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The main support mechanisms to finance renewable energy development
College of Engineering, TEMEP, Seoul National University, Seoul, South Korea.
Jönköping University, Jönköping International Business School, JIBS, Economics, Finance and Statistics.ORCID iD: 0000-0002-7902-4683
2014 (English)In: Renewable & sustainable energy reviews, ISSN 1364-0321, E-ISSN 1879-0690, Vol. 40, 876-885 p.Article, review/survey (Refereed) Published
Abstract [en]

Considering that the major part of greenhouse gases is carbon dioxide, there is a global concern aimed at reducing carbon emissions. In addition, major consumer countries are looking for alternative sources of energy to avoid the impact of higher fossil fuel prices and political instability in the major energy supplying countries. In this regard, different policies could be applied to reduce carbon emissions, such as enhancing renewable energy deployment and encouraging technological innovation and the creation of green jobs. This study compares three main support mechanisms employed by governments to finance renewable energy development programs: feed-in-tariffs, tax incentives, and tradable green certificates. Considering that many of the promising technologies to deploy renewable energy require investment in small-scale energy production systems, these mechanisms could be used to enhance renewable energy development at the desired scale. Employing a carbon emission tax or emission trading mechanism could be considered ideal policies to mitigate emissions at the lowest cost. The comparison of feed-in-tariffs and renewable portfolio standard policies showed that the former is good when a policy to develop renewable energy sources with a low level of risk for investors is considered. However, the latter is an appropriate policy when a market view policy is applied by the government. Finally, considering technological progress and the cost reduction for power generation by renewable energy sources, we suggest that support mechanism policies should be reconsidered from the financial point of view. (C) 2014 Elsevier Ltd. All rights reserved.

Place, publisher, year, edition, pages
2014. Vol. 40, 876-885 p.
Keyword [en]
Renewable energy, Financing renewable energy, Feed-in-tariffs, Tax incentives, Tradable green certificates, Carbon emission tax
National Category
Renewable Bioenergy Research Economics
Identifiers
URN: urn:nbn:se:hj:diva-25894DOI: 10.1016/j.rser.2014.08.013ISI: 000345473600070Local ID: IHHEFSISOAI: oai:DiVA.org:hj-25894DiVA: diva2:789164
Available from: 2015-02-18 Created: 2015-02-18 Last updated: 2016-01-14Bibliographically approved

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CiteExportLink to record
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Cite
Citation style
  • apa
  • harvard1
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  • modern-language-association-8th-edition
  • vancouver
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More styles
Language
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