Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/149337
Authors: 
Liski, Matti
Vehviläinen, Iivo
Year of Publication: 
2016
Series/Report no.: 
CESifo Working Paper 6250
Abstract: 
Subsidies to renewable energy are costly and contentious. We estimate the reduction in prices that follows from the subsidized entry of wind power in the Nordic electricity market. A relatively small-scale entry of renewables leads to a large-scale transfer of surplus from the incumbent producers to the consumers: 10 % market share for wind generation eliminates one-half of the total electricity market expenditures. The subsidies generate net gains to consumers. We develop an approach to analyzing storage and renewable energy in equilibrium, and provide an anatomy of a market dominated by such technologies.
Subjects: 
electricity
renewables
storage
climate policies
JEL: 
L51
L94
Q28
Q42
Q48
Document Type: 
Working Paper

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