Assessing renewable gas policies using a long-term equilibrium energy system model

The European Union’s ambition to be climate neutral by 2050 implies an unprecedented
transformation of the energy system to substantially reduce the use of fossil energy sources.
Economists have identified several potential simultaneous market imperfections – market failures,
policy failures, and political economy constraints – to consider that may provide an economic
rationale for introducing several climate and energy related policies. Market failures in electricity
markets are widely studied in academic literature. Still, insufficient attention has been given to
describe potential market failures in a future decarbonized energy system characterized by
increased sector coupling and renewable gas technologies.

This dissertation assesses renewable gas policies using economic analysis to substantiate the
presence of a market failure or evaluate either the costs or benefits of market interventions in
response to a market failure, thereby highlighting the need for or impact of second-best solutions. In
each chapter of this dissertation, we apply a stylized numerical case study to simulate an energy
system using techno-economic input data and inform the policy assessment.