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Demand pull instruments and the development of wind power in Europe: A counter-factual analysis

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  • Marc Baudry
  • Clément Bonnet

Abstract

Renewable energy technologies are called to play a crucial role in the reduction of greenhouse gas (GHG) emissions. Since most of these technologies did not yet reach grid parity, public policies can rely on two types of approach to stimulate innovation: supply-push and demand-pull. The latter aims at creating demand for new technologies and at stimulating their diffusion. Nevertheless, due to the complex self-sustained dynamics of diffusion and to spillovers between the countries it is hard to determine whether newly installed capacities are imputable to national support policies and/or to policies implemented by neighbor countries. The paper addresses this problem. A micro-founded model of technology diffusion is developed and calibrated. It captures the influence of demand-pull policies on wind power installed capacities for six European countries over the last decade. A counter-factual analysis is carried out to assess the impact of demand-pull policies on wind power development by taking into account the interplay between national policies via spillovers.

Suggested Citation

  • Marc Baudry & Clément Bonnet, 2017. "Demand pull instruments and the development of wind power in Europe: A counter-factual analysis," Working Papers 1705, Chaire Economie du climat.
    • Handle: RePEc:cec:wpaper:1705
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    3. Julián D. Gómez, 2018. "¿Qué determina la adopción de tecnologías para la generación de energías renovables entre países?," Documentos CEDE 17132, Universidad de los Andes, Facultad de Economía, CEDE.
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    5. Edouard Civel & Marc Baudry, 2018. "The Fate of Inventions. What can we learn from Bayesian learning in strategic options model of adoption ?," EconomiX Working Papers 2018-47, University of Paris Nanterre, EconomiX.
    6. Xin-gang, Zhao & Wei, Wang & Jieying, Wang, 2022. "The policy effects of demand-pull and technology-push on the diffusion of wind power: A scenario analysis based on system dynamics approach," Energy, Elsevier, vol. 261(PA).
    7. Clement Bonnet & Samuel Carcanague & Emmanuel Hache & Gondia Seck & Marine Simoën, 2019. "Vers une Géopolitique de l'énergie plus complexe ? Une analyse prospective tridimensionnelle de la transition énergétique," Working Papers hal-02971706, HAL.
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