Exploring the competition between variable renewable electricity and a carbon-neutral baseload technology
Journal article, 2018

In this paper we explore the competition between variable renewable energy sources (VRE) and a carbon-neutral baseload technology in the transition to a low-carbon power system. We study a stylized system subject to a gradually increasing carbon tax using an agent-based model where agents are power companies investing in new capacity. The agents make predictions of the profitability of different investment options. Five electricity generating technologies are available in the model: coal, gas, wind, solar PV and a more expensive carbon-neutral baseload technology. We compare the output from our model with a corresponding optimization model. We present two main findings: (1) installed capacity of VRE initially increases with a carbon tax. However, once the carbon tax has reached a certain level the installed capacity of VRE starts to decline due to competition with the stylized carbon-neutral baseload technology. (2) With limited foresight we find that the model underinvests (first 25 years) in wind and then overinvests in wind compared to the optimal solution. The reasons for these dynamic phenomena are explained and an extensive sensitivity analysis is carried out.

Agent-based modeling

Wind power

Investment decisions

Variable renewables

Optimization

Solar PV

Author

Emma Jonson

Chalmers, Space, Earth and Environment, Physical Resource Theory, Physical Resource Theory 2

Christian Azar

Chalmers, Space, Earth and Environment, Physical Resource Theory

Kristian Lindgren

Chalmers, Space, Earth and Environment, Physical Resource Theory

Liv Lundberg

Chalmers, Space, Earth and Environment, Physical Resource Theory, Physical Resource Theory 2

Energy Systems

1868-3967 (ISSN) 1868-3975 (eISSN)

1-24

En agent-baserad ansats för analys och modellering av energisystem i omvandling

Swedish Energy Agency, 2016-01-01 -- 2018-12-31.

Areas of Advance

Energy

Subject Categories

Energy Systems

DOI

10.1007/s12667-018-0308-6

More information

Created

3/27/2019