 Risk-based assessment of the cost-efficiency and the effectivity of renewable energy support schemes: Certificate markets versus feed-in tariffsRiccardo Fagiani, Julián Barquín and Rudi Hakvoort Energy Policy, 2013, vol. 55, issue C, 648-661 Abstract: The introduction of renewable energy sources in the electricity generation mix has the potential to reduce power sector's emissions and countries' dependence on imported oil. Climate change concerns and highly volatile oil prices have attracted governments' interest and support to sustain investments in renewable energy capacity, and different support policies have been implemented in many countries around the world. This paper analyzes the effects of investors' risk aversion on the performance of support schemes. The analysis compares two policy options, a feed-in tariff mechanism with a certificate market system. Results show that while a tariff mechanism could obtain better results than a certificate market, its performance is strictly dependent on regulator choices. A certificate market instead, permits to obtain the desired level of renewable energy market share with good cost-efficiency as long as investors' risk aversion is moderate. Moreover, discounting future cash flows with higher social discount rates further benefits a certificate system making it preferable to feed-in tariffs. Keywords: Renewable energy; Support schemes; Risk aversion (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:enepol:v:55:y:2013:i:c:p:648-661 DOI: 10.1016/j.enpol.2012.12.066 Access Statistics for this article Energy Policy is currently edited by N. France More articles in Energy Policy from Elsevier |
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