Social welfare analysis of the Iberian electricity market accounting for carbon emission prices.

Moreira, A.; Oliveira, F.S.; Pereira, J.

Abstract

In this study, the authors analyse the social welfare impact of the integration of Portugal and Spain in the Iberian electricity market (MIBEL), taking into account the CO2 price for emissions trading. They model the impact of emissions trading on the daily clearing prices and generation scheduling, and its effects on the benefits of integration as a whole. They compare the impact of market integration in Portugal and Spain and show that the welfare impact of the MIBEL is dependent on the CO2 prices. From their analysis, they conclude high CO2 prices lead to a change in the merit order. Moreover, natural gas is the generation technology that most benefits from transmission constraints and from high CO2 prices, as in the base case it is mainly used as a peak technology. The authors have also found that increases in the CO2 prices do not lead to higher profits. Overall, the introduction of the MIBEL will increase social welfare by reducing generation costs and prices.

Citation

MOREIRA, A., OLIVEIRA, F.S. and PEREIRA, J. 2010. Social welfare analysis of the Iberian electricity market accounting for carbon emission prices. IET generation, transmission and distribution [online], 4(2), pages 231-243. Available from: https://doi.org/10.1049/iet-gtd.2009.0105

• Journal Article Type: Article
• Acceptance Date: Oct 14, 2009
• Online Publication Date: Feb 28, 2010
• Publication Date: Feb 28, 2010
• Deposit Date: Oct 21, 2023
• Publicly Available Date: Nov 15, 2023
• Journal: IET generation, transmission and distribution
• Print ISSN: 1751-8687
• Electronic ISSN: 1751-8695
• Publisher: Institution of Engineering and Technology (IET)
• Peer Reviewed: Peer Reviewed
• Volume: 4
• Issue: 2
• Pages: 231-243
• DOI: https://doi.org/10.1049/iet-gtd.2009.0105
• Keywords: Social welfare costs; Electricity market integration; Market modelling
• Public URL: https://rgu-repository.worktribe.com/output/2114779