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Extended policy mix in the power sector: How a coal phase-out redistributes costs and profits among power plants

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  • Gillich, Annika
  • Hufendiek, Kai
  • Klempp, Nikolai

Abstract

With the phase-out of coal power plants, the existing mix of instruments aimed at decarbonising electricity sectors is getting more complex. This paper contributes to its understanding by highlighting the impact of coal phase-out, CO2-price and increasing capacity of variable renewable energies on contribution margins of power plants. By visualizing these three instruments in a brownfield screening curves model (SCM), their fundamental effects on plant operation, electricity price and margins become apparent at a glance. Moreover, the SCM allows to derive generic statements about winners and losers on the supply side. Results are then quantified within a case study for Germany using the power sector model E2M2. The high resolution regarding time and generation system permits a realistic simulation of electricity prices and thus of margins at plant level.

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  • Gillich, Annika & Hufendiek, Kai & Klempp, Nikolai, 2020. "Extended policy mix in the power sector: How a coal phase-out redistributes costs and profits among power plants," Energy Policy, Elsevier, vol. 147(C).
    • Handle: RePEc:eee:enepol:v:147:y:2020:i:c:s0301421520304195
    DOI: 10.1016/j.enpol.2020.111690
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    Citations

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    1. Nils Seckinger & Peter Radgen, 2021. "Dynamic Prospective Average and Marginal GHG Emission Factors—Scenario-Based Method for the German Power System until 2050," Energies, MDPI, vol. 14(9), pages 1-22, April.
    2. Malec, Marcin, 2022. "The prospects for decarbonisation in the context of reported resources and energy policy goals: The case of Poland," Energy Policy, Elsevier, vol. 161(C).
    3. Ozan Korkmaz & Bihrat Önöz, 2022. "Modelling the Potential Impacts of Nuclear Energy and Renewables in the Turkish Energy System," Energies, MDPI, vol. 15(4), pages 1-25, February.
    4. Ruhnau, O. & Bucksteeg, M. & Ritter, D. & Schmitz, R. & Böttger, D. & Koch, M. & Pöstges, A. & Wiedmann, M. & Hirth, L., 2022. "Why electricity market models yield different results: Carbon pricing in a model-comparison experiment," Renewable and Sustainable Energy Reviews, Elsevier, vol. 153(C).
    5. Heerma van Voss, Bas & Rafaty, Ryan, 2022. "Sensitive intervention points in China's coal phaseout," Energy Policy, Elsevier, vol. 163(C).
    6. Yilun Luo & Esmaeil Ahmadi & Benjamin C. McLellan & Tetsuo Tezuka, 2022. "Will Capacity Mechanisms Conflict with Carbon Pricing?," Energies, MDPI, vol. 15(24), pages 1-25, December.
    7. Tiedemann, Silvana & Müller-Hansen, Finn, 2023. "Auctions to phase out coal power: Lessons learned from Germany," Energy Policy, Elsevier, vol. 174(C).
    8. Annika Gillich & Kai Hufendiek, 2022. "Asset Profitability in the Electricity Sector: An Iterative Approach in a Linear Optimization Model," Energies, MDPI, vol. 15(12), pages 1-31, June.

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