The intermittency and volatility of renewable electricity pose challenges to supply reliability, which is not conducive to renewable energy consumption. To ensure a reliable electricity supply, more governments implement subsidy policies to promote the adoption of innovative technologies by renewable energy producers to enhance supply reliability. We compare two types of subsidies provided by a government: investment subsidy (IS) policy, which is implemented in the deployment stage to directly reduce improvement costs, and operational subsidy (OS) policy, which is implemented in the operational stage to increase the renewable energy producer’s marginal returns. First, we show that without government intervention, customers’ low green consciousness or higher improvement costs may prevent the renewable energy producer from enhancing supply reliability. Second, through a comprehensive comparison, we find that both subsidy policies can incentivize the renewable energy producer to improve supply reliability when customers are more green-conscious, and the improvement cost is high. However, the OS policy and the IS policy operate on different mechanisms: the IS policy can directly alleviate the improvement cost burden on the renewable energy producer, while the OS policy serves a dual role of increasing the renewable energy producer’s marginal operational profit and expanding the market demand for renewable electricity. When customers’ green consciousness is low, the government can only choose whether or not to implement the OS policy. Finally, we highlight that the implementation of the IS policy by the government may not be more beneficial to both the renewable energy producer and customers compared to the OS policy. This result informs regulators that energy security should be considered when designing subsidy policies and should not be limited to promoting the interests of participants.

中文翻译：

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应对可靠性挑战：促进可再生电力消费的补贴政策


可再生电力的间歇性和波动性对供电可靠性构成挑战，不利于可再生能源的消费。为确保电力供应可靠，更多政府实施补贴政策，推动可再生能源生产商采用创新技术，提高供电可靠性。我们比较了政府提供的两种补贴：投资补贴 （IS） 政策，在部署阶段实施，直接降低改善成本，和运营补贴 （OS） 政策，在运营阶段实施，以提高可再生能源生产商的边际回报。首先，我们表明，如果没有政府干预，客户的低绿色意识或较高的改进成本可能会阻止可再生能源生产商提高供应可靠性。其次，通过综合比较，我们发现，当客户绿色意识更强且改善成本较高时，两种补贴政策都能激励可再生能源生产商提高供应可靠性。然而，OS 策略和 IS 策略的运作机制不同：IS 策略可以直接减轻可再生能源生产商的改进成本负担，而 OS 策略则起着提高可再生能源生产商边际经营利润和扩大可再生电力市场需求的双重作用。当客户的绿色意识较低时，政府只能选择是否实施 OS 政策。最后，我们强调，与 OS 政策相比，政府实施 IS 政策可能对可再生能源生产商和客户都没有更有利。 这一结果告诉监管机构，在设计补贴政策时应考虑能源安全，而不应仅限于促进参与者的利益。