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Banding: A game changer in the Renewables Obligation scheme in the United Kingdom

Yunfei Wang, Jinke Li, Nigel O'Leary Orcid Logo, Jing Shao Orcid Logo

Energy Economics, Volume: 130, Start page: 107331

Swansea University Authors: Yunfei Wang, Jinke Li, Nigel O'Leary Orcid Logo, Jing Shao Orcid Logo

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DOI (Published version): 10.1016/j.eneco.2024.107331

Abstract

The Renewables Obligation scheme was implemented in the UK in April 2003 to support electricity from renewable sources and was designed as technology-neutral to encourage competition. As less developed technologies were disadvantaged, banding was introduced in April 2009 to provide differentiated su...

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Published in: Energy Economics
ISSN: 0140-9883
Published: Elsevier BV 2024
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URI: https://cronfa.swan.ac.uk/Record/cronfa65457
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spelling v2 65457 2024-01-18 Banding: A game changer in the Renewables Obligation scheme in the United Kingdom 76496d923dbc66a5a320fa5de9c2a86c Yunfei Wang Yunfei Wang true false 1d12dcf12aad73117a2a5f43cf233aae Jinke Li Jinke Li true false fb1a5569008b44e42a4c63a3f971bd29 0000-0002-5971-9306 Nigel O'Leary Nigel O'Leary true false 4957a0af8a9dd429738c64c124c3f8e8 0000-0003-0587-317X Jing Shao Jing Shao true false 2024-01-18 The Renewables Obligation scheme was implemented in the UK in April 2003 to support electricity from renewable sources and was designed as technology-neutral to encourage competition. As less developed technologies were disadvantaged, banding was introduced in April 2009 to provide differentiated support to different technologies. A similar feature was used in other countries but its positive impact has not been identified empirically. This is the first quantitative study to examine the impacts of banding based on time series data from March 2002 to December 2018 in the UK, focusing on onshore wind, offshore wind, and solar. This study considers the impacts of banding via its feed-through effect on the markups and then investors' decisions on renewable projects, instead of considering it as an independent policy intervention. The counterfactual analysis shows that, if banding was not introduced, the offshore wind would remain silent for extended periods, then the UK might have difficulty in achieving its target for renewable generation. Besides, the costs of the RO scheme would be less, but additional fuel costs would be added to cover the generation gap. Journal Article Energy Economics 130 107331 Elsevier BV 0140-9883 Tradable green certificates, Renewables obligation, Banding, Counterfactually analysis, Wind generation, Solar generation 1 2 2024 2024-02-01 10.1016/j.eneco.2024.107331 COLLEGE NANME COLLEGE CODE Swansea University SU Library paid the OA fee (TA Institutional Deal) Swansea University 2024-03-20T17:59:26.7152172 2024-01-18T00:01:47.5824622 Faculty of Humanities and Social Sciences School of Social Sciences - Economics Yunfei Wang 1 Jinke Li 2 Nigel O'Leary 0000-0002-5971-9306 3 Jing Shao 0000-0003-0587-317X 4 65457__29771__485817a4be554861921c1762e15d7e66.pdf 65457_VoR.pdf 2024-03-20T17:58:07.7937798 Output 2170570 application/pdf Version of Record true © 2024 The Author(s). This is an open access article under the CC BY license. true eng http://creativecommons.org/licenses/by/4.0/
title Banding: A game changer in the Renewables Obligation scheme in the United Kingdom
spellingShingle Banding: A game changer in the Renewables Obligation scheme in the United Kingdom
Yunfei Wang
Jinke Li
Nigel O'Leary
Jing Shao
title_short Banding: A game changer in the Renewables Obligation scheme in the United Kingdom
title_full Banding: A game changer in the Renewables Obligation scheme in the United Kingdom
title_fullStr Banding: A game changer in the Renewables Obligation scheme in the United Kingdom
title_full_unstemmed Banding: A game changer in the Renewables Obligation scheme in the United Kingdom
title_sort Banding: A game changer in the Renewables Obligation scheme in the United Kingdom
author_id_str_mv 76496d923dbc66a5a320fa5de9c2a86c
1d12dcf12aad73117a2a5f43cf233aae
fb1a5569008b44e42a4c63a3f971bd29
4957a0af8a9dd429738c64c124c3f8e8
author_id_fullname_str_mv 76496d923dbc66a5a320fa5de9c2a86c_***_Yunfei Wang
1d12dcf12aad73117a2a5f43cf233aae_***_Jinke Li
fb1a5569008b44e42a4c63a3f971bd29_***_Nigel O'Leary
4957a0af8a9dd429738c64c124c3f8e8_***_Jing Shao
author Yunfei Wang
Jinke Li
Nigel O'Leary
Jing Shao
author2 Yunfei Wang
Jinke Li
Nigel O'Leary
Jing Shao
format Journal article
container_title Energy Economics
container_volume 130
container_start_page 107331
publishDate 2024
institution Swansea University
issn 0140-9883
doi_str_mv 10.1016/j.eneco.2024.107331
publisher Elsevier BV
college_str Faculty of Humanities and Social Sciences
hierarchytype
hierarchy_top_id facultyofhumanitiesandsocialsciences
hierarchy_top_title Faculty of Humanities and Social Sciences
hierarchy_parent_id facultyofhumanitiesandsocialsciences
hierarchy_parent_title Faculty of Humanities and Social Sciences
department_str School of Social Sciences - Economics{{{_:::_}}}Faculty of Humanities and Social Sciences{{{_:::_}}}School of Social Sciences - Economics
document_store_str 1
active_str 0
description The Renewables Obligation scheme was implemented in the UK in April 2003 to support electricity from renewable sources and was designed as technology-neutral to encourage competition. As less developed technologies were disadvantaged, banding was introduced in April 2009 to provide differentiated support to different technologies. A similar feature was used in other countries but its positive impact has not been identified empirically. This is the first quantitative study to examine the impacts of banding based on time series data from March 2002 to December 2018 in the UK, focusing on onshore wind, offshore wind, and solar. This study considers the impacts of banding via its feed-through effect on the markups and then investors' decisions on renewable projects, instead of considering it as an independent policy intervention. The counterfactual analysis shows that, if banding was not introduced, the offshore wind would remain silent for extended periods, then the UK might have difficulty in achieving its target for renewable generation. Besides, the costs of the RO scheme would be less, but additional fuel costs would be added to cover the generation gap.
published_date 2024-02-01T17:59:21Z
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