IDEAS home Printed from https://ideas.repec.org/a/eee/energy/v138y2017icp629-646.html
   My bibliography  Save this article

An assessment of Spain's new alternative energy support framework and its long-term impact on wind power development and system costs through behavioral dynamic simulation

Author

Listed:
  • Ibanez-Lopez, A.S.
  • Moratilla-Soria, B.Y.

Abstract

Incentives have played a major role in wind power development in Spain, having allowed the country to reach top worldwide positions in terms of wind power penetration but having also contributed to a structural cost-revenue unbalance. Feed-in tariff and premium schemes had been in force in Spain since the inception of wind power until the adoption of an auction-based support framework in 2016. So far, auctions have resulted in no incentives being allocated to any new wind farm. The present paper analyses the historical evolution of wind power support schemes in Spain and assesses the long run impact of the newly adopted policies on the future evolution of wind capacity and system costs through a behavioral stochastic System Dynamics model. Results show that the current lack of incentives will entail limited wind capacity growth, below the goal set in Spain's Renewable Energy Plan 2011–2020. Incentive levels required to meet specific goals in terms of capacity growth and system costs are computed and discussed.

Suggested Citation

  • Ibanez-Lopez, A.S. & Moratilla-Soria, B.Y., 2017. "An assessment of Spain's new alternative energy support framework and its long-term impact on wind power development and system costs through behavioral dynamic simulation," Energy, Elsevier, vol. 138(C), pages 629-646.
    • Handle: RePEc:eee:energy:v:138:y:2017:i:c:p:629-646
    DOI: 10.1016/j.energy.2017.07.041
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0360544217312161
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.energy.2017.07.041?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Perez, Yannick & Ramos-Real, Francisco Javier, 2009. "The public promotion of wind energy in Spain from the transaction costs perspective 1986-2007," Renewable and Sustainable Energy Reviews, Elsevier, vol. 13(5), pages 1058-1066, June.
    2. del Ri­o González, Pablo, 2008. "Ten years of renewable electricity policies in Spain: An analysis of successive feed-in tariff reforms," Energy Policy, Elsevier, vol. 36(8), pages 2907-2919, August.
    3. Teufel, Felix & Miller, Michael & Genoese, Massimo & Fichtner, Wolf, 2013. "Review of System Dynamics models for electricity market simulations," Working Paper Series in Production and Energy 2, Karlsruhe Institute of Technology (KIT), Institute for Industrial Production (IIP).
    4. Arango, Santiago, 2007. "Simulation of alternative regulations in the Colombian electricity market," Socio-Economic Planning Sciences, Elsevier, vol. 41(4), pages 305-319, December.
    5. Ming-Zhi Gao, Anton & Fan, Chien-Te & Kai, Ji-Jung & Liao, Chao-Ning, 2015. "Sustainable photovoltaic technology development: step-by-step guidance for countries facing PV proliferation turmoil under the feed-in tariff scheme," Renewable and Sustainable Energy Reviews, Elsevier, vol. 43(C), pages 156-163.
    6. Batlle, C. & Pérez-Arriaga, I.J. & Zambrano-Barragán, P., 2012. "Regulatory design for RES-E support mechanisms: Learning curves, market structure, and burden-sharing," Energy Policy, Elsevier, vol. 41(C), pages 212-220.
    7. Tang, Ou & Rehme, Jakob, 2017. "An investigation of renewable certificates policy in Swedish electricity industry using an integrated system dynamics model," International Journal of Production Economics, Elsevier, vol. 194(C), pages 200-213.
    8. Jamil, Faisal & Ahmad, Eatzaz, 2010. "The relationship between electricity consumption, electricity prices and GDP in Pakistan," Energy Policy, Elsevier, vol. 38(10), pages 6016-6025, October.
    9. Kunsch, Pierre L. & Friesewinkel, Jean, 2014. "Nuclear energy policy in Belgium after Fukushima," Energy Policy, Elsevier, vol. 66(C), pages 462-474.
    10. del Rio, Pablo & Gual, Miguel A., 2007. "An integrated assessment of the feed-in tariff system in Spain," Energy Policy, Elsevier, vol. 35(2), pages 994-1012, February.
    11. Abdmouleh, Zeineb & Alammari, Rashid A.M. & Gastli, Adel, 2015. "Review of policies encouraging renewable energy integration & best practices," Renewable and Sustainable Energy Reviews, Elsevier, vol. 45(C), pages 249-262.
