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Evaluating the application of different pricing regimes and low carbon investments in the European electricity market

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  • Oggioni, Giorgia
  • Smeers, Yves
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    Abstract

    The EU-ETS is the first measure initiated by the EU to contribute to the decarbonization of the European energy sector. It is a cap and trade system that requires industries participating to the program to procure allowances to cover their emissions. Electricity Intensive Industries (EIIs) have complained that the system put their European plants at disadvantage compared to facilities located outside the EU. They have asked for actions to mitigate this effect; one of them is to have access to long term contracts with electricity suppliers, ideally with those operating carbon free plants. This paper presents and illustrates a method for assessing the impact of this measure on EIIs participating to the EU cap and trade system.

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    Bibliographic Info

    Article provided by Elsevier in its journal Energy Economics.

    Volume (Year): 34 (2012)
    Issue (Month): 5 ()
    Pages: 1356-1369

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    Handle: RePEc:eee:eneeco:v:34:y:2012:i:5:p:1356-1369

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    Web page: http://www.elsevier.com/locate/eneco

    Related research

    Keywords: Average cost based contracts; Energy intensive industries; EU-ETS; Investments;

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    References

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    1. Luca Zamparelli, 2009. "Average cost and marginal cost pricing in Marshall: Textual analysis and interpretation," The European Journal of the History of Economic Thought, Taylor & Francis Journals, vol. 16(4), pages 665-694.
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    3. Jean-Michel Glachant & Adrien de Hauteclocque, 2009. "Long-term Energy Supply Contracts in European Competition Policy: Fuzzy not Crazy," EUI-RSCAS Working Papers 6, European University Institute (EUI), Robert Schuman Centre of Advanced Studies (RSCAS).
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    5. Szabo, Laszlo & Hidalgo, Ignacio & Ciscar, Juan Carlos & Soria, Antonio, 2006. "CO2 emission trading within the European Union and Annex B countries: the cement industry case," Energy Policy, Elsevier, vol. 34(1), pages 72-87, January.
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    7. Ralph Turvey, 1968. "Peak-Load Pricing," Journal of Political Economy, University of Chicago Press, vol. 76, pages 101.
    8. John T. Wenders, 1976. "Peak Load Pricing in the Electric Utility Industry," Bell Journal of Economics, The RAND Corporation, vol. 7(1), pages 232-241, Spring.
    9. Currier, Kevin M, 1994. "Existence and Uniqueness of Average Cost Pricing Equilibria: A Degree Theoretic Approach," Bulletin of Economic Research, Wiley Blackwell, vol. 46(4), pages 331-39, October.
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