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How CO2 prices accelerate decarbonisation – The case of coal-fired generation in Germany

  • This paper analyses the potential impact of the world's two main coal phase-out instruments: 1) direct regulatory intervention restricting the operation of existing coal-fired generation capacity and prohibiting investment in new capacity and 2) market-based CO2-pricing instruments that make emission-intensive coal-fired generation less competitive. We quantify these instruments' potential effects in the empirical setting of Germany, where both instruments are employed concurrently. However, this paper's approach and methodology can be applied in any jurisdiction or energy system worldwide. Our paper provides quantitative results with a pan-European partial-equilibrium electricity system model. The model applies an innovative three-step approach. Step 1 solves an investment and dispatch problem with reduced technical and temporal complexity for European countries. Step 2 computes the dispatch problem at a bihourly resolution and step 3 solves the investment and dispatch problem for Germany with increased technicalThis paper analyses the potential impact of the world's two main coal phase-out instruments: 1) direct regulatory intervention restricting the operation of existing coal-fired generation capacity and prohibiting investment in new capacity and 2) market-based CO2-pricing instruments that make emission-intensive coal-fired generation less competitive. We quantify these instruments' potential effects in the empirical setting of Germany, where both instruments are employed concurrently. However, this paper's approach and methodology can be applied in any jurisdiction or energy system worldwide. Our paper provides quantitative results with a pan-European partial-equilibrium electricity system model. The model applies an innovative three-step approach. Step 1 solves an investment and dispatch problem with reduced technical and temporal complexity for European countries. Step 2 computes the dispatch problem at a bihourly resolution and step 3 solves the investment and dispatch problem for Germany with increased technical complexity. Our results confirm that both a regulated phase-out as well as a price on CO2 emissions can reduce the amount of coal-fired generation in an electricity system. If CO2 prices remain at current levels, coal-fired power plants leave the market significantly before the regulated phase-out date, reducing demand for employees in the Lusatian lignite industry. Regions and federal governments should take this finding into account when planning and preparing for structural change.show moreshow less

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Metadaten
Author: Smaranda Sgarciu, Daniel Scholz, Felix MüsgensORCiD
DOI:https://doi.org/10.1016/j.enpol.2022.113375
ISSN:0301-4215
Title of the source (English):Energy Policy
Document Type:Scientific journal article peer-reviewed
Language:English
Year of publication:2023
Tag:Kohleausstieg
CO2 price; Coal phase-out; Decarbonisation; Employment; Energy systems modelling
Volume/Year:173
Article number:113375
Way of publication:Open Access
Faculty/Chair:Fakultät 3 Maschinenbau, Elektro- und Energiesysteme / FG Energiewirtschaft
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