Optimal Transition from Coal to Gas and Renewable Power under Capacity Constraints and Adjustment Costs
This paper studies the optimal transition from existing coal power plants to gas and renewable power under a carbon budget. It solves a model of polluting, exhaustible resources with capacity constraints and adjustment costs (to build coal, gas, an...
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| Format: | Policy Research Working Paper |
| Language: | English en_US |
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World Bank Group, Washington, DC
2014
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| Online Access: | http://documents.worldbank.org/curated/en/2014/07/19896708/optimal-transition-coal-gas-renewable-power-under-capacity-constraints-adjustment-costs http://hdl.handle.net/10986/19388 |
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okr-10986-193882021-04-23T14:03:52Z Optimal Transition from Coal to Gas and Renewable Power under Capacity Constraints and Adjustment Costs Lecuyer, Oskar Vogt-Schilb, Adrien ABATEMENT POTENTIAL ALLOWABLE CARBON EMISSIONS ATMOSPHERE ATMOSPHERIC CARBON AVAILABILITY BIOMASS CARBON CARBON BUDGET CARBON BUDGETS CARBON CAPTURE CARBON CONTENT CARBON ECONOMY CARBON EMISSIONS CARBON ENERGY CARBON FOSSIL FUELS CARBON INTENSITIES CARBON INTENSITY CARBON POLICY CARBON PRICE CARBON PRICES CARBON TAX CARBON TAXES CARBON TECHNOLOGIES CARBON-FREE POWER CLEAN ELECTRICITY CLEAN POWER CLEANER ENERGY CLIMATE CLIMATE CHANGE CLIMATE CHANGE MITIGATION CLIMATE CHANGE POLICIES CLIMATE CHANGE POLICY CLIMATE CHANGE RESEARCH CLIMATE POLICIES CLIMATE POLICY CLIMATIC CHANGE CO2 COAL COAL GENERATION COAL PLANTS COAL POWER PLANTS COAL PRODUCTION COAL RESOURCES COST OF COAL COST OF ELECTRICITY CUMULATIVE EMISSIONS DIFFUSION ECOLOGICAL ECONOMICS EFFICIENT USE ELECTRICITY ELECTRICITY CONSUMPTION ELECTRICITY DEMAND ELECTRICITY PRICE ELECTRICITY PRICES ELECTRICITY PRODUCTION ELECTRICITY SECTOR EMISSION EMISSION ABATEMENT EMISSION ALLOWANCES EMISSION CONSTRAINT EMISSION FACTOR EMISSION PATHWAYS EMISSION RATE EMISSION REDUCTION EMISSION REDUCTIONS EMISSION TRADING EMISSIONS EMISSIONS ABATEMENT EMISSIONS CUTS ENERGY CONSUMPTION ENERGY ECONOMICS ENERGY OUTLOOK ENERGY POLICY ENERGY PRODUCTION ENERGY RESOURCES ENERGY SECURITY ENERGY SOURCES ENERGY TECHNOLOGIES ENERGY TECHNOLOGY ENVIRONMENTAL POLICY FOSSIL FOSSIL ENERGY FOSSIL FUEL FOSSIL FUEL DEPOSITS FOSSIL FUEL PRICES FOSSIL FUEL PRODUCTION FOSSIL FUELS FUEL COST FUEL COSTS FUEL PRICE FUEL PRODUCTION FUEL SWITCHING GAS GAS GENERATION GAS INVESTMENT GAS PLANT GAS PLANTS GAS POWER PLANTS GAS PRODUCTION GAS RESERVES GAS RESOURCES GHG GLOBAL WARMING GREENHOUSE GREENHOUSE GAS GREENHOUSE GAS EMISSIONS INTERNATIONAL ENERGY AGENCY INVESTMENT IN COAL IPCC LONG-TERM CLIMATE CHANGE LOW-CARBON MARGINAL ABATEMENT MARGINAL ABATEMENT COST METHANE NATURAL GAS NATURAL RESOURCES NONRENEWABLE ENERGY NONRENEWABLE RESOURCE NONRENEWABLE RESOURCES OIL ONSHORE WIND PEAK CAPACITY PEAK OIL PEAK