Quantities vs. Capacities: Minimizing the Social Cost of Renewable Energy Promotion
This article shows how di erent promotion schemes for renewables a ect economic welfare. Given that the abatement of greenhouse gases is optimally internalized by taxes or emissions trading, our starting point is that the external benefits from renewable energy promotion are not related to actual electricity generation, but to producing and installing capacity. We argue that generation-based subsidies such as feed-in tari s and bonus payments can only be a second-best solution. Our model framework allows us to explain how these second-best instruments cause welfare losses in an environment of volatile demand. We postulate that capacity payments for renewables should be implemented in order to avoid unnecessary social costs.
|Date of creation:|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: (02 51) 83-2 29 71
Fax: (02 51) 83-2 29 70
Web page: http://www.wiwi.uni-muenster.de/insiwo
More information through EDIRC
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.:
- Reiche, Danyel & Bechberger, Mischa, 2004. "Policy differences in the promotion of renewable energies in the EU member states," Energy Policy, Elsevier, vol. 32(7), pages 843-849, May.
- Reyer Gerlagh & Snorre Kverndokk & Knut Rosendahl, 2009.
"Optimal Timing of Climate Change Policy: Interaction Between Carbon Taxes and Innovation Externalities,"
Environmental & Resource Economics,
European Association of Environmental and Resource Economists, vol. 43(3), pages 369-390, July.
- Gerlagh, R. & Kverndokk, S. & Rosendahl, K.E., 2009. "Optimal timing of climate change policy : Interaction between carbon taxes and innovation externalities," Other publications TiSEM 4312dde8-f323-4ee2-9764-a, Tilburg University, School of Economics and Management.
- Brandstätt, Christine & Brunekreeft, Gert & Jahnke, Katy, 2011. "How to deal with negative power price spikes?--Flexible voluntary curtailment agreements for large-scale integration of wind," Energy Policy, Elsevier, vol. 39(6), pages 3732-3740, June.
- Nicolosi, Marco, 2010. "Wind power integration and power system flexibility-An empirical analysis of extreme events in Germany under the new negative price regime," Energy Policy, Elsevier, vol. 38(11), pages 7257-7268, November.
- Lehmann, Paul, 2008.
"Using a Policy Mix for Pollution Control – A Review of Economic Literature,"
21354, University Library of Munich, Germany.
- Lehmann, Paul, 2008. "Using a policy mix for pollution control: A review of economic literature," UFZ Discussion Papers 4/2008, Helmholtz Centre for Environmental Research (UFZ), Division of Social Sciences (ÖKUS).
- : Enzo Fanone & Andrea Gamba & Marcel Prokopczuk, 2011.
"The Case of Negative Day-Ahead Electricity Prices,"
wpn11-01, Warwick Business School, Finance Group.
- Knittel, Christopher R. & Roberts, Michael R., 2005. "An empirical examination of restructured electricity prices," Energy Economics, Elsevier, vol. 27(5), pages 791-817, September.
- Chantal Le Mouel, 2004. "Impacts of alternative agricultural income support schemes on multiple policy goals," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 31(2), pages 125-148, June.
- Fischer, Carolyn & Newell, Richard, 2004.
"Environmental and Technology Policies for Climate Mitigation,"
dp-04-05, Resources For the Future.
- Fischer, Carolyn & Newell, Richard G., 2008. "Environmental and technology policies for climate mitigation," Journal of Environmental Economics and Management, Elsevier, vol. 55(2), pages 142-162, March.
- Guyomard, Herve & Bureau, Jean-Christophe & Gohin, Alexandre & Le Mouel, Chantal, 2000. "Impact of the 1996 US FAIR Act on the Common Agricultural Policy in the World Trade Organisation context: the decoupling issue," Food Policy, Elsevier, vol. 25(1), pages 17-34, February.
When requesting a correction, please mention this item's handle: RePEc:muc:wpaper:201284. 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: (Norbert Hiller)
If references are entirely missing, you can add them using this form.