Comparison of feed-in tariff, quota and auction mechanisms to support wind power development

A comparison of support schemes for market-based deployment of renewable energy in the UK and Germany shows that the feed-in tariff reduces costs to consumers and results in larger deployment. A survey among project developers suggests two explanations: (1) Site selection presents the biggest obstacle under the feed-in tariff. Uncertain financing of other schemes reduces efforts at initial project stages and planning permits become a major obstacle. (2) Project developers do not compete in price but for good sites under the feed-in tariff. Most importantly, turbine producers and construction services contribute to most of the costs, and face at least equal levels of competition under the feed-in tariff. (C) 2007 Elsevier Ltd. All rights reserved.