TY - JOUR
T1 - Bridging the gap
T2 - Do fast-reacting fossil technologies facilitate renewable energy diffusion?
AU - Verdolini, Elena
AU - Vona, Francesco
AU - Popp, David
N1 - Publisher Copyright:
© 2018 Elsevier Ltd
PY - 2018/5
Y1 - 2018/5
N2 - The diffusion of renewable energy in the power system implies high supply variability. Lacking economically viable storage options, renewable energy integration is possible thanks to the presence of modern mid-merit fossil-based technologies, which act as back-up capacity. This paper discusses the role of modern fossil-based power generation technologies in supporting renewable energy investments. We study the deployment of these two technologies conditional on all other drivers in 26 OECD countries between 1990 and 2013. We show that moving from the first to the third quartile of the distribution of modern fossil technologies is associated with an increase in yearly renewable energy investment of between 6 and 14 kW per thousand people, on average and ceteris paribus. This is a sizeable effect, considering that average yearly renewable capacity addition in our sample are around 12 kW per thousand people. These findings are robust to different econometric specifications, various definitions of modern fossil technologies and are stronger for wind, which is more intermittent and for which the mismatch between supply and demand is more marked. Our analysis points to the substantial indirect costs of renewable energy integration and highlights the complementarity of investments in different generation technologies for a successful decarbonization process.
AB - The diffusion of renewable energy in the power system implies high supply variability. Lacking economically viable storage options, renewable energy integration is possible thanks to the presence of modern mid-merit fossil-based technologies, which act as back-up capacity. This paper discusses the role of modern fossil-based power generation technologies in supporting renewable energy investments. We study the deployment of these two technologies conditional on all other drivers in 26 OECD countries between 1990 and 2013. We show that moving from the first to the third quartile of the distribution of modern fossil technologies is associated with an increase in yearly renewable energy investment of between 6 and 14 kW per thousand people, on average and ceteris paribus. This is a sizeable effect, considering that average yearly renewable capacity addition in our sample are around 12 kW per thousand people. These findings are robust to different econometric specifications, various definitions of modern fossil technologies and are stronger for wind, which is more intermittent and for which the mismatch between supply and demand is more marked. Our analysis points to the substantial indirect costs of renewable energy integration and highlights the complementarity of investments in different generation technologies for a successful decarbonization process.
KW - Complementarity
KW - Energy and environmental policy
KW - Fossil energy investments
KW - Renewable energy investments
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U2 - 10.1016/j.enpol.2018.01.058
DO - 10.1016/j.enpol.2018.01.058
M3 - Article
AN - SCOPUS:85044656119
SN - 0301-4215
VL - 116
SP - 242
EP - 256
JO - Energy Policy
JF - Energy Policy
ER -