Market-Based Environmental Policies in the Power Sector : State of the Art and Future Research Needs

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Journal Title
Journal ISSN
Volume Title
A2 Katsausartikkeli tieteellisessä aikakauslehdessä
Date
2023-09
Major/Subject
Mcode
Degree programme
Language
en
Pages
16
59-74
Series
Current Sustainable/Renewable Energy Reports, Volume 10, issue 3
Abstract
Purpose of Review So-called Green New Deals aim to decarbonise the power sector via market-based instruments. Consequently, engineering-economic models for analysing the sustainable-energy transition have proliferated. This review categorises existing approaches and identifies areas for extending the state of the art. Recent Findings We cluster the extant literature into two groups: engineering/operational research (M1) and environmental economics (M2). While M1 focuses on the power sector’s technical and spatio-temporal aspects, M2’s emphasis is on incentives and externalities. Depending on the nature of the research question, either perspective (or both) may be suitable. Summary Since the envisaged electrification of the wider economy implies tighter coupling between formerly distinct sectors, e.g., power and heat, both M1 and M2 will have to adapt to the new paradigm in terms of methodology and application areas. Here, eliciting coordinating mechanisms, enhancing algorithms for solving hierarchical models, soft linking bottom-up and top-down models, and crafting robust environmental policy in face of uncertainty over externalities are some of the vistas for future research.
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Citation
Siddiqui , A , Tanaka , M & Chen , Y 2023 , ' Market-Based Environmental Policies in the Power Sector : State of the Art and Future Research Needs ' , Current Sustainable/Renewable Energy Reports , vol. 10 , no. 3 , pp. 59-74 . https://doi.org/10.1007/s40518-023-00211-8