Monetization of policy costs and sustainability benefits associated with renewable energy in fossil fuel-rich countries (FFRCs)
The electricity sector in Middle Eastern fossil fuel-rich countries (FFRCs) is characterised by the high electricity subsidies that result in a large price gap between Feed-in Tariffs (FiT) and consumer electricity prices, which inhibits electricity generation from renewable energy sources (RES-E)....
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| Format: | Article |
| Language: | English |
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Elsevier
2023-09-01
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| Series: | Environmental and Sustainability Indicators |
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| Online Access: | http://www.sciencedirect.com/science/article/pii/S266597272300048X |
| _version_ | 1797790827455447040 |
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| author | Vahid Ghorbani Pashakolaie Kiomars Heydari Alberto Almena |
| author_facet | Vahid Ghorbani Pashakolaie Kiomars Heydari Alberto Almena |
| author_sort | Vahid Ghorbani Pashakolaie |
| collection | DOAJ |
| description | The electricity sector in Middle Eastern fossil fuel-rich countries (FFRCs) is characterised by the high electricity subsidies that result in a large price gap between Feed-in Tariffs (FiT) and consumer electricity prices, which inhibits electricity generation from renewable energy sources (RES-E). Meanwhile, RES-E development could reduce GHG emissions, allow fossil fuel to be sustainably commercialised or processed, and save water consumption in thermal power plants as an alternative solution in FFRCs. This study aimed at monetarizing those benefits and evaluating the performance of RES-E policy in a FFRCs framework by defining the benefit-cost ratio as a sustainability indicator, considering Iran as a case study scenario. Results showed that the FiT purchase price was seven times higher than the average consumer price of electricity, which implied a $US 345 million cost for renewable energy support during the 2009–2019 time window. Conversely, benefits from the use of renewable energy were estimated in $US 68 million. The resulting benefit-cost ratio of RES-E policy was found to be 0.2, which indicates that FiT policy was inefficient and only 20% of the expenditure could be recovered. To make RES-E policies more efficient and foster renewable energy deployment, limiting the electricity subsidy that widens the price gap between FiT and market price has been suggested. Furthermore, carbon price was identified to have high impact on the benefit-cost ratio indicator. A policy framework setting a 100 $US/t CO2 would balance RES-E policy costs and benefits. This evidence could aid in decision-making for RES-E implementation in FFRCs. |
| first_indexed | 2024-03-13T02:10:04Z |
| format | Article |
| id | doaj.art-6439b18989cc4a86929576ede178a63f |
| institution | Directory Open Access Journal |
| issn | 2665-9727 |
| language | English |
| last_indexed | 2024-03-13T02:10:04Z |
| publishDate | 2023-09-01 |
| publisher | Elsevier |
| record_format | Article |
| series | Environmental and Sustainability Indicators |
| spelling | doaj.art-6439b18989cc4a86929576ede178a63f2023-07-01T04:35:43ZengElsevierEnvironmental and Sustainability Indicators2665-97272023-09-0119100271Monetization of policy costs and sustainability benefits associated with renewable energy in fossil fuel-rich countries (FFRCs)Vahid Ghorbani Pashakolaie0Kiomars Heydari1Alberto Almena2Teesside University International Business School, Middlesbrough, UK; Corresponding author. Room 1.07, The phoenix building, Teesside University, Middlesbrough, TS1 3BX, UK.Energy Economics Research Department, Niroo Research Institute (NRI), Tehran, IranSchool of Chemical Engineering, University of Salamanca, SpainThe electricity sector in Middle Eastern fossil fuel-rich countries (FFRCs) is characterised by the high electricity subsidies that result in a large price gap between Feed-in Tariffs (FiT) and consumer electricity prices, which inhibits electricity generation from renewable energy sources (RES-E). Meanwhile, RES-E development could reduce GHG emissions, allow fossil fuel to be sustainably commercialised or processed, and save water consumption in thermal power plants as an alternative solution in FFRCs. This study aimed at monetarizing those benefits and evaluating the performance of RES-E policy in a FFRCs framework by defining the benefit-cost ratio as a sustainability indicator, considering Iran as a case study scenario. Results showed that the FiT purchase price was seven times higher than the average consumer price of electricity, which implied a $US 345 million cost for renewable energy support during the 2009–2019 time window. Conversely, benefits from the use of renewable energy were estimated in $US 68 million. The resulting benefit-cost ratio of RES-E policy was found to be 0.2, which indicates that FiT policy was inefficient and only 20% of the expenditure could be recovered. To make RES-E policies more efficient and foster renewable energy deployment, limiting the electricity subsidy that widens the price gap between FiT and market price has been suggested. Furthermore, carbon price was identified to have high impact on the benefit-cost ratio indicator. A policy framework setting a 100 $US/t CO2 would balance RES-E policy costs and benefits. This evidence could aid in decision-making for RES-E implementation in FFRCs.http://www.sciencedirect.com/science/article/pii/S266597272300048XFeed-in tariff (FiT)FFRCsElectricity subsidyBenefit-cost ratioRES-E policy |
| spellingShingle | Vahid Ghorbani Pashakolaie Kiomars Heydari Alberto Almena Monetization of policy costs and sustainability benefits associated with renewable energy in fossil fuel-rich countries (FFRCs) Environmental and Sustainability Indicators Feed-in tariff (FiT) FFRCs Electricity subsidy Benefit-cost ratio RES-E policy |
| title | Monetization of policy costs and sustainability benefits associated with renewable energy in fossil fuel-rich countries (FFRCs) |
| title_full | Monetization of policy costs and sustainability benefits associated with renewable energy in fossil fuel-rich countries (FFRCs) |
| title_fullStr | Monetization of policy costs and sustainability benefits associated with renewable energy in fossil fuel-rich countries (FFRCs) |
| title_full_unstemmed | Monetization of policy costs and sustainability benefits associated with renewable energy in fossil fuel-rich countries (FFRCs) |
| title_short | Monetization of policy costs and sustainability benefits associated with renewable energy in fossil fuel-rich countries (FFRCs) |
| title_sort | monetization of policy costs and sustainability benefits associated with renewable energy in fossil fuel rich countries ffrcs |
| topic | Feed-in tariff (FiT) FFRCs Electricity subsidy Benefit-cost ratio RES-E policy |
| url | http://www.sciencedirect.com/science/article/pii/S266597272300048X |
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