converging or diverging?," Energy Policy, Elsevier, vol. 51(C), pages 192-201.
    4. Paul Lehmann & Felix Creutzig & Melf-Hinrich Ehlers & Nele Friedrichsen & Clemens Heuson & Lion Hirth & Robert Pietzcker, 2012. "Carbon Lock-Out: Advancing Renewable Energy Policy in Europe," Energies, MDPI, vol. 5(2), pages 1-32, February.
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    JEL classification:

    • D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy Formulation and Implementation
    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities
    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights

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