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Innovative Energy Technologies and Climate Policy in Germany

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  • Katja Schumacher
  • Ronald D. Sands

Abstract

Due to the size and structure of its economy, Germany is one of the largest carbon emitters in the European Union. However, Germany is facing a major renewal and restructuring process in electricity generation. Within the next two decades, up to 50% of current electricity generation capacity may retire because of end-of-plant lifetime and the nuclear phase-out pact of 1998. Substantial opportunities therefore exist for deployment of advanced electricity generating technologies in both a projected baseline and in alternative carbon policy scenarios. We simulate the potential role of coal integrated gasification combined cycle (IGCC), natural gas combined cycle (NGCC), carbon dioxide capture and storage (CCS), and wind power within a computable general equilibrium of Germany from the present through 2050. These advanced technologies and their role within a future German electricity system are the focus of this paper. We model the response of greenhouse gas emissions in Germany to various technology and carbon policy assumptions over the next few decades. In our baseline scenario, all of the advanced technologies except CCS provide substantial contributions to electricity generation. We also calculate the carbon price where each fossil technology, combined with CCS, becomes competitive. Constant carbon price experiments are used to characterize the model response to a carbon policy. This provides an estimate of the cost of meeting an emissions target, and the share of emissions reductions available from the electricity generation sector.

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File URL: http://www.diw.de/documents/publikationen/73/diw_01.c.43496.de/dp509.pdf
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Bibliographic Info

Paper provided by DIW Berlin, German Institute for Economic Research in its series Discussion Papers of DIW Berlin with number 509.

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Length: 29 p.
Date of creation: 2005
Date of revision:
Publication status: Published in: Energy Policy 34 (2006) 18, 3929-3941
Handle: RePEc:diw:diwwpp:dp509

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Keywords: Climate policy; Energy technology; General equilibrium modelling; CO2 capture and storage;

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References

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  1. Sands, Ronald D., 2004. "Dynamics of carbon abatement in the Second Generation Model," Energy Economics, Elsevier, vol. 26(4), pages 721-738, July.
  2. Christopher N. MacCracken & James A. Edmonds & Son H. Kim & Ronald D. Sands, 1999. "The Economics of the Kyoto Protocol," The Energy Journal, International Association for Energy Economics, vol. 0(Special I), pages 25-71.
  3. McFarland, J. R. & Reilly, J. M. & Herzog, H. J., 2004. "Representing energy technologies in top-down economic models using bottom-up information," Energy Economics, Elsevier, vol. 26(4), pages 685-707, July.
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Citations

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Cited by:
  1. Praetorius, Barbara & Schumacher, Katja, 2009. "Greenhouse gas mitigation in a carbon constrained world: The role of carbon capture and storage," Energy Policy, Elsevier, vol. 37(12), pages 5081-5093, December.
  2. Vallentin, Daniel, 2007. "Inducing the international diffusion of carbon capture and storage technologies in the power sector," Wuppertal Papers 162, Wuppertal Institute for Climate, Environment and Energy.
  3. Katja Schumacher & Ronald D. Sands, 2006. "Where Are the Industrial Technologies in Energy-Economy Models?: An Innovative CGE Approach for Steel Production in Germany," Discussion Papers of DIW Berlin 605, DIW Berlin, German Institute for Economic Research.
  4. Evans, Annette & Strezov, Vladimir & Evans, Tim J., 2009. "Assessment of sustainability indicators for renewable energy technologies," Renewable and Sustainable Energy Reviews, Elsevier, vol. 13(5), pages 1082-1088, June.
  5. Liu, Chung-Ming & Liou, Ming-Lone & Yeh, Shin-Cheng & Shang, Neng-Chou, 2009. "Target-aimed versus wishful-thinking in designing efficient GHG reduction strategies for a metropolitan city: Taipei," Energy Policy, Elsevier, vol. 37(2), pages 400-406, February.

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