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Market Driven Power Plant Investment Perspectives in Europe: Climate Policy and Technology Scenarios until 2050 in the Model EMELIE-ESY

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  • Andreas Schröder
  • Thure Traber
  • Claudia Kemfert

Abstract

EMELIE-ESY is a partial equilibrium model with focus on electricity markets. Private investors optimize their generation capacity investment and dispatch over the horizon 2010 to 2050. In the framework of the Energy Modeling Forum 28, we investigate how climate policy regimes affect market developments under different technology availabilities and climate policies on the European power markets. The model projects an only minor increase of power consumption because of higher wholesale prices or energy efficiency current climate policy, and a balanced consumption pathway under ambitious climate policy. These results contrast with findings of POLES and PRIMES models in the reference case that predict unexpected heavy consumption increases by 2050. By contrast, we find no investment into Carbon Capture and Storage (CCS) and a diminishing share of nuclear energy. We find that renewable energy supply extension as projected can sufficiently meet electricity consumption complemented by only few capacity investments in conventional technology.

Suggested Citation

  • Andreas Schröder & Thure Traber & Claudia Kemfert, 2013. "Market Driven Power Plant Investment Perspectives in Europe: Climate Policy and Technology Scenarios until 2050 in the Model EMELIE-ESY," Discussion Papers of DIW Berlin 1268, DIW Berlin, German Institute for Economic Research.
    • Handle: RePEc:diw:diwwpp:dp1268
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    References listed on IDEAS

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    1. Thure Traber & Claudia Kemfert, 2012. "German Nuclear Phase-out Policy: Effects on European Electricity Wholesale Prices, Emission Prices, Conventional Power Plant Investments and Eletricity Trade," Discussion Papers of DIW Berlin 1219, DIW Berlin, German Institute for Economic Research.
    2. Andreas Schröder & Friedrich Kunz & Jan Meiss & Roman Mendelevitch & Christian von Hirschhausen, 2013. "Current and Prospective Costs of Electricity Generation until 2050," Data Documentation 68, DIW Berlin, German Institute for Economic Research.
    3. Traber, Thure & Kemfert, Claudia, 2011. "Refunding ETS proceeds to spur the diffusion of renewable energies: An analysis based on the dynamic oligopolistic electricity market model EMELIE," Utilities Policy, Elsevier, vol. 19(1), pages 33-41, January.
    4. -, 2011. "The economics of climate change in the Caribbean," Sede Subregional de la CEPAL para el Caribe (Estudios e Investigaciones) 38620, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
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    1. Franziska Holz & Christian Von Hirschhausen, 2013. "The Infrastructure Implications Of The Energy Transformation In Europe Until 2050 — Lessons From The Emf28 Modeling Exercise," Climate Change Economics (CCE), World Scientific Publishing Co. Pte. Ltd., vol. 4(supp0), pages 1-26.
    2. Zeng, Yingying, 2017. "Indirect double regulation and the carbon ETSs linking: The case of coal-fired generation in the EU and China," Energy Policy, Elsevier, vol. 111(C), pages 268-280.
    3. Lukáš Rečka & Milan Ščasný, 2017. "Impacts of Reclassified Brown Coal Reserves on the Energy System and Deep Decarbonisation Target in the Czech Republic," Energies, MDPI, vol. 10(12), pages 1-27, November.
    4. Huppmann, Daniel & Egerer, Jonas, 2015. "National-strategic investment in European power transmission capacity," European Journal of Operational Research, Elsevier, vol. 247(1), pages 191-203.
    5. Geoffrey J. Blanford & Christoph Weissbart, 2019. "A Framework for Modeling the Dynamics of Power Markets – The EU-REGEN Model," ifo Working Paper Series 307, ifo Institute - Leibniz Institute for Economic Research at the University of Munich.
    6. Rečka, L. & Ščasný, M., 2016. "Impacts of carbon pricing, brown coal availability and gas cost on Czech energy system up to 2050," Energy, Elsevier, vol. 108(C), pages 19-33.

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    Keywords

    Electricity markets; investment; climate policy;
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