Effectiveness of policy measures in transforming the energy system

• Published in: Energy policy Vol. 35; no. 1; pp. 627 - 639
• Main Author: Lund, P.D.
• Format: Journal Article
• Language: English
• Published: Oxford Elsevier Ltd 2007; Elsevier; Elsevier Science Ltd
• Series: Energy Policy
• Subjects: Alternative energy sources; Applied sciences; Costs; Effectiveness; Energy; Energy economics; Energy impacts; Energy policy; Energy utilization; Exact sciences and technology; General, economic and professional studies; Impact analysis; Market penetration; Policy analysis; Policy cost; Policy measures; Public policy; Renewable energy sources; Studies; Subsidies; Policy cost; Policy measures; Energy impacts; Performance evaluation; Renewable energy; Energy conservation; Efficiency; Energy policy; Cost analysis; Public policy
• ISSN: 0301-4215; 1873-6777
• DOI: 10.1016/j.enpol.2006.01.008

The effectiveness of public policy measures in creating energy impacts were investigated through 20 policy cases on renewable energy and efficient energy use. The policies were grouped into subsidy-type and catalyzing measures based on the use of the public financial resources. The policy cost of subsidies ranged from 1
€/MWh up to over 100
€/MWh, the feed-in tariffs being clearly the most expensive choice. The public measures that strive for catalyzing market breakthroughs lie in the range 0.1–1
€/MWh, but some business driven and procurement type measures could come down to even 0.01
€/MWh. The policy costs observed could decrease by 25–60% if accounting for lagging energy impacts. The better policy efficiency of catalytic measures is most likely due to a stronger market and business sensitiveness, understanding of market needs, and focusing more on the end-use sector with active stakeholder involvement. The magnitude of the energy impacts were in average larger from the subsidy instruments but a few end-use technologies linked to catalytic measures reached even higher effects due to the strong market penetration achieved.