Political prices or political quantities

and onwards are subjected to payment according to these not yet totally settled rules. Almost no contracts have been entered into under them, which has brought Dan-ish wind power development to a very critical situation (NEW ENERGY 3/2001). Only offshore wind turbines are being built, as they are subject to specific " demonstration project " subsidies and payment rules.The 2000 wind power boom (around 600 MW) was contracted before the end of 1999 and is based on the old PPAM rules in effect until then. In 2000 the German parliament approved a new advanced " Political price-/amount market " and in June 2001 the French parliament accepted a similar model. Recently the EU authorities accepted the use of the PPAM model in the proposed Directive for electricity from renewable energy sources (NEW ENERGY 4/2001). This keeps the question of the future regulation framework open.The PQPM model, therefore, is no longer the only possible future regulation model.This development has lately been supported by a European Court adjudication of March 2001, which says that the German " Political price-/amount market " model is not to be regarded as illegal state aid and is therefore acceptable as a way of supporting the development of renewable energies (NEW ENERGY 2/2001). The main arguments for introducing a " Political quota-/certificate price market " system have been linked to the belief that a system with quota regulation and a price regulated on the market would increase competition between suppliers of renewable energies and results in getting more " value for money. " Upon examining the various arguments and the dynamics of the debate, it is striking that there seems to be no thorough discussion of the fact that, compared to fossil fuel technologies, renewable energy technologies are characterised by: a. A cost structure with a very high percentage of investment-fixed costs and very low running costs, which implies high investor risks on the market and increasing im-wo main renewable energy (RE) governance models are discussed here: (a) The " Political price-/amount market " (PPAM) model, which has politically set prices for renewable energy based electricity, and where the produced quantity of renewable energy based electricity is determined on the market; and (b) The " Political quota-/certificate price market " (PQPM) model, where the renewable energy based electricity quantity is politically fixed as a quota and the renewable energy based electricity prices are determined on the market. …