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ID:
176124
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| Summary/Abstract |
The economic context for renewable power in Europe is shifting: feed-in tariffs are replaced by auctioned premiums as the main support schemes. As renewables approach competitiveness, political pressure mounts to phase out support, whereas some other actors perceive a need for continued fixed-price support. We investigate how the phase-out of support or the reintroduction of feed-in tariffs would affect investors’ choices for renewables through a conjoint analysis. In particular, we analyse the impact of coordination – the simultaneousness – of policy changes across countries and technologies. We find that investment choices are not strongly affected if policy changes are coordinated and returns unaffected. However, if policy changes are uncoordinated, investments shift to still supported – less mature and costlier – technologies or countries where support remains or is reintroduced. This shift is particularly strong for large investors and could potentially skew the European power mix towards an over-reliance on a single, less mature technology or specific generation region, resulting in a more expensive power system. If European countries want to change their renewable power support policies, and especially if they phase out support and expose renewables to market competition, it is important that they coordinate their actions.
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| 2 |
ID:
191280
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| Summary/Abstract |
Multi-technology auctions are a popular instrument to support renewable electricity in the European Union. While they increase competition, some technologies could dominate, which might be an issue for some countries’ power system reliability. Using statistical methods, I analyse how balanced or skewed European multi-technology auctions are and investigate driving factors. I show that 80% of all multi-technology auction rounds from 2011 to 2020 were skewed, strongly or exclusively favouring one technology. None of the investigated design elements and general context factors can explain this. Instead, specific auction-external context factors may better explain the observed skewness. Furthermore, the aggregated outcome across all rounds, years, and countries is relatively balanced because the rounds are differently skewed. This could be coincidental and change in the future if outcomes remain strongly skewed. Policymakers may consider shifting to technology-specific auctions that target single technologies, particularly if they cannot manage the risks of skewed auction outcomes. Thereby, they promote a diverse and targeted deployment of renewables.
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