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PDF Policy for Development of Renewable Energy for Power Form

PDF Policy for Development of Renewable Energy for Power Form

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Hello again! In the long run, the entire energy supply will need to become sustainable, but we are still far away from that target. What can we do about this? Most renewable energy technologies are not yet cost-competitive. Their average cost per MWh is higher than the wholesale market price for electricity. An important reason is that the social costs of CO2 emissions are not reflected in the electricity price. A second investment barrier is that technologies such as wind, solar, hydro and geothermal energy are highly capital-intensive. This means that most of the costs are made up front, causing higher investment risk than, for instance, for a gas plant, given the uncertainty of future electricity prices. So how can we attract more investment in renewable energy technologies? Policy makers have a choice between price and quantity instruments. Investment in renewable energy can be stimulated through subsidies - increasing the price they receive, or a requirement can be implemented to

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