Interactions of emission caps and renewable electricity support schemes

Christoph Böhringer and Manuela Behrens ()

Journal of Regulatory Economics, 2015, vol. 48, issue 1, 74-96

Abstract: Over the last decades many OECD countries have implemented green quotas, feed-in tariffs, or feed-in premiums to promote electricity production from renewable energy sources (RES-E). More recently, these RES-E policies are overlaid with emission caps to reduce $$\hbox {CO}_2$$ CO 2 emissions. In this paper we investigate how emission caps change the electricity market outcome of pre-existing support schemes for renewable electricity production: with a green quota RES-E production declines, while it remains constant for feed-in tariffs, and expands for feed-in premiums; across all three RES-E policies an emission cap drives up the consumer electricity price with the price increase being lowest for the case of feed-in premiums; the economic adjustment cost to emission caps on the other hand turn out to be highest for pre-existing feed-in premiums, followed by feed-in tariffs and green quotas. Copyright Springer Science+Business Media New York 2015

Keywords: Overlapping regulation; Renewable electricity support schemes; Emission caps; Q48; Q58; H23 (search for similar items in EconPapers)
Date: 2015
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Citations: View citations in EconPapers (15)

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DOI: 10.1007/s11149-015-9279-x

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