An overview of CO2 cost pass-through to electricity prices in Europe
Jouvet, Pierre-André; Solier, Boris (2013), An overview of CO2 cost pass-through to electricity prices in Europe, Energy Policy, 61, p. 1370-1376. http://dx.doi.org/10.1016/j.enpol.2013.05.090
TypeArticle accepté pour publication ou publié
Journal nameEnergy Policy
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Abstract (EN)This paper investigates the link between wholesale electricity prices in Europe and the CO2 cost, i.e. the price of European Union Allowances (EUAs), over the two first phases of the European Union Emissions Trading Scheme (EU ETS). We set up a theoretical framework and an empirical model to estimate to what extent daily fluctuations of CO2 costs may have impacted electricity prices. Regarding estimation results for the first phase of the EU ETS, about 42% of estimated pass-through rates appear to be statistically significant, while only one third of them are statistically different from zero in the second phase. We try to improve those results by proposing alternative estimates based on the EU ETS compliance periods.
Subjects / KeywordsEuropean Union Emissions Trading Scheme; EU ETS; spot markets
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