The European Emissions Trading System and the German and Polish electricity market : influence of market structures and market regulation on the carbon market : case study report
by Jan Abrell, Regina Betz, Mirjam Kosch (Zurich University of Applied Sciences (ZHAW), Winterthur) ; on behalf of the German Environment Agency ; publisher: Umweltbundesamt ; report performed by: Zurich University of Applied Sciences (ZHAW) ; edited by: Section V 3.3 Economic Aspects of Emissions Trading, Monitoring, Evaluation, Claudia Gibis
This report analyses the interaction of the European Emissions Trading System (EU ETS)and the German and Polish electricity markets along two main questions: How do EU ETS design features affect the environmental effectiveness of the system and the quality of the carbon price signal? How do electricity market design features in Poland and Germany affect the carbon price induced abatement in the power sector? Based on publicly available data and expert interviews, we derive three main findings on the impact of the electricity market structure on the quality of the EUA price.First, the diversity and age of the capacity portfolio determine the response of the electricity system to the EUA price. In systems with relatively young gas-fired plants, observing a fuel-switching is likely before major investment taking place. Second, complementary policies such as renewable or combined heat and power support and retail price policies (as the price cap for power in Poland) reduce the role of the carbon price. The former for dispatching and investment decisions and the latter for demand reduction and energy efficiency investments. Third, complementary policies also reduce the predictability of the carbon price as they affect investments and demand for emission allowances. The market stability reserve (MSR) -an automatic adjustment mechanism within the EU ETS –can reduce the impact of these effects on the allowance price to some extent, but does not remove all uncertainties.This case study is part of the project “Influence of market structures and market regulation on the carbon market” that aims to identify the impact of market structures and regulations on carbon markets and to investigate the interdependencies between carbon and energy markets in Europe, California, China, South Korea, and Mexico.
Year of publication: |
December 2020
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Authors: | Abrell, Jan ; Betz, Regina Annette ; Kosch, Mirjam |
Other Persons: | Gibis, Claudia (ed.) |
Institutions: | Deutschland / Umweltbundesamt (issuing body, commission) ; Zürcher Hochschule für Angewandte Wissenschaften (contributor) |
Publisher: |
Dessau-Roßlau : Umweltbundesamt |
Subject: | emissions trading | electricity markets | Regulation | Emissionshandel | Emissions trading | Elektrizitätswirtschaft | Electric power industry | EU-Staaten | EU countries | Deutschland | Germany | Marktstruktur | Market structure | Regulierung | Treibhausgas-Emissionen | Greenhouse gas emissions | Polen | Poland | Markt | Market |
Saved in:
freely available
Extent: | 1 Online-Ressource (76 Seiten, 2,43 MB) Diagramme |
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Series: | Climate change. - Dessau-Roßlau : Umweltbundesamt, ISSN 1862-4359, ZDB-ID 2274175-6. - Vol. 2020, 48 |
Type of publication: | Book / Working Paper |
Type of publication (narrower categories): | Forschungsbericht ; Graue Literatur ; Non-commercial literature |
Language: | English |
Notes: | Report completed in: August 2020 Zusammenfassung auf Englisch und Deutsch |
Source: | ECONIS - Online Catalogue of the ZBW |
Persistent link: https://www.econbiz.de/10012626309