Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/171307
Authors: 
May, Nils
Neuhoff, Karsten
Year of Publication: 
2017
Series/Report no.: 
DIW Discussion Papers 1684
Abstract: 
Power systems with increasing shares of wind and solar power generation have higher capital and lower operational costs than traditional technologies. This increases the importance of the cost of finance for total system cost. We quantify how renewable policy design can influence cost of finance by addressing regulatory risk and facilitating hedging. We use interview data on wind power financing costs from the EU and model how long-term contracts signed between project developers and energy suppliers impact financing costs in the context of green certificate schemes. Be- tween the policy regimes, the cost of renewable energy deployment differ by 30%.
Subjects: 
Investments
Long-term contracts
Financing costs
Liberalization of power markets
Renewable energy policies
JEL: 
Q42
Q55
O38
Document Type: 
Working Paper

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