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The Economic and Policy Setting of Renewable Energy: Where Do Things Stand?

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  • Darmstadter, Joel

    (Resources for the Future)

Abstract

This paper looks at the status and prospects of renewables—with particular emphasis on windpower—in the electric power sector. Although renewables account for a steadily rising share of electricity generation in various countries, their role remains small in absolute terms. In part, this is because of technological progress of and successful competition from fossil-fueled generation—notably, combined cycle gas turbines. While diminishing, subsidies continue to be indispensable to the use of renewables in most places. Viability of renewables-based electricity is undermined by the cost of externalities for which fossil energy combustion is only partially charged. A number of countries (and states in the U.S.) have launched obligatory requirements for renewables-based electricity in the years ahead. This so-called “renewable portfolio standard,” while technology-forcing, offers an opportunity for an economically efficient way of promoting greater market penetration of renewables.

Suggested Citation

  • Darmstadter, Joel, 2003. "The Economic and Policy Setting of Renewable Energy: Where Do Things Stand?," RFF Working Paper Series dp-03-64, Resources for the Future.
    • Handle: RePEc:rff:dpaper:dp-03-64
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    File URL: http://www.rff.org/RFF/documents/RFF-DP-03-64.pdf
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    References listed on IDEAS

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    1. McVeigh, James & Burtraw, Dallas & Darmstadter, Joel & Palmer, Karen L., 1999. "Winner, Loser, or Innocent Victim? Has Renewable Energy Performed As Expected?," Discussion Papers 10627, Resources for the Future.
    2. MacAuley, Molly K. & Shih, Jhih-Shyang & Aronow, Emily & Austin, David H. & Bath, Tom & Darmstadter, Joel, 2002. "Measuring the Contribution to the Economy of Investments in Renewable Energy: Estimates of Future Consumer Gains," Discussion Papers 10588, Resources for the Future.
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    Cited by:

    1. Jonathan A. Cook & C.-Y. Cynthia Lin Lawell, 2020. "Wind Turbine Shutdowns and Upgrades in Denmark: Timing Decisions and the Impact of Government Policy," The Energy Journal, , vol. 41(3), pages 81-118, May.
    2. Azam, Md Sadequl & Bhattacharjee, Atish & Hassan, Mahedi & Rahaman, Mashudur & Aziz, Shahin & Ali Shaikh, Md Aftab & Islam, Md Saidul, 2024. "Performance enhancement of solar PV system introducing semi-continuous tracking algorithm based solar tracker," Energy, Elsevier, vol. 289(C).
    3. Palmer, Karen & Burtraw, Dallas, 2005. "Cost-effectiveness of renewable electricity policies," Energy Economics, Elsevier, vol. 27(6), pages 873-894, November.
    4. Mark Huntley & Donald Redalje, 2007. "CO 2 Mitigation and Renewable Oil from Photosynthetic Microbes: A New Appraisal," Mitigation and Adaptation Strategies for Global Change, Springer, vol. 12(4), pages 573-608, May.
    5. Koncz, Gábor, 2015. "The role of solid biomass used for energy purposes in settlement development," Journal of Central European Green Innovation, Karoly Robert University College, vol. 3(2), pages 1-11.

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    More about this item

    Keywords

    Renewable energy; electricity; windpower; externalities;
    All these keywords.

    JEL classification:

    • Q21 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Demand and Supply; Prices
    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities

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