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Transaction Cost Economics of Regulations to foster Renewable Energy Sources in the Electricity Sector

Langniss, Ole LU (2002) ENER Forum 3 In [Host publication title missing]
Abstract
Renewable portfolio standards (RPS) and minimum price standards are two systems to foster the market dissemination of renewable energies in the electricity sector. Transaction Cost Economics brings forward that the contractual relations in real structures have to be investigated to judge on the efficiency of governance structures. This paper seeks to do so by comparing governance structures created by the Texan RPS and the German EEG as an example for a successful minimum price standard. Analysis suggests that differences in static efficiency between both regulations are not as big as economic theory would suggest. The need to safeguard long-term investments establishes long-term contracts as the prevailing form of governance in the Texan... (More)
Renewable portfolio standards (RPS) and minimum price standards are two systems to foster the market dissemination of renewable energies in the electricity sector. Transaction Cost Economics brings forward that the contractual relations in real structures have to be investigated to judge on the efficiency of governance structures. This paper seeks to do so by comparing governance structures created by the Texan RPS and the German EEG as an example for a successful minimum price standard. Analysis suggests that differences in static efficiency between both regulations are not as big as economic theory would suggest. The need to safeguard long-term investments establishes long-term contracts as the prevailing form of governance in the Texan RPS, thus limiting competition. On the other hand, the German EEG provides a large range of freedom to the power generators giving them strong incentives to optimise both the investment and the operation of a power plant. (Less)
Please use this url to cite or link to this publication:
author
organization
publishing date
type
Chapter in Book/Report/Conference proceeding
publication status
published
subject
keywords
Transaction Cost Economics, Regulation
in
[Host publication title missing]
publisher
European Network for Energy Economic Research
conference name
ENER Forum 3
language
English
LU publication?
yes
id
c2e7d770-4831-45d6-aa8b-27930605f9e0 (old id 604545)
date added to LUP
2007-12-12 19:36:41
date last changed
2016-04-16 08:59:38
@inproceedings{c2e7d770-4831-45d6-aa8b-27930605f9e0,
  abstract     = {Renewable portfolio standards (RPS) and minimum price standards are two systems to foster the market dissemination of renewable energies in the electricity sector. Transaction Cost Economics brings forward that the contractual relations in real structures have to be investigated to judge on the efficiency of governance structures. This paper seeks to do so by comparing governance structures created by the Texan RPS and the German EEG as an example for a successful minimum price standard. Analysis suggests that differences in static efficiency between both regulations are not as big as economic theory would suggest. The need to safeguard long-term investments establishes long-term contracts as the prevailing form of governance in the Texan RPS, thus limiting competition. On the other hand, the German EEG provides a large range of freedom to the power generators giving them strong incentives to optimise both the investment and the operation of a power plant.},
  author       = {Langniss, Ole},
  booktitle    = {[Host publication title missing]},
  keyword      = {Transaction Cost Economics,Regulation},
  language     = {eng},
  publisher    = {European Network for Energy Economic Research},
  title        = {Transaction Cost Economics of Regulations to foster Renewable Energy Sources in the Electricity Sector},
  year         = {2002},
}