Inter-temporal R&D and Capital Investment Portfolios for the Electricity Industry’s Low Carbon Future

Abstract

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. This paper explores cost-effective low-carbon R&D and capital investment portfolios for the electricity generation sector through 2060. We present a novel method for long-term planning by combining an economic model of endogenous non-linear technical change and a generation capacity planning model with key features of the electricity system. The model captures the complementary nature of technologies in the power sector; physical integration constraints; and the opportunity to build new knowledge capital as a non-linear function of R&D and accumulated knowledge, which reflects the diminishing marginal returns to research characteristic of the energy innovation process. We show portfolios for future scenarios with and without carbon emission limits, and demonstrate the importance of including various features by comparing results from a reference version of the model to results from alternative versions that omit these features. Our results caution that using economic frameworks that do not incorporate critical electricity and innovation system features may over-or under-estimate the value of emerging technologies, and therefore the cost-effectiveness of R&D opportunities. Terms of use: Documents inJEL-Code: Q420, Q540, Q550.

Spatiotemporal evolution of investment-carbon emission coupling coordination in China’s electricity market

“…(Morris et al, 2018;Braungardt et al, 2021), it is difficult to evaluate the importance of different technologies in achieving a steady investment to reduce carbon emissions. A key issue for policymakers is how to allocate limited funding across multiple technologies, balancing R&D investment to drive innovation in emerging low-carbon technologies (Santen et al, 2017).…”

Incumbent’s Bane or Gain? Renewable Support and Strategic Behavior in Electricity Markets

“…Our research question bridges the gap between three strands of literature on the analysis of electricity markets: investment incentives, strategic behavior under decarbonization policies, and incumbents' behavior. There is a large body of literature addressing different aspects of investment decisions such as risk (e.g., Deilen, Felling, Leisen, and Weber, 2018), market design (e.g., the capacity payment debate in Ritz, Teirilä, and Ritz, 2018;Llobet and Padilla, 2018), and joint R&D and generation capacity investments (e.g., Santen, Webster, Popp, and Pérez-arriaga, 2017). Regarding strategic company behavior, there are plenty of empirical market power assessments for different markets (e.g., Mountain, 2013;Woerman, 2018) as well as theoretical assessments of the effects of oligopolistic or monopolistic markets on outcomes of energy policies (e.g., Ambec and Crampes, 2015).…”