Carbon Capture and Storage, Wind and Nuclear Power, and Technology Learning

Abstract:     
Limiting the carbon emissions of electricity generation will require significant investments in low-carbon technologies. Moreover, the phaseout of nuclear power generation induces the need for replacement investments. One of the replacement options is the carbon capture, transport and storage technology (CCTS). We analyze the impact of carbon restrictions on the diffusion of low-carbon technologies. All technologies are characterized by specific costs and CO2 emissions, which need to be covered by constraint emission permits. The fossil fuel-based capacity can be replaced by low-carbon energy technologies which are associated with initially higher costs and, in the case of CCTS, with a lower thermal efficiency. Both parameters improve due to endogenous learning effects if the technology is applied. Using a numerical model for the European Union we show that CCTS plays an important role for the replacement of nuclear power capacities.

Number of Pages in PDF File: 20

Keywords: CCS, Technology Learning, Climate, Wind, Carbon Capture, Power Plant Economics, Technology Adoption

JEL Classification: H23, O3, Q4

working papers series