Analysis of the market penetration of clean coal technologies and its impacts in China's electricity sector

This paper discusses policy instruments for promoting the market penetration of clean coal technologies (CCTs) into China's electricity sector and the evaluation of corresponding effects. Based on the reality that coal will remain the predominant fuel to generate electricity and conventional pulverized coal boiler power plants have serious impacts on environment degradation, development of clean coal technologies could be one alternative to meet China's fast growing demand of electricity as well as protect the already fragile environment. A multi-period market equilibrium model is applied and an electricity model of China is established to forecast changes in the electricity system up to 2030s. Three policy instruments: SO₂ emission charge, CO₂ emission charge and implementing subsidies are considered in this research. The results show that all instruments cause a significant shift in China's electricity structure, promote CCTs’ competitiveness and lead China to gain great benefit in both resource saving and environment improvement. Since resource security and environment degradation are becoming primary concerns in China, policies that could help to gain generations’ market share of advanced coal-based technologies such as CCTs’ is suitable for the current situation of China's electricity sector.     

Explaining the diffusion of renewable energy technology in developing countries

In this paper we study the diffusion of non-hydro renewable energy (NHRE) technologies for electricity generation across 108 developing countries between 1980 and 2010. We use two-stage estimation methods to identify the determinants behind the choice of whether or not to adopt NHRE as well as about the amount of electricity to produce from renewable energy sources. We find that NHRE diffusion accelerates with the implementation of economic and regulatory instruments, higher per capita income and schooling levels, and stable, democratic regimes. In contrast, increasing openness and aid, institutional and strategic policy support programs, growth of electricity consumption, and high fossil fuel production appear to delay NHRE diffusion. Furthermore, we find that a diverse energy mix increases the probability of NHRE adoption. Finally, we find a weak support for a positive influence of the Kyoto Protocol on NHRE diffusion and no evidence for any influence resulting from financial sector development.     

Renewable energy: Externality costs as market barriers

This paper addresses the impact of environmentally based market failure constraints on the adoption of renewable energy technologies through the quantification in financial terms of the externalities of electric power generation, for a range of alternative commercial and almost-commercial technologies. It is shown that estimates of damage costs resulting from combustion of fossil fuels, if internalised into the price of the resulting output of electricity, could lead to a number of renewable technologies being financially competitive with generation from coal plants. However, combined cycle natural gas technology would have a significant financial advantage over both coal and renewables under current technology options and market conditions. On the basis of cost projections made under the assumption of mature technologies and the existence of economies of scale, renewable technologies would possess a significant social cost advantage if the externalities of power production were to be “internalised”. Incorporating environmental externalities explicitly into the electricity tariff today would serve to hasten this transition process.     

Identifying barriers in the diffusion of renewable energy sources

Rapid diffusion of renewable energy sources (RES) in the electricity power sector is crucial if the EU wants to fulfill its 2050 CO₂ reduction commitments. For this reason, identifying and alleviating all barriers that hinder the development of RES is necessary to the successful deployment of these technologies. This paper discusses the main barriers in the diffusion of wind and photovoltaic (PV) solar power in the Greek electricity sector by drawing on the literature of technological innovation systems and system functions. Furthermore, we provide an explanation of the different diffusion rates between the two technologies. Inadequate financial resources, low grid capacity, delays in the issuance of building permits, opposition from local communities to the construction of wind farms and the lack of a stable institutional framework are among the most important barriers that inhibit the diffusion of the wind and PV solar power. The nature of the barriers identified in this study calls for policy intervention.     

