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The French nuclear bet / Quentin Perrier. Faere,2017, 43 p. (Policy paper 2017-01) https://halshs.archives-ouvertes.fr/halshs-01487296/documentFollowing the first oil crisis, France launched the world’s largest ever nuclear energy program, commissioning 58 new reactors. These reactors are now reaching 40 years of age, the end of their technological lifetime. This places France at an energy policy crossroads: should the reactors be retrofitted or should they be decommissioned? The cost-optimal decision depends on several factors going forward, in particular the expected costs of nuclear energy production, electricity demand levels and carbon prices, all of which are subject to significant uncertainty. To deal with these uncertainties, we apply the Robust Decision Making framework to determine which reactors should be retrofitted. We build an investment and dispatch optimization model, calibrated for France. Then we use it to study 27 retrofit strategies for all combinations of uncertain parameters, which amounts to nearly 3,000 runs. Our analysis produces two robust strategies, which involve shutting down between 7 and 14 of the 14 oldest reactors, while extending the lifetime of all remaining reactors...Baromètre du Marché de l’Energie - Hiver 2016. Grenoble Ecole de Management, mars 2017, 4 p. http://www.grenoble-em.com/actualite-barometre-du-marche-de-lenergie-hiver-2016Cette édition Hiver 2016 sonde l’opinion des experts français de l’énergie sur la décentralisation du secteur électrique français. Dans le cadre du changement de présidence à venir, les experts ont également été interrogés sur les directions à donner à la politique énergétique française dans les cinq prochaines années...Challenges for naturel gas in the context of the Energy Union : project report / Chloé Le Coq and Sébastien Schwenen. Bruxelles : CERRE ; Stockholm School of Economics, March 2017, 36 p. http://www.cerre.eu/sites/cerre/files/170307_CERRE_GasChallenges_final.pdfMany scenarios for the European transition to a low-carbon energy system require a significant involvement of the gas sector. However, current regulation, market design and network operation should be revisited if Europe is to benefit from the advantages gas can offer during the energy transition. This is the key finding of the CERRE report 'Challenges for Natural Gas in the Context of the Energy Union'.The gas sector should be well-placed to play a role in Europe’s energy transition: it has a lower carbon content than coal, the sector has enjoyed a recent global growth in supply, and it can operate effectively as a back-up to intermittent renewable energy sources.However, Europe’s gas sector is currently under pressure. Low prices for both coal and carbon call into question the competitiveness of gas, its role in security of supply and its role in the wider energy transition.To shed light on these issues and assess the prospects for the European gas sector, this CERRE report examines recent market and policy developments.Distributional Impacts of Energy Taxes / William A. Pizer, Steven Sexton. NBER Working Paper No. 23318, April 2017 http://www.nber.org/papers/w23318Despite popularity among economists for their efficiency, energy pollution taxes enjoy less political support than standards-based regulation because of common perceptions that they burden the poor relative to the rich. However, the literature on pollution tax incidence and consumption surveys in Mexico, the United Kingdom, and the United States, suggest energy taxes need not be as regressive as often assumed. This paper demonstrates that the incidence of such taxes varies according to the energy commodities that are taxed, the physical, social and climatic characteristics of jurisdictions in which they are implemented, and how the revenue is used. It is also shown that the variation in household energy expenditure within income groups is greater than variation across income groups in many cases. These horizontal equity impacts are reviewed, as are their implications for policy making.Renewable energy in Europe 2017: recent growth and knock-on effects / Mihai Tomescu, Ils Moorkens, Wouter Wetzels, Lukas Emele, Erik Laes and Erika Meynaerts. European Environment Agency, 2017 (EEA Report No 3/2017) http://www.eea.europa.eu/publications/renewable-energy-in-europe-2017Addressing climate change requires a globally coordinated, long-term response across all economic sectors. The 2015 Paris Agreement provides the framework for limiting global warming to less than 2 degrees Celsius above pre-industrial levels and for pursuing efforts to limit it to 1.5 degrees Celsius. Early in this process, the European Union has adopted ambitious and binding climate and energy targets for 2020 and 2030. Member States have set the strategic objective of building an Energy Union, which aims to provide affordable, secure and sustainable energy (European Council, 2014) and which has a forward‑looking climate policy at its core (European Council, 2015). The most recent package of legislative measures, adopted by the European Commission in November 2016, aims to consolidate and match national climate and energy efforts, and facilitate the delivery of the 2030 targets for climate, energy efficiency and renewable energy sources (RES). This report provides information about progress in RES in 2014 at the EU, country, energy market sector and RES technology levels.Equilibrium supply security in a multinational electricity market with renewable production / Thomas Tangeras. Cambridge : Energy Policy Research Group, 2017, 39 p. (EPRG WP 1707) http://www.eprg.group.cam.ac.uk/eprg-working-paper-1707/An increasing reliance on solar and wind power has raised concern about system ability to consistently satisfy electricity demand. This paper examines countries’ unilateral incentives to achieve supply security through capacity reserves and market integration in a multinational electricity market. Capacity reserves protect consumers against blackouts and extreme prices, but distort consumption and investment. Market integration alleviates supply constraints, but requires costly network reinforcement. Capacity reserves can be up- or downward distorted, but network investment is always insufficient in equilibrium. Capacity reserves are smaller when there are financial markets or when dispatched solely to resolve domestic supply constraints.How to judge whether supporting solar PV is justified / David Newbery. Cambridge : Energy Policy Research Group, 2017, 15 p. (EPRG WP 1706) http://www.eprg.group.cam.ac.uk/eprg-working-paper-1706/Renewable electricity, particularly solar PV, creates external benefits of learning-by-doing that drives down costs. If eventually economic, these technologies will thereafter create social value by reducing carbon emissions with value greater than the cost of abatement. This paper sets out a method for assessing whether a trajectory of investment that involves initial subsidies is justified by the subsequent learning-by-doing spillovers and whether it is worth accelerating current investment rates. Given current costs and learning rates, accelerating the current rate of investment appears globally socially beneficial, particularly if that investment is deployed in high insolation locations.What future(s) for liberalized electricity markets: efficient, equitable or innovative? / David Newbery. Cambridge : Energy Policy Research Group, 2017, 38 p. (EPRG WP 1705) http://www.eprg.group.cam.ac.uk/eprg-working-paper-1705/Well-designed electricity liberalization has delivered efficiency gains, but political risks of decarbonizing the sector have undermined investment incentives in energy-only markets, while poorly designed regulated tariffs have increased the cost of accommodating renewables. The paper sets out principles from theory and public economics to guide market design, capacity remuneration, renewables support and regulatory tariff setting, illustrating their application in a hypothetical high capital cost low variable cost electricity system in “Andia” that resembles Peru. Such characteristics are likely to become more prevalent with increasing renewables penetration, where poor regulation is already threatening current utility business models. The appendix develops and applies a method for determining the subsidy justified by learning spillovers from solar PV.China’s Power Generation Dispatch / Mun Ho, Zhongmin Wang, Zichao Yu. Washington DC : Resources for the Future, April 2017, 37 p. http://www.rff.org/research/publications/china-s-power-generation-dispatchWe describe China’s state institutions, the electric power control system, and past reform efforts, including the challenges of implementation within the existing governance structure. This context is key for designing future reforms and carbon pricing.