Extended policy mix in the power sector: How a coal phase-out redistributes costs and profits among power plants

Annika Gillich, Kai Hufendiek and Nikolai Klempp

Energy Policy, 2020, vol. 147, issue C

Abstract: With the phase-out of coal power plants, the existing mix of instruments aimed at decarbonising electricity sectors is getting more complex. This paper contributes to its understanding by highlighting the impact of coal phase-out, CO2-price and increasing capacity of variable renewable energies on contribution margins of power plants. By visualizing these three instruments in a brownfield screening curves model (SCM), their fundamental effects on plant operation, electricity price and margins become apparent at a glance. Moreover, the SCM allows to derive generic statements about winners and losers on the supply side. Results are then quantified within a case study for Germany using the power sector model E2M2. The high resolution regarding time and generation system permits a realistic simulation of electricity prices and thus of margins at plant level.

Keywords: Decarbonisation; Electricity sector; Coal phase-out; Contribution margins; Policy mix; Screening curves (search for similar items in EconPapers)
Date: 2020
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Citations: View citations in EconPapers (11)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:enepol:v:147:y:2020:i:c:s0301421520304195

DOI: 10.1016/j.enpol.2020.111690

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