IDEAS home Printed from https://ideas.repec.org/p/cpb/discus/222.html
   My bibliography  Save this paper

The socially optimal energy transition in a residential neighbourhood in the Netherlands

Author

Listed:
  • Arie ten Cate

Abstract

The coming energy transition in residential neighbourhoods in the Netherlands is the result of the increasing cost of CO2 emission and the decreasing costs of solar PhotoVoltaics (PV) and alternative techniques of residential heating, namely Combined Heat and Power (CHP) and heat pump. The coming energy transition in residential neighbourhoods in the Netherlands is the result of the increasing cost of CO2 emission and the decreasing costs of solar PhotoVoltaics (PV) and alternative techniques of residential heating, namely Combined Heat and Power (CHP) and heat pump. The optimal transition is found by minimizing the total discounted social costs of residential energy consumption and generation. Social costs include the cost of CO2 emission and the investment in the electric network. The model integrates economics and the electric constraints based on the Alternating Current (AC) network power flow. The results indicate that in the optimal transition nearly all houses are going to use an air-to-water heat pump with auxiliary gas heating. This shift from gas to electricity depends very little on the future CO2 price or the network costs. Solar PV is not yet socially profitable at this moment. The "business case" for a household, using private costs, includes taxes and excludes CO2 costs and uses a higher discount rate. In the resulting optimum no heat pumps are used. However, reducing the ratio of the electricity tax versus the gas tax moves the private optimum to the social optimum. In order to use the model (with GAMS) or to verify table 18 (with Octave/Matlab), download the packed file below (If needed: rename it from .txt to .zip and unpack the file). After the publication, the following problem was noted by a reader. According to section 5.3, first paragraph, the heat pump is socially optimal in the old neighbourhood. However, in general this is somewhat unrealistic: the heat pump has a low water temperature, requiring enlarging the capacity of the radiators. Also, "starting at 20 euro" at page 11 is simply the actual value up to 2010.

Suggested Citation

  • Arie ten Cate, 2012. "The socially optimal energy transition in a residential neighbourhood in the Netherlands," CPB Discussion Paper 222, CPB Netherlands Bureau for Economic Policy Analysis.
    • Handle: RePEc:cpb:discus:222
    as

