scholarly journals The effect of differentiating costs of capital by country and technology on the European energy transition

2021 ◽  
Vol 167 (1-2) ◽  
Author(s):  
Friedemann Polzin ◽  
Mark Sanders ◽  
Bjarne Steffen ◽  
Florian Egli ◽  
Tobias S. Schmidt ◽  
...  
Keyword(s):  
Cost Of Capital ◽  
Energy Transition ◽  
Energy System ◽  
World Market ◽  
Low Carbon ◽  
Eu Countries ◽  
Energy Technologies ◽  
Electricity System ◽  
The Cost ◽  
Low Carbon Energy

AbstractCost of capital is an important driver of investment decisions, including the large investments needed to execute the low-carbon energy transition. Most models, however, abstract from country or technology differences in cost of capital and use uniform assumptions. These might lead to biased results regarding the transition of certain countries towards renewables in the power mix and potentially to a sub-optimal use of public resources. In this paper, we differentiate the cost of capital per country and technology for European Union (EU) countries to more accurately reflect real-world market conditions. Using empirical data from the EU, we find significant differences in the cost of capital across countries and energy technologies. Implementing these differentiated costs of capital in an energy model, we show large implications for the technology mix, deployment, carbon emissions and electricity system costs. Cost-reducing effects stemming from financing experience are observed in all EU countries and their impact is larger in the presence of high carbon prices. In sum, we contribute to the development of energy system models with a method to differentiate the cost of capital for incumbent fossil fuel technologies as well as novel renewable technologies. The increasingly accurate projections of such models can help policymakers engineer a more effective and efficient energy transition.

scholarly journals Modelling Socio-Environmental Sensitivities: How Public Responses to Low Carbon Energy Technologies Could Shape the UK Energy System

2014 ◽  
Vol 2014 ◽  
pp. 1-13 ◽  
Author(s):  
Brighid Moran Jay ◽  
David Howard ◽  
Nick Hughes ◽  
Jeanette Whitaker ◽  
Gabrial Anandarajah
Keyword(s):  
Risk Aversion ◽  
Natural Resources ◽  
Large Scale ◽  
Energy System ◽  
Low Carbon ◽  
Energy Technologies ◽  
The Uk ◽  
The Cost ◽  
Low Carbon Energy

Low carbon energy technologies are not deployed in a social vacuum; there are a variety of complex ways in which people understand and engage with these technologies and the changing energy system overall. However, the role of the public’s socio-environmental sensitivities to low carbon energy technologies and their responses to energy deployments does not receive much serious attention in planning decarbonisation pathways to 2050. Resistance to certain resources and technologies based on particular socio-environmental sensitivities would alter the portfolio of options available which could shape how the energy system achieves decarbonisation (the decarbonisation pathway) as well as affecting the cost and achievability of decarbonisation. Thus, this paper presents a series of three modelled scenarios which illustrate the way that a variety of socio-environmental sensitivities could impact the development of the energy system and the decarbonisation pathway. The scenarios represent risk aversion (DREAD) which avoids deployment of potentially unsafe large-scale technology, local protectionism (NIMBY) that constrains systems to their existing spatial footprint, and environmental awareness (ECO) where protection of natural resources is paramount. Very different solutions for all three sets of constraints are identified; some seem slightly implausible (DREAD) and all show increased cost (especially in ECO).

Low Carbon Transition of Power System in China: Pathways and Policy Design Implications

2011 ◽  
Vol 361-363 ◽  
pp. 1832-1836
Author(s):  
Chang Hong Zhao ◽  
Yan Xu ◽  
Jia Hai Yuan
Keyword(s):  
Policy Design ◽  
Reference Value ◽  
Energy Transition ◽  
Energy System ◽  
Transition Management ◽  
Low Carbon ◽  
Policy Makers ◽  
Package Design ◽  
Electricity System ◽  
Low Carbon Energy

This paper studies the low carbon transition of electricity system in China. The paper describes the approach, which builds on transitions and transition management using a multi-level perspective (MLP) of niches, socio-technical regime and landscape. A MLP analysis on China’s power sector is presented to understand the current landscape, regime and niches. Five transition pathways with their possible technology options are presented. The paper goes further to propose an interactive management framework for low carbon energy system transition in China and reprehensive technology options are appraised to indicate the policy package design logic in the framework. The work in the paper will be useful in informing policy-makers and other stakeholders and may provide reference value for other countries for energy transition management.

