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Phasing out coal and phasing in renewables – Good or bad news for arctic gas producers?

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  • Lindholt, Lars
  • Glomsrød, Solveig

Abstract

This paper examines to what extent downscaling of global coal based electricity generation encourages gas demand and affects regional activity in gas production, with emphasis on the arctic regions. In our reference scenario up to 2050 we take into consideration that renewables is set to increase its contribution to global electricity production over time, while coal will contribute less. We find that a policy scenario with further phasing out of coal and phasing in of renewables in line with the 2°C scenario for the power sector up to 2050, will lead to reduced arctic gas production compared to the reference scenario, although total worldwide electricity production doubles over the same period. However, even in a situation with less resources in the Arctic, future investments in new reserves in the region are still profitable in our 2°C policy scenario, as total arctic gas production is marginally higher in 2050 than today.

Suggested Citation

  • Lindholt, Lars & Glomsrød, Solveig, 2018. "Phasing out coal and phasing in renewables – Good or bad news for arctic gas producers?," Energy Economics, Elsevier, vol. 70(C), pages 1-11.
    • Handle: RePEc:eee:eneeco:v:70:y:2018:i:c:p:1-11
    DOI: 10.1016/j.eneco.2017.12.015
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    References listed on IDEAS

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    1. Gang Liu, 2004. "Estimating Energy Demand Elasticities for OECD Countries. A Dynamic Panel Data Approach," Discussion Papers 373, Statistics Norway, Research Department.
    2. Burke, Paul J. & Yang, Hewen, 2016. "The price and income elasticities of natural gas demand: International evidence," Energy Economics, Elsevier, vol. 59(C), pages 466-474.
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    Cited by:

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    3. Fijorek, Kamil & Jurkowska, Aleksandra & Jonek-Kowalska, Izabela, 2021. "Financial contagion between the financial and the mining industries – Empirical evidence based on the symmetric and asymmetric CoVaR approach," Resources Policy, Elsevier, vol. 70(C).
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    5. Margarida Casau & Diana C. M. Cancela & João C. O. Matias & Marta Ferreira Dias & Leonel J. R. Nunes, 2021. "Coal to Biomass Conversion as a Path to Sustainability: A Hypothetical Scenario at Pego Power Plant (Abrantes, Portugal)," Resources, MDPI, vol. 10(8), pages 1-20, August.
    6. Lars Lindholt, 2019. "Effects of higher required rates of return on the tax take in an oil province," Discussion Papers 892, Statistics Norway, Research Department.
    7. Lars Lindholt & Taoyuan Wei, 2023. "The Effects on Energy Markets of Achieving a 1.5 °C Scenario," IJERPH, MDPI, vol. 20(5), pages 1-20, February.

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    More about this item

    Keywords

    Arctic; Coal market; Gas market; Electricity market; Equilibrium model;
    All these keywords.

    JEL classification:

    • Q31 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Demand and Supply; Prices
    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

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