Journal
ENERGY STRATEGY REVIEWS
Volume 34, Issue -, Pages -Publisher
ELSEVIER
DOI: 10.1016/j.esr.2021.100628
Keywords
Feed-in tariff; Renewable portfolio standard; Renewable energy; Uncertainty
Categories
Funding
- National Natural Science Foundation of PRC [71771057]
- Natural Science Foundation of Hunan Province [2020JJ5111]
- Project of Hunan Social Science Achievement Appraisal Committee [XSP20YBZ081]
- Youth Innovation Driven Project of Hunan University of Technology and Bussiness [19QD04]
- Guangdong Social Science Foundation [GD17XYJ23]
- Collaborative Innovation Center of Scientific Finance industry
- Innovative Group Foundation (Humanities and Social Sciences) for Higher Education of Guangdong Province [2015WCXTD009]
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This paper examines the effects of uncertainty on renewable energy production and policies, revealing that feed-in tariff (FIT) has a better incentive effect, while renewable portfolio standard (RPS) offers higher production and profit stability. It is observed that at low cost stages, the intensity of both policies is directly proportional to renewable energy output.
Environmental pollution, climate warming and other issues have become global issues, and the use of renewable energy as the best way to solve the problem has gradually attracted the attention of all countries. Uncertainty has an important effect on the production of renewable energy. Through a two-stage model, this paper compares the effects of feed-in tariff (FIT) and renewable portfolio standard (RPS) in the developing renewable energy industry under uncertainty. The results show that the FIT have higher expected output and profit, and lower market prices. The risks of production and gain is of relatively more significant. By contrast, the production and profit of RPS remain relatively more stable. When the cost of renewable energy is high, the incentive effect of the policy under FIT is better. As the cost decreases, the incentive effect under RPS will continually increase. In summary, at low cost, the output of renewable energy is proportional to the intensity of the policy under the two policies. We can further conclude that FIT is suitable for the early stage of the development of the renewable energy industry. Once the industry is mature, we can strategically integrate FIT and RPS to ensure a healthy and sustainable development.
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