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Several European countries plan to phase out coal-fired power plants in order to reach their greenhouse gas abatement targets. Additionally, the phase-out will bring about so-called ancillary effects or co-effects. In our study, we focus on the co-effects induced in the countries that export coal to Europe. Furthermore, we examine the ancillary effects imposed on China as a major supplier of technologies (like solar energy technologies) that will replace coal-fired power plants. Using a combination of an input-output model, econometric analysis and employing the concept of the United Nations’ Sustainable Development Goals, we assess impacts of coal phase-out policies on environmental, economic, and societal dimensions. Our results show that despite negative impacts on income and employment in coal-exporting countries, a phase-out of coal-fired power plants is linked with multiple positive effects. In particular, we observe improvements in water management and biodiversity conservation, reduced release of pollutants, and improvements on a societal level. However, even if we consider a reduction in the use of coal in the European steel production sector as an additional challenge, these positive impacts on coal exporting countries remain rather small. The same applies to the effects we observe for China.

The main drivers of transformation processes of electricity markets stem from climate policies and changing economic environments. In order to analyse the respective developments, modelling approaches regularly rely on multiple structural and parametric simplifications. For example, discontinuities in economic development (recessions and booms) are frequently disregarded. Distorting effects that are caused by such simplifications tend to scale up with an extension of the time horizon of the analysis and can significantly affect the accuracy of long-term projections. In this study, we include information on economic discontinuities and elaborate on their influences on short-and long-term modelling outcomes. Based on historical data, we identify the impact of a high-amplitude change in economic parameters and examine its cumulative effect on the German electricity market by applying a techno-economic electricity market model for the period from 2005 to 2014. Similar changes may consistently occur in the future and we expect that a more comprehensive understanding of their effects on long-term scenarios will increase the validity of long-term models. Results indicate that policy decision making based on modelling frameworks can benefit from a comprehensive understanding of the underlying simplifications of most scenario studies.