Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/81408
Authors: 
Tangerås, Thomas
Year of Publication: 
2013
Series/Report no.: 
IFN Working Paper 968
Abstract: 
I analyze renewable electricity policy in a multinational electricity market with transmission investment. If national policy makers choose support schemes to maximize domestic welfare, then a trade policy motive arises operating independently of any direct benefit of renewable electricity. The model predicts electricity importing (exporting) countries to choose policies which reduce (increase) electricity prices. A narrow pursuit of domestic objectives distorts transmission investment, thereby market integration, below the efficient level. Distortions cannot be corrected by imposing national renewable targets alone. Instead, subsidies to transmission investment and a harmonization of and reduction in the number of policy instruments can improve welfare.
Subjects: 
Market integration
Renewable electricity
Trade policy
Transmission investment
JEL: 
D23
F15
Q48
Q56
Document Type: 
Working Paper

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