Can designs inspired by control theory keep deployment policies effective and cost-efficient as technology prices fall?
Deployment policies based on economic incentives are among the most effective tools for speeding up the diffusion of clean energy technologies. Policy instruments such as feed-in tariffs have played a critical role in driving the growth of solar photovoltaics, and could accelerate the uptake of othe...
| Main Authors: | , , , |
|---|---|
| Format: | Article |
| Language: | English |
| Published: |
IOP Publishing
2020-01-01
|
| Series: | Environmental Research Letters |
| Subjects: | |
| Online Access: | https://doi.org/10.1088/1748-9326/ab6fbf |
| _version_ | 1827870184968290304 |
|---|---|
| author | Alejandro Nuñez-Jimenez Christof Knoeri Joern Hoppmann Volker H Hoffmann |
| author_facet | Alejandro Nuñez-Jimenez Christof Knoeri Joern Hoppmann Volker H Hoffmann |
| author_sort | Alejandro Nuñez-Jimenez |
| collection | DOAJ |
| description | Deployment policies based on economic incentives are among the most effective tools for speeding up the diffusion of clean energy technologies. Policy instruments such as feed-in tariffs have played a critical role in driving the growth of solar photovoltaics, and could accelerate the uptake of other technologies that are key to the decarbonization of energy systems. Historical experiences, however, show that failing to adjust economic incentives to falling technology prices can fundamentally undermine these policies’ effectiveness and cost-efficiency. This paper addresses this challenge by assessing three novel policy designs. Based on control-theory principles, the proposed mechanisms modify incentives in response to changes in deployment, policy costs, or profitability for adopters. We assess the outcomes that each policy design would have achieved when applied to Germany’s feed-in tariff for solar photovoltaics between 2000 and 2016. For this purpose, we developed an agent-based model that allows us to simulate the adoption decisions of individual households and medium-sized and large firms, as well as the evolution of technology prices. Our results show that responsive designs inspired by control theory might produce policies that follow their targets more closely, and at a lower cost. In addition, our analysis suggests that the studied designs could greatly reduce uncertainty over policy outcomes and windfall profits. This research also highlights the role of the temporal distribution of policy targets, and identifies policy design tradeoffs, drawing relevant implications for the design of future deployment policies. |
| first_indexed | 2024-03-12T15:53:17Z |
| format | Article |
| id | doaj.art-e6cc90c20d0b4836aa1b4727973273c5 |
| institution | Directory Open Access Journal |
| issn | 1748-9326 |
| language | English |
| last_indexed | 2024-03-12T15:53:17Z |
| publishDate | 2020-01-01 |
| publisher | IOP Publishing |
| record_format | Article |
| series | Environmental Research Letters |
| spelling | doaj.art-e6cc90c20d0b4836aa1b4727973273c52023-08-09T15:04:01ZengIOP PublishingEnvironmental Research Letters1748-93262020-01-0115404400210.1088/1748-9326/ab6fbfCan designs inspired by control theory keep deployment policies effective and cost-efficient as technology prices fall?Alejandro Nuñez-Jimenez0https://orcid.org/0000-0002-1505-9772Christof Knoeri1https://orcid.org/0000-0003-0355-1011Joern Hoppmann2https://orcid.org/0000-0002-1820-6600Volker H Hoffmann3Group for Sustainability and Technology, ETH Zurich, Weinbergstrasse 56/58, 8092 Zurich, SwitzerlandGroup for Sustainability and Technology, ETH Zurich, Weinbergstrasse 56/58, 8092 Zurich, SwitzerlandGroup for Sustainability and Technology, ETH Zurich, Weinbergstrasse 56/58, 8092 Zurich, Switzerland; Chair of Management, University of Oldenburg , Ammerländer Heerstraße, D-26129 Oldenburg, GermanyGroup for Sustainability and Technology, ETH Zurich, Weinbergstrasse 56/58, 8092 Zurich, SwitzerlandDeployment policies based on economic incentives are among the most effective tools for speeding up the diffusion of clean energy technologies. Policy instruments such as feed-in tariffs have played a critical role in driving the growth of solar photovoltaics, and could accelerate the uptake of other technologies that are key to the decarbonization of energy systems. Historical experiences, however, show that failing to adjust economic incentives to falling technology prices can fundamentally undermine these policies’ effectiveness and cost-efficiency. This paper addresses this challenge by assessing three novel policy designs. Based on control-theory principles, the proposed mechanisms modify incentives in response to changes in deployment, policy costs, or profitability for adopters. We assess the outcomes that each policy design would have achieved when applied to Germany’s feed-in tariff for solar photovoltaics between 2000 and 2016. For this purpose, we developed an agent-based model that allows us to simulate the adoption decisions of individual households and medium-sized and large firms, as well as the evolution of technology prices. Our results show that responsive designs inspired by control theory might produce policies that follow their targets more closely, and at a lower cost. In addition, our analysis suggests that the studied designs could greatly reduce uncertainty over policy outcomes and windfall profits. This research also highlights the role of the temporal distribution of policy targets, and identifies policy design tradeoffs, drawing relevant implications for the design of future deployment policies.https://doi.org/10.1088/1748-9326/ab6fbfpolicy designclean energydeployment policyagent-based modelfeed-in tariffadjustment mechanism |
| spellingShingle | Alejandro Nuñez-Jimenez Christof Knoeri Joern Hoppmann Volker H Hoffmann Can designs inspired by control theory keep deployment policies effective and cost-efficient as technology prices fall? Environmental Research Letters policy design clean energy deployment policy agent-based model feed-in tariff adjustment mechanism |
| title | Can designs inspired by control theory keep deployment policies effective and cost-efficient as technology prices fall? |
| title_full | Can designs inspired by control theory keep deployment policies effective and cost-efficient as technology prices fall? |
| title_fullStr | Can designs inspired by control theory keep deployment policies effective and cost-efficient as technology prices fall? |
| title_full_unstemmed | Can designs inspired by control theory keep deployment policies effective and cost-efficient as technology prices fall? |
| title_short | Can designs inspired by control theory keep deployment policies effective and cost-efficient as technology prices fall? |
| title_sort | can designs inspired by control theory keep deployment policies effective and cost efficient as technology prices fall |
| topic | policy design clean energy deployment policy agent-based model feed-in tariff adjustment mechanism |
| url | https://doi.org/10.1088/1748-9326/ab6fbf |
| work_keys_str_mv | AT alejandronunezjimenez candesignsinspiredbycontroltheorykeepdeploymentpolicieseffectiveandcostefficientastechnologypricesfall AT christofknoeri candesignsinspiredbycontroltheorykeepdeploymentpolicieseffectiveandcostefficientastechnologypricesfall AT joernhoppmann candesignsinspiredbycontroltheorykeepdeploymentpolicieseffectiveandcostefficientastechnologypricesfall AT volkerhhoffmann candesignsinspiredbycontroltheorykeepdeploymentpolicieseffectiveandcostefficientastechnologypricesfall |