Investments in a Combined Energy Network Model: Substitution between Natural Gas and Electricity?

24 Pages Posted: 6 Jun 2014

See all articles by Jan Abrell

Jan Abrell

ETH Zürich - Centre for Energy Policy and Economics (CEPE)

Hannes Weigt

WWZ, Wirtschaftswissenschaftliche Fakultät der Universität Basel

Date Written: June 6, 2014

Abstract

Natural gas plays an important role in the future development of electricity markets as it is the least emission intensive fossil generation option while additionally providing the needed flexibility in plant operation to deal with intermittent renewable generation. As both the electricity and the natural gas market rely on networks, congestion on one market may lead to changes on another. In addition, investments in one market have an impact in the other and may even become substitutes for one another. The objective of this paper is to develop a dynamic model representation of coupled natural gas and electricity network markets to test the potential interaction with respect to investments. The model is tested under simplified conditions as well as for a stylized European network setting. The results indicate that there is a potential for investment-substitution and significant market interactions that warrants the application of coupled models especially with regard to simulations of long term system developments.

Keywords: Electricity network, Natural gas network, Europe, MCP

JEL Classification: L94, L95, Q4

Suggested Citation

Abrell, Jan and Weigt, Hannes, Investments in a Combined Energy Network Model: Substitution between Natural Gas and Electricity? (June 6, 2014). Available at SSRN: https://ssrn.com/abstract=2446781 or http://dx.doi.org/10.2139/ssrn.2446781

Jan Abrell

ETH Zürich - Centre for Energy Policy and Economics (CEPE) ( email )

8092 Zurich
Switzerland

Hannes Weigt (Contact Author)

WWZ, Wirtschaftswissenschaftliche Fakultät der Universität Basel ( email )

Basel, 4051
Switzerland

HOME PAGE: http://fonew.unibas.ch/

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
112
Abstract Views
638
rank
267,035
PlumX Metrics