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Power System Transformation toward Renewables: Investment Scenarios for Germany

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  • Jonas Egerer and Wolf-Peter Schill

Abstract

We analyze distinctive investment scenarios for the integration of fluctuating renewables in the German power system. Using a combined model for dispatch, transmission, and investment, three different investment options are considered, including gas-fired power plants, pumped hydro storage, and transmission lines. We find that geographically optimized power plant investments dominate in the reference scenarios for 2024 and 2034. In scenarios with decreased renewable curtailment, storage and transmission requirements significantly increase. In an alternative scenario with larger investments into storage, system costs are only slightly higher compared to the reference; thus, considering potential system values of pumped hydro storage facilities that are not included in the optimization, a moderate expansion of storage capacities appears to be a no-regret strategy from a system perspective. Additional transmission and storage investments may not only foster renewable integration, but also increase the utilization of emission-intensive plants. A comparison of results for 2024 and 2034 indicates that this is only a temporary effect. In the long run, infrastructure investments gain importance in the context of an ongoing energy transition from coal to renewables. Because of long lead times, planning and administrative procedures for large-scale projects should start early.

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  • Jonas Egerer and Wolf-Peter Schill, 2014. "Power System Transformation toward Renewables: Investment Scenarios for Germany," Economics of Energy & Environmental Policy, International Association for Energy Economics, vol. 0(Number 2).
    • Handle: RePEc:aen:eeepjl:eeep3_2_03egerer
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    15. Jonas Egerer and Wolf-Peter Schill, 2014. "Power System Transformation toward Renewables: Investment Scenarios for Germany," Economics of Energy & Environmental Policy, International Association for Energy Economics, vol. 0(Number 2).
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    1. Egerer, Jonas & Rosellón, Juan & Schill, Wolf-Peter, 2015. "Power System Transformation toward Renewables: An Evaluation of Regulatory Approaches for Network Expansion," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 36(4), pages 105-128.
    2. Jonas Egerer, Clemens Gerbaulet, and Casimir Lorenz, 2016. "European Electricity Grid Infrastructure Expansion in a 2050 Context," The Energy Journal, International Association for Energy Economics, vol. 0(Sustainab).
    3. Côté, Elizabeth & Salm, Sarah, 2022. "Risk-adjusted preferences of utility companies and institutional investors for battery storage and green hydrogen investment," Energy Policy, Elsevier, vol. 163(C).
    4. Egerer, Jonas & Grimm, Veronika & Kleinert, Thomas & Schmidt, Martin & Zöttl, Gregor, 2021. "The impact of neighboring markets on renewable locations, transmission expansion, and generation investment," European Journal of Operational Research, Elsevier, vol. 292(2), pages 696-713.
    5. Wiese, Frauke & Schlecht, Ingmar & Bunke, Wolf-Dieter & Gerbaulet, Clemens & Hirth, Lion & Jahn, Martin & Kunz, Friedrich & Lorenz, Casimir & Mühlenpfordt, Jonathan & Reimann, Juliane & Schill, Wolf-P, 2019. "Open Power System Data – Frictionless data for electricity system modelling," Applied Energy, Elsevier, vol. 236(C), pages 401-409.
    6. Claudia Kemfert & Friedrich Kunz & Juan Rosellón, 2015. "A Welfare Analysis of the Electricity Transmission Regulatory Regime in Germany," Discussion Papers of DIW Berlin 1492, DIW Berlin, German Institute for Economic Research.
    7. Wolf-Peter Schill & Michael Pahle & Christian Gambardella, 2016. "On Start-up Costs of Thermal Power Plants in Markets with Increasing Shares of Fluctuating Renewables," Discussion Papers of DIW Berlin 1540, DIW Berlin, German Institute for Economic Research.
    8. Maïzi, Nadia & Mazauric, Vincent & Assoumou, Edi & Bouckaert, Stéphanie & Krakowski, Vincent & Li, Xiang & Wang, Pengbo, 2018. "Maximizing intermittency in 100% renewable and reliable power systems: A holistic approach applied to Reunion Island in 2030," Applied Energy, Elsevier, vol. 227(C), pages 332-341.
    9. Jonas Egerer, 2016. "Open Source Electricity Model for Germany (ELMOD-DE)," Data Documentation 83, DIW Berlin, German Institute for Economic Research.
    10. Kondziella, Hendrik & Bruckner, Thomas, 2016. "Flexibility requirements of renewable energy based electricity systems – a review of research results and methodologies," Renewable and Sustainable Energy Reviews, Elsevier, vol. 53(C), pages 10-22.
    11. Friedrich Kunz and Hannes Weigt, 2014. "Germanys Nuclear Phase Out - A Survey of the Impact since 2011 and Outlook to 2023," Economics of Energy & Environmental Policy, International Association for Energy Economics, vol. 0(Number 2).
    12. Zerrahn, Alexander & Schill, Wolf-Peter, 2017. "Long-run power storage requirements for high shares of renewables: review and a new model," Renewable and Sustainable Energy Reviews, Elsevier, vol. 79(C), pages 1518-1534.
    13. Schill, Wolf-Peter & Egerer, Jonas & Rosellón, Juan, 2015. "Testing Regulatory Regimes for Power Transmission Expansion with Fluctuating Demand and Wind Generation," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 47(1), pages 1-28.
    14. Jonas Egerer and Wolf-Peter Schill, 2014. "Power System Transformation toward Renewables: Investment Scenarios for Germany," Economics of Energy & Environmental Policy, International Association for Energy Economics, vol. 0(Number 2).

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