Fuel Switching in the Electricity Sector under the EU ETS: Review and Prospective |
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Authors: | Erik Delarue Kris Voorspools William D’haeseleer |
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Affiliation: | 1Graduate Research Assistant, Division of Applied Mechanics and Energy Conversion, Univ. of Leuven (K.U. Leuven), Celestijnenlaan 300A, B-3001 Leuven, Belgium. E-mail: erik.delarue@mech.kuleuven.be 2Energy and Environmental Markets, Fortis Bank, Warandeberg 3, B-1000 Brussels, Belgium. E-mail: kris.voorspools@fortis.com 3Professor, Division of Applied Mechanics and Energy Conversion, Univ. of Leuven (K.U. Leuven), Celestijnenlaan 300A, B-3001 Leuven, Belgium (corresponding author). E-mail: william.dhaeseleer@mech.kuleuven.be
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Abstract: | The European Union has implemented the European Union emission trading scheme (EU ETS) as an instrument to facilitate greenhouse gas (GHG) emission abatement stipulated in the Kyoto protocol. Empirical data show that in the early stages of the EU ETS, the value of a ton of CO2 has already led to emission abatement through switching from coal to gas in the European electric power sector. In the second part of this paper, an electricity generation simulation model is used to perform simulations on the switching behavior in both the first and the second trading periods of the EU ETS. In 2005, the reduction in GHG emissions in the electric power sector due to EU ETS is estimated close to 88?Mton. For the second trading period, a European Union allowance (EUA) price dependent GHG reduction curve has been determined. The obtained switching potential turns out to be significant, up to 300?Mton/year, at sufficiently high EUA prices. |
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Keywords: | Powerplants Emissions Europe Simulation Fuels |
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