The Economic and Policy Setting of Renewable Energy: Where Do Things Stand?

Joel Darmstadter

RFF Working Paper Series from Resources for the Future

Abstract: This paper looks at the status and prospects of renewables—with particular emphasis on windpower—in the electric power sector. Although renewables account for a steadily rising share of electricity generation in various countries, their role remains small in absolute terms. In part, this is because of technological progress of and successful competition from fossil-fueled generation—notably, combined cycle gas turbines. While diminishing, subsidies continue to be indispensable to the use of renewables in most places. Viability of renewables-based electricity is undermined by the cost of externalities for which fossil energy combustion is only partially charged. A number of countries (and states in the U.S.) have launched obligatory requirements for renewables-based electricity in the years ahead. This so-called “renewable portfolio standard,” while technology-forcing, offers an opportunity for an economically efficient way of promoting greater market penetration of renewables.

Keywords: Renewable energy; electricity; windpower; externalities (search for similar items in EconPapers)
JEL-codes: L94 Q21 (search for similar items in EconPapers)
Date: 2003-12-31
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Citations: View citations in EconPapers (7)

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