Li, FGN;
Trutnevyte, E;
(2017)
Investment appraisal of cost-optimal and near-optimal pathways for the UK electricity sector transition to 2050.
Applied Energy
, 189
pp. 89-109.
10.1016/j.apenergy.2016.12.047.
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Abstract
Deep decarbonisation of the electricity sector is central to achieving the United Kingdom’s (UK) climate policy targets for 2050 and meeting its international commitments under the Paris Agreement. While the overall strategy for decarbonising the energy system has been well established in previous studies, there remain deep uncertainties around the total investment cost requirements for the power system. The future of the power system is of critical importance because low carbon electricity may create significant opportunities for emissions reduction in buildings and transport. A key policy application of quantitative analysis using models is to explore how much investment needs to be mobilised for the energy transition. However, past estimates of energy transition costs for the UK power sector have focused only on 2030 rather than 2050 and consider a relatively narrow range of uncertainties. This paper addresses this important research gap. The UK government's main whole system energy economy model is linked to a power system model that employs an advanced approach to uncertainty analysis, combining Monte Carlo simulation with Modelling-to-Generate Alternatives (MGA), producing 800 different scenario pathways. These pathways simultaneously consider uncertainties in policy, technology and costs. The results show that with No Climate Policy, installed generation capacities in 2050 are found in the range 60–75 GW, while under an 80% Reduction in GHG Emissions, between 100 GW and 130 GW of plant are required. Meeting climate targets for 2050 is also found to increase the investment requirements for new electricity generation. The interquartile range for cumulative investments in new generation under the No Climate Policy scenario ranges from £60bn to £75bn, while under an 80% Reduction in GHG Emissions, investment requirements approximately double to £110bn - £140bn. The exercise demonstrates the importance of uncertainty analysis to policy evaluation, yielding insights for future research practice both in the UK and internationally.
| Type: | Article |
|---|---|
| Title: | Investment appraisal of cost-optimal and near-optimal pathways for the UK electricity sector transition to 2050 |
| Open access status: | An open access version is available from UCL Discovery |
| DOI: | 10.1016/j.apenergy.2016.12.047 |
| Publisher version: | http://dx.doi.org/10.1016/j.apenergy.2016.12.047 |
| Language: | English |
| Additional information: | Copyright © 2016. This manuscript version is published under a Creative Commons Attribution Non-commercial Non-derivative 4.0 International licence (CC BY-NC-ND 4.0). This licence allows you to share, copy, distribute and transmit the work for personal and non-commercial use providing author and publisher attribution is clearly stated. Further details about CC BY licences are available at http://creativecommons.org/licenses/by/4.0. Access may be initially restricted by the publisher. |
| Keywords: | Uncertainty analysis, Energy transitions, Electricity, Investment appraisal, Modelling to generate alternatives, Decarbonization, Energy Systems Modelling, Energy Economics, Energy Policy |
| UCL classification: | UCL UCL > Provost and Vice Provost Offices > UCL BEAMS UCL > Provost and Vice Provost Offices > UCL BEAMS > Faculty of the Built Environment |
| URI: | https://discovery.ucl.ac.uk/id/eprint/1533006 |
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