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ID:
132630
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| Publication |
2014.
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| Summary/Abstract |
The recent low CO2 prices in the European Union Emission Trading Scheme (EU ETS) have triggered a discussion whether the EU ETS needs to be adjusted. We study the effects of CO2 price floors and a price ceiling on the dynamic investment pathway of two interlinked electricity markets (loosely based on Great Britain, which already has introduced a price floor, and on Central Western Europe). Using an agent-based electricity market simulation with endogenous investment and a CO2 market (including banking), we analyse the cross-border effects of national policies as well as system-wide policy options.
A common, moderate CO2 auction reserve price results in a more continuous decarbonisation pathway. This reduces CO2 price volatility and the occurrence of carbon shortage price periods, as well as the average cost to consumers. A price ceiling can shield consumers from extreme price shocks. These price restrictions do not cause a large risk of an overall emissions overshoot in the long run. A national price floor lowers the cost to consumers in the other zone; the larger the zone with the price floor, the stronger the effect. Price floors that are too high lead to inefficiencies in investment choices and to higher consumer costs.
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| 2 |
ID:
088280
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| Publication |
2009.
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| Summary/Abstract |
The share of microgeneration (power generation at the level of households and small businesses) in the Dutch electricity system continues to grow. Over time, this development may pose a threat to the reliability and efficiency of the Dutch electricity balancing market. We investigated possible changes to the design of the Dutch balancing market that can maintain or even improve upon its current operational performance level. The first step of the research was an analysis of the existing Dutch balancing market. It consists of three main instruments: programme responsibility, the single buyer market for regulating and reserve power (RRP), and imbalance settlement. The balancing market currently functions satisfactorily. Subsequently, the effects of large-scale development of microgeneration in the Netherlands were evaluated with a qualitative scenario analysis. Four microgeneration scenarios and two methods for allocating the household electricity consumption and generation were considered. The four scenarios concerned large-scale penetration of PV, heat-led micro CHP, electricity-led micro CHP operated by the household consumer, and electricity-led micro CHP operated by the supply company. The last scenario was found to have the strongest positive net effect. Finally, six design options were identified for improving the Dutch balancing market design in case the share of microgeneration would increase substantially. Of these six options, adjusting the profile methodology and the regulation of smart meters are no-regret options that can be implemented immediately. The attractiveness of the other options depends upon the microgeneration portfolio that emerges, the manageability of large metering data flows, and the nature of the technical effects of large-scale microgeneration penetration.
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