Modeling the Cost of Achieving a Renewable Energy Target: Does it Pay to Cooperate Across Borders?
Electricity markets are increasingly integrated across borders, but transmission and renewable energy policies often remain local and uncoordinated. In this paper, we analyze how cooperative behavior in developing renewable energy technologies across borders and/or cross-border transmission capacity investment can reduce the cost of achieving a renewable energy target. We use a three step equilibrium model with: i) transmission investment, ii) generation investment and iii) electricity market that we apply to an interconnected two zone system. We find that it pays to cooperate if the zones have different renewable energy sources, but the success of a renewable energy cooperation also depends on cooperation in transmission development, which is therefore an important interaction to take into account in renewable energy policy discussions.
|Date of creation:||15 Sep 2011|
|Contact details of provider:|| Postal: Convento, Via delle Fontanelle, 19, 50014 San Domenico di Fiesole (FI) Italy|
Web page: http://www.eui.eu/RSCAS/
More information through EDIRC
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.:
- Meeus, Leonardo, 2011.
"Implicit auctioning on the Kontek Cable: Third time lucky?,"
Elsevier, vol. 33(3), pages 413-418, May.
- Leonardo Meeus, 2010. "Implicit Auctioning on the Kontek Cable: Third Time Lucky?," RSCAS Working Papers 2010/49, European University Institute.
- Meeus, Leonardo, 2011. "Why (and how) to regulate power exchanges in the EU market integration context?," Energy Policy, Elsevier, vol. 39(3), pages 1470-1475, March.
- Leonardo Meeus, 2010. "Why (and how) to regulate Power Exchanges in the EU market integration context?," RSCAS Working Papers 2010/12, European University Institute.
- Joskow, Paul L., 2005. "Transmission policy in the United States," Utilities Policy, Elsevier, vol. 13(2), pages 95-115, June.
- Joskow, P.L., 2004. "Transmission Policy in the United States," Cambridge Working Papers in Economics 0454, Faculty of Economics, University of Cambridge.
- Paul L. Joskow, 2004. "Transmission Policy in the United States," Working Papers 0417, Massachusetts Institute of Technology, Center for Energy and Environmental Policy Research.
- Yin, Haitao & Powers, Nicholas, 2010. "Do state renewable portfolio standards promote in-state renewable generation[glottal stop]," Energy Policy, Elsevier, vol. 38(2), pages 1140-1149, February.
- Meeus, Leonardo & Purchala, Konrad & Belmans, Ronnie, 2005. "Development of the Internal Electricity Market in Europe," The Electricity Journal, Elsevier, vol. 18(6), pages 25-35, July.
- Wiser, Ryan & Namovicz, Christopher & Gielecki, Mark & Smith, Robert, 2007. "The Experience with Renewable Portfolio Standards in the United States," The Electricity Journal, Elsevier, vol. 20(4), pages 8-20, May.
- Benjamin, Richard, 2007. "Principles for Interregional Transmission Expansion," The Electricity Journal, Elsevier, vol. 20(8), pages 36-47, October.
- Sauma, Enzo E. & Oren, Shmuel S., 2009. "Do generation firms in restructured electricity markets have incentives to support social-welfare-improving transmission investments?," Energy Economics, Elsevier, vol. 31(5), pages 676-689, September.
- Joskow, Paul L., 2008. "Capacity payments in imperfect electricity markets: Need and design," Utilities Policy, Elsevier, vol. 16(3), pages 159-170, September.
- Lund, P.D., 2009. "Effects of energy policies on industry expansion in renewable energy," Renewable Energy, Elsevier, vol. 34(1), pages 53-64. Full references (including those not matched with items on IDEAS)
When requesting a correction, please mention this item's handle: RePEc:rsc:rsceui:2011/46. 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: (RSCAS web unit)
If references are entirely missing, you can add them using this form.