Greenhouse gas mitigation, Prices, Investments, Carbon, and Electricity
Poland is on track to meet its international greenhouse-gas emissions commitments. However, it will need to cut emissions significantly in the future, if the European Commission's proposal on the Low Carbon Roadmap is adopted. Policies should ensure that the country's substantial reduction potential, mainly linked to the energy sector's high emissions intensity, and implying overall abatement costs above the EU-average, is realised in a least-cost fashion by imposing an economywide single carbon price. This stands in contrast with current explicit and implicit carbon prices, which vary widely across different sectors of the economy. Crucial to least-cost abatement is also a high responsiveness to the EU-ETS carbon price signal. While Poland has made good progress in complying with EU regulations related to the energy sector, the large share of public ownership and the lack of effective separation between electricity producers and distributors may blur the price signal for investment decisions in generation capacity. The isolation of the Polish electricity market implies a need for more investment in low-emission technologies in Poland to achieve a given emissions-reduction target, whereas a deeper integration with neighbouring electricity markets would spread the burden more efficiently across countries. The cost-efficiency advantage of uniform support to renewables via green certificates should be retained to minimise abatement costs. Government policies aimed at a higher share of nuclear power and natural gas from shale formations need to take fully into account tail risks and the short- and longterm environmental costs of the use of the former and fully consider environmental risks related to extraction of the latter. Energy efficiency policies can help to address market failure but should not be allowed to distort relative carbon prices. [ABSTRACT FROM AUTHOR]
Economic policy, Prices, Economists, Economics, Capital investments, Carbon, Electricity, and Climate change
In this brief update on analysing the economic costs associated with carbon policy uncertainty, we outline the public policy processes commenced by the Commonwealth Government following the publication of Nelson et al. (2010). We also summarise the research completed by other economists testing the hypothesis that there are material economic costs associated with ongoing carbon policy uncertainty. Independent studies by Frontier Economics (2010), Deloitte (2011) and Sinclair Knight Merz (2011) all conclude that climate change policy uncertainty will result in sub-optimal capital investment within the electricity sector. In turn, this sub-optimal investment will manifest itself in unnecessary increases in electricity prices. [ABSTRACT FROM AUTHOR]
Prices, Electric utilities, Emissions (Air pollution), Energy consumption, Renewable energy sources, Carbon, and Electricity
The power industry has been grappling with regulatory uncertainty in relation to carbon since late 2004 when Australian state governments committed to the introduction of an emissions trading scheme. This article estimates the additional cost to electricity users associated with the sub-optimal introduction of new power generating capacity given regulatory delays. We find the costs to be significant; under a business-as-usual electricity demand growth scenario, prices in 2020 would be about $8.60/MWh higher than necessary. We also find that costs to consumers are lower where complementary policies are introduced to encourage energy efficiency and renewable energy. [ABSTRACT FROM AUTHOR]
Black Book - Aluminum & Norsk Hydro: Right Commodity, Right Assets, Right Time. Apr2008, p45-47. 3p.
Aluminum industry, Prices, Emissions (Air pollution), Aluminum, Electricity, and Carbon
The article deals with the price formation of aluminum. It notes that improvements in cell design of aluminum have led to a decrease in the amount of electricity required in its production. Inert anode technology is cited to lower costs and solve carbon emissions. This technology will be commercially available in 10 years. A significant divergence between copper and aluminum is expected in 2009.
Fuss, Sabine, Johansson, Daniel J.A., Szolgayova, Jana, and Obersteiner, Michael
Energy Policy. Feb2009, Vol. 37 Issue 2, p733-743. 11p.
Carbon dioxide industry, Renewable energy sources, Environmental policy, Energy policy, Emissions (Air pollution), Prices, Government policy, Government policy on climate change, Fossil fuels, Carbon, Energy development, and Electricity
This paper presents a real options model where multiple options are evaluated simultaneously so that the effect of the individual options on each other is accounted for. We apply this model to the electricity sector, where we analyze three typical technologies based on fossil fuel, fossil fuel with carbon capture and renewable energy, respectively. In this way, we can analyze the transition from CO2-intensive to CO2-neutral electricity production in the face of rising and uncertain CO2 prices. In addition, such a modelling approach enables us to estimate precisely the expected value of (perfect) information, i.e. the willingness of investors and producers to pay for information about the correct CO2 price path. As can be expected, the expected value of information rises with increasing CO2 price uncertainty. In addition, the larger the price uncertainty, the larger are the cumulative CO2 emissions over the coming century. The reason for this is that the transition to less CO2-intensive technologies is increasingly postponed with rising CO2 price uncertainty. By testing different price processes (geometric Brownian motion versus jump processes with different jump frequencies), we can also make useful recommendations concerning the importance of policy predictability. We find that it is better to have climate change policies that are stable over a certain length of time and change abruptly than less abrupt but more frequently changing policies. Less frequent fluctuations reduce the expected value of information and result in smaller cumulative CO2 emissions. [Copyright &y& Elsevier]
Power Economics. 6/1/2005, Vol. 9 Issue 11, p4-4. 1/9p.
Emissions (Air pollution), Air pollution, Prices, Carbon, and Electricity
The article reports that prices of European carbon emissions have hit a record high after concerns that companies could exceed permitted targets over the next three years. The surge in Great Britain gas and electricity prices has also been a significant factor, following fears of tight supplies in the coming Winter.
Energy industries, International agencies, Emissions (Air pollution), Emissions trading, Prices, Carbon, and Electricity
Reports that energy companies need to engage themselves more in meeting Kyoto Protocol environmental targets if they are to survive, according to the International Energy Agency. Impact of the cost of paying for carbon emissions on the average wholesale price of electricity; Need of companies to prepare for the European Union's carbon emissions trading scheme according to Eurelectric chairman William Kyte.