Promoting renewable electricity generation in imperfect markets: price vs. quantity control

Weiyu Gao, Reinhard Madlener and Peter Zweifel
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Weiyu Gao: Shanghai Development Research Center, Shanghai, People's Republic of China
Peter Zweifel: Socioeconomic Institute, University of Zurich, Hottingerstrasse 10, 8032 Zurich, Switzerland

No 05-45, CEPE Working paper series from CEPE Center for Energy Policy and Economics, ETH Zurich

Abstract: The search for economically effcient policy instruments designed to promote the diffusion of renewable energy technologies in liberalized markets has led to the introduction of quota-based tradable `green' certifcate (TGC) schemes for renewable power. However, there is a debate about the pros and cons of TGC, a quantity control policy, compared to guaranteed feed-in tariffs (FIT), a price control policy. In this paper we contrast these two alternatives in terms of cost effectiveness and social welfare, taking into account that electricity markets are not perfectly competitive.

Keywords: Renewable electricity; Feed-in tariffs; Tradable green certifcates; Quota; Energy policy; Duopoly (search for similar items in EconPapers)
JEL-codes: Q42 Q48 (search for similar items in EconPapers)
Pages: 33 pages
Date: 2005-12
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Citations: View citations in EconPapers (8)

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