The impact of policy measures on future power generation portfolio and infrastructure: a combined electricity and CCTS investment and dispatch model (ELCO)

This paper presents a general electricity-CO 2 modeling framework that is able to simulate interactions of the energy-only market with different forms of national policy measures. We set up a two sector model where players can invest into various types of generation technologies including renewables...

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Bibliographic Details
Published inEnergy systems (Berlin. Periodical) Vol. 9; no. 4; pp. 1025 - 1054
Main Authors Mendelevitch, Roman, Oei, Pao-Yu
Format Journal Article
LanguageEnglish
Published Berlin/Heidelberg Springer Berlin Heidelberg 01.11.2018
Springer Nature B.V
Subjects
Carbon sequestration
Computer simulation
Economic conditions
Economics and Management
Electricity
Electricity pricing
Energy
Energy Policy
Energy Systems
Enhanced oil recovery
Incentives
Investment
Markets
Nuclear energy
Oil recovery
Operations Research/Decision Theory
Optimization
Original Paper
Power dispatch
CCS
Electricity
UK
L94
EOR
Energy policy
CO
Modeling
O33
Q42
C61
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Summary:This paper presents a general electricity-CO 2 modeling framework that is able to simulate interactions of the energy-only market with different forms of national policy measures. We set up a two sector model where players can invest into various types of generation technologies including renewables, nuclear power and carbon capture, transport, and storage (CCTS). For a detailed representation of CCTS we also include industry players (iron and steel as well as cement), and CO 2 transport and CO 2 storage including the option for CO 2 enhanced oil recovery (CO 2 -EOR). The players maximize their expected profits based on variable, fixed and investment costs as well as endogenous prices of electricity, CO 2 abatement cost and other incentives, subject to technical and environmental constraints. Demand is inelastic and represented via type hours. The model framework allows for regional disaggregation and features simplified electricity and CO 2 pipeline networks. It is balanced via a market clearing for the electricity as well as CO 2 market. The equilibrium solution is subject to constraints on CO 2 emissions and renewable generation share. We apply the model to a case study of the UK electricity market reform to illustrate the mechanisms and potential results attained from the model.
ISSN:1868-3967
1868-3975
DOI:10.1007/s12667-017-0242-z