„We are like tenant farmers chopping down the fence around our house for fuel when we should be using Nature's inexhaustible sources of energy— sun, wind and tide.” Thomas Alva Edison(1931) Introduction Energy development pathways around the world are driven by different goals which either alone or in combination determine national energy policies. Some of the main goals 1 include: • Furthering climate protection by greenhouse gas(GHG) emission reduction; • Strengthening energy security by developing national or diversifying energy sources; • Furthering energy access, e.g. also in rural areas off the grid; • Containing the cost of energy; • Maintaining international competitiveness; • Developing new market opportunities; • Protecting the health of citizens, e.g. by reducing coal dust; • Avoiding high-risk technologies, e.g. nuclear power. The expansion of renewable energy(RE) sources can be considered favorable for many if not all of these goals. Decision makers can take recourse to a portfolio of policy instruments to promote renewable energy expansion, including feed-in tariffs(FiTs), premium payments, renewable quotas obligations, subsidies e.g. for research and development(R&D), tax measures, and favorable loans. In practice, these instruments are applied alone or in varying combinations. 2 For example, the United Kingdom has implemented a combination of quotas and FiTs to promote electricity from RE; Germany, in turn, combines FiTs with premium payments. While a few decades ago, the emphasis in European countries lay on subsidizing research and development, the focus has since shifted to stimulating market demand. 3 1 See also IRENA(2013), p.4. 2 Diekmann et al.(2012), p. 16. 3 Zhang(2013), p. 2. 4