POWER PHOTOVOLTAIC POWER POLLUTION POWER GENERATION POWER PLANT POWER PLANTS POWER PRODUCTION POWER SECTOR PP PRICE OF ELECTRICITY RENEWABLE ENERGIES RENEWABLE ENERGY RENEWABLE ENERGY SOURCE RENEWABLE POWER RENEWABLE SOURCE RENEWABLE SOURCES SHADOW PRICE SUPPLY OF ELECTRICITY TEMPERATURE WIND WINDMILL WINDMILLS This paper studies the optimal transition from existing coal power plants to gas and renewable power under a carbon budget. It solves a model of polluting, exhaustible resources with capacity constraints and adjustment costs (to build coal, gas, and renewable power plants). It finds that optimal investment in renewable energy may start before coal power has been phased out and even before investment in gas has started, because doing so allows for smoothing investment over time and reduces adjustment costs. Gas plants may be used to reduce short-term investment in renewable power and associated costs, but must eventually be phased out to allow room for carbon-free power. One risk for myopic agents comparing gas and renewable investment is thus to overestimate the lifetime of gas plants -- e.g., when computing the levelized cost of electricity -- and be biased against renewable power. These analytical results are quantified with numerical simulations of the European Commission's 2050 energy roadmap. 2014-08-15T19:03:29Z 2014-08-15T19:03:29Z 2014-07 http://documents.worldbank.org/curated/en/2014/07/19896708/optimal-transition-coal-gas-renewable-power-under-capacity-constraints-adjustment-costs http://hdl.handle.net/10986/19388 English en_US Policy Research Working Paper;No. 6985 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank Group, Washington, DC Publications & Research :: Policy Research Working Paper Publications & Research European Union |
| repository_type |
Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
| building |
World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English en_US |
| topic |
ABATEMENT POTENTIAL ALLOWABLE CARBON EMISSIONS ATMOSPHERE ATMOSPHERIC CARBON AVAILABILITY BIOMASS CARBON CARBON BUDGET CARBON BUDGETS CARBON CAPTURE CARBON CONTENT CARBON ECONOMY CARBON EMISSIONS CARBON ENERGY CARBON FOSSIL FUELS CARBON INTENSITIES CARBON INTENSITY CARBON POLICY CARBON PRICE CARBON PRICES CARBON TAX CARBON TAXES CARBON TECHNOLOGIES CARBON-FREE POWER CLEAN ELECTRICITY CLEAN POWER CLEANER ENERGY CLIMATE CLIMATE CHANGE CLIMATE CHANGE MITIGATION CLIMATE CHANGE POLICIES CLIMATE CHANGE POLICY CLIMATE CHANGE RESEARCH CLIMATE POLICIES CLIMATE POLICY CLIMATIC CHANGE CO2 COAL COAL GENERATION COAL PLANTS COAL POWER PLANTS COAL PRODUCTION COAL RESOURCES COST OF COAL COST OF ELECTRICITY CUMULATIVE EMISSIONS DIFFUSION ECOLOGICAL ECONOMICS EFFICIENT USE ELECTRICITY ELECTRICITY CONSUMPTION ELECTRICITY DEMAND ELECTRICITY PRICE ELECTRICITY PRICES ELECTRICITY PRODUCTION ELECTRICITY SECTOR EMISSION EMISSION ABATEMENT EMISSION ALLOWANCES EMISSION CONSTRAINT EMISSION FACTOR EMISSION PATHWAYS EMISSION RATE EMISSION REDUCTION