Abstract
Policies to support wind energy development are most effective when they deliver power at the lowest cost per unit of added capacity and per unit of delivered electricity. Our analysis uses real Spanish onshore wind project data to identify which approaches deliver the lowest cost to society.
Highlights
Countries around the world are promoting the adoption of renewable energy technologies as a means of enhancing energy security, environmental sustainability, national industries and green jobs, among other things
Between 2006 and 2014, the real daily price of electricity ranged from a minimum of €0/megawatt hour (MWh) to over €106/MWh (Figure 3)
Around 76 percent of the daily price observations fall within the price interval €33.4/MWh to €63.9/MWh
Summary
Countries around the world are promoting the adoption of renewable energy technologies as a means of enhancing energy security, environmental sustainability, national industries and green jobs, among other things. Given the recent economic slowdown in many developed countries, some governments are re-evaluating their policy support for renewable energy. This is the case for some European countries, including Spain. In Spain, policymakers adopted a feed-in tariff as the main form of subsidy and this drove significant deployment of renewable technologies. Feed-in tariffs provide a guaranteed revenue to investors but the total cost of the policy is variable for ratepayers. As a result, this uncertainty in total costs for the ratepayer becomes a major concern in a scenario of economic stagnation and decline in electricity consumption, such as Spain experienced from 2008–2013
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