Lecuyer, OskarVogt-Schilb, Adrien2014-08-152014-08-152014-07https://hdl.handle.net/10986/19388This paper studies the optimal transition from existing coal power plants to gas and renewable power under a carbon budget. It solves a model of polluting, exhaustible resources with capacity constraints and adjustment costs (to build coal, gas, and renewable power plants). It finds that optimal investment in renewable energy may start before coal power has been phased out and even before investment in gas has started, because doing so allows for smoothing investment over time and reduces adjustment costs. Gas plants may be used to reduce short-term investment in renewable power and associated costs, but must eventually be phased out to allow room for carbon-free power. One risk for myopic agents comparing gas and renewable investment is thus to overestimate the lifetime of gas plants -- e.g., when computing the levelized cost of electricity -- and be biased against renewable power. These analytical results are quantified with numerical simulations of the European Commission's 2050 energy roadmap.en-USCC BY 3.0 IGOABATEMENT POTENTIALALLOWABLE CARBON EMISSIONSATMOSPHEREATMOSPHERIC CARBONAVAILABILITYBIOMASSCARBONCARBON BUDGETCARBON BUDGETSCARBON CAPTURECARBON CONTENTCARBON ECONOMYCARBON EMISSIONSCARBON ENERGYCARBON FOSSIL FUELSCARBON INTENSITIESCARBON INTENSITYCARBON POLICYCARBON PRICECARBON PRICESCARBON TAXCARBON TAXESCARBON TECHNOLOGIESCARBON-FREE POWERCLEAN ELECTRICITYCLEAN POWERCLEANER ENERGYCLIMATECLIMATE CHANGECLIMATE CHANGE MITIGATIONCLIMATE CHANGE POLICIESCLIMATE CHANGE POLICYCLIMATE CHANGE RESEARCHCLIMATE POLICIESCLIMATE POLICYCLIMATIC CHANGECO2COALCOAL GENERATIONCOAL PLANTSCOAL POWER PLANTSCOAL PRODUCTIONCOAL RESOURCESCOST OF COALCOST OF ELECTRICITYCUMULATIVE EMISSIONSDIFFUSIONECOLOGICAL ECONOMICSEFFICIENT USEELECTRICITYELECTRICITY CONSUMPTIONELECTRICITY DEMANDELECTRICITY PRICEELECTRICITY PRICESELECTRICITY PRODUCTIONELECTRICITY SECTOREMISSIONEMISSION ABATEMENTEMISSION ALLOWANCESEMISSION CONSTRAINTEMISSION FACTOREMISSION PATHWAYSEMISSION RATEEMISSION REDUCTIONEMISSION REDUCTIONSEMISSION TRADINGEMISSIONSEMISSIONS ABATEMENTEMISSIONS CUTSENERGY CONSUMPTIONENERGY ECONOMICSENERGY OUTLOOKENERGY POLICYENERGY PRODUCTIONENERGY RESOURCESENERGY SECURITYENERGY SOURCESENERGY TECHNOLOGIESENERGY TECHNOLOGYENVIRONMENTAL POLICYFOSSILFOSSIL ENERGYFOSSIL FUELFOSSIL FUEL DEPOSITSFOSSIL FUEL PRICESFOSSIL FUEL PRODUCTIONFOSSIL FUELSFUEL COSTFUEL COSTSFUEL PRICEFUEL PRODUCTIONFUEL SWITCHINGGASGAS GENERATIONGAS INVESTMENTGAS PLANTGAS PLANTSGAS POWER PLANTSGAS PRODUCTIONGAS RESERVESGAS RESOURCESGHGGLOBAL WARMINGGREENHOUSEGREENHOUSE GASGREENHOUSE GAS EMISSIONSINTERNATIONAL ENERGY AGENCYINVESTMENT IN COALIPCCLONG-TERM CLIMATE CHANGELOW-CARBONMARGINAL ABATEMENTMARGINAL ABATEMENT COSTMETHANENATURAL GASNATURAL RESOURCESNONRENEWABLE ENERGYNONRENEWABLE RESOURCENONRENEWABLE RESOURCESOILONSHORE WINDPEAK CAPACITYPEAK OILPEAK POWERPHOTOVOLTAIC POWERPOLLUTIONPOWER GENERATIONPOWER PLANTPOWER PLANTSPOWER PRODUCTIONPOWER SECTORPPPRICE OF ELECTRICITYRENEWABLE ENERGIESRENEWABLE ENERGYRENEWABLE ENERGY SOURCERENEWABLE POWERRENEWABLE SOURCERENEWABLE SOURCESSHADOW PRICESUPPLY OF ELECTRICITYTEMPERATUREWINDWINDMILLWINDMILLS10.1596/1813-9450-6985