Assessing the Cost-Effectiveness of Renewable Energy Deployment Subsidies: Biomass in the United Kingdom and Germany

In the last decade, a growing number of countrieshave employed subsidies to increase the deployment of renewable energy technologies. The subsidies have been credited with a wide range of positive outcomes, and some advocate that more countries around the world should introduce similar schemes. The policies have also attracted critics, who question whether the subsidies are the best way to achieve the statedpolicy objectives and whether the costs can be justified. This paper explores the cost-effectiveness of subsidies to electricity-generating biomass technologies. How much has been spent supporting the industry? What value can be assigned to the benefits that have been achieved?
In considering these questions, this paper focuses ondeployment subsidies for electricity-generating biomass technologies in two European countries, the United Kingdom and Germany, and considers what lessons other countries might draw from their experience.