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Co-firing coal with biomass under mandatory obligation for renewable electricity: implication for the electricity mix

Vincent Bertrand ()

Working Papers from Chaire Economie du climat

Abstract: This paper analyses the effect of recognizing co-firing coal with biomass as a renewable energy sources (RES) so as to meet the mandatory obligations in electricity. We provide simulations for the French and German electricity mix, with investigations about consequences for cost savings in the power sector and CO2 emissions. Results indicate that, if co-firing is recognized as a RES, coal would crowd-out traditional RES, not only with increased generation from existing coal plants, but also with additional investments in coal that would be substituted for traditional RES. Investments in coal may be more significant in France than in Germany, which may correspond to adding up to 243% of coal capacity in French electricity by 2030, whereas the same progression is 27% in Germany. Regarding CO2 emissions, we find sharp increases when co-firing is recognized as a RES. The rise is more significant in Germany due to more coal capacities. In the case of France, the magnitude of increased emissions highly depends on the share of nuclear electricity, with fewer increase when old nuclear stations are prolonged. Finally, we find that including co-firing in the set of RES reduces the overall costs associated with managing the power system. We also balanced the cost saving for the power sector with the increased social cost from higher CO2 emissions. Results show that the cost saving is dominated by the increased carbon cost for the society if the carbon valuation is around 100 Euros per tCO2, except in France when old nuclear stations are prolonged.

Keywords: Co-firing; Biomass; Renewable electricity obligation; Electricity mix; CO2 emissions; Social cost of carbon (search for similar items in EconPapers)
Pages: 25 pages
Date: 2017
New Economics Papers: this item is included in nep-dcm, nep-ene, nep-env and nep-reg
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http://www.chaireeconomieduclimat.org/RePEc/cec/wp ... 2017-04-Bertrand.pdf First version, 2017 (application/pdf)

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Journal Article: Co-firing Coal with Biomass under Mandatory Obligation for Renewable Electricity: Implication for the Electricity Mix (2019) Downloads
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