Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. This paper uses theoretical and numerical economic equilibrium models to examine optimal renewable energy (RE) support policies for wind and solar resources in the presence of a carbon externality associated with the use of fossil fuels. We emphasize three main issues for policy design: the heterogeneity of intermittent natural resources, budget-neutral financing rules, and incentives for carbon mitigation. We find that differentiated subsidies for wind and solar, while being optimal, only yield negligible efficiency gains. Policies with smart financing of RE subsidies which either relax budget neutrality or use "polluter-pays-the-price" financing in the context of budget-neutral schemes can, however, approximate socially optimal outcomes. Our analysis suggests that optimally designed RE support policies do not necessarily have to be viewed as a costly second-best option when carbon pricing is unavailable. (JEL Q28, Q42, Q52, Q58, C61).

As of 2016, about 110 jurisdictions worldwide-at the national or sub-national level-had enacted policies subsidizing wind and solar power (REN, 2017). The Renewable Energy Directive by the European Commission (2010) established a policy framework for the promotion of RE in the EU with the aim to meet by 2030 27% of total EU-wide energy consumption with renewables. In the United States, the federal government provides sizable production and investment tax credits for RE and more than half of the states have adopted renewable portfolio standards mandating minimum levels of RE generation (U.S. Department of Energy, 2016). 2 Edenhofer et al. (2018) estimate that approximately 340 Gt CO 2 emissions out of a global carbon 50Hertz. 2018. "Wind Production in the German Region Controlled by 50Hertz.

No abstract

Mitigating climate change will require integrating large amounts of highly intermittent renewable energy (RE) sources in future electricity markets. Considerable uncertainties exist about the cost and availability of future large-scale storage to alleviate the potential mismatch between demand and supply. This paper examines the suitability of regulatory (public policy) mechanisms for coping with the volatility induced by intermittent RE sources, using a numerical equilibrium model of a future wholesale electricity market. We find that the optimal RE subsidies are technology-specific reflecting the heterogeneous value for system integration. Differentiated RE subsidies reduce the curtailment of excess production, thereby preventing costly investments in energy storage. Using a simple cost-benefit framework, we show that a smart design of RE support policies significantly reduces the level of optimal storage. We further find that the marginal benefits of storage rapidly decrease for short-term (intra-day) storage and are small for long-term (seasonal) storage independent of the storage level. This suggests that storage is not likely to be the limiting factor for decarbonizing the electricity sector.

As of 2016, about 110 jurisdictions worldwide-at the national or sub-national level-had enacted policies subsidizing wind and solar power (REN, 2017). The Renewable Energy Directive by the European Commission (2010) established a policy framework for the promotion of RE in the EU with the aim to meet by 2030 27% of total EU-wide energy consumption with renewables. In the United States, the federal government provides sizable production and investment tax credits for RE and more than half of the states have adopted renewable portfolio standards mandating minimum levels of RE generation (U.S. Department of Energy, 2016). 2 Edenhofer et al. (2018) estimate that approximately 340 Gt CO 2 emissions out of a global carbon 50Hertz. 2018. "Wind Production in the German Region Controlled by 50Hertz.