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Time flexibility to reduce climate change mitigation costs for Japanese electricity supply sector
Author(s) -
Sugiyama Taishi,
Nagano Koji,
Takahashi Masahito
Publication year - 2000
Publication title -
electrical engineering in japan
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.136
H-Index - 28
eISSN - 1520-6416
pISSN - 0424-7760
DOI - 10.1002/(sici)1520-6416(20000415)131:1<68::aid-eej7>3.0.co;2-7
Subject(s) - flexibility (engineering) , electricity , environmental economics , mains electricity , economics , greenhouse gas , marginal cost , industrial organization , business , natural resource economics , microeconomics , engineering , ecology , management , voltage , electrical engineering , biology
The idea of greenhouse‐gas credit borrowing in global or national context faces severe problems such as international and intergenerational equity issues. Though the merit of cost reduction is obvious, the possibility is small for such a scheme to be massively allowed in future international negotiations. Still, there is a good chance for each specific player to use the idea of time flexibility. Through analytic and numerical model analysis, this paper demonstrates the merits of time flexibility on a sector base. First, the derived analytic solution for time paths of marginal mitigation costs gives an insight to the relation between timing and costs of mitigation action. Second, the numerical model analysis for the Japanese electricity supply sector shows that time flexibility can drastically reduce costs for mitigation in the sector. Time flexibility is important specifically to the Japanese electricity supply sector because (1) the sector is capital intensive and has long capital turnover time and (2) available mitigation option is limited for the near future. A sector like the Japanese utility sector needs some kind of mechanism to virtually realize the merits of using time flexibility. Domestic and international emission trading systems are the most promising candidate to date. © 2000 Scripta Technica, Electr Eng Jpn, 131(1): 68–77, 2000