Energy system impacts of the Norwegian-Swedish TGC market
International Journal of Energy Sector Management
ISSN: 1750-6220
Article publication date: 4 April 2016
Abstract
Purpose
The purpose of this study is to analyze the power market and greenhouse gas (GHG) emission effects of the joint Norwegian–Swedish tradable green certificates (TGCs) market, which is established to support investments according to a 26.4 TWh increased annual renewable electricity generation (REG) by 2020.
Design/methodology/approach
The study applies an energy system model with high granularity in time and space, and detailed power system data for the Nordic countries, Germany, The Netherlands and UK.
Findings
The results show that the TGC scheme will cause a 8.7-9.3 /MWh reduction in average electricity prices in the Nordic countries. The price decrease will to a limited extent pass through to Germany, The Netherlands and UK. When assuming a low carbon price level, the new REG will reduce annual GHG emissions by 10.9 Mtonnes in 2020, primarily through substitution of German natural gas power. A sensitivity analysis shows that the GHG emission effect of the TGCs is highly sensitive to changes in the carbon price. Investment levels up to a 90 TWh increased REG per year are found to cause increasing GHG emission reductions.
Originality/value
The study results signal the importance of taking the TGC policy into account in decision-making processes in the Northern European power system, in particular for market actors in the Nordic area. The authors conclude that the Nordic countries potentially can play a vital role in a future Northern European low carbon power system through export of green balancing power, substitution of thermal power and reduced GHG emissions from the Northern European power sector.
Keywords
Acknowledgements
The authors would gratefully like to acknowledge Hans Ravn for useful cooperation and support during the modeling process. Furthermore, the authors would like to thank collaborators at Statnett (the Norwegian TSO) and the Norwegian Water Resources and Energy Directorate (NVE) for providing us with detailed and updated power system data, with a special thank to Knut Styve Hornnes and Håvard Hamnaberg for fruitful discussions and assistance throughout the data collection phase. Finally, the authors would like to thank Jon Gustav Kirkerud for his assistance with the data collection.
Citation
Tveten, Å.G. and Bolkesjø, T.F. (2016), "Energy system impacts of the Norwegian-Swedish TGC market", International Journal of Energy Sector Management, Vol. 10 No. 1, pp. 69-86. https://doi.org/10.1108/IJESM-07-2014-0003
Publisher
:Emerald Group Publishing Limited
Copyright © 2016, Emerald Group Publishing Limited