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Phasing out coal and phasing in renewables – good or bad news for arctic gas producers?

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This paper examines to what extent downscaling of global coal based electricity generation encourages gas demand and affects regional activity in gas production, with emphasis on the arctic regions. In our reference scenario up to 2050 we take into consideration that renewables is set to increase its contribution to global electricity production over time, while coal will contribute less. We find that a policy scenario with further phasing out of coal and phasing in of renewables in line with the 2 degrees scenario for the power sector up to 2050, will lead to reduced arctic gas production compared to the reference scenario, although total worldwide electricity production doubles over the same period. However, even in a situation with less resources and higher costs in the Arctic, future investments in new reserves in the region are still profitable in our policy scenario, as total arctic gas production then is only marginally lower in 2050 than today.

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  • Lars Lindholt & Solveig Glomsrød, 2017. "Phasing out coal and phasing in renewables – good or bad news for arctic gas producers?," Discussion Papers 856, Statistics Norway, Research Department.
    • Handle: RePEc:ssb:dispap:856
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    More about this item

    Keywords

    Arctic; Coal market; Gas market; Electricity market; Equilibrium model;
    All these keywords.

    JEL classification:

    • Q31 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Demand and Supply; Prices
    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

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