Low Carbon Electricity Investment: The Limitations of Traditional Approaches and a Radical Alternative
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Authors
Laing, Tim
Grubb, Michael
Publication Date
2010-09Series
Cambridge Working Papers in Economics
Publisher
Faculty of Economics
Type
Working Paper
Metadata
Show full item recordCitation
Laing, T., & Grubb, M. (2010). Low Carbon Electricity Investment: The Limitations of Traditional Approaches and a Radical Alternative. https://doi.org/10.17863/CAM.5248
Abstract
Moving to a very low carbon electricity system is central to meeting the goals of UK energy policy, and indeed to the wider global challenge of tackling climate change. This will require massive investment in low carbon electricity sources. This working paper identifies four key difficulties with the current mainstream approach of relying on the impact of a carbon price in the present liberalised electricity market, supplemented with additional incentive mechanisms like renewable obligation certificates and feed-in tariffs. We then summarise alternate mechanisms and propose a new approach, aimed at harnessing the potential interest and capital of electricity consumers, large and small, directly in funding low carbon electricity investments, in the form of longterm ‘Green Power’ contracts that operate in a separate, differentiated contract market.
Keywords
Electricity, Renewables, Climate Change, Green Power
Sponsorship
ESRC