    12. Alonso, Patricia Martínez & Hewitt, Richard & Pacheco, Jaime Díaz & Bermejo, Lara Román & Jiménez, Verónica Hernández & Guillén, Jara Vicente & Bressers, Hans & de Boer, Cheryl, 2016. "Losing the roadmap: Renewable energy paralysis in Spain and its implications for the EU low carbon economy," Renewable Energy, Elsevier, vol. 89(C), pages 680-694.
    13. Olsina, Fernando & Garces, Francisco & Haubrich, H.-J., 2006. "Modeling long-term dynamics of electricity markets," Energy Policy, Elsevier, vol. 34(12), pages 1411-1433, August.
    14. Pierre Louis Kunsch & Jean Friesewinkel, 2014. "Nuclear energy policy in Belgium after Fukushima," ULB Institutional Repository 2013/189447, ULB -- Universite Libre de Bruxelles.
    15. Ford, Andrew, 1999. "Cycles in competitive electricity markets: a simulation study of the western United States," Energy Policy, Elsevier, vol. 27(11), pages 637-658, October.
    16. Avril, S. & Mansilla, C. & Busson, M. & Lemaire, T., 2012. "Photovoltaic energy policy: Financial estimation and performance comparison of the public support in five representative countries," Energy Policy, Elsevier, vol. 51(C), pages 244-258.
    17. Hasani, Masoud & Hosseini, Seyed Hamid, 2011. "Dynamic assessment of capacity investment in electricity market considering complementary capacity mechanisms," Energy, Elsevier, vol. 36(1), pages 277-293.
    18. del Río, Pablo & Mir-Artigues, Pere, 2012. "Support for solar PV deployment in Spain: Some policy lessons," Renewable and Sustainable Energy Reviews, Elsevier, vol. 16(8), pages 5557-5566.
    19. Allan, Grant J. & Bryden, Ian & McGregor, Peter G. & Stallard, Tim & Kim Swales, J. & Turner, Karen & Wallace, Robin, 2008. "Concurrent and legacy economic and environmental impacts from establishing a marine energy sector in Scotland," Energy Policy, Elsevier, vol. 36(7), pages 2734-2753, July.
    20. de la Hoz, Jordi & Martín, Helena & Miret, Jaume & Castilla, Miguel & Guzman, Ramon, 2016. "Evaluating the 2014 retroactive regulatory framework applied to the grid connected PV systems in Spain," Applied Energy, Elsevier, vol. 170(C), pages 329-344.
    21. Ortega, Margarita & del Río, Pablo & Montero, Eduardo A., 2013. "Assessing the benefits and costs of renewable electricity. The Spanish case," Renewable and Sustainable Energy Reviews, Elsevier, vol. 27(C), pages 294-304.
    22. Sáenz de Miera, Gonzalo & del Ri­o González, Pablo & Vizcaino, Ignacio, 2008. "Analysing the impact of renewable electricity support schemes on power prices: The case of wind electricity in Spain," Energy Policy, Elsevier, vol. 36(9), pages 3345-3359, September.
    23. Saysel, Ali Kerem & Hekimoğlu, Mustafa, 2013. "Exploring the options for carbon dioxide mitigation in Turkish electric power industry: System dynamics approach," Energy Policy, Elsevier, vol. 60(C), pages 675-686.
    24. Liu, Ximei & Zeng, Ming, 2017. "Renewable energy investment risk evaluation model based on system dynamics," Renewable and Sustainable Energy Reviews, Elsevier, vol. 73(C), pages 782-788.
    25. López-Peña, Álvaro & Pérez-Arriaga, Ignacio & Linares, Pedro, 2012. "Renewables vs. energy efficiency: The cost of carbon emissions reduction in Spain," Energy Policy, Elsevier, vol. 50(C), pages 659-668.
    26. Calds, N. & Varela, M. & Santamara, M. & Sez, R., 2009. "Economic impact of solar thermal electricity deployment in Spain," Energy Policy, Elsevier, vol. 37(5), pages 1628-1636, May.
    27. Sarasa-Maestro, Carlos J. & Dufo-López, Rodolfo & Bernal-Agustín, José L., 2013. "Photovoltaic remuneration policies in the European Union," Energy Policy, Elsevier, vol. 55(C), pages 317-328.
    28. Eric W. T. Ngai & Angappa Gunasekaran & Samuel Fosso Wamba & Shahriar Akter & Rameshwar Dubey, 2017. "Big data analytics in electronic markets," Electronic Markets, Springer;IIM University of St. Gallen, vol. 27(3), pages 243-245, August.
