Project

Fraunhofer Institute for
Systems and Innovation Research ISI

KNEE

Economic evaluation of costs and benefit effects of RE expansion in the German electricity and heat sector – KNEE

Results of the project (funded by the Federal Ministry for the Environment, Nature Conservation and Nuclear Safety (BMU)

Question:  What are the cost and benefit effects of renewable energy (RE) deployment in the German power and heat sector? 
This question has been the focus of the multi-year research project KNEE. The study is being carried out by: 

  • Fraunhofer Institute for Systems and Innovation Research (ISI, Karlsruhe),

  • Institute of Economic Structures Research (GWS mbH, Osnabrück), 

  • Institute for Future Energy Systems (IZES, Saarbrücken) and

  • German Institute for Economic Research (DIW Berlin, Berlin).

One of the major outcomes is a conceptual framework to facilitate an overall evaluation of the effects without double counts or gaps. This framework subdivides the cost and benefit effects of renewable energy expansion into three main categories:

  • System-related cost and benefit aspects

  • Distributional effects of policies

  • Macroeconomic aspects

and other effects that are not yet quantified.
Aggregated cost and benefit effects can only be determined within the respective categories.
Further, a projection of system-related potential effects for 2020 and 2030 is made under certain assumption showing what the costs and benefits of RE deployment will be in 2020 and 2030.

In a follow-up project (Impacts of Renewable Energy Source (ImpRES)), further methodological approaches on how to quantify effects are investigated.