A transitional perspective on European electricity
European electricity production is an important source of greenhouse-gas emissions, and probably dominant in the shorter term in an EU emissions trading scheme (EU ETS) perspective. Simultaneously, the market is at least semi-closed, yielding policy discretion. Drawing on work performed under Phase 1 and under the EU-funded ADAM project, we intend to analyze the sector under the present pressures. The focus of this work will be a view toward longer-term changes that involve incentives and developments toward new technologies, where important issues include: interactions between the electricity sector and EU ETS; the roles of EU-domestic initiatives like the renewable energy directive; R&D instruments; and cooperation beyond the EU. An interesting issue is the effect of the CO2 allowance price on the European electricity prices, including under Kyoto trading in the period 2008 - 2012. We seek to identify this spill-over effect in different regions ofEurope , in a situation where other features of electricity markets (such as degree of liberalization), other policy tools, new electricity generation technologies, and electricity transfer capacity are changing.
