Amigues, Jean-Pierre, Ayong Le Kama, Alain
and Moreaux, Michel
(2013)
Equilibrium Transitions from Non Renewable Energy to Renewable Energy under Capacity Constraints.
TSE Working Paper, n. 13-440
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Abstract
We study the transition between non renewable and renewable energy sources with adjustment costs over the production capacity of renewable energy. Assuming constant variable marginal costs for both energy sources, convex adjustment costs and a more expensive renewable energy, we show the following. With sufficiently abundant non renewable energy endowments, the dynamic equilibrium path is composed of a first time phase of only non renewable energy use followed by a transition phase substituting progressively renewable energy to non renewable energy before a last time phase of only renewable energy use. The investment into renewable energy may either begin before actual production of renewable energy or be delayed until the energy price achieves a sufficient gap with respect to the renewable energy cost. With an initially abundant non renewable resource, the features of the transition between non renewable and renewable energy do not depend upon the initial resource stock.
Item Type: | Monograph (Working Paper) |
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Language: | English |
Date: | October 2013 |
Uncontrolled Keywords: | non renewable resource, renewable energy, adjustment costs, resources transition, capacity constraints |
JEL Classification: | D92 - Intertemporal Firm Choice and Growth, Investment, or Financing Q30 - General Q40 - General Q42 - Alternative Energy Sources |
Subjects: | B- ECONOMIE ET FINANCE |
Divisions: | TSE-R (Toulouse) |
Site: | UT1 |
Date Deposited: | 09 Jul 2014 17:39 |
Last Modified: | 02 Apr 2021 15:48 |
OAI Identifier: | oai:tse-fr.eu:27704 |
URI: | https://publications.ut-capitole.fr/id/eprint/15759 |