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ID:
171500
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| Summary/Abstract |
The energy sector transition requires large financial investments in low-carbon generation technologies, to be delivered by a variety of actors with heterogeneous characteristics. Real-world actors have bounded-rationality, reflected by their limited foresight and heterogeneous expectations, and as past trends influence their investments. Agent-based models are highly suitable modelling frameworks to study such realistic and complex energy transition dynamics. This paper introduces BRAIN-Energy, a novel agent-based model which explicitly allows to explore the impacts of actors' heterogeneous characteristics, and of their interactions, on the transition pathways of the UK, German and Italian electricity sectors. Results show that actors' heterogeneous characteristics pose barriers to effective decarbonisation efforts, affect the speed of the transition, and impact the transition's security of supply and affordability dimensions. Limited foresight and path-dependency lead to investment cycles (both virtuous and vicious). The country comparison highlights how such effects are stronger in markets with more heterogeneous market players.
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| 2 |
ID:
176114
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| Summary/Abstract |
Sulfur dioxide (SO2) emissions from coal-fired power plants in China have declined significantly since an incentive-based policy named as the desulfurated electricity pricing premium program (DEPPP) was implemented for all coal-fired power plants in 2006. Using industrial pollution panel data from 350 prefectures in China and difference-in-differences models, we estimate causal effects of the DEPPP on the coal-fired power plants. We find that the DEPPP provided the coal-fired power plants strong incentives to invest in capital-intensive flue gas desulfurization (FGD) equipment and to operate the installed FGD at a higher rate, and thus contributed to significant reductions in total SO2 emissions in China. Our results suggest that the DEPPP reduced uncertainty faced by the coal-fired power plants when making large capital investments in SO2 abatement techniques such as FGD to comply with stringent environmental regulations. However, the DEPPP may not be cost-effective in reducing SO2 emissions given heterogeneous marginal costs for operating FGD units in different coal-fired power plants. Furthermore, the effectiveness of the DEPPP also depends on strengthened environmental regulatory capacities to enforce coal-fired power plants to comply with the operating rate requirement for the installed FGD.
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