Abstract
In this paper, the likely impacts of the EU emission trading system on
the Nordic electricity market and on the position of various market
actors are assessed. In its first phase, the EU CO2 emission
trading system includes power plants with thermal capacity greater than
20 MW, metals industry, pulp and paper industry, mineral industry and
oil refineries. This paper describes the assessment done for the Finnish
Minister of Trade and Industry, analysing the likely impacts on power
plant operators, on energy-intensive industries, on other industries and
on other consumer groups. The impacts of emissions trading were studied
with the VTT electricity market model and with the TIMES energy system
model. The annual average electricity price was found to rise
0.74 EUR MW h− 1 for every 1 € tonne CO2−1
in the Nordic area. Large windfall profits were estimated to incur to
electricity producers in the Nordic electricity market. In Finland,
metals industry and private consumers were estimated to be most affected
by the electricity market price increases. Expanded nuclear power
generation could limit the increases in the prices of electricity to
one-third compared to those in the base case.
Original language | English |
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Pages (from-to) | 193 - 211 |
Number of pages | 19 |
Journal | Energy Economics |
Volume | 30 |
Issue number | 2 |
DOIs | |
Publication status | Published - 2008 |
MoE publication type | A1 Journal article-refereed |
Keywords
- Nordic electricity market
- Investment
- CO2 emission
- Windfall profit
- Industry
- Domestic sector