Primary Energy System Chain Security Under the Energy Transition

2021 ◽  
Author(s):  
Osamah Alsayegh
Keyword(s):  
Electric Vehicles ◽  
Energy Demand ◽  
Oil And Gas ◽  
Supply And Demand ◽  
Energy Transition ◽  
System Security ◽  
Energy System ◽  
Primary Energy ◽  
Low Carbon ◽  
Low Carbon Energy

Abstract This paper examines the energy transition consequences on the oil and gas energy system chain as it propagates from net importing through the transit to the net exporting countries (or regions). The fundamental energy system security concerns of importing, transit, and exporting regions are analyzed under the low carbon energy transition dynamics. The analysis is evidence-based on diversification of energy sources, energy supply and demand evolution, and energy demand management development. The analysis results imply that the energy system is going through technological and logistical reallocation of primary energy. The manifestation of such reallocation includes an increase in electrification, the rise of energy carrier options, and clean technologies. Under healthy and normal global economic growth, the reallocation mentioned above would have a mild effect on curbing the oil and gas primary energy demands growth. A case study concerning electric vehicles, which is part of the energy transition aspect, is presented to assess its impact on the energy system, precisely on the fossil fuel demand. Results show that electric vehicles are indirectly fueled, mainly from fossil-fired power stations through electric grids. Moreover, oil byproducts use in the electric vehicle industry confirms the reallocation of the energy system components' roles. The paper's contribution to the literature is the portrayal of the energy system security state under the low carbon energy transition. The significance of this representation is to shed light on the concerns of the net exporting, transit, and net importing regions under such evolution. Subsequently, it facilitates the development of measures toward mitigating world tensions and conflicts, enhancing the global socio-economic wellbeing, and preventing corruption.

Research Design, Scoping Tools, and Preview

2018 ◽  
Author(s):  
Kathleen Araújo
Keyword(s):  
Fossil Fuels ◽  
International Energy Agency ◽  
Field Work ◽  
Energy System ◽  
Oil Shocks ◽  
Low Carbon ◽  
Energy Agency ◽  
Technology Learning ◽  
Energy Technologies ◽  
Low Carbon Energy

This chapter outlines the design of the current study. It discusses my underlying logic for scoping energy system change with theory-building in the form of (1) a framework on intervention that operationalizes insights from the previous chapter and (2) conceptual models of structural readiness. A brief review then follows of related, global developments to provide broader context for the cases. The chapter concludes with a preview of the transitions that will be discussed in depth in subsequent chapters. This book draws on my research of four national energy system transitions covering the period since 1970. I selected a timeframe that reflected a common context of international events which preceded as well as followed the oil shocks of 1973 and 1979. Such framing allowed me to trace policy and technology learning over multiple decades for different cases. I completed field work for this project primarily between 2010 and 2012, with updates continuing through to the time this book went to press. I selected cases from more than 100 countries in the International Energy Agency (IEA) databases. The ones that I chose represented countries which demonstrated an increase of 100% or more in domestic production of a specific, low carbon energy and the displacement of at least 15 percentage points in the energy mix by this same, low carbon energy relative to traditional fuels for the country and sector of relevance. I utilized adoption and displacement metrics to consider both absolute and relative changes. Final cases reflect a diversity of energy types and, to some extent, differences in the socio-economic and geographic attributes of the countries. The technologies represent some of the more economically-competitive substitutes for fossil fuels. It’s important to emphasize that the number of cases was neither exhaustive nor fully representative. Instead, the cases reflect an illustrative group of newer, low carbon energy technologies for in depth evaluation. Each of the cases shares certain, basic similarities. These include a national energy system comprised of actors, inputs, and outputs with systemic architecture connecting the constituent parts in a complex network of energy-centered flows over time—including extraction, production, sale, delivery, regulation, and consumption.

scholarly journals Higher cost of finance exacerbates a climate investment trap in developing economies

