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WIREs Energy Environ.
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Effectiveness and efficiency of support schemes for electricity from renewable energy sources

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A variety of support schemes for renewable energy sources in the electricity sector (RES‐E) are currently being implemented in EU member states. The main tools used for this purpose are either price‐based policy instruments such as feed‐in tariffs or premiums, or quantity‐based instruments such as quota systems using tradable green certificates. Much work has been devoted to the motivation for and evaluation of these instruments, mostly in the form of country/local case studies, model simulations, or econometric modeling. The main drivers behind these policies are addressing the externalities of the environmentally harmful emissions of electricity generation and stimulating technological innovation. Two frequently used evaluation criteria for support schemes and instruments are their effectiveness and economic efficiency. We find that those support schemes, which are most effective in stimulating the growth of RES‐E generation, are typically economically efficient as well. Generally, it can be concluded that support schemes, which are technology specific, and those that avoid unnecessary risks in project revenues, are more effective and efficient than technology‐neutral support schemes, or schemes with higher revenue risk. The most recent quantitative assessment shows that some convergence can now be observed between schemes applying price‐ and quantity‐based instruments. With respect to policy effectiveness, quota schemes show improvements. Regarding efficiency, the situation is still very heterogeneous, and remuneration levels in many EU member states are still substantially higher than generation costs. This article is categorized under: Energy Infrastructure > Economics and Policy Energy Infrastructure > Systems and Infrastructure Energy Infrastructure > Climate and Environment Energy Systems Economics > Economics and Policy
RES‐shares in EU‐27 vs. NREAP trajectory values 2012.
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Effectiveness vs. profit levels for onshore wind in 2009.
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Efficiency for onshore wind in 2011.
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Deployment status indicator onshore wind 2010. (Reproduced with permission from Ref . Copyright 2011, Fraunhofer ISI.)
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Effectiveness for onshore wind in 2010.
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Aggregated effectiveness across all MS for main technologies in 2010.
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Evolution of the main RES‐E support schemes in the EU‐27.
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Overview of the main RES‐E support schemes in the EU‐27.
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Electricity generation from “new” RES in EU‐27 from 1990–2010.
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Electricity generation from RES in EU‐27 from 1990–2010.
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Energy Infrastructure > Systems and Infrastructure
Energy Infrastructure > Climate and Environment
Energy Infrastructure > Economics and Policy
Energy Systems Economics > Economics and Policy
Energy Systems Economics

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