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Promotion of Electricity from Renewable Energy in Europe post 2020 - the Economic Benefits of Cooperation

  • Fürsch, Michaela

    ()

    (Energiewirtschaftliches Institut an der Universitaet zu Koeln)

  • Lindenberger, Dietmar

    ()

    (Energiewirtschaftliches Institut an der Universitaet zu Koeln)

Registered author(s):

    In Europe, the availability of renewable energies, especially from sun and wind, diff ers signi cantly across regions. Consequently, cooperation in the deployment of renewable energy among European countries potentially yields substantial efficiency gains. However, in order to achieve the 2020 renewable energy targets for electricity, Member States of the European Union almost purely rely on domestic production. For the period after 2020, a European renewable energy target has not yet been de fined, but decarbonization pathways outlined in the Roadmap of the European Commission include renewable energy shares of electricity generation to be 50-60% by 2030. Therefore, we analyze the benefi ts of cooperation compared to continuing with national renewable energy support after 2020. We use a large-scale dynamic investment and dispatch model of the European electricity system and find that compared to a 2030 CO2-only target(-40% compared to 1990 emission levels), electricity system costs increase by 5 to 7% when a European-wide renewable energy target for electricity generation (of around 55%) is additionally implemented. However, these additional costs are lower by 41 to 45% compared to the additional electricity system costs which would arise if the renewable energy target was reached through national support systems (without cooperation). Furthermore, we find that the cooperation gains (i.e., the cost reduction achieved by cooperation) are quite robust: They decrease only slightly when interconnectors are not further extended (compared to today) and depend only slightly on assumptions about investment cost developments of renewable energy technologies. With regard to the practical implementation of cooperation, however, unclear administrative issues and questions concerning the fair sharing of costs and bene fits between the Member States represent major obstacles that need to be tackled in order to reach renewable energy targets at the lowest costs possible.

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    Paper provided by Energiewirtschaftliches Institut an der Universitaet zu Koeln in its series EWI Working Papers with number 2013-16.

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    Length: 28 pages
    Date of creation: 11 Aug 2013
    Date of revision:
    Handle: RePEc:ris:ewikln:2013_016
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    1. Michaela Fursch & Dietmar Lindenberger & Raimund Malischek & Stephan Nagl & Timo Panke & Johannes Truby, 2012. "German Nuclear Policy Reconsidered: Implications for the Electricity Market," Economics of Energy & Environmental Policy, International Association for Energy Economics, vol. 0(Number 3).
    2. Munoz, Miquel & Oschmann, Volker & David Tabara, J., 2007. "Harmonization of renewable electricity feed-in laws in the European Union," Energy Policy, Elsevier, vol. 35(5), pages 3104-3114, May.
    3. Nagl, Stephan & Fürsch, Michaela & Paulus, Moritz & Richter, Jan & Trüby, Johannes & Lindenberger, Dietmar, 2011. "Energy policy scenarios to reach challenging climate protection targets in the German electricity sector until 2050," Utilities Policy, Elsevier, vol. 19(3), pages 185-192.
    4. Fürsch, Michaela & Hagspiel, Simeon & Jägemann, Cosima & Nagl, Stephan & Lindenberger, Dietmar & Tröster, Eckehard, 2013. "The role of grid extensions in a cost-efficient transformation of the European electricity system until 2050," Applied Energy, Elsevier, vol. 104(C), pages 642-652.
    5. Jägemann, Cosima & Fürsch, Michaela & Hagspiel, Simeon & Nagl, Stephan, 2013. "Decarbonizing Europe's power sector by 2050 — Analyzing the economic implications of alternative decarbonization pathways," Energy Economics, Elsevier, vol. 40(C), pages 622-636.
    6. Söderholm, Patrik, 2008. "Harmonization of renewable electricity feed-in laws: A comment," Energy Policy, Elsevier, vol. 36(3), pages 946-953, March.
    7. Marcelo Saguan & Leonardo Meeus, 2011. "Modeling the Cost of Achieving a Renewable Energy Target: Does it Pay to Cooperate Across Borders?," RSCAS Working Papers 2011/46, European University Institute.
    8. Richter, Jan, 2011. "DIMENSION - A Dispatch and Investment Model for European Electricity Markets," EWI Working Papers 2011-3, Energiewirtschaftliches Institut an der Universitaet zu Koeln.
    9. Klessmann, Corinna & Lamers, Patrick & Ragwitz, Mario & Resch, Gustav, 2010. "Design options for cooperation mechanisms under the new European renewable energy directive," Energy Policy, Elsevier, vol. 38(8), pages 4679-4691, August.
    10. Capros, Pantelis & Mantzos, Leonidas & Parousos, Leonidas & Tasios, Nikolaos & Klaassen, Ger & Van Ierland, Tom, 2011. "Analysis of the EU policy package on climate change and renewables," Energy Policy, Elsevier, vol. 39(3), pages 1476-1485, March.
    11. Lauber, Volkmar, 2004. "REFIT and RPS: options for a harmonised Community framework," Energy Policy, Elsevier, vol. 32(12), pages 1405-1414, August.
    12. Paulus, Moritz & Borggrefe, Frieder, 2011. "The potential of demand-side management in energy-intensive industries for electricity markets in Germany," Applied Energy, Elsevier, vol. 88(2), pages 432-441, February.
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