Flexible &amp; binding: can it be effective?: Thesis on the Renewable Energy Directive, the flexibility of instrument choice and the binding national targets

The European Union has been promoting the use and production of renewable energies through various policies. In 2009, the Renewable Energy Directive 2009/28/EC was introduced. The Directive also set mandatory targets for the EU-28 Member States individually. The Member States are free to choose the instruments with which they promote the use of renewable energy consumption. In achieving these goals two main instruments were used: price-based or quota-based instruments. Therefore, the central question to this research is ‘what effect does the introduction of mandatory national targets, combined with the freedom of instrument choice, introduced by the Renewable Energy Directive (2009), have on the share of renewable energy in the EU-28 from 2004 to 2018?’ The academic debate does not give a clear answer on both of these topics. The effectiveness of the mandatory national targets and which instrument for promoting renewable energy is the most efficient is disputed. The most popular...Show moreThe European Union has been promoting the use and production of renewable energies through various policies. In 2009, the Renewable Energy Directive 2009/28/EC was introduced. The Directive also set mandatory targets for the EU-28 Member States individually. The Member States are free to choose the instruments with which they promote the use of renewable energy consumption. In achieving these goals two main instruments were used: price-based or quota-based instruments. Therefore, the central question to this research is ‘what effect does the introduction of mandatory national targets, combined with the freedom of instrument choice, introduced by the Renewable Energy Directive (2009), have on the share of renewable energy in the EU-28 from 2004 to 2018?’ The academic debate does not give a clear answer on both of these topics. The effectiveness of the mandatory national targets and which instrument for promoting renewable energy is the most efficient is disputed. The most popular policy for promoting renewable energy are the price-based policies (FIT/FIP). This can also clearly be seen in the EU-28, where the FIT is in the clear majority. The research question will be tested by using three statistical models. First, a pooled regression model will be used to estimate the effect of the introduction of the RED and the instruments that were used on the share of renewable energy in the EU-28. Secondly, some biases will be corrected for by using a Fixed Effects regression model. The dependent variable that will be used is ‘the share of renewable energy in the gross final energy consumption’ in the EU-28 countries. Our final model will investigate the presence of beta- convergence, which will be used to test how the ambition of the national targets played a role. The results show that the levels of renewable energy increased after the introduction of the RED in 2009. The results from the method of beta-convergence show that countries that had a more ambitious national goal set for them in 2009 showed a more substantial growth in their share of renewable energy. Besides that, the results give no reliable and clear answer to the question which promotion instrument is more effective. The only significant result shows that price-based policies show higher levels of renewable energy in their energy mix, which is in line with our expectations.Show less

Leiden University Student Repository

Documents

In Collections

Flexible & binding: can it be effective? Thesis on the Renewable Energy Directive, the flexibility of instrument choice and the binding national targets