The promotion of renewable energies: guaranteed prices or market of green certificates? - Paper N. 04.10.50

The objective of this article is to discuss the compared benefits and drawbacks of various available incentive systems for renewable energies (more particularly wind energy). The author first presents the model developed by Weitzman which considers three actors (the regulatory state, a representative producer, and a representative consumer) and introduces an uncertainty on the costs of pollution control. Then, he discusses different systems: the system of guarantees feed-in prices which has been used by Germany, Denmark, Spain and France to support the development of wind energy, the system of quotas with auctions which is used in the UK and has been used in France before the previous one, the system of decentralized quotas backed to a market of green certificates, and the system of voluntary funding