Title: Promotion of renewable energy sources: effects on innovation

Authors: Mario Ragwitz, Claus Huber, Gustav Resch

Addresses: Fraunhofer Institute for Systems and Innovation Research, Breslauer Strasse 48, 76139 Karlsruhe, Germany. ' TU Wien, Institut fur Elektrische Anlagen und Energiewirtschaft, Energy Economics Group, Vienna University of Technology, Gusshausstr. 25–29/E373–2, A–1040 Vienna, Austria. ' TU Wien, Institut fur Elektrische Anlagen und Energiewirtschaft, Energy Economics Group, Vienna University of Technology, Gusshausstr. 25–29/E373–2, A–1040 Vienna, Austria

Abstract: To meet existing and future targets for renewable energy sources, national governments, EU policymakers and electricity market stakeholders have a pronounced interest in designing optimal instruments for the promotion of Renewable Energy Sources in the Electricity sector (RES-E). This paper characterises the present status of the RES-E markets in Europe, the portfolio of promotional instruments currently applied across the EU and the progress the Member States have made in reaching the targets. In particular, existing support schemes are analysed in terms of their effectiveness in achieving additional RES-E generation and in terms of their ability to meet the targets at minimum costs (efficiency). Our empirical findings show that instruments which are effective also tend to be efficient. Further, the short- and long-term diffusion of specific RES technologies depends on the support schemes in place. Finally, the paper discusses the compatibility of different instruments to support RES-E in the context of more general energy policy objectives.

Keywords: energy policy; renewable energy; support instruments; effectiveness; efficiency; technology diffusion; public policy; innovation; regulation; electricity.

DOI: 10.1504/IJPP.2007.012275

International Journal of Public Policy, 2007 Vol.2 No.1/2, pp.32 - 56

Published online: 02 Feb 2007 *

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