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Is Belgium overshooting in its policy support to cut the cost of capital of renewable sources of energy ?

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  • Antonio Estache
  • Anne-Sophie Steichen

Abstract

The paper documents the differences in capital costs between electricity-generation companies in Belgium based on whether they rely on traditional thermal sources or on RES. The assessment involves an analysis of a sample of twenty-six firms. It shows that government programs have more than compensated renewable-energy firms for high capital costs related to the increased risks of these energy sources.

Suggested Citation

  • Antonio Estache & Anne-Sophie Steichen, 2015. "Is Belgium overshooting in its policy support to cut the cost of capital of renewable sources of energy ?," Reflets et perspectives de la vie économique, De Boeck Université, vol. 0(1), pages 33-45.
    • Handle: RePEc:cai:rpvedb:rpve_541_0033
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    References listed on IDEAS

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    1. Haas, Reinhard & Panzer, Christian & Resch, Gustav & Ragwitz, Mario & Reece, Gemma & Held, Anne, 2011. "A historical review of promotion strategies for electricity from renewable energy sources in EU countries," Renewable and Sustainable Energy Reviews, Elsevier, vol. 15(2), pages 1003-1034, February.
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    6. Masini, Andrea & Menichetti , Emanuela, 2013. "Investment Decisions in the Renewable Energy Sector: An Analysis of Non-Financial Drivers," HEC Research Papers Series 976, HEC Paris.
    7. Mitchell, C. & Bauknecht, D. & Connor, P.M., 2006. "Effectiveness through risk reduction: a comparison of the renewable obligation in England and Wales and the feed-in system in Germany," Energy Policy, Elsevier, vol. 34(3), pages 297-305, February.
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    Cited by:

    1. Ferreira Savoia, José Roberto & Securato, José Roberto & Bergmann, Daniel Reed & Lopes da Silva, Fabiana, 2019. "Comparing results of the implied cost of capital and capital asset pricing models for infrastructure firms in Brazil," Utilities Policy, Elsevier, vol. 56(C), pages 149-158.
    2. Steffen, Bjarne, 2020. "Estimating the cost of capital for renewable energy projects," Energy Economics, Elsevier, vol. 88(C).
    3. Đukan, Mak & Kitzing, Lena, 2023. "A bigger bang for the buck: The impact of risk reduction on renewable energy support payments in Europe," Energy Policy, Elsevier, vol. 173(C).
    4. Justyna Franc-Dąbrowska & Magdalena Mądra-Sawicka & Anna Milewska, 2021. "Energy Sector Risk and Cost of Capital Assessment—Companies and Investors Perspective," Energies, MDPI, vol. 14(6), pages 1-20, March.
    5. Piotr W. Saługa & Krzysztof Zamasz & Zdzisława Dacko-Pikiewicz & Katarzyna Szczepańska-Woszczyna & Marcin Malec, 2021. "Risk-Adjusted Discount Rate and Its Components for Onshore Wind Farms at the Feasibility Stage," Energies, MDPI, vol. 14(20), pages 1-12, October.

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