Effectiveness of feed-in tariff and renewable portfolio standard under strategic pricing in network access

2017 Fiscal Year Final Research Report

• Project/Area Number: 15K17058
• Research Category: Grant-in-Aid for Young Scientists (B)
• Allocation Type: Multi-year Fund
• Research Field: Economic policy
• Research Institution: Waseda University
• Principal Investigator: KURAKAWA YUKIHIDE 早稲田大学, 理工学術院, 次席研究員(研究院講師) (80749200)
• Research Collaborator: Hibiki Akira 東北大学, 大学院経済学研究科, 教授
• Project Period (FY): 2015-04-01 – 2018-03-31
• Keywords: 固定価格買取制度 / プレミアムタリフ型FIT制度 / RPS制度 / 接続コスト / 発送電分離

Outline of Final Research Achievements

This study compares the effectiveness of fixed-price and premium-price feed-in tariffs (FIT) and renewable portfolio standards (RPS) for promoting production from RES, explicitly considering strategic pricing in network access. The effects of vertical structure, i.e., vertical integration and separation, are also investigated. It is shown that under vertical integration, the effectiveness of both FIT policies are fully offset by strategic pricing in network access, whereas RPS does not create an incentive for the manipulation. This is because a higher access price induces a higher cost for the vertically integrated monopolist to meet the purchase obligation under RPS. Consequently, RPS is potentially more effective than FIT policies under vertical integration. It is also shown that vertical separation improves the effectiveness of both FIT policies but adversely reduces that of RPS.

Free Research Field

エネルギー経済学・環境経済学