6. Conclusion
In this paper, we have investigated the optimal development of the intermittent technologies to generate electricity, given the competition of incumbent
generators using the conventional technologies. We also analyze the efficiency of the emission allowance markets in decentralizing the socially optimal outcomes through the mechanisms of competitive market equilibrium. We have shown that the optimal investment in the intermittent technologies cannot be implemented under perfect competition if the emission cap is fix.
This result is due to the contradiction between an electricity production which strongly depends on the availability of intermittent energies and a fixed emissions cap regardless of the state of nature. However the second-best solution can be implemented but this requires to reduce the investment in renewable capacities compared to the optimal level and to distribute more pollution permits than the expected pollution at the first-best optimum.
More can be done within our framework. First, other sources of intermittent energy can be considered. The diversification of energy sources is a possible solution to mitigate intermittency. Our model can be extended to accommodate several intermittent sources of energy with heterogeneous costs and occurrence. Another question the model can address is to allow the disinvestment in conventional capacity. Finally and more evident, is to have heterogeneous consumers to be more realistic.