The role of costs, incentives and risks

The report finds that because policy goals can depend upon investment in particular technologies, it must be designed with the investment risks, not just technology costs, in mind.  This is not because concern with costs is wrong, but because costs are only part of the equation.

Policymakers cannot dtermine which technologies get built, they can only provide incentives to encourage a diverse and/or low carbon generation mix.  And if incentives are to deliver such investment, they must be based on a clear understanding of how investment decisions are made.

Journal Articles

Gross, R., Blyth, W., Heptonstall, P. (2010) Risks, revenues and investment in electricity generation: Why policy needs to look beyond costs. Energy Economics 2 (4): 796-804.