Gawel, Erik Lehmann, Paul Purkus, Alexandra Söderholm, Patrik Witte, Katherina
Year of Publication:
UFZ Discussion Paper No. 4/2016
In order to achieve cost-effective RES-E deployment it is often argued that technology-neutral support schemes for renewables are indispensable. Against this background, RES-E support policies making widely use of technology differentiation in remuneration settings, e.g. across the EU, are frequently criticized from a theoretical point of view. However, in this paper we provide a systematic critique of the technology neutrality concept as a foundation for designing policy support schemes in the RES-E technology field. Specifically, the main objective of the paper is to scrutinize the arguments for technology-neutrality, and discuss three conceptual arguments for why technology-specific support schemes could in fact help minimize the societal costs of reaching future RES-E targets. We also briefly address different political economy concerns, which could constrain the choice of cost-effective policy support schemes, and that have to be taken into account for economic policy advice. For empirical illustration of the key arguments we refer to the case of German RES-E support.
renewable energy technologies technology-specific support market failures Germany