Article ID Journal Published Year Pages File Type
995528 Energy Policy 2013 7 Pages PDF
Abstract

•Green certificates are the main renewable electricity policy instrument in Sweden.•Green certificates cover only a small share of total RES-E production.•Increasing certificate coverage improves efficiency, but leaves windfall rent.•Municipalities veto socially desirable RES-E projects.•We propose market-based building permits as a solution to this NIMBY problem.

Green certificates are the main instrument for promoting renewable electricity (RES-E) in Sweden. But certificates cover only a limited share of total RES-E production. Under partial coverage, crowding out may arise whereby costly new RES-E replaces inexpensive old RES-E. Granting certificates to all of RES-E production improves efficiency, but leaves windfall rent to otherwise profitable facilities. We also analyze transaction costs in the permit process for new RES-E in Sweden. Municipalities veto socially desirable projects because of asymmetrically distributed investment costs and benefits. We propose market-based permit fees rather than limited veto rights as a solution to this NIMBY problem.

Related Topics
Physical Sciences and Engineering Energy Energy Engineering and Power Technology
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