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International audience; Reunion Island, similar to most insular regions, is ruled by a carbon-based economy that is heavily dependent on fossil fuels. In recent years, the energy transition towards a low-carbon economy has become the watchword of this French overseas region, with the objective of a 100% renewable energy mix by 2030. Reducing fossil fuel use while maintaining economic growth is an important issue for all countries but is even more important for island territories with structural and geographical handicaps. Energy transition and drastic greenhouse gas emission reductions represent costs and opportunities that need to be quantified. This research paper assesses the environmental and macroeconomic effects of the carbon price policy introduced in France to meet the target of the Paris Agreement. The acceptability of the tax significantly depends on the possibility of recycling tax revenues. Different schemes for recycling tax revenues are considered in simulations. The methodology used is a computable general equilibrium (CGE) model for Reunion Island (GetRun-NRJ) that takes into account all island specificities. The results show that the carbon tax enables substitutions between fossil and renewable energy production and reduces CO 2 emissions. However, the tax has negative effects on the aggregate economy. The implemented tax revenue recycling compensation mechanisms mitigate the negative impacts, but the results differ significantly, as the recycling schemes do not support the same economic actors.

International audience; Declared in 2010 as a UNESCO world heritage site, the overseas French Region of La Reunion – Reunion Island – has adopted a strategy for sustainable development which aims to attain energy autonomy by 2030. With currently half of the island’s power generated by coal-fired power plants, this unique European territory in the Indian Ocean has large potential for renewable energy generation (solar, marine, wind and biomass) and so largely bases the achieving of this goal on the development of these renewable energy sources. Since 2007, La Réunion has implemented the GERRI project, Green Energy Revolution, where all low carbon innovations are promoted in order to be integrated into the society by 2030; this includes transport, energy production, storage and use, town planning and construction. This also includes tourism, La Reunion aiming to develop an ecological tourism sector with the objective of welcoming 600,000 tourists by 2020. The Reunion’s plan for making its electricity system 100% renewable involves a multi-fold process. The French Minister of Ecology already mandated in April 2009 that all new constructions in overseas departments to install solar hot water heating on all new construction. Additionally, biomass will increasingly substitute coal, which will entail the development of more fibrous sources of sugarcane, supported by an increase in cane farms that also produce solar power. Increased hydropower and geothermal energy will also enter the mix, along with experimenting with tidal power. These measures will also help the island achieve its goal to meeting all heating and cooling needs with renewable resources. The aim of this study is to discuss the large integration of renewable energy in the Reunion power system through the bottom-up energy model TIMES-Reunion (Drouineau, 2011; Bouckaert, 2013). This research is developed with TIMES-Reunion, a bottom-up model describing the small and isolated energy system in great detail of current and future technologies (Drouineau, 2011). This technological model is drived by an exogeneous energy demand and aims at minimize the global discounted cost of the energy system. The time horizon range from 2008 to 2030. We investigate different scenarios binding the target of 100% renewables sources in power generation by 2030 and specifying potentials for renewable energy sources. Moreover we implement sensitivity analysis especialy based on solar, ocean energy, geothermal and sugarcane. We analyse the changes of the current production patterns to move toward a system capable of meeting the energy challenge. In the business as usual, the Reunion electricity production doubles from 2008 to 2030, in particular based on the development of coal. The oil becomes missing in 2015, coal being more profitable, and the share of renewables stabilizes around 35% by 2030. Despite tremendous potential of renewable present on the island, a transition to a 100% renewable energy needs being supported by incitations or constraints. We analyse the impact on the electricity mix of changes in the level of renewables potentials. Particularly, we discuss the level of development of solar and wave/ocean energies. We also explore the impact on the system of strong political choices on 1) the development of geothermal through the authorization to exploit geothermal energy in a protected natural area and 2) the exploitation of 100% energy-sugarcane. Then, in respect with the large development of renewables as solar and wind, we investigate scenarios dealing with the management of intermittent energy including exploitation rule in line with the decision of the network operator (rule of 30% of intermittent energy).

The accident in Fukushima, Japan, in March 2011 has reactivated the discussion on how to meet ambitious climate mitigation objectives as some European countries reconsider the contribution of nuclear power in their energy mix. This study evaluates the impact of nuclear power reduction in Europe on the electricity mix under carbon emission reduction scenarios while considering the availability of carbon capture and storage technological options. The potential cost of carbon reduction is also addressed using the bottom-up optimization model TIAM-FR. The results suggest that CCS technologies constitute an interesting option in a case of stringent climate targets and limited nuclear electricity. However, the unavailability of CCS technologies induces a significant increase in carbon cost to achieve the climate policy.