Analyzing the determinants of wind capacity additions in the eu an econometric study
Sponsored Links
This presentation is the property of its rightful owner.
1 / 38

Analyzing the determinants of wind capacity additions in the EU. An econometric study. PowerPoint PPT Presentation


  • 103 Views
  • Uploaded on
  • Presentation posted in: General

Analyzing the determinants of wind capacity additions in the EU. An econometric study. Pablo del Río González Consejo Superior de Investigaciones Científicas Miguel Angel Tarancón Universidad de Castilla-La Mancha. IAEE International Conference. Stockholm, June 21st 2011. . INDEX. Aim.

Download Presentation

Analyzing the determinants of wind capacity additions in the EU. An econometric study.

An Image/Link below is provided (as is) to download presentation

Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.


- - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - -

Presentation Transcript


Analyzing the determinants of wind capacity additions in the EU. An econometric study.

Pablo del Río González

Consejo Superior de Investigaciones Científicas

Miguel Angel Tarancón

Universidad de Castilla-La Mancha

IAEE International Conference. Stockholm, June 21st 2011.


INDEX

  • Aim.

  • Background.

  • Existing literature.

  • Conceptual framework.

  • Hypotheses.

  • Results.

  • Concluding remarks.


AIM

  • Aim:

    • The aim of this paper is to identify the sources of differences in wind on-shore electricity generation capacity additions in the EU Member States.

    • An econometric model is developed in which capacity additions are explained according to several variables.


Background

  • Capacity additions in renewable electricity are crucial in order to decarbonise the energy system.

  • 20-20-20-10.

  • National Renewable Energy Action Plans indicating how MS plan to reach those targets.

  • Thus, an analysis of the main drivers and barriers to those capacity additions can shed light on the most appropriate policies to encourage them.


Existing literature on the determinants

  • Case studies (dozens).

  • Mostly focused on the policy variable.

  • A few econometric studies on the topic (four).

  • Focus on the US.


Conceptual framework

  • Techno-economic variables.

  • Policy variables.

  • Administrative and grid-connection variables.

  • Public acceptability.

  • General situation of the economy and investment climate.

  • Electricity variables.

  • Other variables.


Conceptual framework

  • Techno-economic variables.

    • Maturity levels.

    • Potentials and costs.

    • Existing capital stock

    • Other


Conceptual framework

  • Policy variables.

    • Deployment targets.

    • Instruments and design elements.

    • Support levels.

    • Policy stability.


WIND ON-SHORE

Price ranges (average to maximum support) for direct support of wind onshore in EU27 (average tariffs are indicative) compared to long-term marginal generation costs (minimum to average costs). Support schemes are normalised to 15 years. Source: Ragwitz et al (2007).


What instruments are applied in Europe?

Source: Resch et al (2009)


EVOLUTION OF SUPPORT SCHEMES IN THE EU


EVOLUTION OF SUPPORT SCHEMES IN THE EU

Source: European Commission (2008)


Conceptual framework

  • Administrative and grid-connection variables.

  • Public acceptability.

  • General situation of the economy and investment climate.

  • Electricity-sector variables.

  • Other variables.


Data

  • 24 EU countries.

  • Data for dependent and explanatory variables: different sources.


The hypotheses

  • The dependent variable


The hypotheses


The hypotheses


Results

Correlation matrix


Results

Ramsey-RESET test.


Results

Breusch-Pagan/Cook-Weisberg test.


Results

Information Matrix Test.


Results

Regressions

(standardised coefficients).


Results

  • RESUPWIN

  • Positive sign.

  • Not statistically significant.

  • Support levels not determining factor

  • Confirmation of the results in other studies.


WIND ON-SHORE

Source: European Commission (2008).


Results

  • ADPOTWIN

  • Positive sign.

  • Not statistically significant.

  • Potentials not determining factor

  • Schmalensee (2009) for the U.S.

  • Implications for effectiveness and cost-efficiency.


Results

  • TYPSUPWIN

  • Positive sign.

  • Not statistically significant.

  • FITs have not led to greater capacity additions.

  • Type of support scheme is not as relevant as expected.

  • Key variable: risks.


Results

  • Four major aspects lead to large investors’ RISKS, some are related to the instrument, others are not:

  • The type of instrument.

  • General investment risks in a country.

  • Constantly changing RES-E support schemes

  • The design details of the instrument


Results

  • BCI

  • Positive sign.

  • Statistically significant.

  • Support for 3) and 4).


Results

  • CHANGESYS and ADAPSYS

  • Negative sign.

  • Statistically significant.

  • Support for 2).


Results

  • ADWARWIN

  • Negative sign.

  • Statistically significant.

  • It confirms the relevance of administrative barriers as a main barrier to wind investments


Results

  • SHANUHY

  • Negative sign.

  • Not statistically significant.

  • Complementarity.


Results

  • ACCWIN

  • Negative sign.

  • Not statistically significant.

  • Indirect effect?? Correlation RESUPWIN and ACCWIN is 0.24


Results

  • ELDEMPH05

  • Positive sign.

  • Not statistically significant.

  • Cost-competitiveness with other energy sources


Concluding remarks

  • The statistical significance and economic relevance of the explanatory variables coincide.

  • Relevance of risks and stability of regulation.

  • Security and stability vs. flexibility.

  • Do the right thing from the start!! Avoid major changes and retroactivity.

  • Reduce administrative barriers.


Concluding remarks

  • Increasing support levels:

    • -unlikely to trigger capacity additions? Threshold effects?

    • -while leading to windfall profits.

  • Potentials: Are capacity additions taking place in the EU where better wind resources are available?

  • Type of support scheme.


Limitations and avenues for further research

  • More sophisticated econometrics?? Any suggestion?

  • Small sample size.

  • Cross-section data, i.e. time-varying explanatory variables are not included.

  • A standard OLS model may lead to biased and inconsistent parameters due to the omission of time-variant covariates.


Limitations and avenues for further research

  • Panel-data models: the real-world of data availability.

  • Analyse the impact of design elements with the help of econometric models.


[email protected]


  • Login