The by improvement of operation and efficiency. (Schaeffer, Boots,

The intermittent nature of wind and solar means renewable
sources are less efficient compared with the near-constant stream of
electricity from thermal power plants. An essential ingredient to overcoming
these shortcomings is public policy. Production tax credits, rebates, loan
programs, subsidies, and results-based mechanisms (RBM) are some of the tools
that can aid in spurring investment in the renewable field.

 

An example of one widespread instrument is the subsidy,
which can be directed into renewable energy capacity or on renewable energy
output. On the one hand, subsidies on installed capacity stimulate supply but
not demand for renewable electricity and can be unfairly distributed. On the
other hand, subsidies on output (e.g. premium tariff) have been granted seeking
for a successful deployment of renewable energy; nonetheless, there is not a
strong incentive for investors to drive down cost by improvement of operation
and efficiency. (Schaeffer, Boots, Martens, & Voogt, 1999) In the European
Union, the increase in solar PV installations has been achieved to a big extent
thanks to feed-in tariffs, which help to provide a stable source of income for
renewable energy projects, thus lowering the risks of the project. In some cases,
these tariffs were not adjusted swiftly to reflect the actual costs of solar PV,
which have been dropping very fast in recent times, thereby leading to a huge
investment in solar PV installations. Also, China is steering its policy from a
feed-in-tariff (FIT) programme to a more flexible system comprising a Green
Certificate Scheme (GCS), along with a power market reform, new transmission
lines and the expansion of distributed generation. This strategy intends to
reduce renewable energy projects exposure to reduced wholesale prices when the
demand is low and renewable energy production is available and more abundant.  (International
Energy Agency (IEA), 2017)

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The intermittent nature of wind and solar means renewable
sources are less efficient compared with the near-constant stream of
electricity from thermal power plants. An essential ingredient to overcoming
these shortcomings is public policy. Production tax credits, rebates, loan
programs, subsidies, and results-based mechanisms (RBM) are some of the tools
that can aid in spurring investment in the renewable field.

 

An example of one widespread instrument is the subsidy,
which can be directed into renewable energy capacity or on renewable energy
output. On the one hand, subsidies on installed capacity stimulate supply but
not demand for renewable electricity and can be unfairly distributed. On the
other hand, subsidies on output (e.g. premium tariff) have been granted seeking
for a successful deployment of renewable energy; nonetheless, there is not a
strong incentive for investors to drive down cost by improvement of operation
and efficiency. (Schaeffer, Boots, Martens, & Voogt, 1999) In the European
Union, the increase in solar PV installations has been achieved to a big extent
thanks to feed-in tariffs, which help to provide a stable source of income for
renewable energy projects, thus lowering the risks of the project. In some cases,
these tariffs were not adjusted swiftly to reflect the actual costs of solar PV,
which have been dropping very fast in recent times, thereby leading to a huge
investment in solar PV installations. Also, China is steering its policy from a
feed-in-tariff (FIT) programme to a more flexible system comprising a Green
Certificate Scheme (GCS), along with a power market reform, new transmission
lines and the expansion of distributed generation. This strategy intends to
reduce renewable energy projects exposure to reduced wholesale prices when the
demand is low and renewable energy production is available and more abundant.  (International
Energy Agency (IEA), 2017)

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For You For Only $13.90/page!


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