Coal-Biomass Co-firing within Renewable Portfolio Standards: Strategic Adoption by Heterogeneous Firms and Emissions Implications

Brayam Valqui, Mort D. Webster, Shanxia Sun and Thomas Hertel

The Energy Journal, 2023, vol. 44, issue 5, 115-148

Abstract: As electricity from coal declines, co-firing coal plants with biomass has been proposed to extend coal unit life, increase production, and reduce carbon emissions. Previous studies reach conflicting conclusions on whether coal biomass co-firing would result in a net increase or decrease in carbon emissions. We explore whether biomass co-firing would decrease emissions using a novel framework that includes two critical features of electricity markets: strategic adoption decisions by firms and intertemporal constraints on power plant operations. We apply this framework to a case study based on the Midwestern U.S. electricity market and show that profit maximizing firms will retrofit mid-efficiency coal units, rather than the most or least efficient units. We demonstrate that, contrary to expectations, this strategy leads to a net increase in system-wide carbon emissions under high carbon prices because of the other generators displaced by co-firing units.

Keywords: Electricity markets; Game theory; Technology adoption; Equilibrium framework; Environmental regulations (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://journals.sagepub.com/doi/10.5547/01956574.44.4.bval (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:sae:enejou:v:44:y:2023:i:5:p:115-148

DOI: 10.5547/01956574.44.4.bval

Access Statistics for this article

More articles in The Energy Journal
Bibliographic data for series maintained by SAGE Publications ().