Low Carbon Electricity Investment: The Limitations of Traditional Approaches and a Radical Alternative

Timothy Laing and Michael Grubb

Cambridge Working Papers in Economics from Faculty of Economics, University of Cambridge

Abstract: Moving to a very low carbon electricity system is central to meeting the goals of UK energy policy, and indeed to the wider global challenge of tackling climate change. This will require massive investment in low carbon electricity sources. This working paper identifies four key difficulties with the current mainstream approach of relying on the impact of a carbon price in the present liberalised electricity market, supplemented with additional incentive mechanisms like renewable obligation certificates and feed-in tariffs. We then summarise alternate mechanisms and propose a new approach, aimed at harnessing the potential interest and capital of electricity consumers, large and small, directly in funding low carbon electricity investments, in the form of longterm ‘Green Power’ contracts that operate in a separate, differentiated contract market.

Keywords: Electricity; Renewables; Climate Change; Green Power (search for similar items in EconPapers)
JEL-codes: Q41 (search for similar items in EconPapers)
Date: 2010-10-01
New Economics Papers: this item is included in nep-ene and nep-env
References: View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
https://www.econ.cam.ac.uk/sites/default/files/pub ... pe-pdfs/cwpe1057.pdf

Related works:
Working Paper: Low Carbon Electricity Investment: The Limitations of Traditional Approaches and a Radical Alternative (2010)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cam:camdae:1057

Access Statistics for this paper

More papers in Cambridge Working Papers in Economics from Faculty of Economics, University of Cambridge
Bibliographic data for series maintained by Jake Dyer ().