Wind Power Development: Economics and Policies

34 Pages Posted: 20 Apr 2016

See all articles by G. Cornelis van Kooten

G. Cornelis van Kooten

University of British Columbia; University of Victoria - Economics

Govinda R. Timilsina

World Bank - Development Research Group (DECRG)

Date Written: March 1, 2009


This study reviews the prospects of wind power at the global level. Existing studies indicate that the earth's wind energy supply potential significantly exceeds global energy demand. Yet, only 1 percent of the global electricity demand is currently derived from wind power despite 40 percent annual growth in wind generating capacity over the past 25 years. More than 98 percent of total current wind power capacity is installed in the developed countries plus China and India. It has been estimated that wind power could supply 7 to 34 percent of global electricity needs by 2050. However, wind power faces a large number of technical, economic, financial, institutional, market, and other barriers. To overcome these barriers, many countries have employed various policy instruments, including capital subsidies, tax incentives, tradable energy certificates, feed-in tariffs, grid access guarantees and mandatory standards. Besides these policies, climate change mitigation initiatives resulting from the Kyoto Protocol (e.g., CO2-emission reduction targets in developed countries and the Clean Development Mechanism in developing countries) have played a significant role in promoting wind power.

Keywords: Energy Production and Transportation, Carbon Policy and Trading, Windpower, Environment and Energy Efficiency, Energy and Environment

Suggested Citation

van Kooten, G. Cornelis and van Kooten, G. Cornelis and Timilsina, Govinda R., Wind Power Development: Economics and Policies (March 1, 2009). World Bank Policy Research Working Paper No. 4868, Available at SSRN:

G. Cornelis Van Kooten (Contact Author)

University of British Columbia ( email )

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University of Victoria - Economics ( email )

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Govinda R. Timilsina

World Bank - Development Research Group (DECRG) ( email )

1818 H Street NW
Washington, DC 20433
United States

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