Integrated Power and Economic Analysis of Austria’s Renewable Electricity Transformation

Robert Gaugl (), Mark Sommer, Claudia Kettner, Udo Bachhiesl, Thomas Klatzer, Lia Gruber, Michael Böheim, Kurt Kratena and Sonja Wogrin
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Robert Gaugl: Institute of Electricity Economics and Energy Innovation (IEE), Graz University of Technology, Inffeldgasse 18, 8010 Graz, Austria
Mark Sommer: Austrian Institute of Economic Research (WIFO), Arsenal Objekt 20, 1030 Wien, Austria
Claudia Kettner: Austrian Institute of Economic Research (WIFO), Arsenal Objekt 20, 1030 Wien, Austria
Udo Bachhiesl: Institute of Electricity Economics and Energy Innovation (IEE), Graz University of Technology, Inffeldgasse 18, 8010 Graz, Austria
Thomas Klatzer: Institute of Electricity Economics and Energy Innovation (IEE), Graz University of Technology, Inffeldgasse 18, 8010 Graz, Austria
Lia Gruber: Institute of Electricity Economics and Energy Innovation (IEE), Graz University of Technology, Inffeldgasse 18, 8010 Graz, Austria
Michael Böheim: Austrian Institute of Economic Research (WIFO), Arsenal Objekt 20, 1030 Wien, Austria
Kurt Kratena: Centre of Economic Scenario Analysis and Research (CESAR), Fuhrmannsgasse 2A/4, 1080 Wien, Austria
Sonja Wogrin: Institute of Electricity Economics and Energy Innovation (IEE), Graz University of Technology, Inffeldgasse 18, 8010 Graz, Austria

Energies, 2023, vol. 16, issue 5, 1-19

Abstract: Austria has set the goal to transform its electricity sector to 100% renewable energy sources by 2030. The transition to highly renewable power systems is not only a technical challenge but also has economic implications due to high investment needs. Furthermore, electricity price and demand are interlaced and influence each other, which requires both technical and economic analyses. In order to provide these comprehensive integrated analyses, we present a novel approach of linking the technical model of the continental European electricity system ATLANTIS with the macroeconomic model DYNK . This allows us, inter alia, to analyze the effects of increasing shares of renewables on wholesale electricity prices and demand, and to perform a sensitivity analysis with respect to CO 2 prices. Our results show that increasing CO 2 prices greatly affect coal-fired generation abroad, which in turn promotes the role of gas-fired generation, at least until 2030. For Austria, this results in increased national gas-fired generation and electricity exports. Therefore, gas-fired power plants still determine the Austrian market price for electricity in the merit order, which leads to higher electricity prices due to CO 2 pricing. In turn, however, higher electricity prices only cause a marginal reduction in the electricity demand in Austria.

Keywords: renewable energies; macroeconomic modelling; electricity economics; DC-OPF; model linkage; Austria (search for similar items in EconPapers)
JEL-codes: Q Q0 Q4 Q40 Q41 Q42 Q43 Q47 Q48 Q49 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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