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Market pull instruments and the development of wind power in Europe: a counterfactual analysis

Marc Baudry () and Clément Bonnet ()

No 2015-18, EconomiX Working Papers from University of Paris Nanterre, EconomiX

Abstract: Renewable energy technologies are called to play a crucial role in the reduction of greenhouse gas emissions. Since most of these technologies are immature, public policies provide for two types of support: technology push and market pull. The latter aims at creating demand for new technologies and at stimulating their diffusion. Nevertheless, due to the complex self-sustained dynamics of diffusion it is hard to determine whether newly installed capacities are imputable to the impulse effect of instruments at the beginning of the diffusion process or to the current support. The paper addresses this problem. A micro-founded model of technology diffusion is built to estimate the impact of the yearly average Return-on-Investment (RoI) on the yearly count of commissioned wind farms in six European countries over the last decade. A counter-factual analysis is carried out to assess the impact of policy instruments on the RoI and, indirectly, on diffusion.

Keywords: Renewable energy; technology diffusion; wind power; market pull; technology push. (search for similar items in EconPapers)
JEL-codes: O33 Q42 Q55 H23 C61 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-ene, nep-env, nep-reg and nep-tid
Date: 2015
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Persistent link: https://EconPapers.repec.org/RePEc:drm:wpaper:2015-18

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