Impact of Carbon Costs on Wholesale Electricity Market

탄소비용이 CBP전력시장에 미치는 영향

  • 김욱 (한국남부발전 발전처) ;
  • 박종배 (건국대학 전기공학과) ;
  • 이주원 (건국대학 전기공학과)
  • Received : 2009.06.08
  • Accepted : 2009.11.23
  • Published : 2010.04.01


Carbon costs, either in the form of a carbon tax or through permit prices in an emissions trading scheme, would ultimately be reflected in higher electricity prices. This price "pass-through" is very critical to the effective design of new policies to curb the amount of carbon emissions. This paper sets out in a structured way the factors that determine price pass-through and how carbon costs would impact on the electricity market and the existing coal-fired power plants. It is shown that pass-through can vary drastically if the underlying dispatch potential of generators varies significantly across alternative emissions reduction scenarios. It can also vary depending on the availability of competing cleaner forms of generation. Pass-through as a measure of business performance is therefore hard to generalize across different circumstances and should be interpreted carefully.


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