Joint research unit 7235

Towards carbon neutrality and energy independence in Europe: Can new storage and renewables push fossil fuels out?

Speaker :Milien Dhorne

Discutants : Quentin Hoarau (sénior) et Paul Maillet (junior)

Abstract:

Variable and renewable energy (VRE) sources lie at the core of the European energy decarbonating and independence strategy. A larger share of renewable generation requires flexibility options to cope with intermittency and production uncertainty. Among the flexibility solutions, energy storage has become increasingly interesting because of its versatility and recent high costs reductions. In this paper, we investigate the development potential of energy storage solutions as future dispatchable assets to compete with existing fossil fuel power plants. We propose a novel analysis in the light of the recent energy and geopolitical crisis, which might help the understanding of where Europe stands today in its path towards energy independence. We use a stochastic competitive optimization framework, calibrated on the current Western Europe power system, to derive the market value of new storage technologies and their impact on the price structure. We estimate the long-term equilibrium of flexibility capacities under different renewable horizons, CO2 prices and vehicle-to-grid (V2G) trajectories. We subsequently analyze incremental revenues and costs due to the presence of storage on the wholesale market and their distributions among renewable firms, conventional power plants and electricity consumers. We find evidence that, without additional support policies, the development of stationary storage remains moderate and located in a few countries of interest, mainly because of fierce competition from gas facilities. The contribution of V2G is predominant as it accounts for a large part of the new storage capacity. Finally, we highlight a detrimental effect of new storage on the revenues of fossil fuel power plants and a significant and positive effect on solar and wind revenues, making the case for a smart design of support public policies that integrates the transfers storage operates between market firms.

AGENDA

Tuesday 4 October 2022

Présentation de l’ouvrage “Sociologie historique du capitalisme”, Paris, La Découverte, 2021

Claire Lemercier (CNRS, CSO Sciences Po Paris) et Pierre François (CNRS, CSO Sciences Po Paris)

Présentation de l’ouvrage “Sociologie historique du capitalisme”, Paris, La Découverte, 2021

Tuesday 4 October 2022

Recherche et Economie et Socioéconomie Politique, des Institutions et des Régulations (RESPIR)

Claire Lemercier (CNRS, CSO Sciences Po Paris) et Pierre François (CNRS, CSO Sciences Po Paris)

Présentation de l’ouvrage “Sociologie historique du capitalisme”, Paris, La Découverte, 2021

Thursday 6 October 2022

Colloques et Workshops

9th International Meeting in Law & Economics

Thursday 6 October 2022

Lunch

Tobias Kretschmer (LMU Munich and CEPR)

Competing for attention on information platforms : the case of news.

Thursday 6 October 2022

Competing for attention on information platforms : the case of news.

Tobias Kretschmer (LMU Munich and CEPR)

Competing for attention on information platforms : the case of news.

Thursday 6 October 2022

Groupe de travail Economie Comportementale

Denis Charles (CRIEF)

11h, salle G110 et en visio

Information disclosure and mortgage insurance choice under substandard risk

Thursday 6 October 2022

Information disclosure and mortgage insurance choice under substandard risk

Denis Charles (CRIEF)

11h, salle G110 et en visio

Information disclosure and mortgage insurance choice under substandard risk

Monday 10 October 2022

Law, Institutions and Economics in Nanterre (LIEN)

Tobias Kretschmer (LMU Munich)

En salle 614 et en distanciel

Strategic confusopoly: evidence from the UK mobile market

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