Planning implications from the interactions between renewable energy programs and carbon regulation

Abstract

Complex relationships exist between programs to reduce carbon dioxide (CO2) from the electricity sector and programs to promote renewable electricity generation. Simulation modeling of three scenarios in the UK electricity sector are used to identify potential interactions between these programs. A strict CO2 cap can result in a renewable electricity requirement being easily met. Conversely, the renewables quota could be required under low natural gas prices to keep electricity suppliers from switching from coal to gas. Similarly, CO2 trading can reduce renewables deployment levels because purchased CO2 allowances replace renewables. Therefore, both programs are required to ensure CO2 and renewables goals. The planning implications for administrative procedures and renewables subsidies are also discussed.