This paper examines the impacts of uncertainties in U.S. renewable energy policy on the investment decisions of renewable electricity producers. The authors develop and solve a dynamic optimization model to understand how investment in wind energy depends on market and policy uncertainties. These uncertainties include the federal government’s uncertain decision about the continuation of the Production Tax Credit (PTC) policy and the stochasticity of prices in the market for Renewable Electricity Credits (RECs). The results show that investors require higher REC prices to invest without the PTC policy. Results contribute to our understanding of how policy uncertainty affects the profitability threshold required for investors to commit to renewable energy projects.
The regulator’s balancing act: Data centers’ impact on affordability, reliability, and sustainability
Surging demand for data center capacity requires significant and rapid investments in generation and delivery infrastructure