2021 ◽  
Vol 12 (1) ◽  
Author(s):  
Nadia Ameli ◽  
Olivier Dessens ◽  
Matthew Winning ◽  
Jennifer Cronin ◽  
Hugues Chenet ◽  
...  
Keyword(s):  
Cost Of Capital ◽  
Developing Economies ◽  
Low Cost ◽  
Weighted Average ◽  
Energy Transition ◽  
Green Energy ◽  
Electricity Production ◽  
Low Carbon ◽  
Policy Interventions ◽  
The Cost

AbstractFinance is vital for the green energy transition, but access to low cost finance is uneven as the cost of capital differs substantially between regions. This study shows how modelled decarbonisation pathways for developing economies are disproportionately impacted by different weighted average cost of capital (WACC) assumptions. For example, representing regionally-specific WACC values indicates 35% lower green electricity production in Africa for a cost-optimal 2 °C pathway than when regional considerations are ignored. Moreover, policy interventions lowering WACC values for low-carbon and high-carbon technologies by 2050 would allow Africa to reach net-zero emissions approximately 10 years earlier than when the cost of capital reduction is not considered. A climate investment trap arises for developing economies when climate-related investments remain chronically insufficient. Current finance frameworks present barriers to these finance flows and radical changes are needed so that capital is more equitably distributed.

scholarly journals European Cities in the Energy Transition: A Preliminary Analysis of 27 Cities

Energies ◽  
2020 ◽  
Vol 13 (6) ◽  
pp. 1315 ◽  
Author(s):  
Estitxu Villamor ◽  
Ortzi Akizu-Gardoki ◽  
Olatz Azurza ◽  
Leire Urkidi ◽  
Alvaro Campos-Celador ◽  
...  
Keyword(s):  
Fossil Fuels ◽  
Selection Process ◽  
Energy Transition ◽  
Energy System ◽  
Low Carbon ◽  
European Cities ◽  
Leading Role ◽  
Starting Point ◽  
Low Carbon Energy ◽  
Current Energy

Nowadays, there is a wide scientific consensus about the unsustainability of the current energy system and at the same time, social awareness about climate change and the IPCC’s goals is increasing in Europe. Amongst the different pathways towards them, one alternative is the radical transition to a democratic low-carbon energy system where the local scale has a key leading role. Under this scope, this research is framed within the mPOWER project, financed by the European Commission’s H2020 programme, which promotes collaboration among different European municipalities in order to boost the transition to a renewable-based participatory energy system. This paper presents the starting point of the mPOWER project, where the main energy features of 27 selected European municipalities are collected and analysed for the year 2016. An open public tender and selection process was carried out among European cities in order to choose the candidates to participate in mPOWER project. A view of this situation will be taken by the mPOWER project as a diagnostic baseline for the following steps: a peer-to-peer knowledge-sharing process among these European municipalities, and subsequently, among a more extensive group. The first finding of the paper is that, even if those municipalities are trying to reduce their greenhouse gas emissions, they are highly dependent on fossil fuels, even in cases where renewable energies have significant presence. Second, their energy consumption is logarithmically related to the human development index and gross domestic product but not to the size of the cities and their climate characteristics. Finally, despite the work that these cities are making towards energy transition in general and within the mPOWER project in particular, the paper shows a high difficulty mapping their energy systems. The lack of accurate and unified data by the municipalities is a sign of disempowerment at a local and public level in the energy sphere and makes difficult any strategy to advance towards a bottom-up energy transition. Among other goals, the mPOWER project aims to reveal these kinds of difficulties and help local authorities in managing their transition paths.

scholarly journals Diagnosing Barriers and Enablers for the Flemish Energy Transition

2019 ◽  
Vol 11 (20) ◽  
pp. 5558
Author(s):  
Erik Laes ◽  
Pieter Valkering ◽  
Yves De Weerdt
Keyword(s):  
Energy Transition ◽  
Energy System ◽  
System Innovation ◽  
Low Carbon ◽  
System Transformation ◽  
Multiple Perspectives ◽  
Incremental Change ◽  
Barriers And Enablers ◽  
Transition Pathways ◽  
Low Carbon Energy

