Effectiveness of policy measures in transforming the energy system

The effectiveness of public policy measures in creating energy impacts were investigated through 20 policy cases on renewable energy and efficient energy use. The policies were grouped into subsidy-type and catalyzing measures based on the use of the public financial resources. The policy cost of subsidies ranged from 1 EURO/MWh up to over 100 EURO/MWh, the feed-in tariffs being clearly the most expensive choice. The public measures that strive for catalyzing market breakthroughs lie in the range 0.1-1 EURO/MWh, but some business driven and procurement type measures could come down to even 0.01 EURO/MWh. The policy costs observed could decrease by 25-60% if accounting for lagging energy impacts. The better policy efficiency of catalytic measures is most likely due to a stronger market and business sensitiveness, understanding of market needs, and focusing more on the end-use sector with active stakeholder involvement. The magnitude of the energy impacts were in average larger from the subsidy instruments but a few end-use technologies linked to catalytic measures reached even higher effects due to the strong market penetration achieved. (c) 2006 Elsevier Ltd. All rights reserved.