What Regulation May be Appropriate to Support Sustainable Energy Inputs for Electric Generation?

Are there concepts and policies from the history of electric power regulation that bear on current efforts to build and incorporate generation derived from sustainable energy sources? We first look to see what issues have been addressed and what tools were applied to implement policies. To address unique features of renewable energy, resource economic theory applies conceptual tools of ´nonrivalry´ and ´nonexclusivity´ that may be useful to identify relevant market failures. As an example, can these new perspectives be applied to guide the debate over source-based versus load-based emissions allowance trading? Esty additionally argues that embracing sustainable generation enhances competitiveness. It is broadly accepted that transmission grid upgrades are needed to link large-scale renewable sources with distant loads. Fine-grained realtime monitoring connecting generators to end users is rapidly being adopted to support effective inclusion of distributed generation. Feed-in tariffs, renewables portfolio standards and carbon taxes have been implemented to support long-term capitalization and refinement of innovative market mechanism like cap- and-trade.