Chair of Environmental Economics

Environmental Economics

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Press release: Direct subsidies for renewable energy jeopardises energy storage facilities and the success of the energy reform.

Fabian Naumann (Foto: privat)

Which is the most effective approach to driving a sustainable energy reform: subsidising renewable energy or putting a price on carbon emissions? What effect will increased use of renewable energy have on the system as a whole? The three researchers Dr. Adhurim Haxhimusa, Fachhochschule Graubünden, Prof. Dr. Mario Liebensteiner, FAU, and Fabian Naumann, Technische Universität Kaiserslautern investigated the role of pumped-storage hydroelectric power stations, the only technology available at present which is capable of compensating for fluctuation in production. They came to the conclusion that by lowering market prices, direct subsidies for renewable energy actually jeopardise the economic success of the required storage facilities. In order to ensure the success of the energy reform, the researchers therefore recommend more stringent CO2 pricing.

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