Authors: | Andor, Mark Voss, Achim |
Title: | Optimal renewable-energy subsidies |
Language (ISO): | en |
Abstract: | We derive optimal subsidization of renewable energies in electricity markets. The analysis takes into account that capacity investment must be chosen under uncertainty about demand conditions and capacity availability, and that capacity as well as electricity generation may be sources of externalities. The main result is that generation subsidies should correspond to externalities of electricity generation (e.g., greenhouse gas reductions), and investment subsidies should correspond to externalities of capacity (e.g., learning spillovers). If only capacity externalities exist, then electricity generation should not be subsidized at all. Our results suggest that some of the most popular promotion instruments cause welfare losses. |
Subject Headings: | peak-load pricing feed-in tariffs optimal subsidies renewable energy sources demand uncertainty capacity investment |
URI: | http://hdl.handle.net/2003/32932 http://dx.doi.org/10.17877/DE290R-7230 |
Issue Date: | 2014-03-07 |
Appears in Collections: | Sonderforschungsbereich (SFB) 823 |
Files in This Item:
File | Description | Size | Format | |
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DP_0614_SFB823_Andor_Voss.pdf | DNB | 299.77 kB | Adobe PDF | View/Open |
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