Power markets in transition: Decarbonization, energy efficiency, and short-term demand response

Mathias Mier and Christoph Weissbart

Energy Economics, 2020, vol. 86, issue C

Abstract: Energy efficiency and short-term demand response are key issues in the decarbonization of power markets. However, their interaction and combined impact on market prices as well as on the supply side, is yet to be understood. We develop a framework to implement short-term demand response and investments in energy efficiency in detailed partial equilibrium power market models. We quantify our results using the EU-REGEN model for the European power market. Under an 80% emission reduction target, energy efficiency contributes only 11% of carbon emission reductions. Intermittent renewable energies such as wind and solar power account for the major share of 53%. In comparison to a scenario without short-term demand response and energy efficiency investments, 70 GW gas power is decommissioned immediately and 180 GW less gas capacity is needed in 2050, which underlines the need for immediate action by policy makers to avoid locking the EU power market into an inefficient path.

Keywords: Energy efficiency; Demand response; Renewable energy; Dispatchable technologies; Energy modeling; Optimal dispatch; Investment planning (search for similar items in EconPapers)
JEL-codes: C61 L94 Q41 Q51 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (26)

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Related works:
Working Paper: Power markets in transition: Decarbonization, energy efficiency, and short-term demand response (2020)
Working Paper: Power Markets in Transition: Decarbonization, Energy Efficiency, and Short-Term Demand Response (2019)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:eneeco:v:86:y:2020:i:c:s0140988319304414

DOI: 10.1016/j.eneco.2019.104644

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