    29. Heras-Saizarbitoria, Iñaki & Cilleruelo, Ernesto & Zamanillo, Ibon, 2011. "Public acceptance of renewables and the media: an analysis of the Spanish PV solar experience," Renewable and Sustainable Energy Reviews, Elsevier, vol. 15(9), pages 4685-4696.
    30. Schallenberg-Rodriguez, Julieta, 2017. "Renewable electricity support systems: Are feed-in systems taking the lead?," Renewable and Sustainable Energy Reviews, Elsevier, vol. 76(C), pages 1422-1439.
    31. Jäger-Waldau, Arnulf & Szabó, Márta & Scarlat, Nicolae & Monforti-Ferrario, Fabio, 2011. "Renewable electricity in Europe," Renewable and Sustainable Energy Reviews, Elsevier, vol. 15(8), pages 3703-3716.
    32. Qudrat-Ullah, Hassan & Seong, Baek Seo, 2010. "How to do structural validity of a system dynamics type simulation model: The case of an energy policy model," Energy Policy, Elsevier, vol. 38(5), pages 2216-2224, May.
    33. Alishahi, E. & Moghaddam, M. Parsa & Sheikh-El-Eslami, M.K., 2012. "A system dynamics approach for investigating impacts of incentive mechanisms on wind power investment," Renewable Energy, Elsevier, vol. 37(1), pages 310-317.
    34. Cansino, José M. & Pablo-Romero, María del P. & Román, Rocío & Yñiguez, Rocío, 2010. "Tax incentives to promote green electricity: An overview of EU-27 countries," Energy Policy, Elsevier, vol. 38(10), pages 6000-6008, October.
    35. Assili, Mohsen & Javidi D.B., M. Hossein & Ghazi, Reza, 2008. "An improved mechanism for capacity payment based on system dynamics modeling for investment planning in competitive electricity environment," Energy Policy, Elsevier, vol. 36(10), pages 3703-3713, October.
    36. Mendes, Carla & Soares, Isabel, 2014. "Renewable energies impacting the optimal generation mix: The case of the Iberian Electricity Market," Energy, Elsevier, vol. 69(C), pages 23-33.
    37. Gallego-Castillo, Cristobal & Victoria, Marta, 2015. "Cost-free feed-in tariffs for renewable energy deployment in Spain," Renewable Energy, Elsevier, vol. 81(C), pages 411-420.
    38. del Río, Pablo & Unruh, Gregory, 2007. "Overcoming the lock-out of renewable energy technologies in Spain: The cases of wind and solar electricity," Renewable and Sustainable Energy Reviews, Elsevier, vol. 11(7), pages 1498-1513, September.
    39. Burgos-Payán, Manuel & Roldán-Fernández, Juan Manuel & Trigo-García, Ángel Luis & Bermúdez-Ríos, Juan Manuel & Riquelme-Santos, Jesús Manuel, 2013. "Costs and benefits of the renewable production of electricity in Spain," Energy Policy, Elsevier, vol. 56(C), pages 259-270.
    40. de la Hoz, Jordi & Martín, Helena & Ballart, Jordi & Monjo, Lluis, 2014. "Evaluating the approach to reduce the overrun cost of grid connected PV systems for the Spanish electricity sector: Performance analysis of the period 2010–2012," Applied Energy, Elsevier, vol. 121(C), pages 159-173.
    41. de la Hoz, Jordi & Boix, Oriol & Martín, Helena & Martins, Blanca & Graells, Moisès, 2010. "Promotion of grid-connected photovoltaic systems in Spain: Performance analysis of the period 1998-2008," Renewable and Sustainable Energy Reviews, Elsevier, vol. 14(9), pages 2547-2563, December.
    42. Bunn, Derek W. & Larsen, Erik R., 1992. "Sensitivity of reserve margin to factors influencing investment behaviour in the electricity market of England and Wales," Energy Policy, Elsevier, vol. 20(5), pages 420-429, May.
    43. Elizondo Azuela, Gabriela & Barroso, Luiz & Khanna, Ashish & Wang, Xiaodong & Wu, Yun & Cunha, Gabriel, 2014. "Performance of renewable energy auctions : experience in Brazil, China and India," Policy Research Working Paper Series 7062, The World Bank.
    44. Ortega-Izquierdo, Margarita & del Río, Pablo, 2016. "Benefits and costs of renewable electricity in Europe," Renewable and Sustainable Energy Reviews, Elsevier, vol. 61(C), pages 372-383.
