Testing European goals for the Spanish electricity system using a disaggregated CGE model

Abstract

This paper addresses the economic and environmental effects of three scenarios of change for the electricity sector in Spain, in line with the European Union targets: (1) to address the low trade with the rest of Europe, increasing the integration with the European network; (2) to enhance environmental sustainability, increasing the use of renewable energy sources, while decreasing the use of brown energy sources; and (3) increasing the competitiveness of the Spanish electricity sector. To this end, we develop a computable general equilibrium model, with 72 productive sectors, eleven of which are energy sectors, where electricity is disaggregated into five production technologies and transmission, distribution, commercialization, and related activities. The model is calibrated on a previously developed input-output table with this detailed disaggregation for Spain for 2013. Our results suggest potential improvements in production and trade, and reductions in CO2 emissions in scenario 2 are also observed.