The impact of power market structure on the pass-through of CO2 emissions trading costs to electricity prices. A theoretical approach
Creators
- 1. ECN Policy Studies, Petten (Netherlands)
- 2. Merced School of Engineering, University of California, Merced, CA (United States)
- 3. Department of Geography and Environmental Engineering, Johns Hopkins University, Baltimore, Maryland (United States)
Description
This paper analyses the impact of power market structure on the pass-through rate (PTR) of CO2 emissions trading costs on electricity prices from a theoretical point of view, including graphical illustrations and mathematical proofs. Market structure refers in particular to the number of firms active in the market as well as to the shape of the power demand and supply curves. In addition, it analyses the impact of other power market related factors on the PTR of carbon costs to electricity prices, notably the impact of ET-induced changes in the merit order of power generation technologies or the impact of pursuing other market strategies besides maximising generators' profits, such as maximising market shares or sales revenues of power companies. It shows that each of these factors can have a significant impact on the rate of passing-through carbon costs to electricity prices
Availability note (English)
Available from the author at ECN Policy Studies, P.O. Box 1, 1755 ZG, Petten (NL)Additional details
Publishing Information
- Publisher
- EAERE
- Imprint Place
- Venice (Italy)
- Imprint Pagination
- 23 p.
INIS
- Country of Publication
- Italy
- Country of Input or Organization
- Netherlands
- INIS RN
- 40105947
- Subject category
- S29: ENERGY PLANNING, POLICY AND ECONOMY;
- Resource subtype / Literary indicator
- Non-conventional Literature
- Descriptors DEI
- CARBON DIOXIDE; COST; ECONOMIC ELASTICITY; ELECTRIC UTILITIES; ELECTRICITY; EMISSION; EMISSIONS TRADING; MARKET; MATHEMATICAL MODELS; POWER DEMAND; PRICES; SALES
- Descriptors DEC
- CARBON COMPOUNDS; CARBON OXIDES; CHALCOGENIDES; DEMAND; ENVIRONMENTAL POLICY; GOVERNMENT POLICIES; OXIDES; OXYGEN COMPOUNDS; PUBLIC UTILITIES
Optional Information
- Notes
- Paper presented at the 17th Annual Conference of the European Association of Environmental and Resource Economics (EAERE), Amsterdam, Netherlands, June 24-27, 2009