Gone with the wind? An empirical analysis of the renewable energy rent transfer

Matti Liski and Iivo Vehviläinen

Cambridge Working Papers in Economics from Faculty of Economics, University of Cambridge

Abstract: Subsidies to renewable energy are costly and contentious. We estimate the reduction in prices that follows from the subsidized entry of wind power in the Nordic electricity market. A relatively small-scale entry of renewables leads to a large-scale transfer of surplus from the incumbent producers to the consumers: 10 % market share for wind generation eliminates one-half of the total electricity market expenditures. The subsidies generate net gains to consumers. We develop an approach to analyzing storage and renewable energy in equilibrium, and provide an anatomy of a market dominated by such technologies.

Keywords: Electricity; renewables; storage; climate policies (search for similar items in EconPapers)
JEL-codes: L51 L94 Q28 Q42 Q48 (search for similar items in EconPapers)
Date: 2017-01-09
New Economics Papers: this item is included in nep-com, nep-ene, nep-env and nep-reg
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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Related works:
Working Paper: Gone with the wind: an empirical analysis of the renewable energy rent transfer (2017)
Working Paper: Gone with the Wind? An Empirical Analysis of the Renewable Energy Rent Transfer (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:cam:camdae:1701

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