Promoting renewable energy through capacity markets: An analysis of the Russian support scheme

Anatole Boute

Energy Policy, 2012, vol. 46, issue C, 68-77

Abstract: Most existing support schemes aim to stimulate the deployment of renewable energy sources in the electricity sector on the basis of the electricity output (MWh) of renewable energy installations. Support is anchored in the electricity commodity market. In contrast to this established approach, Russia intends to promote renewable energy through the capacity market. The idea is to remunerate investors for the installed capacity (MW) of their installations, in particular for the availability of their installations to produce electricity. This article argues that, contrary to the implicit consensus, a capacity-based approach to supporting renewable energy can provide an alternative to the current output-based schemes. Capacity-based schemes limit the incentive that the operators of renewable energy installations currently have under output-based schemes to deliver electricity to the grid even in periods of low demand. These schemes also provide investors with a more predictable income flow. However, to be successful, the regulation of capacity supply – currently designed for flexible power plants – needs to accommodate the specific production patterns of variable renewable energy installations. This paper examines ways to overcome this challenge in Russia and provides more general conclusions on the complex interaction between capacity markets and renewable energy investments.

Keywords: Renewables; Capacity markets; Russia (search for similar items in EconPapers)
Date: 2012
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (21)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0301421512002315
Full text for ScienceDirect subscribers only

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:eee:enepol:v:46:y:2012:i:c:p:68-77

DOI: 10.1016/j.enpol.2012.03.026

Access Statistics for this article

Energy Policy is currently edited by N. France

More articles in Energy Policy from Elsevier
Bibliographic data for series maintained by Catherine Liu ().