Equilibrium transitions from non-renewable energy to renewable energy under capacity constraints - INRAE - Institut national de recherche pour l’agriculture, l’alimentation et l’environnement
Article Dans Une Revue Journal of Economic Dynamics and Control Année : 2015

Equilibrium transitions from non-renewable energy to renewable energy under capacity constraints

Résumé

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.

Dates et versions

hal-02634238 , version 1 (27-05-2020)

Identifiants

Citer

Jean-Pierre Amigues, Alain Ayong Le Kama, Michel Moreaux. Equilibrium transitions from non-renewable energy to renewable energy under capacity constraints. Journal of Economic Dynamics and Control, 2015, 55, pp.89-112. ⟨10.1016/j.jedc.2015.04.001⟩. ⟨hal-02634238⟩
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