Subsidization of fossil fuel and renewable energy: subsidies to renewables: when, how much and for how long?

The work will focus on financial and economic analysis, seeking to establish how cost-effective various support mechanisms for different types of renewables are in various countries.  It will focus on the key forms of renewables being supported: wind, biomass and PV (Photovoltaics).  

The work will establish comparative values for the policy attributes met by renewables, with reference to the cost of their provision from other options.  This will need to take risks into account, for example it is not easy to establish an exact social value of carbon and other attributes (such as security of supply) may be even more difficult to establish.  Governments may therefore be justified in overcompensating for renewables to at least some extent.

Analysis of governments’ desire to gain a share of the future market for clean energy technologies will be conducted with reference to market and trade values.

Outcomes: (i) A stock-taking paper, assessing the current literature; (ii) An assessment of the cost-effectiveness of renewables subsidies for a range of technologies in a range of countries. The split will be a sectoral one, with three papers to be produced on wind, biomass and photovoltaics (PV). (iii) A synthesis paper giving “Guidance to Policymakers”.