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Phasing out coal - An impact analysis comparing five large-scale electricity market models

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  • Pöstges, Arne
  • Bucksteeg, Michael
  • Ruhnau, Oliver
  • Böttger, Diana
  • Haller, Markus
  • Künle, Eglantine
  • Ritter, David
  • Schmitz, Richard
  • Wiedmann, Michael

Abstract

Climate target achievement has a crucial influence on the modelling and the decision processes in the energy sector. It induced the development of several policy instruments to mitigate greenhouse gas emissions, including administrative and market-based mechanisms for phasing out coal-fired generation technologies. In order to analyse such instruments, electricity market and energy system models are widely used. However, results and corresponding recommendations largely depend on the formulation of the respective model. This motivates a systematic comparison of five large-scale electricity market models which are applied to European scenarios considering the period until 2030. An evolved diff-in-diff approach is proposed to analyse the effects of two coal phase-out strategies. This contribution expands on that of earlier studies and provides some more general takeaways for both modellers and decision-makers. For instance, the evolved diff-in-diff analysis shows the influence of the reference scenario when evaluating a policy instrument. Furthermore, the importance of technical aspects such as constraints for combined heat and power plants are discussed and implications regarding three dimensions (economic, environmental, and security of supply) are presented.

Suggested Citation

  • Pöstges, Arne & Bucksteeg, Michael & Ruhnau, Oliver & Böttger, Diana & Haller, Markus & Künle, Eglantine & Ritter, David & Schmitz, Richard & Wiedmann, Michael, 2021. "Phasing out coal - An impact analysis comparing five large-scale electricity market models," EconStor Preprints 234102, ZBW - Leibniz Information Centre for Economics.
    • Handle: RePEc:zbw:esprep:234102
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    Cited by:

    1. Kirchem, Dana & Schill, Wolf-Peter, 2023. "Power sector effects of green hydrogen production in Germany," Energy Policy, Elsevier, vol. 182(C).
    2. Mayer, Martin János & Biró, Bence & Szücs, Botond & Aszódi, Attila, 2023. "Probabilistic modeling of future electricity systems with high renewable energy penetration using machine learning," Applied Energy, Elsevier, vol. 336(C).
    3. Ruhnau, O. & Bucksteeg, M. & Ritter, D. & Schmitz, R. & Böttger, D. & Koch, M. & Pöstges, A. & Wiedmann, M. & Hirth, L., 2022. "Why electricity market models yield different results: Carbon pricing in a model-comparison experiment," Renewable and Sustainable Energy Reviews, Elsevier, vol. 153(C).
    4. Do, Thang Nam & Burke, Paul J., 2023. "Phasing out coal power in a developing country context: Insights from Vietnam," Energy Policy, Elsevier, vol. 176(C).
    5. Marco Sebastian Breder & Felix Meurer & Michael Bucksteeg & Christoph Weber, 2022. "Spatial Incentives for Power-to-hydrogen through Market Splitting," EWL Working Papers 2203, University of Duisburg-Essen, Chair for Management Science and Energy Economics, revised Jul 2022.

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    More about this item

    Keywords

    model comparison; coal phase-out; electricity market model; energy policy;
    All these keywords.

    JEL classification:

    • P11 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - Planning, Coordination, and Reform
    • P28 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - Natural Resources; Environment
    • Q4 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy
    • Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects

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