Power Markets in Transition: Decarbonization, Energy Efficiency, and Short-Term Demand Response

Mathias Mier and Christoph Weissbart

No 284, ifo Working Paper Series from ifo Institute - Leibniz Institute for Economic Research at the University of Munich

Abstract: Energy efficiency and short-term demand response are key issues in the decarbonization of power markets. However, their interaction and combined impact on market prices as well as on the supply side, is yet to be understood. We develop a framework to implement investments in energy efficiency and short-term demand response in detailed partial equilibrium power market models. We quantify our results using the EU-REGEN model for the European power market and find that energy efficiency contributes, under a 80% emission reduction target, only 11% of carbon emission reductions. Intermittent renewable energies such as wind and solar power account for the major share of 53%. However, both energy efficiency and short-term demand response have their merits in reducing marginal abatement costs and additionally exhibit an subadditive effect, at least under a 80% climate policy.

JEL-codes: C61 L94 Q41 Q51 (search for similar items in EconPapers)
Date: 2019
New Economics Papers: this item is included in nep-ene, nep-env and nep-reg
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (11)

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Related works:
Journal Article: Power markets in transition: Decarbonization, energy efficiency, and short-term demand response (2020)
Working Paper: Power markets in transition: Decarbonization, energy efficiency, and short-term demand response (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:ces:ifowps:_284

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