CO2 Abatement from Renewable Energy Injections in the German Electricity Sector: Does a CO2 Price Help?
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2012-003.pdf
Description
main article
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2.95 MB
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Checksum (MD5)
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Author(s)
Weigt, Hannes
Delarue, Erik
Ellerman, Denny
Date Issued
April 2012
Publisher
MIT CEEPR
Citation
WP-2012-003
Series/Report no.
CEEPR Working Papers;2012-003
Abstract
The overlapping impact of the Emission Trading System (ETS) and renewable energy (RE)
deployment targets creates a classic case of interaction effects. Whereas the price interaction is widely
recognized and has been thoroughly discussed, the effect of an overlapping instrument on the
abatement attributable to an instrument has gained little attention. This paper estimates the actual
reduction in demand for European Union Allowances that has occurred due to RE deployment
focusing on the German electricity sector, for the five years 2006 through 2010. Based on a unit
commitment model we estimate that CO2 emissions from the electricity sector are reduced by 33 to 57
Mtons, or 10% to 16% of what estimated emissions would have been without any RE policy.
Furthermore, we find that the abatement attributable to RE injections is greater in the presence of an
allowance price than otherwise. The same holds for the ETS effect in presence of RE injection. This
interaction effect is consistently positive for the German electricity system, at least for these years, and
on the order of 0.5% to 1.5% of emissions.
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http://web.mit.edu/ceepr/www/publications/workingpapers.html
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