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…
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The German “Energiewende”—An Introduction
The German government’s multi-decade effort to transition to a low-carbon, renew-ables-based energy economy is now commonly known as “energiewende” (“energy transition”). The transition has four major objectives: increasing the share of renewables to at least 80% (in electricity) and 60% for total final energy consumption, reducing greenhouse gas emissions by 80-95% (basis: 1990), phasing out…
Regional Cooperation Potentials in the European Context: Survey and Case Study Evidence from the Alpine Region
The energiewende (“Energy Turnaround”) in Germany will occur within the context of setting up Europe’s internal electricity market. An important initial step will be to intensify regional cooperation between neighboring countries. We assert that the full benefits of regional cooperation will be realized by integrating Europe’s market segments, e.g., real-time, day ahead, reserve markets and…
Germany’s Nuclear Phase Out – A Survey of the Impact since 2011 and Outlook to 2023
In this paper we analyze the effects of the German nuclear phase out, focusing on the seven nuclear power plants affected by the March 2011 moratorium, and continuing through the final phase out of the last plant in 2022. We provide an ex-post assessment of model analyses on the impact of the nuclear moratorium presented…
Optionality and Policymaking in Re-Transforming the British Power Market
Conventional models to support policymaking for the energy sector have been largely based on deterministic or static settings that focus on planning welfare- maximising investment pathways. But, in a liberalised market, since investments are made by competitive, profit-maximising companies, the increased intervention of government policy in the trading arrangements creates uncertain responses to incentives. Industry…
How Should Different Countries Tax Fuels to Correct Environmental Externalities?
This essay discusses (based on a recent IMF study) how developed and developing countries alike might put into practice the principle of ‘getting prices right’ to address the major externalities from energy. The efficient set of taxes includes charges on fuel use for carbon and local pollution (with credits for emissions capture during combustion) and…
European experiences with white certifirecate obligations: A critical review of existing evaluations
White certificate obligations impose energy savings targets on energy companies and allow them to trade energy savings certificates. They can be seen as a means of internalizing energy-use externalities and addressing energy efficiency market failures. This paper reviews existing evaluations of experiences with white certificate obligations in Great Britain, Italy and France. Ex ante microeconomic…
Evaluation of Environmental Taxation on Multiple Air Pollutants in the Electricity Generation Sector – Evidence from New South Wales, Australia
This paper investigates the effects of environmental taxes on the emissions intensity (measured as mass per TWh) of Nitrogen Oxides (NOx), Sulfur Oxides (SOx), Coarse Particulate Matter (CPM) and Fine Particulate Matter (FPM) from electricity generators in New South Wales (NSW), Australia. Electricity generators in NSW are subject to environmental taxation on air pollution through…
Climate policy, interconnection and carbon leakage: The effect of unilateral UK policy on electricity and GHG emissions in Ireland
This paper examines the effect of the UK’s unilateral policy to implement a carbon price floor in Great Britain for fossil-fuel based electricity generation on the adjoining electricity market in Ireland. We find that, subject to efficient use of interconnectors between the two markets and constant imports from France and the Netherlands, a carbon price…
Modelling Net Zero and Sector Coupling: Lessons for European Policy Makers
This paper seeks to discuss some of the policy implications which arise from the modelling of Net Zero GHG emissions in 2050 within a sector coupling approach. We draw on a major study of the EU-UK energy system in 2050 produced by the Centre for Regulation in Europe (Chyong et al. 2021), which involved stakeholders…