Analysing the impact of renewable energy regulation on retail electricity prices

Pablo del Rio (), Pere Mir-Artigues () and Elisa Trujillo-Baute
Additional contact information
Pablo del Rio: IPP-CSIC
Pere Mir-Artigues: UdL & Energy Sustainability Research Group (UB)

No 2016/19, Working Papers from Institut d'Economia de Barcelona (IEB)

Abstract: Retail electricity prices have substantially increased in the last decade in the European Union (EU) as a result of different regulations, raising the concern of policy makers. The growth in the support costs for electricity from renewable energy sources (RES-E) has often been singled out as a main driver of these prices. The aim of this paper is to analyse the degree of influence of RES-E promotion costs on the evolution of the retail price of electricity in the EU Member States. The analysis is carried out for households as well as for industry, with the help of a panel data econometric model. Our results show that the impact of renewable energy promotion costs on the retail electricity prices is positive and statistically significant, although relatively small. Differences across consumer types can be observed. An increase of 1% in those costs induces an average increase of only 0.023% in industrial retail prices and 0.008% in the residential retail prices. This impact on retail prices is mediated by the type of support scheme being adopted, with price-based support instruments showing a greater effect than quantity-based ones.

Keywords: Electricity prices; renewable energy; public support (search for similar items in EconPapers)
JEL-codes: C24 L11 Q41 (search for similar items in EconPapers)
Pages: 27 pages
Date: 2016
New Economics Papers: this item is included in nep-ene, nep-eur, nep-reg and nep-sog
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Journal Article: Analysing the impact of renewable energy regulation on retail electricity prices (2018)
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Persistent link: https://EconPapers.repec.org/RePEc:ieb:wpaper:doc2016-19

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