Steffen Jenner

Assessing the Strength and Effectiveness of Renewable Electricity Feed-In Tariffs in European Union Countries

In the last two decades, feed-in tariffs (FIT) have emerged as one of the most popular policies for supporting renewable electricity (RES-E) generation. A few studies have assessed the effectiveness of RES-E policies, but most ignore policy design features and market characteristics (e.g. electricity price and production cost) that influence policy strength. We employ 1992–2008 panel data to conduct the first econometric analysis of the effectiveness of FIT policies in promoting solar photovoltaic (PV) and onshore wind power development in 26 European Union countries. We develop a new indicator for FIT strength that captures variability in tariff size, contract duration, digression rate, and electricity price and production cost to estimate the resulting return on investment. We regress this indicator on added RES-E capacity using a fixed effects specification and find that FIT policies have driven solar PV development in the EU. However, this effect is overstated without controlling for country characteristics and is concealed without accounting for policy design. We do not find robust evidence that FIT policies have driven wind power development. Overall, we show that the interaction of policy design, electricity price, and electricity production cost is a more important determinant of RES-E development than policy enactment alone.

Have State Renewable Portfolio Standards Really Worked? Synthesizing Past Policy Assessments to Build an Integrated Econometric Analysis of RPS effectiveness in the U.S.

Renewable portfolio standards (RPS) are the most popular U.S. state-level policy tools for promoting deployment of electricity from renewable energy (RES-E). While several econometric studies have estimated the effect of RPS policies on RES-E deployment, results are sometimes contradictory. Thus, there is a need to not only reconcile these studies but also establish a definitive answer to the question whether RPS policies have been effective in increasing RES-E deployment. We use a panel – 50 states over 1990-2010 – of renewable deployment, policy design elements and market dynamics to capture the heterogeneity in state RPS design and state characteristics. We run time series cross sectional regressions with fixed effects, and verify the causal effect implied by our results with a nonparametric matching analysis. We trace discrepancies among past findings to differences in data classification and model specification. We show that the key feature of RPS policies – RPS stringency – has no effect, and in some cases a negative effect, on RES-E deployment. We also investigate the impact of individual RPS features. We show that renewable energy certificate (REC) unbundling as well as the presence of RPS in neighboring states is correlated with greater RES-E deployment locally, while other features – such as allowing greater flexibility to buy renewable energy from out-of-state – slows in-state RES-E deployment. We show that mandatory green power options have a positive effect on RES-E deployment while net metering schemes appear to have a negative impact. However, we were unable to detect any impact of an interaction effect between RPS and these policies. Finally, we investigate the impact of policies on the deployment of individual renewable technologies (biomass, geothermal, solar, and wind) and demonstrate differentiated policy impacts, such as biomass driving the result on RPS stringency.

The impact of private interest contributions on RPS adoption

In the last two decades, many U.S. states introduced policies to promote electricity generation from renewable energy sources (RES-E). Renewable portfolio standards (RPS) are considered to be the key RES-E policy tool to date. This article tackles the question on why some state legislators were front-running the trend of RPS implementation whereas others adopted policies just recently, and why others have not adopted them at all. We compile data on financial contributions of conventional energy interest groups (CEI) and renewable energy interest groups (REI) to state-level policy-makers between 1998 and 2010. By means of hazard and tobit regressions, we test the effect of these financial contributions on the probability of RPS adoption and on RPS stringency. The article provides evidence in favor of interest group theory. First, CEI have donated more to state-level legislators affiliated with the Republican Party than to Democrats while contributions from REI went largely to the latter. Second, there are statistically significant links between the likelihood of RPS adoption and private interest contributions. Contributions from CEI have a negative effect on the likelihood of RPS adoption whereas REI contributions have a positive effect.

Did Feed-In Tariffs Work? An Econometric Assessment

Feed-in tariffs are the most popular policy tool to support electricity from renewable energy sources in Europe. I introduce a simple investment decision model to explain how different policy design features influence the incentive to invest in renewable energy systems. The theoretical tool captures tariff amount, contract duration, electricity price, system lifetime, price uncertainty, generation cost, discount rate, and an alternative investment option. In a fixed effects model, I regress technology-specific generation on the resulting covariate. Using a sample of 26 EU member countries between 1990 and 2010, I find that FIT policies have effectively supported biomass, geothermal, and solar photovoltaic electricity generation. However, there is no such link between FIT policies and onshore wind generation. I show that alternative measures of FIT policies, such as binary and nominal variables, can yield misleading results. The paper provides country-specific recommendations for policymakers on how to increase the overall effectiveness of their existing feed-in tariffs.

The Impact of State Policy on Deployment and Cost of Solar PV: A Sector-Specific Empirical Analysis

Using a panel database for 27 programs in 16 U.S. states over 1998-2009, we assess the impact of 12 state-level policies on the cost and deployment of solar photovoltaic (PV) technologies for two sectors defined by system sizes: residential (

Shale Gas vs. Coal

The aim of this paper is to examine the environmental impacts of shale gas, conventional gas and coal on air, water, and land in the United States. These factors decisively affect the quality of life (public health and safety) as well as local and global environmental protection. Comparing various lifecycle assessments, this paper will suggest that a shift from coal to shale gas would benefit public health, the safety of workers, local environmental protection, water consumption, and the land surface. Most likely, shale gas also comes with a smaller GHG footprint than coal. However, shale gas extraction can affect water safety. This paper also discusses related aspects that exemplify how shale gas can be more beneficial in the short and long term. First, there are technical solutions readily available to fix the most crucial problems of shale gas extraction, such as methane leakages and other geo-hazards. Second, shale gas is best equipped to smoothen the transition to an age of renewable energy. Finally, this paper will recommend tighter regulations.

The Impact of Private Interest Contributions on Energy Policy Making

In the last two decades, many U.S. states introduced support policies to promote electricity generation from renewable energy sources. Renewable portfolio standards are their most popular policy choices to date. This paper tackles the question why some state legislators were front-running the trend of RPS implementation while others adopted policies just recently, and again others have not incentivized investment so far. In short, what drives states to support renewable energy? We base our empirical analysis on theoretical reasoning. First, we present an application of the common agency model developed by Dixit et al. (1997) to better understand the impact of special industrial interests on policy decision-making. Second, we compile data on financial contributions of conventional energy interests (CEI) and renewable energy interests (REI) to state-level policymakers between 1998 and 2006. Third, in a series of panel, hazard and tobit regressions, we test the impact of these financial contributions on (i) the probability of a state to adopt a RPS policy and (ii) on the stringency of the RPS. We also control for state effects, time trends, and a set of socio-economic and political covariates. Combining our empirical framework with the theoretical model produces key insights into U.S. state level energy policy making. First, CEI have donated over-proportionally to state-level legislators affiliated with the Republican party while contributions from REI went largely to Democrats. Second, we reveal statistically significant links between the likelihood of RPS adoption and private interest contributions. Financial contributions from CEI have a negative impact on the likelihood of RPS adoption while REI contributions have a positive impact. Third, the estimates show a similar – albeit less significant – pattern on RPS stringency.