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The competitive environment of the European electricity sector in the post-Kyoto scenarios

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  • Carrillo-Hermosilla, Javier
  • Del Río, Pablo
  • Könnölä, Totti
  • García, Carlos

Abstract

This paper shows how the uncertainty associated to the absence of a post-Kyoto regime regarding Greenhouse Gas mitigation is affecting investments in mitigation activities in the EU electricity sector and, thus, future emissions levels. Based on a wide survey of EU power companies, the paper identifies the most likely post-Kyoto scenarios considered by these firms and how they are coping with such uncertainty in their current investment decisions. The major conclusion is that the non-existence of a post-Kyoto regime is having a negative effect on current business investment decisions in mitigation activities, increasing risk premiums and financing costs. All in all, the companies surveyed foresee post-Kyoto compliance regimes with emissions trading systems that would guarantee the continuity of the value of the reductions made beforehand, although they differ in their perceptions of the form that a post-Kyoto regime could take.

Suggested Citation

  • Carrillo-Hermosilla, Javier & Del Río, Pablo & Könnölä, Totti & García, Carlos, 2006. "The competitive environment of the European electricity sector in the post-Kyoto scenarios," MPRA Paper 19390, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:19390
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    References listed on IDEAS

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    1. den Elzen, Michel & Lucas, Paul & Vuuren, Detlef van, 2005. "Abatement costs of post-Kyoto climate regimes," Energy Policy, Elsevier, vol. 33(16), pages 2138-2151, November.
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    More about this item

    Keywords

    Post-Kyoto scenarios; EU electricity sector; investment decisions;
    All these keywords.

    JEL classification:

    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy
    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities
    • O52 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Europe
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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