## The Economics of Decarbonizing Electricity Production

_IMF Working Papers, October 4, 2024_

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## Bibliographic details
- Authors: Gregor Schwerhoff
- Published: October 4, 2024
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9798400290046.001

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### Summary
- Electricity production is the sector with the largest share of global emissions.
- Identifying the lowest cost option for achieving decarbonization (and full reliability) is a complex optimization problem at the intersection of economics and engineering.
- Key determinants include:
  - the cost of individual technologies,
  - the geographical potential,
  - the complementarities between energy sources,
  - supporting infrastructure like electricity grids and energy storage.
- The paper reviews the literature and draws high-level conclusions from specialized analyses.

### Major findings and projections
- Energy-economy models have strongly changed projections of the optimal electricity mix in recent years.
- While models differ in detail, models project that:
  - the share of renewable energy, mostly solar and wind power, increases steadily in a “below 2°C” scenario,
  - renewable energy becomes the dominant source of energy by 2050.
- An electricity system based on solar and wind power can use flexibility options as a complement instead of baseload energy.
- Models vary by the degree to which renewable energy is supported by carbon capture and storage, bioenergy, and nuclear energy.

### Publication and metadata
- Author: Gregor Schwerhoff
- Date: October 4, 2024
- Pages: 33
- Volume: 2024
- Issue: 213
- Series: Working Paper No. 2024/213
- DOI: https://doi.org/10.5089/9798400290046.001
- Stock No: WPIEA2024213
- ISBN: 9798400290046
- ISSN: 1018-5941

### Subjects and keywords
- Subject: Commodities, Economic sectors, Electricity, Environment, Natural gas sector, Non-renewable resources, Renewable energy, Technology
- Keywords: climate policy, Electricity, electricity production, energy economy modeling, energy system, energy transition, energy-economy model, flexibility option, Global, Natural gas sector, Non-renewable resources, Renewable energy

*IMF Working Paper — Gregor Schwerhoff, “The Economics of Decarbonizing Electricity Production”, October 4, 2024.*

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_Source: https://www.imf.org/en/publications/wp/issues/2024/10/04/the-economics-of-decarbonizing-electricity-production-555901_