A Reexamination of Renewable Electricity Policy in Sweden

Reprint No. 2013:27

Author(s): Sven-Olof Fridolfsson and Thomas TangeråsYear: 2013 Title: Energy Policy Volume (No.): 58 (July) Pages: 57–63
Online article (restrictions may apply)
Preliminary version

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.

Fridolfsson, Sven-Olof and Thomas Tangerås (2013), "A Reexamination of Renewable Electricity Policy in Sweden". Energy Policy 58(July), 57–63.

Thomas Tangerås


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