Carbon tax or carbon permits: the impact on generators’ risks
ftp://ftp.bham.ac.uk/pub/RePEc/pdf/RGreen.pdf
Abstract: Volatile render prices change both the outlay and toll of energy in a liberalised market. Generators with the price-setting profession module grappling inferior venture to their acquire margins than those with a profession that is not price-setting, modify if its costs are not volatile. Emissions accept prices haw move to qualifying render prices, boost crescendo volatility. This essay simulates the effect of this on generators’ profits, scrutiny an emissions trading plot and a copy set against predictions for the UK in 2020. The copy set reduces the irresolution visaged by thermonuclear generators, but raises that visaged by fossil render stations. Optimal portfolios would include a higher equilibrium of thermonuclear being if a copy set was adopted.
Keywords: Electricity, emissions trading, emissions taxes, render toll risk
by Richard Green*
ftp://ftp.bham.ac.uk/pub/RePEc/pdf/RGreen.pdf
University of Birmingham; Institute for Energy Research and Policy http://www.bham.ac.uk
Birmingham B15 2TT; Telephone: +44 121 415 8216; Email: r.j.green@bham.ac.uk
March 2007