Ninfole & Rosendahl (2025): Direct Air Capture and interactions with the electricity market – Preprint
Stefano Ninfole and Knut Einar Rosendahl, IN: SSRN, https://doi.org/10.2139/ssrn.5468320
Direct Air Capture (DAC) operation is very energy intensive, and large-scale use of DAC will thus impact the electricity market. Meanwhile, electricity generation is becoming more volatile with bigger share of intermittent technologies. This paper examines possible interactions between the electricity market and adoption of DAC technologies. Combining theoretical analysis with stylized numerical simulations, the authors show that DAC adoption can increase or decrease electricity price volatility, depending on the choice of DAC technology.