What Is Effect of Climate Change Mitigating Policies on Energy Sector in Slovakia?

We assess the impacts of more strict regulation than the EU-wide 20% CO2 reduction target in 2020 on Slovak energy sector. Linear dynamic optimisation model MESSAGE with very detailed structure of Slovak energy sector is used for the assessment of impacts of imposing a carbon tax of €17 per tonne of CO2 and for two emission caps on CO2 emission that follow the EU policy to tighten the GHG target at the EU. The impacts on the fuel-mix and the technology-mix of energy sector in Slovakia, air quality and GHG emission, economic costs are assessed. Environmental benefits attributable to air pollutants and greenhouse gasses are quantified by using the ExternE impact pathway analysis. The impacts of 17€ scenario are similar to the baseline scenario. The Slovak public electricity sector achieves CO2 emission intensity of 0.465 t CO2 per MWh that is lower than the EC benchmark already in 2009. Maximal feasible CO2 emission reduction in the Slovak electricity sector is 24.6 % compared to the year 2005. The average carbon intensity will decline to 0.057 tCO2 per MWh in 2020 and result in 15.4 % reduction of CO2 in 2020 compared to the 17€ scenario level. Total production costs are €481 million higher (18.6%) in Cap24.6 scenario. As a consequence of the emission reduction, the externality costs are €190 million smaller in CAP24.6 scenario than in the 17€ scenario in 2020. Our results indicate that it is feasible to reduce CO2 emissions in the power sector in Slovakia more than the 20% reduction target set at the EU level.