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Environmental Economics and Policy Studies

, Volume 18, Issue 2, pp 193–211 | Cite as

Policy interaction and the integration of volatile renewable energy

  • Klaus S. Friesenbichler
Research Article Green Growth, Eco Innovation and Sustainable Transitions
  • 251 Downloads

Abstract

This paper argues that there are inherent trade-offs in energy policy objectives that pose frictions to the establishment of a new technology base. We ask how institutions in an evolving electricity system can be designed to best achieve policy targets that are partly conflicting. In particular, this concerns sector regulation that seeks to maintain security of supply which may conflict with the promotion of volatile renewable energy displacing peak and emergency capacities on the wholesale market. In a case study of the electricity sectors in Germany, Spain and Denmark, policy fields are analysed, which jointly determine systemic performance. The results suggest a key role of policy coordination in mitigating outage risks arising due to the displacement effect.

Keywords

Renewables Electricity market Trade-off Policy coordination Institutions 

JEL Classification

Q48 Q49 Q55 Q59 Z13 

Notes

Acknowledgments

I wish to thank Alessio D’Amato, Roberto Antonietti, Kenneth Arrow, Michael Böheim, Thomas Bruckner, Heinz Hollenstein, Werner Hölzl, Kurt Kratena, Georg Licht, Ina Meyer, Michael Peneder, Andreas Reinstaller, Gustav Resch, Ádám Török, Gerhard Schwarz, Reinhilde Veugelers the participants of the WWW for Europe workshop in March 2013 in Mannheim, the GCW conference participants in June 2014 in Turin and two anonymous referees. This research was financially supported by the FP7 of the European Commission (WWW for Europe; THEME SSH.2011.1.2-19). Parts of this article have been published as a working paper (Friesenbichler 2013). The usual caveat regarding responsibility for accuracy applies fully.

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Copyright information

© Society for Environmental Economics and Policy Studies and Springer Japan 2015

Authors and Affiliations

  1. 1.Austrian Institute of Economic Research (WIFO)ViennaAustria

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