Fast market penetration of energy technologies in retrospect with application to clean energy futures

The fast penetration of energy technologies in the past was analyzed and applied to investigate the prospects of new energy technologies. The results show that single energy sources have obtained quite a dominant position in the past. In the USA, at one time both oil and coal each represented over half of all the yearly additions to energy capacity for more than half a century and reached a dominant position in overall energy production. Oil showed a similar dominance on a global scale. For two decades nuclear power represented one third of all the new electricity added worldwide and over 60% in the countries possessing nuclear power. In some countries nuclear grew to around half of all electricity in less than just 10 years. Applying these empirical observations to new renewables and assuming similar growth conditions as for the old technologies, the share of renewable electricity could grow from its present 19% to 60% by 2050, which would drop the baseline CO₂ emissions by 27%. The share of new renewables of all electricity would come up to 42%. The rate of adoption of these new technologies would not exceed that of oil or nuclear in the past, but they would need to dominate new electricity investments from 2030 onwards. A hypothetical fast-track case for solar photovoltaics, assuming an expansion similar to that seen in the case of nuclear and oil, would lead to a 20–25% share of all electricity in 2050. An important observation is that the fast and high penetration of energy technologies implies, in most cases, a full lock-in into these, requiring a preferential position regarding investments and a favorable long-term policy framework.     

Hidden biases in Australian energy policy

The challenges in developing technology for the capture and storage of CO₂ from coal, oil and gas power generation, as well as those associated with the storage of nuclear waste, are widely regarded as solvable. According to proponents of clean coal, oil and gas technologies, as well as the proponents of nuclear technology, it is only a matter of time and resources to find a solution to their waste problems. Similarly, the Australian Government argues that our main efforts need to be concentrated on clean coal technologies, as well as considering the nuclear option. However, when it comes to the challenges associated with renewable energy technologies, like intermittency of wind generated grid power, storage of electricity from renewable energy and so on, there seems to be an attitude amongst Australian energy planners that these challenges represent insurmountable technical and financial problems, and will, at least in the short to medium term, prevent them from becoming a viable alternative to coal, oil, gas and uranium based energy technologies.     

Implications of technological learning on the prospects for renewable energy technologies in Europe

The objective of this article is to examine the consequences of technological developments on the market diffusion of different renewable electricity technologies in the EU-25 until 2020, using a market simulation model (ADMIRE REBUS). It is assumed that from 2012 a harmonized trading system will be implemented, and a target of 24% renewable electricity (RES-E) in 2020 is set and met. By comparing optimistic and pessimistic endogenous technological learning scenarios, it is found that diffusion of onshore wind energy is relatively robust, regardless of technological development, but diffusion rates of offshore wind energy and biomass gasification greatly depend on their technological development. Competition between these two options and (existing) biomass combustion options largely determines the overall costs of electricity from renewables and the choice of technologies for the individual member countries. In the optimistic scenario, in 2020 the market price for RES-E is 1 €ct/kWh lower than in the pessimistic scenario (about 7 vs. 8 €ct/kWh). As a result, total RES-E production costs are 19% lower, and total governmental expenditures for RES-market stimulation are 30% lower in the optimistic scenario.     

Modeling a clean energy standard for electricity: Policy design implications for emissions,supply, prices,and regions

The electricity sector is responsible for roughly 40% of U.S. carbon dioxide (CO₂) emissions, and a reduction in CO₂ emissions from electricity generation is an important component of the U.S. strategy to reduce greenhouse gas emissions. Toward that goal, several proposals for a clean energy standard (CES) have been put forth, including one espoused by the Obama administration that calls for 80% clean electricity by 2035 phased in from current levels of roughly 40%. This paper looks at the effects of such a policy on CO₂ emissions from the electricity sector, the mix of technologies used to supply electricity, electricity prices, and regional flows of clean energy credits. The CES leads to a 30% reduction in cumulative CO₂ emissions between 2013 and 2035 and results in dramatic reductions in generation from conventional coal. The policy also results in fairly modest increases on national electricity prices, but this masks a wide variety of effects across regions.     

