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.
How does uncertainty in renewable energy policy affect decisions to invest in wind energy?
Northeastern University Energy Systems Society 8th Annual Energy Conference
Margarita Patria moderates the panel titled “Energy Policy and Regulation” during the conference. For more information on this event, click here.
Energy Bar Association Honors our Veteran
CRA is a proud sponsor of this event to honor those who have served in the U.S. Armed Forces. For more information on this event, click here.