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Wind versus Nuclear Options for Generating Electricity in a Carbon Constrained World: Proceedings of the CSME International Congress 2016

Gerrit van Kooten

No 2016-06, Working Papers from University of Victoria, Department of Economics, Resource Economics and Policy Analysis Research Group

Abstract: A mathematical programming model is used to examine the impact of carbon taxes on the optimal generation mix in Alberta’s electrical system. The model permits decommissioning of generating assets with high CO2 emissions and investment in new gas, wind and, in some scenarios, nuclear capacity. Although there are interties between Alberta and the U.S. and Saskatchewan, the focus is on the one to British Columbia, as wind energy can potentially be stored in reservoirs behind hydroelectric dams. Storage can also smooth out the net load facing nuclear facilities. In the model, a carbon tax facilitates early removal of coal-fired capacity, which is replaced by low-emissions gas plants. It is only when the carbon tax exceeds $80/tCO2 that wind enters the system, although wind is displaced by nuclear power if that option is permitted. Despite high upfront costs, nuclear outcompetes wind primarily because wind requires a great deal of gas capacity that is not needed with nuclear energy. While wind alone could lower CO2 emissions by two-thirds, nuclear can reduce them by more than 90%.

Keywords: climate change; renewable energy; transmission capacity; energy storage (search for similar items in EconPapers)
JEL-codes: Q42 (search for similar items in EconPapers)
Pages: 8 pages
Date: 2016-06
New Economics Papers: this item is included in nep-ene, nep-env and nep-ger
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