Abstract
In the framework of the Energy Modeling Forum 28, we investigate how climate policy regimes affect market developments under different technology availabilities on the European power markets. We use the partial equilibrium model EMELIE-ESY with focus on electricity markets in order to determine how private investors optimize their generation capacity investment and operation over the horizon 2010 to 2050. For the year 2050, the model projects a minor increase of power consumption of 10% under current climate policy, and a balanced pathway for consumption under ambitious climate policy compared to 2010 levels. These results contrast with findings of POLES and PRIMES models that predict strong consumption increases of 44% to 48% by 2050 and claim competitiveness of nuclear power and CCS options. Under ambitious climate policy, our findings correspond with major increases of wholesale electricity market prices and comparatively less pronounced emission price increases, which trigger no investments into Carbon Capture and Storage (CCS) and a strongly diminishing share of nuclear energy.
Highlights
Introduction and Literature ReviewMany existing studies analyze technology developments on the European power market
PRIMES finds a 10% decrease of nuclear power generation compared to 2010 production, whereas the model POLES computes an increase of about 10% with a generation of 985 TWh in 2050
We have assessed the potential impacts of different climate policy regimes on electricity prices, CO2 prices and generation capacity investment within the EMF 28 framework
Summary
Many existing studies analyze technology developments on the European power market. Results for electricity generation capacity of these studies vary greatly. The World Energy Outlook (IEA, 2011) expects capacity expansion of gasfired plants, coal-fired plants, and nuclear power in Europe. A study of EWI (2012) projects gas-fueled generation capacity investment to almost double by 2030 while investment in other conventional resources ought to decline. The Energy Roadmap of the European Commission (EC, 2011) outlines several scenarios of power capacity. In most Roadmap scenarios, fossil-fuel based power capacity remains roughly constant until 2050. CCS capacity is projected to be deployed and nuclear power capacity is expected to increase slightly in the reference scenario. As drivers of the differences in capacity developments, we can distinguish between modeling approaches, the consideration of back-up capacity requirements, and the development of Renewable Energy Sources (RES) as source of electricity
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