- 1 - 1 Transactional Efficiency and Public Promotion of renewables in the Electric Industry: The choice between structures of hybrid governance Dominique FINON, CIRED, EHESS and CNRS, Paris and Yannick PEREZ, GRJM-ADIS, University of Paris Sud Summary By recourse to the Williamson and Goldberg’s transactional analysis, this paper compares the relative efficiency of three institutional devices, recently implemented by some countries to promote renewable energies in electricity generation. These devices are identified as structures of hybrid governance because they are composed of two complementary contracts articulated around an obligation of purchases imposed upon some electricity market players. This contractual duality puts first in relation the public authority mandated by the citizens and the mandated purchasers (generally the electricity suppliers); then it shows the relation between these purchasers and the producers that are candidates for investment in renewable energy sources (RES). For the attributes of the transactions held in the context of these contracts are identified, and an analysis is made of the three governance structures’ sensitivity to the risk of hold-up: the guaranteed feed-in tariffs, the bidding system for long- term contracting, and the exchangeable quotas system. Finally, the performances of these three devices are compared by reference to three criteria: transactional efficiency in relation to protection of investments in renewables in the long term, control of the collective cost and redistributive effects (rents) allowed by these mechanisms, and finally their capacity to stimulate technical progress and to sustain industrial policy in RES equipment manufacture. This paper shows that none of the three devices offers an optimal solution in each of these dimensions, and that according to the relative importance of the criteria, an adapted structure of governance exists.