Effectiveness of policy measures in transforming the energy system

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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 EURO/MWh up to over 100 EURO/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 EURO/MWh, but some business driven and procurement type measures could come down to even 0.01 EURO/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. (c) 2006 Elsevier Ltd. All rights reserved.

Original languageEnglish
Pages (from-to)627-639
Number of pages13
JournalEnergy Policy
Issue number1
Publication statusPublished - Jan 2007
MoE publication typeA1 Journal article-refereed


  • policy cost
  • policy measures
  • energy impacts

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