Industrialised economies are currently confronted with the challenge of transitioning to a low-carbon energy system. Starting from the insight that ‘system innovation’ rather than incremental change is needed, we diagnose barriers and enablers for energy system transformation for the case of Flanders (Belgium). We thereby combine multiple perspectives: a techno-economic perspective to derive a technology-based vision on the energy transition, a technology innovation perspective to assess barriers and enablers regarding the upscaling of technological niche-innovations, and a system innovation perspective to address fundamental barriers and enablers associated with transformative system change. We highlight the complementary features of the three perspectives and describe how insights can feed into the development of energy transition pathways.

scholarly journals The social and environmental complexities of extracting energy transition metals

2020 ◽  
Vol 11 (1) ◽  
Author(s):  
Éléonore Lèbre ◽  
Martin Stringer ◽  
Kamila Svobodova ◽  
John R. Owen ◽  
Deanna Kemp ◽  
...  
Keyword(s):  
Risk Factors ◽  
Transition Metals ◽  
Energy Transition ◽  
Scenario Planning ◽  
Low Carbon ◽  
Energy Technologies ◽  
Governance Indicators ◽  
The Social ◽  
Mining Projects ◽  
Low Carbon Energy

Abstract Environmental, social and governance pressures should feature in future scenario planning about the transition to a low carbon future. As low-carbon energy technologies advance, markets are driving demand for energy transition metals. Increased extraction rates will augment the stress placed on people and the environment in extractive locations. To quantify this stress, we develop a set of global composite environmental, social and governance indicators, and examine mining projects across 20 metal commodities to identify the co-occurrence of environmental, social and governance risk factors. Our findings show that 84% of platinum resources and 70% of cobalt resources are located in high-risk contexts. Reflecting heightened demand, major metals like iron and copper are set to disturb more land. Jurisdictions extracting energy transition metals in low-risk contexts are positioned to develop and maintain safeguards against mining-related social and environmental risk factors.

scholarly journals Introduction

2021 ◽  
pp. 3-7
Author(s):  
Dominik Möst ◽  
Steffi Schreiber ◽  
Martin Jakob
Keyword(s):  
Renewable Energy Sources ◽  
Energy System ◽  
Low Carbon ◽  
Technological Learning ◽  
Technology Plan ◽  
Energy Technologies ◽  
Policy Measures ◽  
Flexibility Options ◽  
Low Carbon Energy ◽  
The Impact

AbstractThe future energy system in Europe needs to be decarbonized and thus be based almost exclusively on renewable energy sources. Therefore it is challenged by the intermittent nature of renewables and requires several flexibility options. The interaction between different options and the impact on environment and society are in the focus of this contribution. It is the core objective of this book to analyze and evaluate the development toward a low-carbon energy system with focus on flexibility options in the EU to support the implementation of the Strategy Energy Technology Plan. The analyses are based on a bottom-up modeling environment that considers current and future energy technologies, policy measures and their impact on environment and society while considering technological learning of low-carbon and flexibility technologies.

scholarly journals Financing the Transition Toward Carbon Neutrality—an Agent-Based Approach to Modeling Investment Decisions in the Electricity System

2021 ◽  
Vol 3 ◽  
Author(s):  
Jinxi Yang ◽  
Christian Azar ◽  
Kristian Lindgren
Keyword(s):  
Large Scale ◽  
Carbon Tax ◽  
Energy Transition ◽  
Energy System ◽  
Low Carbon ◽  
Agent Based ◽  
Carbon Neutrality ◽  
Investment Financing ◽  
Electricity System ◽  
Low Carbon Technologies

Transitioning to a low-carbon electricity system requires investments on a very large scale. These investments require access to capital, but that access can be challenging to obtain. Most energy system models do not (explicitly) model investment financing and thereby fail to take this challenge into account. In this study, we develop an agent-based model, where we explicitly include power sector investment financing. We find that different levels of financing constraints and capital availabilities noticeably impact companies' investment choices and economic performances and that this, in turn, impacts the development of the electricity capacity mix and the pace at which CO2 emissions are reduced. Limited access to capital can delay investments in low-carbon technologies. However, if the financing constraint is too relaxed, the risk of going bankrupt can increase. In general, companies that anticipate carbon prices too high above or too far below the actual development, along with those that use a low hurdle rate, are the ones that are more likely to go bankrupt. Emissions are cut more rapidly when the carbon tax grows faster, but there is overall a greater tendency for agents to go bankrupt when the tax grows faster. Our energy transition model may be particularly useful in the context of the least financially developed markets.

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