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LITERATURE REVIEW ON THE COMPARISON OF SOME RE POLICY INSTRUMENTS

 
21.07.2020 15:05
Автор: Oleh Ozarowski, PhD student, Kraków University of Economics, Poland
[Секція 8. Світова економіка та міжнародні відносини;]

National and regional RE policies play a crucial role in the effective bolstering and expansion of renewables due to its cost disadvantage compared to fossil fuels. The extensive research already emphasizes the key role of public policy in the wide deployment of clean energy sources and related innovation in this branch.

In the framework of different policies to support renewables, countries resort to different policy instruments. The rationale behind choosing the right policy tool hinges on the country-specific factors like the budget size or social acceptance for renewables. The other factors are the policy goals of the governments. The most popular policy instruments are feed-in tariffs (FIT), renewable portfolio standards (RPS), tenders, subsidies and tax incentives. The most popular among policy makers are FIT and RPS.

In literature, there are many studies that have assessed renewable energy policies in different parts of the world. Most of them address the issue of a particular RE policy instrument or a comparison between different policies. As in case of governments, academics also pay most attention to the two policy tools: FIT and RPS. Kilinc-Ata who adopted an econometric approach to reviewing renewable energy policies of the European Union and the USA. Findings from the study concluded that tax, feed-in tariffs (FiT), and tenders are the most effective policies, while quota is the least effective [1]. 

Dong investigated the relative effectiveness of FIT and RPS for wind capacity development by analyzing five years of panel data in 53 countries. The paper confirmed that FIT was better than RPS in terms of effectiveness. According to Dong, FIT was more successful in the long-term term for promoting wind energy, although, in the short run, RPS could also provide some incentives to developers [2]. 

Li measured the effectiveness of diverse policies for the photovoltaic (PV) and wind power development in the EU. The findings confirmed that the FIT is more efficient than RPS for PV and wind power development [3]. De Mello Santana (2016) analyzed the long- and short-term cost-effectiveness of RPS, FIT, and auctions using levelized lifecycle costs and experience curves. Findings indicate that RPS was more cost-effective than FIT in the short-term from the consumer perspective [4]. There are also more studies, focusing on performance of RE policies. In this short article, the author attempted to pick the most relevant studies to provide some insights into the discussion on the topic. 

Literature:

1. Kilinc-Ata, N. (2016). The evaluation of renewable energy policies across EU countries and US states: An econometric approach. Energy for Sustainable Development, 31, 83–90

2. Dong, C.G. (2012). Feed-in tariff vs. renewable portfolio standard: an empirical test of their relative effectiveness in promoting wind capacity development. Energy Policy 42, 476–485.

3. Li, S.J., Chang, T.H., Chang, S.L. (2017). The policy effectiveness of economic instruments for the photovoltaic and wind power development in the European Union. Renew. Energy 101, 660–666.

4. De Mello Santana, P. H. (2016). Cost-effectiveness as energy policy mechanisms: The paradox of technology-neutral and technology-specific policies in the short and long term. Renewable and Sustainable Energy Reviews, 58, 1216–1222.



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