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Integrated Power and Economic Analysis of Austria’s Renewable Electricity Transformation

Author

Listed:
  • Robert Gaugl

    (Institute of Electricity Economics and Energy Innovation (IEE), Graz University of Technology, Inffeldgasse 18, 8010 Graz, Austria)

  • Mark Sommer

    (Austrian Institute of Economic Research (WIFO), Arsenal Objekt 20, 1030 Wien, Austria)

  • Claudia Kettner

    (Austrian Institute of Economic Research (WIFO), Arsenal Objekt 20, 1030 Wien, Austria)

  • Udo Bachhiesl

    (Institute of Electricity Economics and Energy Innovation (IEE), Graz University of Technology, Inffeldgasse 18, 8010 Graz, Austria)

  • Thomas Klatzer

    (Institute of Electricity Economics and Energy Innovation (IEE), Graz University of Technology, Inffeldgasse 18, 8010 Graz, Austria)

  • Lia Gruber

    (Institute of Electricity Economics and Energy Innovation (IEE), Graz University of Technology, Inffeldgasse 18, 8010 Graz, Austria)

  • Michael Böheim

    (Austrian Institute of Economic Research (WIFO), Arsenal Objekt 20, 1030 Wien, Austria)

  • Kurt Kratena

    (Centre of Economic Scenario Analysis and Research (CESAR), Fuhrmannsgasse 2A/4, 1080 Wien, Austria)

  • Sonja Wogrin

    (Institute of Electricity Economics and Energy Innovation (IEE), Graz University of Technology, Inffeldgasse 18, 8010 Graz, Austria)

Abstract

Austria has set the goal to transform its electricity sector to 100% renewable energy sources by 2030. The transition to highly renewable power systems is not only a technical challenge but also has economic implications due to high investment needs. Furthermore, electricity price and demand are interlaced and influence each other, which requires both technical and economic analyses. In order to provide these comprehensive integrated analyses, we present a novel approach of linking the technical model of the continental European electricity system ATLANTIS with the macroeconomic model DYNK . This allows us, inter alia, to analyze the effects of increasing shares of renewables on wholesale electricity prices and demand, and to perform a sensitivity analysis with respect to CO 2 prices. Our results show that increasing CO 2 prices greatly affect coal-fired generation abroad, which in turn promotes the role of gas-fired generation, at least until 2030. For Austria, this results in increased national gas-fired generation and electricity exports. Therefore, gas-fired power plants still determine the Austrian market price for electricity in the merit order, which leads to higher electricity prices due to CO 2 pricing. In turn, however, higher electricity prices only cause a marginal reduction in the electricity demand in Austria.

Suggested Citation

  • Robert Gaugl & Mark Sommer & Claudia Kettner & Udo Bachhiesl & Thomas Klatzer & Lia Gruber & Michael Böheim & Kurt Kratena & Sonja Wogrin, 2023. "Integrated Power and Economic Analysis of Austria’s Renewable Electricity Transformation," Energies, MDPI, vol. 16(5), pages 1-19, February.
    • Handle: RePEc:gam:jeners:v:16:y:2023:i:5:p:2229-:d:1080197
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    References listed on IDEAS

    as
    1. Kurt Kratena & Mark Sommer & Gerhard Streicher & Simone Salotti & Juan Manuel Valderas Jaramillo, 2017. "FIDELIO 2: Overview and Theoretical Foundations of the Second Version of the Fully Interregional Dynamic Econometric Long-term Input-Output Model for the EU 27," WIFO Studies, WIFO, number 61880, April.
    2. Krakowski, Vincent & Assoumou, Edi & Mazauric, Vincent & Maïzi, Nadia, 2016. "Feasible path toward 40–100% renewable energy shares for power supply in France by 2050: A prospective analysis," Applied Energy, Elsevier, vol. 171(C), pages 501-522.
    3. Krakowski, Vincent & Assoumou, Edi & Mazauric, Vincent & Maïzi, Nadia, 2016. "Reprint of Feasible path toward 40–100% renewable energy shares for power supply in France by 2050: A prospective analysis," Applied Energy, Elsevier, vol. 184(C), pages 1529-1550.
    4. Kirchner, Mathias & Sommer, Mark & Kratena, Kurt & Kletzan-Slamanig, Daniela & Kettner-Marx, Claudia, 2019. "CO2 taxes, equity and the double dividend – Macroeconomic model simulations for Austria," Energy Policy, Elsevier, vol. 126(C), pages 295-314.
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