Promoting renewables – not simply a question of money
Promoting renewables – not simply a question of money

Summary/Abstract: The article looks at state support for renewable energy sources and provides a theoretical overview of regulatory interventions. It analyzes theoretical approaches to regulation and identifies how they can be used to promote renewable energy sources. To ensure effective regulation/state support for RES it is important to define any market failures and the form of regulation required to deal most effectively with them. The author considers the failure of the market to value the public benefits of renewables to be key and argues that it remains largely unaddressed by the current legislative and regulatory framework. There are a number of market and commercialization barriers that negatively affect the market penetration of renewables. These include administrative barriers, discriminatory grid policies and subsidies for other fuels. Removing any remaining barriers against RES, such as cumbersome and lengthy administrative procedures, discriminatory grid policies, old-fashioned regulation and ongoing subsidies for fossil fuels, could also make RES more market based, while saving consumers’ money. However, theories and historical experience show that it might be more difficult to take advantages away from incumbents and simplify existing rules than to throw consumers’ money at new entrants.

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