    45. Prados, María-José, 2010. "Renewable energy policy and landscape management in Andalusia, Spain: The facts," Energy Policy, Elsevier, vol. 38(11), pages 6900-6909, November.
    46. Nicolini, Marcella & Tavoni, Massimo, 2017. "Are renewable energy subsidies effective? Evidence from Europe," Renewable and Sustainable Energy Reviews, Elsevier, vol. 74(C), pages 412-423.
    47. Montes, Germán Martínez & Prados Martín, Enrique & Ordóñez García, Javier, 2007. "The current situation of wind energy in Spain," Renewable and Sustainable Energy Reviews, Elsevier, vol. 11(3), pages 467-481, April.
    48. Ibanez-Lopez, A.S. & Martinez-Val, J.M. & Moratilla-Soria, B.Y., 2017. "A dynamic simulation model for assessing the overall impact of incentive policies on power system reliability, costs and environment," Energy Policy, Elsevier, vol. 102(C), pages 170-188.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Esmaieli, M. & Ahmadian, M., 2018. "The effect of research and development incentive on wind power investment, a system dynamics approach," Renewable Energy, Elsevier, vol. 126(C), pages 765-773.
    2. Quero García, Pablo & Chica Ruiz, Juan Adolfo & García Sanabria, Javier, 2020. "Blue energy and marine spatial planning in Southern Europe," Energy Policy, Elsevier, vol. 140(C).
    3. José Rafael Dorrego Portela & Geovanni Hernández Galvez & Quetzalcoatl Hernandez-Escobedo & Ricardo Saldaña Flores & Omar Sarracino Martínez & Orlando Lastres Danguillecourt & Pascual López de Paz & A, 2022. "Microscale Wind Assessment, Comparing Mesoscale Information and Observed Wind Data," Sustainability, MDPI, vol. 14(19), pages 1-12, September.
    4. Fathy, Ahmed & Rezk, Hegazy & Yousri, Dalia & Kandil, Tarek & Abo-Khalil, Ahmed G., 2022. "Real-time bald eagle search approach for tracking the maximum generated power of wind energy conversion system," Energy, Elsevier, vol. 249(C).
    5. Ramadan, Mohamad & Khaled, Mahmoud & Haddad, Ahmad & Abdulhay, Bakri & Durrant, Andy & El Hage, Hicham, 2018. "An inhouse code for simulating heat recovery from boilers to heat water," Energy, Elsevier, vol. 157(C), pages 200-210.
    6. El Hage, Hicham & Herez, Amal & Ramadan, Mohamad & Bazzi, Hassan & Khaled, Mahmoud, 2018. "An investigation on solar drying: A review with economic and environmental assessment," Energy, Elsevier, vol. 157(C), pages 815-829.
    7. Jaber, Hassan & Khaled, Mahmoud & Lemenand, Thierry & Murr, Rabih & Faraj, Jalal & Ramadan, Mohamad, 2019. "Domestic thermoelectric cogeneration drying system: Thermal modeling and case study," Energy, Elsevier, vol. 170(C), pages 1036-1050.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Ibanez-Lopez, A.S. & Martinez-Val, J.M. & Moratilla-Soria, B.Y., 2017. "A dynamic simulation model for assessing the overall impact of incentive policies on power system reliability, costs and environment," Energy Policy, Elsevier, vol. 102(C), pages 170-188.
    2. Sergio Coronas & Jordi de la Hoz & Àlex Alonso & Helena Martín, 2022. "23 Years of Development of the Solar Power Generation Sector in Spain: A Comprehensive Review of the Period 1998–2020 from a Regulatory Perspective," Energies, MDPI, vol. 15(4), pages 1-53, February.
    3. de la Hoz, Jordi & Martín, Helena & Miret, Jaume & Castilla, Miguel & Guzman, Ramon, 2016. "Evaluating the 2014 retroactive regulatory framework applied to the grid connected PV systems in Spain," Applied Energy, Elsevier, vol. 170(C), pages 329-344.
    4. de la Hoz, Jordi & Martín, Helena & Ballart, Jordi & Monjo, Lluis, 2014. "Evaluating the approach to reduce the overrun cost of grid connected PV systems for the Spanish electricity sector: Performance analysis of the period 2010–2012," Applied Energy, Elsevier, vol. 121(C), pages 159-173.