Compromises in energy policy—Using fuzzy optimization in an energy systems model

Over the last year in Germany a great many political discussions have centered around the future direction of energy and climate policy. Due to a number of events related to energy prices, security of supply and climate change, it has been necessary to develop cornerstones for a new integrated energy and climate policy. To supplement this decision process, model-based scenarios were used. In this paper we introduce fuzzy constraints to obtain a better representation of political decision processes, in particular, to find compromises between often contradictory targets (e.g. economic, environmentally friendly and secure energy supply). A number of policy aims derived from a review of the ongoing political discussions were formulated as fuzzy constraints to explicitly include trade-offs between various targets. The result is an overall satisfaction level of about 60% contingent upon the following restrictions: share of energy imports, share of biofuels, share of CHP electricity, CO₂ reduction target and use of domestic hard coal. The restrictions for the share of renewable electricity, share of renewable heat, energy efficiency and postponement of nuclear phase out have higher membership function values, i.e. they are not binding and therefore get done on the side.     

The decline of the world’s energy intensity

Energy intensity of the total primary energy supply (TPES), total final energy consumption (TFC) and LOSSES in the conversion from TPES to TFC were analyzed for the World, OECD and Rest of the World (ROW) countries. LOSSES increased significantly for all groups of countries due to the increase of electricity production from coal in the period studied (1971–2008). Electricity share final consumption almost doubled, increasing from 8.8% to 17.2% in the period studied. However the energy intensity of LOSSES remained practically constant, which reflects the fact that the efficiency of electricity generation from coal (the main source of electricity) remained practically constant in that period. Despite the attractiveness of end-use devices running on electricity such as computers, which is typical of modern societies, the CO₂ emissions are bound to increase unless coal is replaced by less carbon emitting sources such as natural gas, renewables and nuclear energy.     

Innovative energy technologies and climate policy in Germany

Due to the size and structure of its economy, Germany is one of the largest carbon emitters in the European Union. However, Germany is facing a major renewal and restructuring process in electricity generation. Within the next two decades, up to 50% of current electricity generation capacity may retire because of end-of-plant lifetime and the nuclear phase-out pact of 1998. Substantial opportunities, therefore, exist for deployment of advanced electricity generating technologies in both a projected baseline and in alternative carbon policy scenarios. We simulate the potential role of coal integrated gasification combined cycle (IGCC), natural gas combined cycle (NGCC), carbon dioxide capture and storage (CCS), and wind power within a computable general equilibrium model of Germany from the present through 2050. These advanced technologies and their role within a future German electricity system are the focus of this paper. We model the response of greenhouse gas emissions in Germany to various technology and carbon policy assumptions over the next few decades. In our baseline scenario, all of the advanced technologies except CCS provide substantial contributions to electricity generation. We also calculate the carbon price where each fossil technology, combined with CCS, becomes competitive. Constant carbon price experiments are used to characterize the model response to a carbon policy. This provides an estimate of the cost of meeting an emissions target, and the share of emissions reductions available from the electricity generation sector.     

White Certificates for energy efficiency improvement with energy taxes: A theoretical economic model

In this paper we analyze interactions of two energy policy instruments, namely a White Certificates (WhC) scheme as an innovative policy instrument for energy efficiency improvement and energy taxation. These policy instruments differ in terms of objectives and final impacts on the price of electricity. We examine the effect of these policy instruments in the electricity sector, focusing on electricity producers and suppliers in a competitive market. Using microeconomic theory, we identify synergies between market players and demonstrate the total effect on the electricity price when suppliers internalize the behaviour of producers in their decisions. This model refers to an ideal market situation of full liberalization. The cases we examine consist of electricity producers with and without a carbon tax, electricity suppliers with and without an electricity tax, and with WhC obligations. Furthermore, we present a parallel implementation of WhC for electricity suppliers with carbon tax on electricity producers and an electricity tax with WhC obligations to electricity suppliers. We demonstrate differences in optimization behaviour of producers and suppliers. Based on a couple of cases of WhC with carbon and electricity taxes, various positive and negative effects of both schemes in terms of target achievement and efficiency are present, which can lead to an added value of such schemes in the policy mix, although uncertainties of outcomes are quite high. A basic finding is that in a merit order several parameters can increase final electricity price after the implementation of different policies: demand for electricity and electricity supply cost at a large scale and then follow the level of level of obligation for energy saving, level of penalty, and price of WhC (representing the marginal costs of energy saving projects). The impact magnitude of parameters depends on the values chosen and on the initial position of suppliers (i.e. if their actual behaviour deviates from full compliance with targets).     

