The Economic and Climate Value of Flexibility in Green Energy Markets
Abstract This paper examines how enhanced flexibility across space, time, and a regulatory dimension affects the economic costs and CO $$_2$$ 2...
| Main Authors: | , , |
|---|---|
| Other Authors: | |
| Format: | Article |
| Language: | English |
| Published: |
Springer Netherlands
2021
|
| Online Access: | https://hdl.handle.net/1721.1/133038 |
| _version_ | 1826188661510635520 |
|---|---|
| author | Abrell, Jan Rausch, Sebastian Streitberger, Clemens |
| author2 | Massachusetts Institute of Technology. Joint Program on the Science & Policy of Global Change |
| author_facet | Massachusetts Institute of Technology. Joint Program on the Science & Policy of Global Change Abrell, Jan Rausch, Sebastian Streitberger, Clemens |
| author_sort | Abrell, Jan |
| collection | MIT |
| description | Abstract
This paper examines how enhanced flexibility across space, time, and a regulatory dimension affects the economic costs and CO
$$_2$$
2
emissions of integrating large shares of intermittent renewable energy from wind and solar. We develop a numerical model which resolves hourly dispatch and investment choices among heterogeneous energy technologies and natural resources in interconnected wholesale electricity markets, cross-country trade (spatial flexibility), energy storage (temporal flexibility), and tradable green quotas (regulatory flexibility). Taking the model to the data for the case of Europe’s system of interconnected electricity markets, we find that the appropriate combination of flexibility can bring about substantial gains in economic efficiency, reduce costs (up to 13.8%) and lower CO
$$_2$$
2
emissions (up to 51.2%). Regulatory flexibility is necessary to realize most of the maximum possible benefits. We also find that gains from increased flexibility are unevenly distributed and that some countries incur welfare losses. |
| first_indexed | 2024-09-23T08:03:05Z |
| format | Article |
| id | mit-1721.1/133038 |
| institution | Massachusetts Institute of Technology |
| language | English |
| last_indexed | 2024-09-23T08:03:05Z |
| publishDate | 2021 |
| publisher | Springer Netherlands |
| record_format | dspace |
| spelling | mit-1721.1/1330382021-11-01T14:36:57Z The Economic and Climate Value of Flexibility in Green Energy Markets Abrell, Jan Rausch, Sebastian Streitberger, Clemens Massachusetts Institute of Technology. Joint Program on the Science & Policy of Global Change Abstract This paper examines how enhanced flexibility across space, time, and a regulatory dimension affects the economic costs and CO $$_2$$ 2 emissions of integrating large shares of intermittent renewable energy from wind and solar. We develop a numerical model which resolves hourly dispatch and investment choices among heterogeneous energy technologies and natural resources in interconnected wholesale electricity markets, cross-country trade (spatial flexibility), energy storage (temporal flexibility), and tradable green quotas (regulatory flexibility). Taking the model to the data for the case of Europe’s system of interconnected electricity markets, we find that the appropriate combination of flexibility can bring about substantial gains in economic efficiency, reduce costs (up to 13.8%) and lower CO $$_2$$ 2 emissions (up to 51.2%). Regulatory flexibility is necessary to realize most of the maximum possible benefits. We also find that gains from increased flexibility are unevenly distributed and that some countries incur welfare losses. 2021-10-18T18:52:48Z 2021-10-18T18:52:48Z 2021-09 2021-10-03T03:08:15Z Article http://purl.org/eprint/type/JournalArticle https://hdl.handle.net/1721.1/133038 Abrell, Jan, Rausch, Sebastian and Streitberger, Clemens. 2021. "The Economic and Climate Value of Flexibility in Green Energy Markets." en https://doi.org/10.1007/s10640-021-00605-6 Creative Commons Attribution https://creativecommons.org/licenses/by/4.0/ The Author(s) application/pdf Springer Netherlands Springer Netherlands |
| spellingShingle | Abrell, Jan Rausch, Sebastian Streitberger, Clemens The Economic and Climate Value of Flexibility in Green Energy Markets |
| title | The Economic and Climate Value of Flexibility in Green Energy Markets |
| title_full | The Economic and Climate Value of Flexibility in Green Energy Markets |
| title_fullStr | The Economic and Climate Value of Flexibility in Green Energy Markets |
| title_full_unstemmed | The Economic and Climate Value of Flexibility in Green Energy Markets |
| title_short | The Economic and Climate Value of Flexibility in Green Energy Markets |
| title_sort | economic and climate value of flexibility in green energy markets |
| url | https://hdl.handle.net/1721.1/133038 |
| work_keys_str_mv | AT abrelljan theeconomicandclimatevalueofflexibilityingreenenergymarkets AT rauschsebastian theeconomicandclimatevalueofflexibilityingreenenergymarkets AT streitbergerclemens theeconomicandclimatevalueofflexibilityingreenenergymarkets AT abrelljan economicandclimatevalueofflexibilityingreenenergymarkets AT rauschsebastian economicandclimatevalueofflexibilityingreenenergymarkets AT streitbergerclemens economicandclimatevalueofflexibilityingreenenergymarkets |