Details

Autor(en) / Beteiligte

• Chen, Yihsu
• Sijm, Jos
• Hobbs, Benjamin F.
• Lise, Wietze

Titel

Implications of CO2 emissions trading for short-run electricity market outcomes in northwest Europe

Ist Teil von

• Journal of regulatory economics, 2008-12, Vol.34 (3), p.251-281

Ort / Verlag

Boston: Springer US

Erscheinungsjahr

2008

Quelle

2022 ECC(Springer)

Beschreibungen/Notizen

• We examine the short-run implications of CO 2 trading for power production, prices, emissions, and generator profits in northwest Europe in 2005. Simulation results from a transmission-constrained oligopoly model are compared with theoretical analyses to quantify price increases and windfall profits earned by generators. The analyses indicate that the rates at which CO 2 costs are passed through to wholesale prices are affected by market competitiveness, merit order changes, and elasticities of demand and supply. Emissions trading results in large windfall profits, much but not all of which is due to free allocation of allowances. Profits also increase for some generators because their generation mix has low emissions, and so they benefit from electricity price increases. Most emission reductions appear to be due to demand response not generation redispatch.