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Heat or power: How to increase the use of energy wood at the lowest cost?

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  • Caurla, Sylvain
  • Bertrand, Vincent
  • Delacote, Philippe
  • Le Cadre, Elodie

Abstract

We compute the optimal subsidy level for fuelwood consumption that makes it possible to achieve the French biomass energy consumption target. For this purpose, we model the competition and trade-offs between the consumption of fuelwood for heat (FW-H) and the consumption of fuelwood for electricity (FW-E). To do so, we couple a forest sector model with an electricity simulation model, and we test different scenarios combining FW-H and FW-E that account for contrasting potential increases in the carbon price and the potential reduction in the number of nuclear plants. We assess the implications of these scenarios on (1) the budgetary costs for the government, (2) industrial wood producers' profits, (3) cost savings in the power sector for the different scenarios tested, and (4) the carbon balance.

Suggested Citation

  • Caurla, Sylvain & Bertrand, Vincent & Delacote, Philippe & Le Cadre, Elodie, 2018. "Heat or power: How to increase the use of energy wood at the lowest cost?," Energy Economics, Elsevier, vol. 75(C), pages 85-103.
  • Handle: RePEc:eee:eneeco:v:75:y:2018:i:c:p:85-103
    DOI: 10.1016/j.eneco.2018.08.011
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    More about this item

    Keywords

    Forestry sector; Bioenergy; Biomass-based electricity; Carbon pricing; Nuclear power;
    All these keywords.

    JEL classification:

    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy
    • Q23 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Forestry

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