Costs and benefits of energy transition

Overall Concept

The study of whether energy transition towards 100% renewables is socially and economically feasible is yet under hot debates. Some famous debates recently in the scientific communities includes the attacks on Mark Z. Jacobson's 100% RE studies and also T.W. Brown's response to a critical review of 100 % RE systems.

In these debates, the question of how much an energy system with 100% renewables costs is often the main reason both parties disagree with each other. Therefore, it may be important to know how a solid, dynamic, and system oriented analysis on the costs and benefits of energy transition should look like.

In short, there are three scales of CBA (cost-benefit analysis) one should consider for such full scale overview. On the energy system level, the microeconomic level, and the macroeconomic level. The three levels show different perspectives of the effects of energy transition: the energy system level discusses impacts that occur from a technical or engineer point of view, the microeconomic level discusses impacts of different individuals energy transition have on; and the macroeconomic level discusses the net benefits/losses an entire industry or the society itself as a whole will gain during the transition process.

Effects on Energy Systems

There are two kinds of costs that constitute the system total cost of an energy system: the generation cost and the integration cost.

The generation costs are the costs of different types of energy sources to produce energy. One common indicator of this cost is the levelized cost of energy (LCoE). 

Because the LCoE of renewable energy sources have been declining in a rapid speed, and are already cost-competitive with conventional sources under some scenarioes.