Economics at your fingertips  

Carbon price instead of support schemes: Windpower investments by the electricity markets

Dominique Finon, Tanguy Janssen and Marie Petitet
Additional contact information
Dominique Finon: CIRED - centre international de recherche sur l'environnement et le développement - CNRS - Centre National de la Recherche Scientifique - ENPC - École des Ponts ParisTech - EHESS - École des hautes études en sciences sociales - AgroParisTech - Cirad - Centre de Coopération Internationale en Recherche Agronomique pour le Développement

CIRED Working Papers from HAL

Abstract: In this paper we study the development of wind power by the electricity market without any usual support scheme which is aimed at subsidizing non mature renewables, with the sole incentive of a significant carbon price. Long term electricity market and investment decisions simulation by system dynamics modelling is used to trace the electricity generation mix evolution over a 20-year period in a pure thermal system. A range of stable carbon price, as a tax could be, is tested in order to determine the value above which wind power development by market forces becomes economically possible. Not only economic competitiveness in terms of cost price, but also profitability against traditional fossil fuel technologies are necessary for a market-driven development of wind power. Results stress that wind power is really profitable for investors only if the carbon price is very significantly higher than the price required for making wind power MWh's cost price competitive with CCGT and coal-fired plants on the simplistic basis of levelized costs. In this context, the market-driven development of wind power seems only possible if there is a strong commitment to climate policy, reflected by the preference for a stable and high carbon price rather than a fuzzy price of an emission trading scheme. Besides, results show that market-driven development of wind power would require a sky-rocketing carbon price if the initial technology mix includes a share of nuclear plants even with a moratorium on new nuclear development.

Date: 2015-01-23
Note: View the original document on HAL open archive server:
References: Add references at CitEc
Citations: Track citations by RSS feed

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
Journal Article: Carbon Price instead of Support Schemes: Wind Power Investments by the Electricity Market (2016) Downloads
Working Paper: Carbon price instead of support schemes: Windpower investments by the electricity markets (2015)
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:

Access Statistics for this paper

More papers in CIRED Working Papers from HAL
Bibliographic data for series maintained by CCSD ().

Page updated 2021-04-20
Handle: RePEc:hal:ciredw:hal-01108944