Support for solar PV deployment in Spain: Some policy lessons

Rı́o, Pablo del; Mir‐Artigues, Pere

doi:10.1016/j.rser.2012.05.011

Cited by 124 publications

(56 citation statements)

References 16 publications

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“…7 For the investment value to be increasing in both prices, we restrict attention to solutions in the first quadrant; that is, we assume that a S ! 0 and a K !…”

Section: Support Scheme With An Infinite Lifespanmentioning

confidence: 99%

“…6 [20] show that if the value function is homogenous of degree one, then one can let W(S,K)¼Sw(s),s ¼ K/S for some function wð,Þ and reduce the PDE for the twofactor problem to a one-factor PDE. 7 Note that for a S ¼ 0 or a K ¼ 0, the equation reduces to the quadratic equation of the standard one-factor PDE from real options analysis. This equation is known to have a positive and a negative root (see Ref.…”

Section: Support Scheme With An Infinite Lifespanmentioning

confidence: 99%

“…Because these feed-in tariffs have systematically exceeded the marginal costs of renewable electricity production, in 2012 the tariffs for new plants were cut significantly (e.g., Germany) or removed (e.g., Spain). Moreover, Spain, Belgium, the Czech Republic, Bulgaria and Greece have recently enacted retroactive adjustments to their feed-in tariffs, thereby reducing the profitability of already installed plants [7]. Furthermore, a greater influx of intermittent renewable electricity funded by fixed feed-in tariffs challenges the functioning of power markets.…”

Section: Introductionmentioning

confidence: 99%

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Market and policy risk under different renewable electricity support schemes

Boomsma

Linnerud

2015

Energy

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a b s t r a c tWorldwide, renewable electricity projects are granted production support to ensure competitiveness. Depending on the design of these support schemes, the cash inflows to investment projects will be more or less exposed to fluctuations in electricity and/or subsidy prices. Furthermore, as renewable electricity technologies mature, there is a possibility that the current support scheme will be terminated or revised in ways that make it less generous or more in line with market mechanism.Using a real options approach, we examine how investors in power projects respond to such market and policy risks. We show that: (1) due to price diversification, the differences in market risk between support schemes like tradeable green certificates, feed-in premiums and feed-in tariffs are less than commonly believed; (2) the prospects of termination will slow down investments if it is retroactively applied, but speed up investments if it is not; and, (3) this policy uncertainty may add a substantial risk to investments, especially in the first case where investors expect future curtailment of subsidies to affect new and old installations alike. We conclude the paper by discussing the division of risk between investor and government.

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“…7 For the investment value to be increasing in both prices, we restrict attention to solutions in the first quadrant; that is, we assume that a S ! 0 and a K !…”

Section: Support Scheme With An Infinite Lifespanmentioning

confidence: 99%

Section: Support Scheme With An Infinite Lifespanmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

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Market and policy risk under different renewable electricity support schemes

Boomsma

Linnerud

2015

Energy

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“…For example, one of the most well-known assessments of these policies, carried out under the EU-funded OPTRES and RE-SHAPING projects (see, respectively, [42,50]) compare the unitary costs of support (i.e., €/MWh) for different types of policies. However, governments in countries with either an already significant penetration of RES-E or a recently large increase in RES-E deployment are concerned about the total costs of the policy, i.e., This has certainly put a burden on electricity consumers which has led to policy measures aimed at reducing those total costs (see [70] for further details). If these total costs become a priority for governments, instruments and design elements should be adopted with in-built cost-containment mechanisms.…”

Section: The Replymentioning

confidence: 99%

Renewable Energy Promotion: Usual Claims and Empirical Evidence

Rı́o

2014

Green Energy and Efficiency

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Given the alleged environmental and socioeconomic benefits of electricity from renewable energy sources (RES-E), their public promotion has become a policy priority for governments all over the world in the past. However, in those countries with an already large penetration of renewable energy in their electricity mix, there is substantial concern about the policy costs of support for RES-E. Limiting those costs has also become a policy priority both for developed and developing countries. Academia has tried to respond accordingly, and there is already a voluminous literature on the analysis of the effectiveness and costeffectiveness of RES-E support. This literature has been both theoretical and empirical. The later has been based on different methodologies, including case studies and model simulations. However, there are still some general claims which are largely unsupported with empirical data. Other statements are at least arguable or refutable on theoretical grounds. Based on a throughout review of the theoretical and empirical literature, the aim of this chapter is to discuss some usual claims about renewable energy promotion. The results of the analysis suggest fruitful avenues for further research on the topic.

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“…For example, political processes determine whether or not 'market formation' through feed-in-tariffs is available, for which technologies and at what rates. Recent experiences in the UK, Germany and Spain show how contested such processes can be and that they have important impacts for the development of the TIS under study (del Río and Mir-Artigues, 2012;Hoppmann et al, 2014;Smith et al, 2014). Most importantly, this weakness leads TIS scholars to provide instrumental policy recommendations on the basis of their studies which are oversimplified because they neglect an understanding of the political aspects of transitions rather than being based in political realities of the particular case.…”

mentioning

confidence: 99%

Engaging with the politics, agency and structures in the technological innovation systems approach

Kern

2015

Environmental Innovation and Societal Transitions

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Support for solar PV deployment in Spain: Some policy lessons

Cited by 124 publications

References 16 publications

Market and policy risk under different renewable electricity support schemes

Market and policy risk under different renewable electricity support schemes

Renewable Energy Promotion: Usual Claims and Empirical Evidence

Engaging with the politics, agency and structures in the technological innovation systems approach

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