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Energy Transition with Variable and Intermittent Renewable Electricity Generation

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  • Aude Pommeret
  • Katheline Schubert

Abstract

We propose one of the first dynamic models of the optimal transition from fossil fuels to renewables in electricity generation that takes into account the variability and intermittency of renewable energy as well as storage. This work sheds light on the extent to which variability and intermittency constitute a serious obstacle to energy transition and, given these constraints, the value of storage. The results of this model provide useful insight into the complexity of transitioning to a clean energy mix, as well as the role climate policy can play in facilitating both the growth of renewables and storage.

Suggested Citation

  • Aude Pommeret & Katheline Schubert, 2019. "Energy Transition with Variable and Intermittent Renewable Electricity Generation," CESifo Working Paper Series 7442, CESifo.
    • Handle: RePEc:ces:ceswps:_7442
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    File URL: https://www.cesifo.org/DocDL/cesifo1_wp7442.pdf
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    References listed on IDEAS

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    1. Carsten Helm & Mathias Mier, 2018. "Subsidising Renewables but Taxing Storage? Second-Best Policies with Imperfect Pricing," Working Papers V-413-18, University of Oldenburg, Department of Economics, revised Oct 2018.
    2. Lazkano, Itziar & Nøstbakken, Linda & Pelli, Martino, 2017. "From fossil fuels to renewables: The role of electricity storage," European Economic Review, Elsevier, vol. 99(C), pages 113-129.
    3. Ambec, Stefan & Crampes, Claude, 2012. "Electricity provision with intermittent sources of energy," Resource and Energy Economics, Elsevier, vol. 34(3), pages 319-336.
    4. Lafforgue, Gilles & Magné, Bertrand & Moreaux, Michel, 2008. "Energy substitutions, climate change and carbon sinks," Ecological Economics, Elsevier, vol. 67(4), pages 589-597, November.
    5. Hoel, Michael & Kverndokk, Snorre, 1996. "Depletion of fossil fuels and the impacts of global warming," Resource and Energy Economics, Elsevier, vol. 18(2), pages 115-136, June.
    6. Sinn, Hans-Werner, 2017. "Buffering volatility: A study on the limits of Germany's energy revolution," European Economic Review, Elsevier, vol. 99(C), pages 130-150.
    7. Paul L. Joskow, 2011. "Comparing the Costs of Intermittent and Dispatchable Electricity Generating Technologies," American Economic Review, American Economic Association, vol. 101(3), pages 238-241, May.
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    Citations

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    Cited by:

    1. Fatouros, Nikos & Stengos, Thanasis, 2023. "Nuclear Energy, Economic Growth, and the Environment: Optimal policies in a model with endogenous technical change and environmental constraints," The Journal of Economic Asymmetries, Elsevier, vol. 28(C).
    2. Helm, Carsten & Mier, Mathias, 2021. "Steering the energy transition in a world of intermittent electricity supply: Optimal subsidies and taxes for renewables and storage," Journal of Environmental Economics and Management, Elsevier, vol. 109(C).
    3. Jean-Henry Ferrasse & Nandeeta Neerunjun & Hubert Stahn, 2021. "Managing intermittency in the electricity market," Working Papers halshs-03154612, HAL.
    4. Carsten Helm & Mathias Mier, 2020. "Steering the Energy Transition in a World of Intermittent Electricity Supply: Optimal Subsidies and Taxes for Renewables Storage," ifo Working Paper Series 330, ifo Institute - Leibniz Institute for Economic Research at the University of Munich.
    5. David Andrés‐Cerezo & Natalia Fabra, 2023. "Storing power: market structure matters," RAND Journal of Economics, RAND Corporation, vol. 54(1), pages 3-53, March.
    6. Lucas Bretschger & Karen Pittel, 2019. "Twenty Key Questions in Environmental and Resource Economics," CER-ETH Economics working paper series 19/328, CER-ETH - Center of Economic Research (CER-ETH) at ETH Zurich.
    7. Heimvik, Arild & Amundsen, Eirik S., 2021. "Prices vs. percentages: Use of tradable green certificates as an instrument of greenhouse gas mitigation," Energy Economics, Elsevier, vol. 99(C).
    8. Helm, Carsten & Mier, Mathias, 2019. "On the efficient market diffusion of intermittent renewable energies," Energy Economics, Elsevier, vol. 80(C), pages 812-830.
    9. Lucas Bretschger & Karen Pittel, 2020. "Twenty Key Challenges in Environmental and Resource Economics," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 77(4), pages 725-750, December.
    10. Acevedo, Giancarlo & Bernales, Alejandro & Flores, Andrés & Inzunza, Andrés & Moreno, Rodrigo, 2021. "The effect of environmental policies on risk reductions in energy generation," Journal of Economic Dynamics and Control, Elsevier, vol. 126(C).
    11. Neetzow, Paul, 2021. "The effects of power system flexibility on the efficient transition to renewable generation," Applied Energy, Elsevier, vol. 283(C).

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    More about this item

    JEL classification:

    • Q42 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Alternative Energy Sources
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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