There is a wide range of compliance and voluntary instruments available on the electricity market to promote the generation of renewable electricity across Europe, such as Feed-In tariffs (FITs), feed-in premiums (FIPs) and investment grants. While support schemes for renewables can stimulate growth in terms of production, the demand-driven focus is lost. This tends to lead to market distortion, resulting in an inefficient allocation of renewables (e.g. new solar production in regions with a low radiation input). Moreover they tend to have an impact on grid balancing and other regulatory frameworks as such EU support schemes have varying degrees of inefficiency. Moving towards market-based support schemes provides more efficient ways to use tax money.
There is a wide range of compliance and voluntary instruments available on the electricity market to promote the generation of renewable electricity across Europe, such as Feed-In tariffs (FITs), feed-in premiums (FIPs) and investment grants. While support schemes for renewables can stimulate growth in terms of production, the demand-driven focus is lost. This tends to lead to market distortion, resulting in an inefficient allocation of renewables (e.g. new solar production in regions with a low radiation input). Moreover they tend to have an impact on grid balancing and other regulatory frameworks as such EU support schemes have varying degrees of inefficiency. Moving towards market-based support schemes provides more efficient ways to use tax money.