Germany's solar cell promotion: Dark clouds on the horizon

This article demonstrates that the large feed-in tariffs currently guaranteed for solar electricity in Germany constitute a subsidization regime that threatens to reach a level comparable to that of German hard coal production, a notoriously outstanding example of misguided political intervention. Yet, as a consequence of the coexistence of the German Renewable Energy Sources Act (EEG) and the EU Emissions Trading Scheme (ETS), the increased use of renewable energy technologies does not imply any additional emission reductions beyond those already achieved by ETS alone. Similarly disappointing is the net employment balance, which is likely to be negative if one takes into account the opportunity cost of this form of solar photovoltaic (PV) support. Along the lines of the international energy agency [IEA, 2007. Energy policies of IEA countries: Germany, 2007 review. International Energy Agency, OECD, Paris, p. 77], we recommend the immediate and drastic reduction of the magnitude of the feed-in tariffs granted for solar-based electricity. Ultimately, producing electricity on this basis is among the most expensive greenhouse gas abatement options.     

Biomass power: Exploring the diffusion challenges in Spain

The use of biomass resources for power generation offers numerous benefits of interest for political decision-makers: fuel security, rural and industrial development, ecological benefits. In Spain, policy instruments have been used since 1980 to stimulate biomass power generation. However, the diffusion outcome by 2007 was very disappointing: only 525 MW. This paper argues that two factors lie at the core of this: the conceptualization of biomass resources by political decision-makers in the instruments used, and the desire that policy instruments be in line with market liberalization principles. These generated a persistent economic obstacle for biomass power generation, and impeded the development of markets for the supply of biomass resources. The policy learning regarding the heterogeneity of biomass resources, and the investors’ expectations on risks, profitability and resource markets was very slow among political decision-makers. The paper contributes to the understanding of diffusion outcomes by proposing to analyse diffusion by means of five indicators: types of resources, technologies, developers, motivations to invest and project sizes. Besides, the paper shows the usefulness of investigating policy instruments in terms of their risk and profitability characteristics. This enables a better understanding of the diffusion patterns and outcomes.     

Political will and collaboration for electric power reform through renewable energy in Africa

Climate change, in particular rainfall variability, affects rain-dependent agriculture in Africa. The resulting food shortages, in combination with rising population and lack of access to electricity needed for development, require the governments and people of Africa to consider renewable energy sources. One example that has high potential in Africa is solar energy. Many African governments have begun discussions about renewable energy but tangible results have yet to materialize. This research contributes to the governmental efforts by presenting the solar electricity potentials for some African cities. Using photovoltaic geographical information system (PVGIS) data, it is clear that there is enough electricity for urban and rural dwellers if there is political will and if the solar panels are mounted at the suggested optimal angles ranging from 8–34°. The solar irradiation at all sites was higher than the typical daily domestic load requirement of 2324 Wh/m² in urban and rural areas. We provide a strong rationale for political will, collaboration and transparent energy policies that will ensure that life is enhanced through the use of environmentally-friendly renewable energy technologies such as solar power.     

Reformulating taxes for an energy transition

An energy transition toward clean energy sources would reduce environmental impacts. One proposal to trigger this energy transition uses economic instruments, particularly environmental taxes. This research studies the potential impact of taxes on electricity on the environment and the economy. Using a dynamic computable general equilibrium model for Spain with energy and environmental extensions, we assess their current impact on GDP growth, energy use, and a set of different pollutant emissions. Then we propose a reform that would foster an energy transition toward clean energies and assess their economic and environmental impact. We find that only taxing the production of electricity by coal, oil, and natural gas can be better for the environment and economy than taxing all forms of electricity production in a revenue-neutral context. Moreover, the production of electricity by biomass, though considered renewable, is an important source of pollutant emissions and, in these terms, should have less importance in an energy transition.     

