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Incorporating macroeconomic feedback into an energy systems model using an IO approach: Evaluating the rebound effect in the Korean electricity system

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  • Howells, Mark
  • Jeong, Kiho
  • Langlois, Lucille
  • Lee, Man Ki
  • Nam, Kee-Yung
  • Rogner, Hans Holger

Abstract

This paper approximates the emissions rebound effects1 associated with substituting expensive and GHG emitting natural gas (LNG) power plants, with apparently cheaper and lower emitting nuclear plant. It then evaluates the effect this has on economy wide electricity use as well as net GHG emissions changes. The analysis is undertaken by combining aspects of an input-output model with an optimizing energy systems model. The scope of the case study is limited to the effects of the electricity sector (and its emissions) on the Korean economy from 2005 to 2030. Its primary basis (in terms of data and assumptions) is the recent national Basic Plan for Long-Term Electricity Supply and Demand (KPX, 2006).2 The cases considered a limited increase of the share of Advanced Pressurised Reactor (APR) nuclear plant at the expense of combined cycle gas turbine (CCGT) plant running on imported liquefied natural gas (LNG). Three scenarios are studied, based on KPX (2006). These include (1) a Reference scenario,3 (2) a Mitigation scenario (where an extra 5000Â MW of nuclear is allowed to enter the system at the expense of LNG plant, but no emissions rebound is calculated) and (3) a Mitigation+rebound scenario (where some emissions savings of the extra nuclear plant are offset by an emissions rebound).4 The modelling approach developed is useful as it provides a method of including and indicating some economic interactions with the energy system in a relatively transparent manner. Stand alone economic models can lack energy system dynamics, while energy systems model are often decoupled from detailed economic interactions.

Suggested Citation

  • Howells, Mark & Jeong, Kiho & Langlois, Lucille & Lee, Man Ki & Nam, Kee-Yung & Rogner, Hans Holger, 2010. "Incorporating macroeconomic feedback into an energy systems model using an IO approach: Evaluating the rebound effect in the Korean electricity system," Energy Policy, Elsevier, vol. 38(6), pages 2700-2728, June.
    • Handle: RePEc:eee:enepol:v:38:y:2010:i:6:p:2700-2728
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    References listed on IDEAS

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    1. Lee, Hwarang & Kang, Sung Won & Koo, Yoonmo, 2020. "A hybrid energy system model to evaluate the impact of climate policy on the manufacturing sector: Adoption of energy-efficient technologies and rebound effects," Energy, Elsevier, vol. 212(C).
    2. Li, Ke & Lin, Boqiang, 2015. "Heterogeneity in rebound effects: Estimated results and impact of China’s fossil-fuel subsidies," Applied Energy, Elsevier, vol. 149(C), pages 148-160.
    3. Yang, Yafei & Cui, Qi & Wang, Hui, 2024. "Assessing the socioeconomic and environmental impacts of China's power sector changes in 2010–2020," Applied Energy, Elsevier, vol. 364(C).
    4. Li, Ke & Jiang, Zhujun, 2016. "The impacts of removing energy subsidies on economy-wide rebound effects in China: An input-output analysis," Energy Policy, Elsevier, vol. 98(C), pages 62-72.
    5. Becerra-Fernandez, Mauricio & Cosenz, Federico & Dyner, Isaac, 2020. "Modeling the natural gas supply chain for sustainable growth policy," Energy, Elsevier, vol. 205(C).
    6. Ramlall, Indranarain, 2017. "Internalizing CO2 emissions via central banks’ financials: Evidence from the world," Renewable and Sustainable Energy Reviews, Elsevier, vol. 72(C), pages 549-559.
    7. Yu, Xuewei & Moreno-Cruz, Juan & Crittenden, John C., 2015. "Regional energy rebound effect: The impact of economy-wide and sector level energy efficiency improvement in Georgia, USA," Energy Policy, Elsevier, vol. 87(C), pages 250-259.

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