Abstract for: Boom and Bust Cycles in Wind Energy Diffusion Due to Inconsistency and Short-term Bias in National Energy Policies

Common knowledge in the wind industry pinpoints inconsistent policy, such as the production-tax credit scheme in the US, as a key source for boom and bust cycles in the wind energy industry. This paper looks at the sources of the industry boom and bust via a system dynamics model for diffusion of wind energy technology. A model is developed through the combined use of theory and calibration to a set of comparative national and state-level cases. The formulated model captures the effects of inconsistent policy for different national scenarios. The paper demonstrates through the system dynamics model how short-term bias can harm the long term development of the industry by perpetuating these boom and bust cycles. Finally, various policy scenarios that will encourage more sustainable industrial growth are suggested and simulated within the model.