    5. Rios, Daniel & Blanco, Gerardo & Olsina, Fernando, 2019. "Integrating Real Options Analysis with long-term electricity market models," Energy Economics, Elsevier, vol. 80(C), pages 188-205.
    6. de la Hoz, Jordi & Martín, Helena & Martins, Blanca & Matas, José & Miret, Jaume, 2013. "Evaluating the impact of the administrative procedure and the landscape policy on grid connected PV systems (GCPVS) on-floor in Spain in the period 2004–2008: To which extent a limiting factor?," Energy Policy, Elsevier, vol. 63(C), pages 147-167.
    7. Dehghan, Hamed & Amin-Naseri, Mohammad Reza & Nahavandi, Nasim, 2021. "A system dynamics model to analyze future electricity supply and demand in Iran under alternative pricing policies," Utilities Policy, Elsevier, vol. 69(C).
    8. Ahmad, Salman & Mat Tahar, Razman & Muhammad-Sukki, Firdaus & Munir, Abu Bakar & Abdul Rahim, Ruzairi, 2016. "Application of system dynamics approach in electricity sector modelling: A review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 56(C), pages 29-37.
    9. Girard, A. & Gago, E.J. & Ordoñez, J. & Muneer, T., 2016. "Spain's energy outlook: A review of PV potential and energy export," Renewable Energy, Elsevier, vol. 86(C), pages 703-715.
    10. Rios-Festner, Daniel & Blanco, Gerardo & Olsina, Fernando, 2020. "Long-term assessment of power capacity incentives by modeling generation investment dynamics under irreversibility and uncertainty," Energy Policy, Elsevier, vol. 137(C).
    11. Mir-Artigues, Pere & Cerdá, Emilio & del Río, Pablo, 2018. "Analysing the economic impact of the new renewable electricity support scheme on solar PV plants in Spain," Energy Policy, Elsevier, vol. 114(C), pages 323-331.
    12. Teufel, Felix & Miller, Michael & Genoese, Massimo & Fichtner, Wolf, 2013. "Review of System Dynamics models for electricity market simulations," Working Paper Series in Production and Energy 2, Karlsruhe Institute of Technology (KIT), Institute for Industrial Production (IIP).
    13. Polzin, Friedemann & Egli, Florian & Steffen, Bjarne & Schmidt, Tobias S., 2019. "How do policies mobilize private finance for renewable energy?—A systematic review with an investor perspective," Applied Energy, Elsevier, vol. 236(C), pages 1249-1268.
    14. Petitet, Marie & Finon, Dominique & Janssen, Tanguy, 2017. "Capacity adequacy in power markets facing energy transition: A comparison of scarcity pricing and capacity mechanism," Energy Policy, Elsevier, vol. 103(C), pages 30-46.
    15. López Prol, Javier, 2018. "Regulation, profitability and diffusion of photovoltaic grid-connected systems: A comparative analysis of Germany and Spain," Renewable and Sustainable Energy Reviews, Elsevier, vol. 91(C), pages 1170-1181.
    16. Shen, Neng & Deng, Rumeng & Liao, Haolan & Shevchuk, Oleksandr, 2020. "Mapping renewable energy subsidy policy research published from 1997 to 2018: A scientometric review," Utilities Policy, Elsevier, vol. 64(C).
    17. Saysel, Ali Kerem & Hekimoğlu, Mustafa, 2013. "Exploring the options for carbon dioxide mitigation in Turkish electric power industry: System dynamics approach," Energy Policy, Elsevier, vol. 60(C), pages 675-686.
    18. Hary, Nicolas & Rious, Vincent & Saguan, Marcelo, 2016. "The electricity generation adequacy problem: Assessing dynamic effects of capacity remuneration mechanisms," Energy Policy, Elsevier, vol. 91(C), pages 113-127.
    19. Arango, Santiago & Larsen, Erik, 2011. "Cycles in deregulated electricity markets: Empirical evidence from two decades," Energy Policy, Elsevier, vol. 39(5), pages 2457-2466, May.
    20. Armin Leopold, 2016. "Energy related system dynamic models: a literature review," Central European Journal of Operations Research, Springer;Slovak Society for Operations Research;Hungarian Operational Research Society;Czech Society for Operations Research;Österr. Gesellschaft für Operations Research (ÖGOR);Slovenian Society Informatika - Section for Operational Research;Croatian Operational Research Society, vol. 24(1), pages 231-261, March.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:energy:v:138:y:2017:i:c:p:629-646. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.journals.elsevier.com/energy .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.