State-scale evaluation of renewable electricity policy: The role of renewable electricity credits and carbon taxes
We have developed a state-scale version of the MARKAL energy optimization model, commonly used to model energy policy at the US national scale and internationally. We apply the model to address state-scale impacts of a renewable electricity standard (RES) and a carbon tax in one southeastern state, Georgia. Biomass is the lowest cost option for large-scale renewable generation in Georgia; we find that electricity can be generated from biomass co-firing at existing coal plants for a marginal cost above baseline of 0.2-2.2Â cents/kWh and from dedicated biomass facilities for 3.0-5.5Â cents/kWh above baseline. We evaluate the cost and amount of renewable electricity that would be produced in-state and the amount of out-of-state renewable electricity credits (RECs) that would be purchased as a function of the REC price. We find that in Georgia, a constant carbon tax to 2030 primarily promotes a shift from coal to natural gas and does not result in substantial renewable electricity generation. We also find that the option to offset a RES with renewable electricity credits would push renewable investment out-of-state. The tradeoff for keeping renewable investment in-state by not offering RECs is an approximately 1% additional increase in the levelized cost of electricity.
Year of publication: |
2011
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Authors: | Levin, Todd ; Thomas, Valerie M. ; Lee, Audrey J. |
Published in: |
Energy Policy. - Elsevier, ISSN 0301-4215. - Vol. 39.2011, 2, p. 950-960
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Publisher: |
Elsevier |
Keywords: | Renewable electricity standard Carbon tax Renewable electricity credits |
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