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Interplay between Environmental Regulation and Power Markets

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  • Klaus Skytte

Abstract

This paper discusses the difficulty of having three different objectives for the electricity supply sectors in the EU: renewable energy goals, emission reduction goals and minimising consumer prices. In the environment associated with the power markets, the regulatory mechanisms interact with each other and thus the attainment of the specified goals. Analytical discussions in the paper show that synergies do exist between the different regulation mechanisms and the targets. However, the challenge of having the different targets lies in the fact that the mechanisms at present cover different geographical areas and sectors, and that the targets are set differently within each Member State.This is an analytical paper, and its aim is to shed some light on the complexity of this regulation area and inspire more researchers to work in it.

Suggested Citation

  • Klaus Skytte, 2006. "Interplay between Environmental Regulation and Power Markets," EUI-RSCAS Working Papers 4, European University Institute (EUI), Robert Schuman Centre of Advanced Studies (RSCAS).
    • Handle: RePEc:erp:euirsc:p0169
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    References listed on IDEAS

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    1. Catherine Boemare & Philippe Quirion & Steve Sorrell, 2003. "The evolution of emissions trading in the EU: tensions between national trading schemes and the proposed EU directive," Climate Policy, Taylor & Francis Journals, vol. 3(sup2), pages 105-124, December.
    2. Dominique Finon & Philippe Menanteau, 2003. "The Static and Dynamic Efficiency of Instruments of Promotion of Renewables," Post-Print halshs-00001300, HAL.
    3. Soderholm, Patrik & Sundqvist, Thomas, 2003. "Pricing environmental externalities in the power sector: ethical limits and implications for social choice," Ecological Economics, Elsevier, vol. 46(3), pages 333-350, October.
    4. Amundsen, E.S. & Mortensen, J.B., 2001. "The Danish Green Certificate System: Some Simple Analytical Results," Norway; Department of Economics, University of Bergen 226, Department of Economics, University of Bergen.
    5. William J. Baumol & Wallace E. Oates, 1971. "The Use of Standards and Prices for Protection of the Environment," Palgrave Macmillan Books, in: Peter Bohm & Allen V. Kneese (ed.), The Economics of Environment, pages 53-65, Palgrave Macmillan.
    6. Jensen, S. G. & Skytte, K., 2002. "Interactions between the power and green certificate markets," Energy Policy, Elsevier, vol. 30(5), pages 425-435, April.
    7. Amundsen, Eirik S. & Mortensen, Jorgen Birk, 2001. "The Danish Green Certificate System: some simple analytical results," Energy Economics, Elsevier, vol. 23(5), pages 489-509, September.
    8. Boots, M., 2003. "Green certificates and carbon trading in the Netherlands," Energy Policy, Elsevier, vol. 31(1), pages 43-50, January.
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    Citations

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    Cited by:

    1. Oskar Lecuyer & Ruben Bibas, 2011. "Combining climate and energy policies: synergies or antagonisms?," Post-Print hal-00801917, HAL.
    2. GARCIA-ALVAREZ, María Teresa & VARELA-CANDAMIO, Laura & NOVO-CORTI, Isabel, 2013. "Renewable Energy, Electricity Market And Employment: The Case Of Spain," Regional and Sectoral Economic Studies, Euro-American Association of Economic Development, vol. 13(1), pages 131-142.
    3. Oskar Lecuyer & Ruben Bibas, 2011. "Combining Climate and Energy Policies: Synergies or Antagonism? Modeling Interactions With Energy Efficiency Instruments," Working Papers 2011.98, Fondazione Eni Enrico Mattei.
    4. Ellerman, Danny & Delarue, Erik & Weigt, Hannes, 2012. "CO2 Abatement from RES Injections in the German Electricity Sector: Does a CO2 Price Help?," Working papers 2012/14, Faculty of Business and Economics - University of Basel.
    5. del Río, Pablo, 2017. "Why does the combination of the European Union Emissions Trading Scheme and a renewable energy target makes economic sense?," Renewable and Sustainable Energy Reviews, Elsevier, vol. 74(C), pages 824-834.
    6. Fischer, Carolyn & Preonas, Louis, 2010. "Combining Policies for Renewable Energy: Is the Whole Less Than the Sum of Its Parts?," International Review of Environmental and Resource Economics, now publishers, vol. 4(1), pages 51-92, June.
    7. Rüdiger Pethig & Christian Wittlich, 2009. "Interaction of Carbon Reduction and Green Energy Promotion in a Small Fossil-Fuel Importing Economy," CESifo Working Paper Series 2749, CESifo.
    8. Klaus Skytte & Lucien Bobo, 2019. "Increasing the value of wind: From passive to active actors in multiple power markets," Wiley Interdisciplinary Reviews: Energy and Environment, Wiley Blackwell, vol. 8(3), May.
    9. Pablo del Río González, 2007. "The interaction between emissions trading and renewable electricity support schemes. An overview of the literature," Mitigation and Adaptation Strategies for Global Change, Springer, vol. 12(8), pages 1363-1390, October.
    10. Pablo Del R�O, 2009. "Interactions between climate and energy policies: the case of Spain," Climate Policy, Taylor & Francis Journals, vol. 9(2), pages 119-138, January.
    11. Sáenz de Miera, Gonzalo & del Ri­o González, Pablo & Vizcaino, Ignacio, 2008. "Analysing the impact of renewable electricity support schemes on power prices: The case of wind electricity in Spain," Energy Policy, Elsevier, vol. 36(9), pages 3345-3359, September.
    12. Pablo Río, 2014. "On evaluating success in complex policy mixes: the case of renewable energy support schemes," Policy Sciences, Springer;Society of Policy Sciences, vol. 47(3), pages 267-287, September.

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    Keywords

    regulation; electricity; environmental policy;
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