Template-Type: ReDIF-Article 1.0
Author-Name:  Brayam Valqui, Mort D. Webster, Shanxia Sun, and Thomas W. Hertel
Title:  Coal-Biomass Co-firing within Renewable Portfolio Standards: Strategic Adoption by Heterogeneous Firms and Emissions Implications
Classification-JEL: F0
Volume:  Volume 44
Issue:  Number 5
Year:  2023
Abstract:  As electricity from coal declines, co-firing coal plants with biomass has been proposed to extend coal unit life, increase production, and reduce carbon emissions. Previous studies reach conflicting conclusions on whether coal biomass co-firing would result in a net increase or decrease in carbon emissions. We explore whether biomass co-firing would decrease emissions using a novel framework that includes two critical features of electricity markets: strategic adoption decisions by firms and intertemporal constraints on power plant operations. We apply this framework to a case study based on the Midwestern U.S. electricity market and show that profit maximizing firms will retrofit mid-efficiency coal units, rather than the most or least efficient units. We demonstrate that, contrary to expectations, this strategy leads to a net increase in system-wide carbon emissions under high carbon prices because of the other generators displaced by co-firing units.    
Handle: RePEc:aen:journl:ej44-5-Webster
File-URL: http://www.iaee.org/en/publications/ejarticle.aspx?id=4055
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