Supply of renewable energy sources and the cost of EU climate policy
What are the excess costs of a separate 20% target for renewable energy as a part of the EU climate policy for 2020? We answer this question using a computable general equilibrium model, WorldScan, which has been extended with a bottom-up module of the electricity sector. The model set-up makes it possible to directly use available estimates of costs and capacity potentials for renewable energy sources for calibration. In our base case simulation, the costs of EU climate policy with the renewables target are 6% higher than those of a policy without this target. As information on the supply of renewable energy is scarce and uncertain, we perform an extensive sensitivity analysis with respect to the level and steepness of the supply curves for wind energy and biomass. In the range we explore, the excess costs vary from zero (when the target is not binding) to 23% (when the cost progression and the initial cost disadvantage for renewables are doubled).
|Date of creation:||Feb 2010|
|Date of revision:|
|Contact details of provider:|| Postal: Postbus 80510, 2508 GM Den Haag|
Phone: (070) 338 33 80
Fax: (070) 338 33 50
Web page: http://www.cpb.nl/
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- 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.
- Messner, Sabine & Schrattenholzer, Leo, 2000. "MESSAGE–MACRO: linking an energy supply model with a macroeconomic module and solving it iteratively," Energy, Elsevier, vol. 25(3), pages 267-282.
- Stefan Boeters & Ton Manders & Gerard Verweij & M.G.J. den Elzen & Veenendaal. P.J.J., 2007. "Post-2012 climate policy scenarios," CPB Special Publication 70, CPB Netherlands Bureau for Economic Policy Analysis.
- Resch, Gustav & Held, Anne & Faber, Thomas & Panzer, Christian & Toro, Felipe & Haas, Reinhard, 2008. "Potentials and prospects for renewable energies at global scale," Energy Policy, Elsevier, vol. 36(11), pages 4048-4056, November.
- Doukas, Haris & Mannsbart, Wilhelm & Patlitzianas, Konstantinos D. & Psarras, John & Ragwitz, Mario & Schlomann, Barbara, 2007. "A methodology for validating the renewable energy data in EU," Renewable Energy, Elsevier, vol. 32(12), pages 1981-1998.
- Jc Hourcade & M. Jaccard & C. Bataille & F Ghersi, 2006. "Hybrid modeling: New answers to old challenges - Introduction to the special issue of The Energy Journal," Post-Print hal-00716778, HAL.
- 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.
- Schumacher, Katja & Sands, Ronald D., 2007. "Where are the industrial technologies in energy-economy models? An innovative CGE approach for steel production in Germany," Energy Economics, Elsevier, vol. 29(4), pages 799-825, July.
- R. G. Lipsey & Kelvin Lancaster, 1956. "The General Theory of Second Best," Review of Economic Studies, Oxford University Press, vol. 24(1), pages 11-32.
When requesting a correction, please mention this item's handle: RePEc:cpb:discus:142. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ()
If references are entirely missing, you can add them using this form.