    Download full text from publisher

    File URL: https://www.cpb.nl/sites/default/files/publicaties/download/cpb-discussion-paper-222-socially-optimal-energy-transition-residential-neighbourhood-netherlands.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Scarpa, Riccardo & Willis, Ken, 2010. "Willingness-to-pay for renewable energy: Primary and discretionary choice of British households' for micro-generation technologies," Energy Economics, Elsevier, vol. 32(1), pages 129-136, January.
    2. Meier, Helena & Rehdanz, Katrin, 2010. "Determinants of residential space heating expenditures in Great Britain," Energy Economics, Elsevier, vol. 32(5), pages 949-959, September.
    3. Durand-Lasserve, Olivier & Pierru, Axel & Smeers, Yves, 2010. "Uncertain long-run emissions targets, CO2 price and global energy transition: A general equilibrium approach," Energy Policy, Elsevier, vol. 38(9), pages 5108-5122, September.
    4. Macintosh, Andrew & Wilkinson, Deb, 2011. "Searching for public benefits in solar subsidies: A case study on the Australian government's residential photovoltaic rebate program," Energy Policy, Elsevier, vol. 39(6), pages 3199-3209, June.
    5. DeCarolis, Joseph F., 2011. "Using modeling to generate alternatives (MGA) to expand our thinking on energy futures," Energy Economics, Elsevier, vol. 33(2), pages 145-152, March.
    6. Mozumder, Pallab & Vásquez, William F. & Marathe, Achla, 2011. "Consumers' preference for renewable energy in the southwest USA," Energy Economics, Elsevier, vol. 33(6), pages 1119-1126.
    7. Rob Aalbers & Viktoria Kocsis & Victoria Shestalova, 2011. "Optimal regulation under unknown supply of distributed generation," CPB Discussion Paper 192, CPB Netherlands Bureau for Economic Policy Analysis.
    8. Rehdanz, Katrin, 2007. "Determinants of residential space heating expenditures in Germany," Energy Economics, Elsevier, vol. 29(2), pages 167-182, March.
    9. Arie ten Cate, 2010. "Hourglass models of world-wide problems such as climate change," CPB Memorandum 238.rdf, CPB Netherlands Bureau for Economic Policy Analysis.
    10. Vaage, Kjell, 2000. "Heating technology and energy use: a discrete/continuous choice approach to Norwegian household energy demand," Energy Economics, Elsevier, vol. 22(6), pages 649-666, December.
    11. Arie ten Cate, 2010. "Hourglass models of world-wide problems such as climate change," CPB Memorandum 238, CPB Netherlands Bureau for Economic Policy Analysis.
    12. Manning, Neil & Rees, Ray, 1982. "Synthetic demand functions for solar energy," Energy Economics, Elsevier, vol. 4(4), pages 225-231, October.
    13. Parker, Paul, 2008. "Residential solar photovoltaic market stimulation: Japanese and Australian lessons for Canada," Renewable and Sustainable Energy Reviews, Elsevier, vol. 12(7), pages 1944-1958, September.
    14. Audenaert, Amaryllis & De Boeck, Liesje & Geudens, K. & Buyle, M., 2011. "Cost and E-level analysis of different dwelling types and different heating systems with or without heat exchanger," Working Papers 2011/33, Hogeschool-Universiteit Brussel, Faculteit Economie en Management.
    15. Monahan, J. & Powell, J.C., 2011. "A comparison of the energy and carbon implications of new systems of energy provision in new build housing in the UK," Energy Policy, Elsevier, vol. 39(1), pages 290-298, January.
    16. Goto, Hisanori & Goto, Mika & Sueyoshi, Toshiyuki, 2011. "Consumer choice on ecologically efficient water heaters: Marketing strategy and policy implications in Japan," Energy Economics, Elsevier, vol. 33(2), pages 195-208, March.
    17. Braun, Frauke G., 2010. "Determinants of households' space heating type: A discrete choice analysis for German households," Energy Policy, Elsevier, vol. 38(10), pages 5493-5503, October.
    18. Paatero, Jukka V. & Lund, Peter D., 2007. "Effects of large-scale photovoltaic power integration on electricity distribution networks," Renewable Energy, Elsevier, vol. 32(2), pages 216-234.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Arie ten Cate, 2012. "The socially optimal energy transition in a residential neighbourhood in the Netherlands," CPB Discussion Paper 222.rdf, CPB Netherlands Bureau for Economic Policy Analysis.
    2. Michelsen, Carl Christian & Madlener, Reinhard, 2012. "Homeowners' preferences for adopting innovative residential heating systems: A discrete choice analysis for Germany," Energy Economics, Elsevier, vol. 34(5), pages 1271-1283.
    3. Michelsen, Carl Christian & Madlener, Reinhard, 2011. "Homeowners' Preferences for Adopting Residential Heating Systems: A Discrete Choice Analysis for Germany," FCN Working Papers 9/2011, E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN).
    4. Hache, Emmanuel & Leboullenger, Déborah & Mignon, Valérie, 2017. "Beyond average energy consumption in the French residential housing market: A household classification approach," Energy Policy, Elsevier, vol. 107(C), pages 82-95.
    5. Dorothée Charlier & Sondès Kahouli, 2018. "Fuel poverty and residential energy demand: how fuel-poor households react to energy price fluctuations," Post-Print halshs-01957771, HAL.
    6. Dorothée Charlier & Sondès Kahouli, 2019. "From Residential Energy Demand to Fuel Poverty: Income-induced Non-linearities in the Reactions of Households to Energy Price Fluctuations," The Energy Journal, , vol. 40(2), pages 101-138, March.
    7. Jingchao, Zhang & Kotani, Koji & Saijo, Tatsuyoshi, 2018. "Public acceptance of environmentally friendly heating in Beijing: A case of a low temperature air source heat pump," Energy Policy, Elsevier, vol. 117(C), pages 75-85.
    8. Curtis, John & McCoy, Daire & Aravena, Claudia, 2018. "Heating system upgrades: The role of knowledge, socio-demographics, building attributes and energy infrastructure," Energy Policy, Elsevier, vol. 120(C), pages 183-196.
    9. Michelsen, Carl Christian & Madlener, Reinhard, 2011. "Homeowners' Motivation to Adopt a Residential Heating System: A Principal-Component Analysis," FCN Working Papers 17/2011, E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN), revised Jan 2013.
    10. Michelsen, Carl Christian & Madlener, Reinhard, 2013. "Motivational factors influencing the homeowners’ decisions between residential heating systems: An empirical analysis for Germany," Energy Policy, Elsevier, vol. 57(C), pages 221-233.
    11. McCoy, Daire & Curtis, John, 2018. "Exploring the spatial and temporal determinants of gas central heating adoption," Resource and Energy Economics, Elsevier, vol. 52(C), pages 64-86.
    12. Hendrik Schmitz & Reinhard Madlener, 2020. "Heterogeneity in price responsiveness for residential space heating in Germany," Empirical Economics, Springer, vol. 59(5), pages 2255-2281, November.
    13. Rafael de Arce & Ramón Mahía, 2019. "Drivers of Electricity Poverty in Spanish Dwellings: A Quantile Regression Approach," Energies, MDPI, vol. 12(11), pages 1-18, May.
    14. Alberini, Anna & Gans, Will & Velez-Lopez, Daniel, 2011. "Residential consumption of gas and electricity in the U.S.: The role of prices and income," Energy Economics, Elsevier, vol. 33(5), pages 870-881, September.
    15. Ruokamo, Enni, 2016. "Household preferences of hybrid home heating systems – A choice experiment application," Energy Policy, Elsevier, vol. 95(C), pages 224-237.
    16. Sahari, Anna, 2019. "Electricity prices and consumers’ long-term technology choices: Evidence from heating investments," European Economic Review, Elsevier, vol. 114(C), pages 19-53.
    17. Anna Risch & Claire Salmon, 2017. "What matters in residential energy consumption: evidence from France," International Journal of Global Energy Issues, Inderscience Enterprises Ltd, vol. 40(1/2), pages 79-116.
    18. Ma, Ben & Yu, Yihua & Urban, Frauke, 2018. "Green transition of energy systems in rural China: National survey evidence of households’ discrete choices on water heaters," Energy Policy, Elsevier, vol. 113(C), pages 559-570.
    19. Wang, Xia & Ding, Chao & Zhou, Mao & Cai, Weiguang & Ma, Xianrui & Yuan, Jiachen, 2023. "Assessment of space heating consumption efficiency based on a household survey in the hot summer and cold winter climate zone in China," Energy, Elsevier, vol. 274(C).
    20. Mats Kröger & Maximilian Longmuir & Karsten Neuhoff & Franziska Schütze, 2022. "The Costs of Natural Gas Dependency: Price Shocks, Inequality, and Public Policy," Discussion Papers of DIW Berlin 2010, DIW Berlin, German Institute for Economic Research.

    More about this item

    JEL classification:

    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
    • Q42 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Alternative Energy Sources
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cpb:discus:222. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: https://edirc.repec.org/data/cpbgvnl.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.