Support Policies for Renewables: Instrument Choice and Instrument Change from a Public Choice Perspective

Abstract

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. The Institute is funded through income from an endowment fund with additional contributions to its work programme from Denmark, Finland, Sweden, and the United Kingdom. Terms of use: Documents inKatajanokanlaituri 6 B, 00160 Helsinki, FinlandThe views expressed in this paper are those of the author(s), and do not necessarily reflect the views of the Institute or the United Nations University, nor the programme/project donors.Abstract: This paper frames the transition towards clean energies as a sequential process of instrument choice and instrument change. First, regulators decide how to initiate the transition away from fossil energies. Here, support policies for renewable electricity are politically convenient because they face low resistance from fossil energies' interest groups. In the second stage, regulators need to adapt support policies for renewables to challenges arising along the transition pathway. We empirically substantiate our arguments by tracing the development of support policies in Germany. Against the backdrop of this analysis, we point towards small-step policies that could foster the transition process.

The Politics of Market Change towards Sustainability: Revisiting Germany’s Policy Support Framework for Renewables

“…In sum, Germany's electricity market transition illustrates how the strategic framing of a policy's affordability along with the perversion of its originally-intended purpose become powerful market-shaping resources to drive policy acceptance and influence market change in certain directions. The resulting transition pathways are therefore not neutral but deeply political, in the sense that they tend to benefit traditionally well-organised market actor groups with ample political bargaining power (e.g., utilities, large professional developers/IPPs, energy-intensive industrial consumers) while penalising those ill-organised and with reduced political clout (e.g., citizen energy cooperatives, residential electricity consumers) [8,16,172]. As such, they reproduce (but can also disrupt) asymmetric power relations between market participants unequally endowed to shape the selection environments they operate in [51,69].…”

“…Within a European context, Germany is exemplary of how "substantial support policies have effectively been pushing RES into the electricity market" [7] (p. 150). Its experience is illustrative of how the development and growth of a country's RES-E market is tied to Energies 2022, 15, 3898 2 of 27 that of the policies and instruments that it relies upon for its formation and steering [8]. However, the success of the country's feed-in policies for promoting renewables has triggered increasing opposition from electricity market incumbents (i.e., conventional energy utilities) against their continued use while advocating for policy alternatives better aligned with their corporate interests and market positions [9][10][11][12].…”

From Fossil Fuels to Renewable Energy: Tracking Bulgaria’s Transition

“…Stefan Ćetković conducts comparisons of different energy transition models pursued by individual countries worldwide [1]. Authors such as Erik Gawel, Sebastian Strunz, and Paul Lehmann examine support policies for renewables from a public choice perspective [2], while Y. Yankov analyses energy transition from the perspective of geopolitics and diplomacy [3]. D. Stoilov develops model instruments for strategic planning of energy development in Bulgaria [4].…”

Optimal federal co-regulation of renewable energy deployment

“…Furthermore, in particular a transition to a RE-based electricity sector needs sufficient stakeholder support, and therefore offers many opportunities for stakeholder groups to shape regulation policies in their interests.Hence, RE policy has to take into account the potential redistribution of resources among interest groups(Gawel et al, 2017;del Río and Labandeira, 2009). Apart from "rent management" within RE policy(Schmitz et al, 2013), also policy choices as well as the choice of regulatory instruments can be ascribed to rent-seeking behavior of different interest groups(Kirchgässner and Schneider, 2003).…”