The Economics of Transition in the Power Sector by William Blyth

By William Blyth

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2. 3 shows the extent to which price information improves by waiting. The “learning rates” presented here are the extent to which the high and low scenarios for each variable deviate from the mean over the 5-year waiting period. 2 for capital costs and carbon prices respectively. 1. 6 86% 86% 87% 86% EU Commission (2008), “Energy Sources, Production Costs and Performance of Technologies for Power Generation, Heating and Transport”, Commission Staff Working Document Accompanying the Second Strategic Energy Review COM(2008)744.

The option to refurbish or extend the life of existing plants therefore presents a hindrance to deeper emission cuts. This is not necessarily the case in all sectors. g. buildings), it may be worthwhile investing sufficient capital on existing assets to bring more radical performance improvement. In these cases, policies that specifically target the refurbishment of capital stock to improve energy performance may be needed. These cases will be explored in other papers in this series. The Economics of Transition in the Power Sector – © OECD/IEA 2010 Appendix – Model assumptions The cash-flow model in used in this paper calculates the NPV in each of the 64 different scenario Page | 29 combinations of the decision matrix as described in Section 4.

This is not necessarily the case in all sectors. g. buildings), it may be worthwhile investing sufficient capital on existing assets to bring more radical performance improvement. In these cases, policies that specifically target the refurbishment of capital stock to improve energy performance may be needed. These cases will be explored in other papers in this series. The Economics of Transition in the Power Sector – © OECD/IEA 2010 Appendix – Model assumptions The cash-flow model in used in this paper calculates the NPV in each of the 64 different scenario Page | 29 combinations of the decision matrix as described in Section 4.

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