Highlights: - New ways to create and capture value are emerging in the electricity sector, with important implications. An understanding of their key drivers is fundamental. - Wind and solar, the two fastest-growing renewables, require investments in long-lived physical assets with negligible variable costs. Green generators must identify revenue streams that cover the upfront costs. While public support policies have mostly guaranteed generators’ income in the past, market-based solutions are now appearing. - Digitalisation is a second big change, currently addressing retail size units, expanding the availability and usability of information and the controllability of all the interconnected devices. Building on that, new players can develop innovative services targeting specific groups of customers without the need for a significant investment in physical capital. - Greening of generation and digitalisation of retail-size units deeply affect the activities of electricity grids, both transmission and distribution. The existing regulatory compact no longer looks suitable for adapting the current business model of grid companies.
Most existing Emissions Trading Systems (ETSs) include their own specific Price Control Mechanism (PCM): a design feature which steers the allowance price into a desired range. Divergences along five key [...]
The environmental ambition of an ETS may be assessed considering three dimensions: emissions coverage, stringency and determinacy. Allowance prices are an imperfect metric for the stringency of an ETS. Yet, [...]
This report was prepared to inform the Carbon Market Policy Dialogue (CMPD) between the European Commission, as the regulator of the EU Emissions Trading System, and the regulatory authorities for [...]
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