Impact of various federal mitigation policies to reduce CO2 emissions on the operating characteristics of the electricity system

A number of policies are advocated to accelerate de-carbonization of the electricity sector. Too often the consequences of these policies for the operating characteristic of the electricity sector are not thoroughly examined. This lecture will consider a very simple electricity sector model consisting of three competing generation technologies - natural gas, nuclear, and renewables - and compare the quasi-static equilibrium market outcomes of various policies: (1) a technology subsidy, (2) a carbon emission charge, (3) a mandated portfolio standard for renewables, (4) a mandated portfolio standard for carbon free generation, (5) a successful clean energy technology program, and (6) a combination policy of (1) and (2). There are big differences in operating characteristic such as market clearing, price, electricity generation, technology mix, carbon emissions, and consumer surplus for consumers and suppliers.

Speaker: John Deutch, Professor Emeritus, MIT