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Carbon content of electricity futures in Phase II of the EU ETS

Fell, Harrison and Hintermann, Beat and Vollebergh, Herman. (2015) Carbon content of electricity futures in Phase II of the EU ETS. The energy journal, 36 (4). pp. 61-83.

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Abstract

We estimate the relationship between electricity, fuel and carbon prices in Germany, France, the Netherlands, the Nord Pool market and Spain, using one-year futures for base and peakload prices for the years 2009--2012, corresponding to physical settlement during the second market phase of the EU ETS. We employ a series of estimation methods that allow for an increasing interaction between electricity and input prices on the one hand, and between electricity markets on the other. The results vary by country due to different generation portfolios. Overall, we find that (a) carbon costs are passed through fully in most countries; (b) under some model specifications, cost pass-through is higher during peakload than during baseload for France, Germany and the Netherlands; and (c) the results are sensitive to the degree of cross-commodity and cross-market interaction allowed.
Faculties and Departments:06 Faculty of Business and Economics > Departement Wirtschaftswissenschaften > Professuren Wirtschaftswissenschaften > Public Economics / Public Finance (Hintermann)
UniBasel Contributors:Hintermann, Beat
Item Type:Article, refereed
Article Subtype:Research Article
Publisher:International Association for Energy Economics
ISSN:1944-9089
Note:Publication type according to Uni Basel Research Database: Journal article
Language:English
Identification Number:
Last Modified:30 Jun 2016 10:59
Deposited On:04 Feb 2016 10:09

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