Technology evolution and carbon dioxide emission simulation: Examining impacts of carbon dioxide abatement policies in the Canadian electricity sector

This paper examined potential impacts of implementing two CO{dollar}sb2{dollar} reduction policies--carbon taxes and renewable set-asides--on the Canadian electricity supply sector, with a focus on changes of CO{dollar}sb2{dollar} emissions and electricity rates. The analysis was performed based on Electricity Supply System Model (ESSM), a simulation-optimization model developed for simulating technological evolution of electricity generation. The model applied the screening curve approach to optimize the investment of dispatchable generation technologies, and a simulation approach to model renewable technologies' penetration, cost change, and productivity (annual capacity factor).; The modelling results suggested a significant growth in CO{dollar}sb2{dollar} emission in the Canadian electricity supply sector, should the business-as-usual (BAU) scenario continue.; Renewable set-asides (RSA) and carbon emission taxes (CET) offered substantial potentials for CO{dollar}sb2{dollar} emission reductions. Compared to the BAU scenario in the year 2010: a 15% renewable set-aside could would yield a 3.7% emission reduction with a 2% increase of generation costs; a 30% RSA would yield 9% emissions reduction with a 4.5% increases of cost; and a {dollar}20/tonne tax would yield a 15.7% emission reduction with 12.8% increases of generation cost by. In addition, CO{dollar} sb2{dollar} taxes higher than {dollar}20/tonne had only a marginal affect on incremental CO{dollar}sb2{dollar} reductions but significant on electricity rate. However, the modelling result also concluded that without further policy initiatives on retiring existing fossil fuel plants and more aggressive energy conservation programs, it is unlikely for the Canadian electricity sector to stabilize its CO{dollar}sb2{dollar} emissions at its 1990 levels. (Abstract shortened by UMI.)...