Can the Current State Support Mechanisms Help the Growth of Renewable Energies in Wind Markets?

Donato Morea, Lucilla Bittucci, Arturo Cafaro, Fabiomassimo Mango and Pina Murè
Additional contact information
Donato Morea: Department of Mechanical, Chemical and Materials Engineering, University of Cagliari, Via Marengo, 2, 09123 Cagliari, Italy
Lucilla Bittucci: Department of Management, Sapienza University, Via del Castro Laurenziano, 9, 00161 Rome, Italy
Arturo Cafaro: Department of Management, Sapienza University, Via del Castro Laurenziano, 9, 00161 Rome, Italy
Fabiomassimo Mango: Department of Management, Sapienza University, Via del Castro Laurenziano, 9, 00161 Rome, Italy
Pina Murè: Department of Management, Sapienza University, Via del Castro Laurenziano, 9, 00161 Rome, Italy

Sustainability, 2021, vol. 13, issue 21, 1-17

Abstract: The aim of this paper is to provide evidence on the effectiveness of the current state support mechanism incentive adopted by the Italian government in the wind market. In particular, this paper intends to investigate the effectiveness of the auction mechanism as an incentive tool for renewable sources as required by the transposition of Directive 2009/28/EC. In order to demonstrate the economic and financial feasibility of a typical wind-sector investment, we performed a scenario analysis (Monte Carlo simulation) determining a 52,500 Net Present Value (NPV) by varying the key underlying variables of the investment. The results show that with the mechanism currently in place the percentage of positive leveraged NPV is approximately equal to 70%. Despite the state contribution provided through the “Feed-in tariff” mechanism, the profitability of wind projects is not always successful, and this problem could be amplified by the slowness of the authorization procedures. The article offers prime reflections for scholars and policy makers who have long been committed to promoting sustainable development and important considerations on the introduction of further incentive models.

Keywords: project financing; renewable energy; green energy; wind energy; sustainable finance; public incentives; climate change; small and medium-sized enterprises (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

Downloads: (external link)
https://www.mdpi.com/2071-1050/13/21/12094/pdf (application/pdf)
https://www.mdpi.com/2071-1050/13/21/12094/ (text/html)

Related works:
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:gam:jsusta:v:13:y:2021:i:21:p:12094-:d:670474

Access Statistics for this article

Sustainability is currently edited by Ms. Alexandra Wu

More articles in Sustainability from MDPI
Bibliographic data for series maintained by MDPI Indexing Manager ().