Design Flaws in United Kingdom Renewable Energy Support Scheme

Soon after the UK’s Feed-in Tariff (FiT) Scheme providing incentive prices for renewable energy was introduced in 2010, adjustments and modifications were made to eligibility criteria prices. Prices paid (RE) under scheme cut, deployment caps introduced, preliminary accreditation efficiency standards imposed. Controversy ensued as supporters sought help nascent RE technologies, while detractors claimed that a wasteful means of reducing greenhouse gases. In this research, we examine how incentivized FiT its wider impact upon various stakeholders assess compatibility with liberalized electricity markets UK. We employ financial performance metric measure direct costs compensation investors option theory analyze externalities generation. As atmospheric CO2, expensive, imposed large. Whilst UK effective delivering capacity, our findings show flawed because provided greater than required large indirect ignored. Although eventually feed-in tariffs addressed investors, arising from stochastic output dispatch prioritization remain. Given magnitude externalities, volumes may be incompatible current design markets.