Environmental Engineering Reference
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each technology. On the other hand, this analysis falls into the
trap
(see Sect.
2.3
), since some design elements under TGCs are available (credit multi-
pliers and carve-outs) to adapt the support levels to the costs of electricity generation
by each technology.
11
In addition, when a dynamic ef
“
instrumentalism
”
ciency perspective is adopted, it becomes even
clearer that TGCs are not superior. FITs have proven superior since they are able to
support technologies with different levels of maturity and costs, and not only the
cheapest ones (see [
51
]). This facilitates innovation through the advancement of
technologies along their learning curves (through their diffusion) and private R&D
investments, given the existence of a market for renewable energy technologies and
pro
ts to be reinvested (although not neces-
sarily) in R&D. Under a quota with TGCs, the most expensive technologies are not
supported (i.e., those technologies whose costs are above the TGC price), as shown
by Verbruggen [
52
] and Bergek and Jacobsson [
53
] for Belgium and Sweden,
respectively. This is due to the high revenue uncertainty levels (due to the volatile
TGC price) and the very low producer surplus for investors in immature technol-
ogies (if any surplus at all), which makes it extremely dif
tability levels which allow the bene
cult to invest in R&D.
2.5 R&D and Deployment Should Be Combined
2.5.1 The Usual Claim
Learning-by-doing (LBD) and R&D investments are two main sources of techno-
logical change. The former refers to repetitious manufacturing of a product leading
to improvements in the production process and costs reductions in the technologies.
Both factors allow technologies to improve their quality and reduce their costs and
are complementary in addition to carbon prices [
54
]. Some authors argue that, with
respect to some technologies (mostly solar PV), too much public support has been
dedicated to deployment and less than what would have been socially optimal has
been devoted to R&D [
37
]. There seems to be a widespread consensus that past and
current levels of public (and private) investments in renewable energy R&D are too
low to address energy-related concerns, including climate change [
55
].
Data on government energy RD&D (research, development and demonstration)
expenditures in IEA countries show that a peak was reached in 1980, then it declined
and reached a minimum in 1997. The later increase allowed such expenditure in 2009
to be at the same level as in 1980 in absolute terms, although it was reduced, again, in
2010 [
56
]. Likewise, R&D expenditures in renewable energy peaked in the 1980s,
11
Under carve-outs, targets for different technologies exist, leading to a fragmentation of the TGC
market, with one quota for the mature and another for the non-mature technologies. Under credit
multipliers, more TGCs are granted per unit of MWh generated for immature technologies
compared to mature technologies. The alternative is no use of carve-outs or credit multipliers, such
as in the Swedish and Polish TGC schemes [
40
].
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