Valuation struggles over pricing – determining the worth of wind power

ABSTRACT

Public policies such as feed-in tariffs have been widely introduced to stimulate the development of renewable energies, and sustain a decarbonisation of the electricity sector. Proponents argue that these governance instruments safeguard public goods such as the climate – yet they are accused of creating political markets, and political prices, here understood as market distortion. This paper studies the ‘politics’ of pricing by following the adoption of the first feed-in tariff in France. Pricing as a way of achieving non-economic ends, such as climate mitigation, brings the values of several public goods into play, all the while prompting a translation of these values into a single price. Following the struggles over the pricing of wind power in the early 2000s, the study illustrates that rather than a pollution of the market sphere by that of politics, a politics of pricing can be observed in four distinct struggles: namely the framing of the public interest; valuation as the articulation of the future; the possible agencies of governance; and role of valuation methods and calculations.

KEYWORDS:

• Wind power
• feed-in tariff
• pricing
• valuation
• governance

Disclosure statement

No potential conflict of interest was reported by the author.

Notes

1. Here understood in a narrow economic sense; that is, goods that are non-excludable and non-rivalrous (Suzuki 2002).

2. Based on the principle of ‘time-value’ of money according to which a euro is worth more today than a euro tomorrow.

3. An independent administrative authority, founded in 2000 (the year of the adoption of the feed-in tariff), who regulates the French energy sector, for example, guaranteeing a transparent and equal access to transmission and distribution grids.

4. An almost identical notice was published following the replacement of the feed-in tariff in 2006 (CRE 2006).