Power System Transformation toward Renewables: Investment Scenarios for Germany

Jonas Egerer and Wolf-Peter Schill
Authors registered in the RePEc Author Service: Wolf-Peter Schill

Economics of Energy & Environmental Policy, 2014, vol. Volume 3, issue Number 2

Abstract: We analyze distinctive investment scenarios for the integration of fluctuating renewables in the German power system. Using a combined model for dispatch, transmission, and investment, three different investment options are considered, including gas-fired power plants, pumped hydro storage, and transmission lines. We find that geographically optimized power plant investments dominate in the reference scenarios for 2024 and 2034. In scenarios with decreased renewable curtailment, storage and transmission requirements significantly increase. In an alternative scenario with larger investments into storage, system costs are only slightly higher compared to the reference; thus, considering potential system values of pumped hydro storage facilities that are not included in the optimization, a moderate expansion of storage capacities appears to be a no-regret strategy from a system perspective. Additional transmission and storage investments may not only foster renewable integration, but also increase the utilization of emission-intensive plants. A comparison of results for 2024 and 2034 indicates that this is only a temporary effect. In the long run, infrastructure investments gain importance in the context of an ongoing energy transition from coal to renewables. Because of long lead times, planning and administrative procedures for large-scale projects should start early.

JEL-codes: F0 (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (15)

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