Counter-intuitive behaviour of energy system models under CO2 caps and prices

Juliane Weber, Heidi Ursula Heinrichs, Bastian Gillessen, Diana Schumann, Jonas Hörsch, Tom Brown and Dirk Witthaut

Energy, 2019, vol. 170, issue C, 22-30

Abstract: The mitigation of climate change requires a fundamental transition of the energy system. Affordability, reliability and the reduction of greenhouse gas emissions constitute central but often conflicting targets for this energy transition. Against this context, we reveal limitations and counter-intuitive results in the model-based optimization of energy systems, which are often applied for policy advice. When system costs are minimized in the presence of a CO2 cap, efficiency gains free a part of the CO2 cap, allowing cheap technologies to replace expensive low-emission technologies. Even more striking results are observed in a setup where emissions are minimized in the presence of a budget constraint. Increasing CO2 prices can oust clean, but expensive technologies out of the system, and eventually lead to higher emissions. These effects robustly occur in models of different scope and complexity. Hence, extreme care is necessary in the application of energy system optimization models to avoid misleading policy advice.

Keywords: Energy system model; Optimization; CO2 cap; CO2 tax (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:energy:v:170:y:2019:i:c:p:22-30

DOI: 10.1016/j.energy.2018.12.052

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