EMISSION REDUCTIONS EMISSION TRADING EMISSIONS EMISSIONS ABATEMENT EMISSIONS CUTS ENERGY CONSUMPTION ENERGY ECONOMICS ENERGY OUTLOOK ENERGY POLICY ENERGY PRODUCTION ENERGY RESOURCES ENERGY SECURITY ENERGY SOURCES ENERGY TECHNOLOGIES ENERGY TECHNOLOGY ENVIRONMENTAL POLICY FOSSIL FOSSIL ENERGY FOSSIL FUEL FOSSIL FUEL DEPOSITS FOSSIL FUEL PRICES FOSSIL FUEL PRODUCTION FOSSIL FUELS FUEL COST FUEL COSTS FUEL PRICE FUEL PRODUCTION FUEL SWITCHING GAS GAS GENERATION GAS INVESTMENT GAS PLANT GAS PLANTS GAS POWER PLANTS GAS PRODUCTION GAS RESERVES GAS RESOURCES GHG GLOBAL WARMING GREENHOUSE GREENHOUSE GAS GREENHOUSE GAS EMISSIONS INTERNATIONAL ENERGY AGENCY INVESTMENT IN COAL IPCC LONG-TERM CLIMATE CHANGE LOW-CARBON MARGINAL ABATEMENT MARGINAL ABATEMENT COST METHANE NATURAL GAS NATURAL RESOURCES NONRENEWABLE ENERGY NONRENEWABLE RESOURCE NONRENEWABLE RESOURCES OIL ONSHORE WIND PEAK CAPACITY PEAK OIL PEAK POWER PHOTOVOLTAIC POWER POLLUTION POWER GENERATION POWER PLANT POWER PLANTS POWER PRODUCTION POWER SECTOR PP PRICE OF ELECTRICITY RENEWABLE ENERGIES RENEWABLE ENERGY RENEWABLE ENERGY SOURCE RENEWABLE POWER RENEWABLE SOURCE RENEWABLE SOURCES SHADOW PRICE SUPPLY OF ELECTRICITY TEMPERATURE WIND WINDMILL WINDMILLS |
| spellingShingle |
ABATEMENT POTENTIAL ALLOWABLE CARBON EMISSIONS ATMOSPHERE ATMOSPHERIC CARBON AVAILABILITY BIOMASS CARBON CARBON BUDGET CARBON BUDGETS CARBON CAPTURE CARBON CONTENT CARBON ECONOMY CARBON EMISSIONS CARBON ENERGY CARBON FOSSIL FUELS CARBON INTENSITIES CARBON INTENSITY CARBON POLICY CARBON PRICE CARBON PRICES CARBON TAX CARBON TAXES CARBON TECHNOLOGIES CARBON-FREE POWER CLEAN ELECTRICITY CLEAN POWER CLEANER ENERGY CLIMATE CLIMATE CHANGE CLIMATE CHANGE MITIGATION CLIMATE CHANGE POLICIES CLIMATE CHANGE POLICY CLIMATE CHANGE RESEARCH CLIMATE POLICIES CLIMATE POLICY CLIMATIC CHANGE CO2 COAL COAL GENERATION COAL PLANTS COAL POWER PLANTS COAL PRODUCTION COAL RESOURCES COST OF COAL COST OF ELECTRICITY CUMULATIVE EMISSIONS DIFFUSION ECOLOGICAL ECONOMICS EFFICIENT USE ELECTRICITY ELECTRICITY CONSUMPTION ELECTRICITY DEMAND ELECTRICITY PRICE ELECTRICITY PRICES ELECTRICITY PRODUCTION ELECTRICITY SECTOR EMISSION EMISSION ABATEMENT EMISSION ALLOWANCES EMISSION CONSTRAINT EMISSION FACTOR EMISSION PATHWAYS EMISSION RATE EMISSION REDUCTION EMISSION REDUCTIONS EMISSION TRADING EMISSIONS EMISSIONS ABATEMENT EMISSIONS CUTS ENERGY CONSUMPTION ENERGY ECONOMICS ENERGY OUTLOOK ENERGY POLICY ENERGY PRODUCTION ENERGY RESOURCES ENERGY SECURITY ENERGY SOURCES ENERGY TECHNOLOGIES ENERGY TECHNOLOGY ENVIRONMENTAL POLICY FOSSIL FOSSIL ENERGY FOSSIL FUEL FOSSIL FUEL DEPOSITS FOSSIL FUEL PRICES FOSSIL FUEL PRODUCTION FOSSIL FUELS FUEL COST FUEL COSTS FUEL PRICE FUEL PRODUCTION FUEL SWITCHING GAS GAS GENERATION GAS INVESTMENT GAS PLANT GAS PLANTS GAS POWER PLANTS GAS PRODUCTION GAS RESERVES GAS RESOURCES GHG GLOBAL WARMING GREENHOUSE GREENHOUSE GAS GREENHOUSE GAS EMISSIONS INTERNATIONAL ENERGY AGENCY INVESTMENT IN COAL IPCC LONG-TERM CLIMATE CHANGE LOW-CARBON MARGINAL