Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/191289 
Year of Publication: 
2019
Series/Report no.: 
ifo Working Paper No. 284
Publisher: 
ifo Institute - Leibniz Institute for Economic Research at the University of Munich, Munich
Abstract: 
Energy efficiency and short-term demand response are key issues in the decarbonization of power markets. However, their interaction and combined impact on market prices as well as on the supply side, is yet to be understood. We develop a framework to implement investments in energy efficiency and short-term demand response in detailed partial equilibrium power market models. We quantify our results using the EU-REGEN model for the European power market and find that energy efficiency contributes, under a 80% emission reduction target, only 11% of carbon emission reductions. Intermittent renewable energies such as wind and solar power account for the major share of 53%. However, both energy efficiency and short-term demand response have their merits in reducing marginal abatement costs and additionally exhibit an subadditive effect, at least under a 80% climate policy.
Subjects: 
Energy efficiency
demand response
renewable energy
dispatchable technologies
energy modeling
optimal dispatch
investment planning
JEL: 
C61
L94
Q41
Q51
Document Type: 
Working Paper

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