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Power System Transformation toward Renewables: Investment Scenarios for Germany

Author

Listed:
  • Jonas Egerer
  • Wolf-Peter Schill

Abstract

We analyze distinctive investment scenarios for the integration of fluctuating renewables in the German power system. Using a combined model for dispatch, transmission, and investment, three different investment options are considered, including gas-fired power plants, pumped hydro storage, and transmission lines. We find that geographically optimized power plant investments dominate in the reference scenarios for 2024 and 2034. In scenarios with decreasedrenewable curtailment, storage and transmission requirements significantly increase. In an alternative scenario with larger investments into storage, system costs are only slightly higher compared to the reference; thus, considering potential system values of flexible pumped hydro storage facilities that are not included in the optimization, a moderate expansion of storage capacities appears to be a no-regret strategy from a system perspective. Additional transmission and storage investments may not only foster renewable integration, but also increase the utilization of emission-intensive plants. A comparison of results for 2024 and 2034 indicates that this is only a temporary effect. In the long run, infrastructure investments gain importance in the context of an ongoing energy transition from coal to renewables. Because of long lead times, planning and administrative procedures for large-scale projects should start early.

Suggested Citation

  • Jonas Egerer & Wolf-Peter Schill, 2014. "Power System Transformation toward Renewables: Investment Scenarios for Germany," Discussion Papers of DIW Berlin 1402, DIW Berlin, German Institute for Economic Research.
    • Handle: RePEc:diw:diwwpp:dp1402
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    References listed on IDEAS

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    Cited by:

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    3. Claudia Kemfert & Friedrich Kunz & Juan Rosellón, 2015. "A Welfare Analysis of the Electricity Transmission Regulatory Regime in Germany," Discussion Papers of DIW Berlin 1492, DIW Berlin, German Institute for Economic Research.
    4. Zerrahn, Alexander & Schill, Wolf-Peter, 2017. "Long-run power storage requirements for high shares of renewables: review and a new model," Renewable and Sustainable Energy Reviews, Elsevier, vol. 79(C), pages 1518-1534.
    5. repec:aen:journl:ej36-4-egerer is not listed on IDEAS
    6. repec:aen:journl:ej37-si3-egerer is not listed on IDEAS
    7. Maïzi, Nadia & Mazauric, Vincent & Assoumou, Edi & Bouckaert, Stéphanie & Krakowski, Vincent & Li, Xiang & Wang, Pengbo, 2018. "Maximizing intermittency in 100% renewable and reliable power systems: A holistic approach applied to Reunion Island in 2030," Applied Energy, Elsevier, vol. 227(C), pages 332-341.
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    9. Wolf-Peter Schill & Michael Pahle & Christian Gambardella, 2016. "On Start-up Costs of Thermal Power Plants in Markets with Increasing Shares of Fluctuating Renewables," Discussion Papers of DIW Berlin 1540, DIW Berlin, German Institute for Economic Research.
    10. Kondziella, Hendrik & Bruckner, Thomas, 2016. "Flexibility requirements of renewable energy based electricity systems – a review of research results and methodologies," Renewable and Sustainable Energy Reviews, Elsevier, vol. 53(C), pages 10-22.
    11. Côté, Elizabeth & Salm, Sarah, 2022. "Risk-adjusted preferences of utility companies and institutional investors for battery storage and green hydrogen investment," Energy Policy, Elsevier, vol. 163(C).
    12. Schill, Wolf-Peter & Egerer, Jonas & Rosellón, Juan, 2015. "Testing Regulatory Regimes for Power Transmission Expansion with Fluctuating Demand and Wind Generation," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 47(1), pages 1-28.
    13. Jonas Egerer, 2016. "Open Source Electricity Model for Germany (ELMOD-DE)," Data Documentation 83, DIW Berlin, German Institute for Economic Research.
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    JEL classification:

    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
    • H54 - Public Economics - - National Government Expenditures and Related Policies - - - Infrastructures
    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities

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