ABATEMENT MARGINAL ABATEMENT COST METHANE NATURAL GAS NATURAL RESOURCES NONRENEWABLE ENERGY NONRENEWABLE RESOURCE NONRENEWABLE RESOURCES OIL ONSHORE WIND PEAK CAPACITY PEAK OIL PEAK POWER PHOTOVOLTAIC POWER POLLUTION POWER GENERATION POWER PLANT POWER PLANTS POWER PRODUCTION POWER SECTOR PP PRICE OF ELECTRICITY RENEWABLE ENERGIES RENEWABLE ENERGY RENEWABLE ENERGY SOURCE RENEWABLE POWER RENEWABLE SOURCE RENEWABLE SOURCES SHADOW PRICE SUPPLY OF ELECTRICITY TEMPERATURE WIND WINDMILL WINDMILLS Lecuyer, Oskar Vogt-Schilb, Adrien Optimal Transition from Coal to Gas and Renewable Power under Capacity Constraints and Adjustment Costs |
| geographic_facet |
European Union |
| relation |
Policy Research Working Paper;No. 6985 |
| description |
This paper studies the optimal
transition from existing coal power plants to gas and
renewable power under a carbon budget. It solves a model of
polluting, exhaustible resources with capacity constraints
and adjustment costs (to build coal, gas, and renewable
power plants). It finds that optimal investment in renewable
energy may start before coal power has been phased out and
even before investment in gas has started, because doing so
allows for smoothing investment over time and reduces
adjustment costs. Gas plants may be used to reduce
short-term investment in renewable power and associated
costs, but must eventually be phased out to allow room for
carbon-free power. One risk for myopic agents comparing gas
and renewable investment is thus to overestimate the
lifetime of gas plants -- e.g., when computing the levelized
cost of electricity -- and be biased against renewable
power. These analytical results are quantified with
numerical simulations of the European Commission's 2050
energy roadmap. |
| format |
Publications & Research :: Policy Research Working Paper |
| author |
Lecuyer, Oskar Vogt-Schilb, Adrien |
| author_facet |
Lecuyer, Oskar Vogt-Schilb, Adrien |
| author_sort |
Lecuyer, Oskar |
| title |
Optimal Transition from Coal to Gas and Renewable Power under Capacity Constraints and Adjustment Costs |
| title_short |
Optimal Transition from Coal to Gas and Renewable Power under Capacity Constraints and Adjustment Costs |
| title_full |
Optimal Transition from Coal to Gas and Renewable Power under Capacity Constraints and Adjustment Costs |
| title_fullStr |
Optimal Transition from Coal to Gas and Renewable Power under Capacity Constraints and Adjustment Costs |
| title_full_unstemmed |
Optimal Transition from Coal to Gas and Renewable Power under Capacity Constraints and Adjustment Costs |
| title_sort |
optimal transition from coal to gas and renewable power under capacity constraints and adjustment costs |
| publisher |
World Bank Group, Washington, DC |
| publishDate |
2014 |
| url |
http://documents.worldbank.org/curated/en/2014/07/19896708/optimal-transition-coal-gas-renewable-power-under-capacity-constraints-adjustment-costs http://hdl.handle.net/10986/19388 |
| _version_ |
1764443842516353024 |