How Does Climate Change Affect the Transition of Power Systems: The Case of Germany

27 Pages Posted: 19 Oct 2020

See all articles by Alexander Golub

Alexander Golub

American University

Kristina Govorukha

Freiberg University of Mining and Technology

Philip Mayer

Freiberg University of Mining and Technology

Dirk Rübbelke

affiliation not provided to SSRN

Date Written: 2020

Abstract

The effects of extreme weather events, such as heat waves and droughts, are taken into account in both global and European policies. Accordingly, the protection of critical infrastructures and in particular, the resilience of the energy sector was the subject of intense research. There are regional differences in the degree to which extreme events affect the energy sector. In Northern Europe, their intensity has increased dramatically within a decade. In our analysis, we identify emerging risks of extreme weather events, in particular, droughts and high temperatures, for the German power sector. Our analysis is based on extensive datasets comprising temperature and drought data for the last 40 years. We find evidence of a higher frequency of power plants outages as a consequence of droughts and high temperatures. We investigate increases in the wholesale electricity price and price volatility and develop a capacity-adjusted drought index. The results are used to assess the monetary loss of power plant outages due to heat waves and droughts. We stress that increasing frequencies of such extreme weather events will aggravate the observed problem, especially with respect to the transition of the power sector.

Keywords: electricity, utilities, thermal generation, climate change, droughts, weather extremes

JEL Classification: Q400, Q410, Q540

Suggested Citation

Golub, Alexander and Govorukha, Kristina and Mayer, Philip and Rübbelke, Dirk, How Does Climate Change Affect the Transition of Power Systems: The Case of Germany (2020). CESifo Working Paper No. 8613, Available at SSRN: https://ssrn.com/abstract=3711889

Alexander Golub (Contact Author)

American University ( email )

4400 Massachusetts Ave, NW
Washington, DC 20016
United States

Kristina Govorukha

Freiberg University of Mining and Technology ( email )

Akademiestraße 6
Freiberg, 09599
Germany

Philip Mayer

Freiberg University of Mining and Technology ( email )

Akademiestraße 6
Freiberg, 09599
Germany

Dirk Rübbelke

affiliation not provided to SSRN

No Address Available

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