ETS Plus Emission Trading: Power market simulations for IFW

Energynautics was subcontracted by the IFW Kiel Institute for the World Economy within a larger project investigating the impact of a reform in ETS emission trading on various sectors of the economy to evaluate the impact of rising emission prices on the power sector.

The objective was to determine the emission prices at which renewable sources would become economically feasible in the power market without additional incentives, with a special focus on biomass and biogas (as wind and PV are already quite competitive today).

Energynautics used a stripped down version of their dispatch simulation and grid optimization tool ENAplan to conduct simulations of the European wholesale electricity market in 2030 under various emission and fuel prices. Biomass and biogas generators may be able to provide much needed flexibility in a system with a high share of variable renewable energy, however, the generation cost is high compared to most other sources. Results show that a rise of CO2 prices to 25 €/t (up from 14 €/t in early 2018) would already make new PV and wind power plants competitive in the market while negatively impacting the economics of coal fired generation, especially such using lignite. Most biomass and biogas units will only become profitable in the energy-only market beyond 75 €/t.

The project is funded by the German Federal Ministry of Food and Agriculture and was completed in February 2019. Find the final report here:–data.pdf

IFW Kiel Institute for the World Economy

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