Renewable electricity policy: feed-in tariffs versus tradable green certificates

Abstract

The paper discusses feed-in tariffs (a price-based market-pull instrument) and tradable green certificates (quantity-based market-pull instrument) as the two prevailing support schemes for renewable electricity in Europe. It compares them for uncertainty, market and regulatory risks, cost-efficiency, technical innovation (“valley of death”), consumer electricity prices, public finance, NIMBY and local benefits. The paper also gives an overview of the status-quo of RES-E policies in the EU.