CO2 price development in the European power market considering climate objectives

Abstract

The implementation of emission certificates in Europe in 2005 has lead to new uncertainties especially for power companies resulting in additional costs for the power generation. The introduction of certificates goes along with political conditions and objectives particularly in the European Union until 2020. In consequence, these regulations take influence on the power plant scheduling as well as on market prices for electrical energy and CO2 certificates. By using market simulation methods which simulate supply and demand for electrical energy the price development of the emission certificates can be investigated based on system marginal costs for CO2 emissions. In view of these circumstances this paper presents investigations on the CO2 price development in the European power market for different scenarios up to 2020 e.g. concerning the power generation park as well as the demand of electrical energy based on a market simulation method.