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Achieving long-term renewable energy goals: Do intermediate targets matter?

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  • Gencer, Busra
  • van Ackere, Ann

Abstract

Policymakers in various countries often determine roadmaps, a sequence of intermediate goals to achieve their long-term renewable energy objectives. We study the influence of roadmaps on regulatory decisions and market functioning using laboratory experiments. We simulate a stylized electricity market with two generation technologies (a renewable “green” technology and a thermal source) whose share of renewable generation must increase over a 40-year period. Investments in thermal capacity are driven by subsidies and profitability, while green capacity investments solely depend on subsidies. Participants act as regulators and decide each year how many MWs of green and thermal capacity to subsidize while managing the trade-off between blackout risk, cost for customers and subsidies. We manipulate the presence and the time granularity of roadmaps.

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  • Gencer, Busra & van Ackere, Ann, 2021. "Achieving long-term renewable energy goals: Do intermediate targets matter?," Utilities Policy, Elsevier, vol. 71(C).
    • Handle: RePEc:eee:juipol:v:71:y:2021:i:c:s0957178721000771
    DOI: 10.1016/j.jup.2021.101243
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