Sustainability-guided promotion of renewable electricity generation

By Reinhard Madlener, Sigrid Stagl. 2005

154 citations recorded by the source corpus.

In recent years, the threat of global climate change, high fuel import dependence, and rapidly rising electricity demand levels have intensified the quest for more sustainable energy systems. This in turn has increased the need for policy makers to promote electricity generation from renewable energy sources. Guaranteed prices coupled with a buy-back obligation for electricity fed into the grid is a popular renewables promotion instrument, especially in Europe. More recently, driven mainly by electricity market liberalisation efforts, quota targets for the share of renewables in combination with tradable ‘green’ certificates (TGC) have received considerable attention. TGC offer a greater theoretical potential for economic efficiency gains, due to price competition and the greater flexibility assigned to the obliged parties. While guaranteed prices and TGC schemes support the operation of renewable energy technology systems, bidding schemes for renewable energy generation capacity are used to raise economic efficiency on the plant construction side. All of these policy instruments suffer from the shortcoming that they do not explicitly account for the often widely varying environmental, social and economic impacts of the technologies concerned. In this paper, we propose a methodology for the design of renewable energy policy instruments that is based on integrated assessment. In particular, we argue that using participatory multicriteria evaluation as part of the design of renewable energy promotion policies would make it possible: (1) to differentiate the level of promotion in a systematic and transparent manner according to their socio-ecological economic impact, and (2) to explicitly account for the preferences of stakeholders. A further problem of existing TGC and bidding schemes is that diversity of supply could be severely diminished, if few low-cost technologies were allowed to dominate the renewable energy market. To ensure a certain diversity of technologies, our scheme suggests the use of different technology bands for technologies that are relatively homogeneous with respect to their maturity.

Subfields: Economics and Econometrics, Environmental Engineering, Strategy and Management

View Paper: https://www.semanticscholar.org/paper/4005d484eec2c20876672ef1d4820151d14d74ab

How researchers see this paper

The researchers whose trusted networks rank it highest, strongest advocate first. Every researcher gets a different order.

In Economics and Econometrics

In Environmental Engineering

In Strategy and Management

Citations in the corpus

Promoting renewable electricity generation in imperfect markets: Price vs. quantity policies (2008, unknown): “The plan of the European Commission of the 1990s to issue an EU Directive on the promotion of electricity from renewables (CEC, 1998, 1999a,b), which eventually led to the issuance of Directive 2001/77/EC (CEC, 2001), has triggered an intensive political and intellectual debate over the pros and con”
Simulating price patterns for tradable green certificates to promote electricity generation from wind (2007, unknown): “several countries in Europe (Hass et al., 2004; Madlener and Stagl, 2005; Morthorst, 2000; Verbruggen, 2004; Vogstad, 2004).”
Are tradable green certificates a cost-efficient policy driving technical change or a rent-generating machine? Lessons from Sweden 2003–2008 (2010, background): “…and effectiveness of feed-in tariffs have been published (e.g. Morthorst, 2000; Menanteau et al., 2003; Meyer, 2003; Ürge-Vorsatz et al., 2004; Madlener and Stagl, 2005; Ragwitz and Huber, 2005; Rowlands, 2005; Contaldi et al., 2006; Ringel, 2006; Finon and Perez, 2007; del However, it is…”
Design of an economically efficient feed-in tariff structure for renewable energy development (2008, background): “Consideration of the trade-offs within each of these objectives is unavoidable, and there are a number of multiobjective methodologies that can be employed to this end which are both efficient and consistent (Madlener and Stagl 2005).”