Advances in the science and observation of climate change are providing a clearer understanding of the inherent variability of Earth's climate system and its likely response to human and natural influences. The implications of climate change for the environment and society will depend not only on the response of the Earth system to changes in radiative forcings, but also on how humankind responds through changes in technology, economies, lifestyle and policy. Extensive uncertainties exist in future forcings of and responses to climate change, necessitating the use of scenarios of the future to explore the potential consequences of different response options. To date, such scenarios have not adequately examined crucial possibilities, such as climate change mitigation and adaptation, and have relied on research processes that slowed the exchange of information among physical, biological and social scientists. Here we describe a new process for creating plausible scenarios to investigate some of the most challenging and important questions about climate change confronting the global community.

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The next generation of scenarios for climate change research and assessment

This chapter discusses leading problems linked to energy that the world is now confronting and to propose some ideas concerning possible solutions. Oil deserves special attention among all energy sources. Since the beginning of 1981, it has merely been continuing and enhancing the downward movement in consumption and prices caused by excessive rises, especially for light crudes such as those from Africa, and the slowing down of worldwide economic growth. Densely-populated oil-producing countries need to produce to live, to pay for their food and their equipment. If the economic growth of the industrialized countries were to be 4%, even if investment in the rational use of energy were pushed to the limit and the development of nonpetroleum energy sources were also pursued actively, it would be extremely difficult to prevent a sharp rise in prices. It is evident that it is absolutely necessary to pursue actively the development of coal, natural gas, and nuclear power if a physical shortage of energy is not to block economic growth.

World energy outlook

The paper reviews different approaches, technologies, and strategies to manage large-scale schemes of variable renewable electricity such as solar and wind power. We consider both supply and demand side measures. In addition to presenting energy system flexibility measures, their importance to renewable electricity is discussed. The flexibility measures available range from traditional ones such as grid extension or pumped hydro storage to more advanced strategies such as demand side management and demand side linked approaches, e.g. the use of electric vehicles for storing excess electricity, but also providing grid support services. Advanced batteries may offer new solutions in the future, though the high costs associated with batteries may restrict their use to smaller scale applications. Different “P2Y”-type of strategies, where P stands for surplus renewable power and Y for the energy form or energy service to which this excess in converted to, e.g. thermal energy, hydrogen, gas or mobility are receiving much attention as potential flexibility solutions, making use of the energy system as a whole. To “functionalize” or to assess the value of the various energy system flexibility measures, these need often be put into an electricity/energy market or utility service context. Summarizing, the outlook for managing large amounts of RE power in terms of options available seems to be promising.

https://research.aalto.fi/files/6557604/lund_et_al_review.pdf

Review of energy system flexibility measures to enable high levels of variable renewable electricity

The Global Energy Assessment (GEA) brings together over 300 international researchers to provide an independent, scientifically based, integrated and policy-relevant analysis of current and emerging energy issues and options. It has been peer-reviewed anonymously by an additional 200 international experts. The GEA assesses the major global challenges for sustainable development and their linkages to energy; the technologies and resources available for providing energy services; future energy systems that address the major challenges; and the policies and other measures that are needed to realize transformational change toward sustainable energy futures. The GEA goes beyond existing studies on energy issues by presenting a comprehensive and integrated analysis of energy chalenges, opportunities and strategies, for developing, industrialized and emerging economies. This volume is a invaluable resource for energy specialists and technologists in all sectors (academia, industry and government) as well as policymakers, development economists and practitioners in international organizations and national governments.

Global Energy Assessment: Toward a Sustainable Future

Broadband investment and regulation: A literature review

http://www.eprg.group.cam.ac.uk/wp-content/uploads/2008/11/eprg0626.pdf

Fuel mix diversification incentives in liberalized electricity markets: A Mean–Variance Portfolio theory approach

http://www.eprg.group.cam.ac.uk/wp-content/uploads/2009/04/binder1.pdf

Optimal wind power deployment in Europe-A portfolio approach

High fossil fuel prices have rekindled interest in nuclear power. This paper identifies specific characteristics making nuclear power unattractive to merchant generators in liberalized electricity markets, and argues that non-fossil fuel technologies have an overlooked 'option value' given fuel and carbon price uncertainty. Stochastic optimization estimates the company option value of keeping open the choice between nuclear and gas technologies. The merchant option value decreases sharply as the correlation between electricity, gas, and carbon prices rises, casting doubt on whether merchant investors have adequate incentives to choose socially efficient diversification in liberalized electricity markets.

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Nuclear Power: A Hedge against Uncertain Gas and Carbon Prices?

There is no academic consensus on which electricity market design provides the least distorting investment incentives. Theory suggests that "energy-only market" can allow capacity cost recovery by generators. However, separate payments for capacity or reserve obligations do not need to rely on infrequent price spikes to remunerate reserve capacity. Three years after the controversial change from the compulsory British Electricity Pool with capacity payments to the decentralised energyonly New Electricity Trading Arrangements (NETA), we contrast the two market designs in terms of investment incentives, analyse NETA's balancing market failures, and review the case for regulatory support for investment.

Investment Incentives and Electricity Market Design: the British Experience

This paper argues that electricity market reform – particularly the need for complementary mechanisms to remunerate capacity – need to be analysed in the light of the local regulatory and institutional environment. If there is a lack of investment, the priority should be to identify the roots of the problem. The lack of demand side response, short-term reliability management procedures and uncompetitive ancillary services procurement often undermine market reflective scarcity pricing and distort long-term investment incentives. The introduction of a capacity mechanism should come as an optional supplement to wholesale and ancillary markets improvements. Priority reforms should focus on encouraging demand side responsiveness and reducing scarcity price distortions introduced by balancing and congestion management through better dialog between network engineers and market operators.

Fabien A. Roques

Papers

Fuel mix diversification incentives in liberalized electricity markets: A Mean–Variance Portfolio theory approach

Optimal wind power deployment in Europe-A portfolio approach

Nuclear Power: A Hedge against Uncertain Gas and Carbon Prices?

Investment Incentives and Electricity Market Design: the British Experience

Market Design for Generation Adequacy: Healing Causes rather than Symptoms