Renewable Energy Promotion: Usual Claims and Empirical Evidence - Green Energy and Efficiency: An Economic Perspective - page 345

2030. Related support expenditures can then be maintained on a comparatively low
level (at 22.8 as yearly average for new RES-E installations) while

uniform RES support in a harmonized RES trading regime (without banding) may
lead to a much high consumer burden (38.3 billion

23.5 billion €

-

).
The coordination of RES-E remuneration schemes and market frameworks across
national borders can deliver a number of bene

€

ts: increased stability and transpar-
ency for investors, economies of scale, increased competition, and improved
exploitation of resources. In consequence, European coordination can trigger addi-
tional RES-E investments while lowering the overall costs of RES-E deployment.
On the other hand, it is important to protect the

exibility of RES-E policies to be
able to adjust to local framework conditions. A lack of context-speci city can

undermine the ability of remuneration frameworks to overcome local market barriers
and can lower their public acceptance [ 80 ]. How increased cooperation and coor-
dination leads to increased convergence of the most important aspects of effective
and ef

cient support represents a fruitful avenue for further research.

2.8 Security for Investors and Stability of the Support Scheme
Should Be Pursued

2.8.1 The Usual Claim

A general mantra in the RES-E literature is that a stable investment climate should be
guaranteed in order to ensure investor security and, thus, promote RES-E invest-
ments. From a long-term RES-E investment perspective, stop-and-go policies are
highly detrimental and, thus, abrupt or retroactive changes that destroy con

dence
and disrupt markets should be avoided [ 80 ]. Retroactive regulatory changes should
be understood as changes in the existing remuneration conditions, which negatively
affect the revenue certainty of operating plants. Once a generator locks into a given
rate, the policy should not be backwardly and arbitrarily readjusted to amend the
economic conditions. Otherwise, this would create insecurity for investors, making
further investments unattractive. The relevance of legal security and policy stability
for, both, international private entities (e.g., international utility and energy com-
panies, international investment banks and funds, international renewable energy
project developers) and public entities (e.g., development banks, government min-
istries) has been empirically demonstrated for emerging economies [ 81 ].

2.8.2 The Reply

While it is dif cult to argue against the virtues of policy stability, what is exactly that

should be stable? Taken to the extreme, one could argue that the support scheme
should not be changed at all. If interpreted in this way, policy stability would have a
very negative side: this rigidity may lead to problems (in terms of effectiveness or