Improving appraisal of sustainability of energy options – A view from Slovenia

The new Slovenian approach to systematic, transparent, and reproducible appraisal of sustainability as related to electricity production is presented. The common sustainability components, i.e. economy, environment, and society, are integrated into evaluation of the feasibility, rationality, and uncertainty of the energy mix alternatives. A three stage model has been applied for this sustainability appraisal. The first level deals with alternative technologies for electricity production, the second with alternative mixtures of technologies for meeting electricity needs by 2050, and the third takes into account the expected timing of shutting-down existing old power plants and constructing the new ones. Technology alternatives cover both conventional and renewable energy sources: coal fired, gas fired, biomass fired, oil fired, nuclear, hydro, wind, and photovoltaic. The results show that only mixtures of nuclear, hydro, and gas fired technologies are reliable and rational in the context of meeting expected energy needs. The expected share of energy produced by wind and photovoltaic technology is between 8% and 15%, which makes them less sustainable than other technologies. Eventually, they do not meet sustainability goals from the economic and social points of view.     

Technological learning and renewable energy costs: implications for US renewable energy policy

This paper analyzes the relationship between current renewable energy technology costs and cumulative production, research, development and demonstration expenditures, and other institutional influences. Combining the theoretical framework of ‘learning by doing’ and developments in ‘learning by searching’ with the fields of organizational learning and institutional economics offers a complete methodological framework to examine the underlying capital cost trajectory when developing electricity cost estimates used in energy policy planning models. Sensitivities of the learning rates for global wind and solar photovoltaic technologies to changes in the model parameters are tested. The implications of the results indicate that institutional policy instruments play an important role for these technologies to achieve cost reductions and further market adoption.     

Exploring past energy changes and their implications for the pace of penetration of new energy technologies

Possible growth paths for new electricity generation technologies are investigated on the basis of an empirical analysis of past penetration rates. Finding and understanding high market penetration scenarios is relevant to formulating climate change mitigation strategies. The analysis shows that under favorable growth conditions, photovoltaics and wind could produce 15% and 25%, respectively, of world electricity by 2050. Under the same assumptions nuclear power could increase to 41% of world electricity. But it is unlikely that all three technology paths could be realized up to these values simultaneously and therefore the penetration rates presented here should be considered as indicative only. The results show that under positive conditions, an embryonic technology could move as a preferred option into a mainstream energy source within half a century. The introduction of growth constraints reflecting, e.g., severe economic, technical, or political limitations could reduce the above numbers by a factor of up to 2–3. The results indicate a decline in the relative year-to-year growth of new technologies when they have higher market shares. A comparison of the results with other short-term and long-term technology scenarios shows satisfactory agreement.     

The impact of carbon sequestration on the production cost of electricity and hydrogen from coal and natural-gas technologies in Europe in the medium term

Carbon sequestration is a distinct technological option with a potential for controlling carbon emissions; it complements other measures, such as improvements in energy efficiency and utilization of renewable energy sources. The deployment of carbon sequestration technologies in electricity generation and hydrogen production will increase the production costs of these energy carriers. Our economic assessment has shown that the introduction of carbon sequestration technologies in Europe in 2020, will result in an increase in the production cost of electricity by coal and natural gas technologies of 30–55% depending on the electricity-generation technology used; gas turbines will remain the most competitive option for generating electricity; and integrated gasification combined cycle technology will become competitive. When carbon sequestration is coupled with natural-gas steam reforming or coal gasification for hydrogen production, the production cost of hydrogen will increase by 14–16%. Furthermore, natural-gas steam reforming with carbon sequestration is far more economically competitive than coal gasification.