An Assessment of Turkish Energy Sector Development under the Paris Agreement Goals using a CGE Model with Detailed Representation of Power Sector

Bora Kat, Sergey Paltsev and Mei Yuan

No 332822, Conference papers from Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project

Abstract: Heavy reliance on imported energy and fossil-intensive energy generation are substantial challenges that contribute to the economic problems that Turkey currently faces. Most of the researchers who assess the economic impacts of energy and environmental policies in Turkey use a general equilibrium approach. The models developed for this purpose thus far including assessing the targets that Turkey has submitted for the Paris Agreement employ an aggregated power sector representation, which does not capture the technological details. Given the importance of power sector to a successful climate policy, we develop an integrated computable general equilibrium (CGE) model of Turkish economy (TR-EDGE) that combines macroeconomic representation of the non-electric sectors and detailed representation of the power sector where disaggregation of Turkish power sector in a CGE framework is the first attempt. We assess the compliance cost of commitments under several scenarios. First, a reference scenario (BAU) reflecting current official plans including two nuclear power plants to be commissioned until 2030 is defined and calibrated in accordance with medium-term expectations. This scenario also includes the subsidy scheme for renewables which was revised after 2010. Then, we define another scenario in which no nuclear power technology is allowed (NoN). Finally, a scenario comprising the analysis of a national emission trading scheme (TrEm) is proposed. Results indicate that the price per ton of CO2e emission to attain a 21% reduction in GHG emissions (in 2030 as pledged in the submission to the Paris Agreement) compared to BAU level is $51.46 under BAU+TrEm in 2030, while it is $67.90 under NoN+TrEm. Besides this, coal-fired power vanishes by 2030 when the TrEm policy is applied regardless of nuclear assumptions. Moreover, the penetration of wind and solar would not be as much as targeted even if high subsidy rates are modelled as they are specified in the current regulations.

Keywords: Resource/Energy; Economics; and; Policy (search for similar items in EconPapers)
Date: 2017
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