Market Driven Power Plant Investment Perspectives in Europe: Climate Policy and Technology Scenarios until 2050 in the Model EMELIE-ESY

18 Pages Posted: 4 Mar 2013

See all articles by Andreas Schröder

Andreas Schröder

German Institute for Economic Research (DIW Berlin)

Thure Traber

Technical Univeristy of Denmark

Claudia Kemfert

DIW Deutsches Institut für Wirtschaftsforschung

Date Written: February 1, 2013

Abstract

EMELIE-ESY is a partial equilibrium model with focus on electricity markets. Private investors optimize their generation capacity investment and dispatch over the horizon 2010 to 2050. In the framework of the Energy Modeling Forum 28, we investigate how climate policy regimes affect market developments under different technology availabilities and climate policies on the European power markets. The model projects an only minor increase of power consumption because of higher wholesale prices or energy efficiency current climate policy, and a balanced consumption pathway under ambitious climate policy. These results contrast with findings of POLES and PRIMES models in the reference case that predict unexpected heavy consumption increases by 2050. By contrast, we find no investment into Carbon Capture and Storage (CCS) and a diminishing share of nuclear energy. We find that renewable energy supply extension as projected can sufficiently meet electricity consumption complemented by only few capacity investments in conventional technology.

Keywords: electricity markets, investment, climate policy

Suggested Citation

Schröder, Andreas and Traber, Thure and Kemfert, Claudia, Market Driven Power Plant Investment Perspectives in Europe: Climate Policy and Technology Scenarios until 2050 in the Model EMELIE-ESY (February 1, 2013). DIW Berlin Discussion Paper No. 1268, Available at SSRN: https://ssrn.com/abstract=2228163 or http://dx.doi.org/10.2139/ssrn.2228163

Andreas Schröder

German Institute for Economic Research (DIW Berlin) ( email )

Mohrenstraße 58
Berlin, 10117
Germany

Thure Traber (Contact Author)

Technical Univeristy of Denmark ( email )

Anker Engelundsvej 1
Copenhagen, 2800
Denmark

Claudia Kemfert

DIW Deutsches Institut für Wirtschaftsforschung ( email )

Mohrenstraße 58
Berlin, 10117
Germany

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