The impact of modified EU ETS allocation principles on the economics of CHP-based district heating systems

Journal of Cleaner Production

Volumn 20, Issue 1, 2012, Pages 47-60

  Westner, Günther ^a   Madlener, Reinhard ^b  

^a EON Kernkraft GmbH   (Germany)

^b RWTH AACHEN UNIVERSITY   (Germany)

Author keywords

Combined heat power; Emissions trading system; Investment under uncertainty; Real options; Spread

Indexed keywords

COMBINED HEAT; EMISSIONS TRADING SYSTEM; INVESTMENT UNDER UNCERTAINTY; REAL OPTIONS; SPREAD;

CARBON DIOXIDE; DECISION MAKING; DISTRICT HEATING; GAS EMISSIONS; GAS PLANTS; HEATING; INVESTMENTS;

ECONOMICS;

CHANDIPURA VIRUS;

EID: 80054051288     PISSN: 09596526     EISSN: None     Source Type: Journal    
DOI: 10.1016/j.jclepro.2011.08.001     Document Type: Article

References (38)

1. BMU Nationaler Allokationsplan 2008-2012 für die Bundesrepublik Deutschland June 2006 Bundesministerium für Umwelt, Naturschutz und Reaktorsicherheit (BMU) Berlin
2. CEC Questions & Answers on Emissions Trading and National Allocation Plans. MENO/05/84, Brussels Online at: http://ec.europa.eu/clima/documentation/ ets/allocation-2008-en.htm March 08, 2005 (accessed Dec 27, 2010)
3. CEC Commission decision of establishing harmonised efficiency reference values for separate production of electricity and heat in application of Directive 2004/8/EC of the European Parliament and of the Council Official Journal of the European Union, Brussels 21 December 2006
4. CEC Commission decision determining, pursuant to Directive 2003/87/EC of the European Parliament and of the Council, a list of sectors and subsectors which are deemed to be exposed to a significant risk of carbon leakage Official Journal of the European Union, Brussels 24 2009 December 2009.
5. CEC Directive 2009/29/EC of the European Parliament and of the Council amending Directive 2003/87/EC so as to improve and extend the greenhouse gas emission allowance trading scheme of the Community Official Journal of the European Union, Strasbourg 23 2009 April 2009
6. CEC Commission Decision of [...] Determining Transitional Union-Wide Rules for the Harmonised Free Allocation of Emission Allowances Pursuant to Article 10a of Directive 2003/87/EC, Brussels Draft version Online at: http://ec.europa.eu/clima/documentation/ets/docs/decision-free-allocation-22- oct-en.pdf October 25, 2010 (accessed Dec 27, 2010)
7. S. Deng, B. Johnson, and A. Sogomonian Spread options and the valuation of electricity generation assets Proceedings of the 32nd Hawaii International Conference on System Sciences January 5-8, 1999 IEEE Maui, Hawaii
8. A.K. Dixit, and R.S. Pindyck Investment Under Uncertainty 1994 Princeton University Press Princeton, NJ
9. EEA Greenhouse Gas Emission Trends and Projections in Europe 2009-Tracking Progress Towards Kyoto Targets Report No. 9/2009 2009 European Environment Agency (EEA) Copenhagen
10. B. Eikmeier, J. Gabriel, W. Schulz, W. Krewitt, and M. Nast Analyse des nationalen Potenzials für den Einsatz hocheffizienter KWK, einschließlich hocheffizienter Kleinst-KWK, unter Berücksichtigung der sich aus der EU-KWK-RL ergebenden Aspekte December 2005 Endbericht zum Forschungsvorhaben Projekt I A 2 - 37/05
11. M. Fischedick, D. Schüwer, J. Venjakob, F. Merten, D. Mitze, W. Krewitt, M. Nast, C. Schillings, W. Bohnenschäfer, and W. Lindner Anforderungen an Nah- und Fernwärmenetze sowie Strategien für Marktakteure im Hinblick auf die Erreichung der Klimaschutzziele der Bundesregierung bis zum Jahr 2020 December 7, 2006 Research project on behalf of the German Federal Environment Agency (UBA), Final report
12. 2 capture Energy Economics 32 4 2010 805 816
13. S. Fuss, A. Golub, J. Szolgayova, and M. Obersteiner Effects of Low-Cost Offsets on Energy Investment - New Perspectives on REDD 2009 Fondazione Eni Enrico Mattei Working Papers, No. 277
14. P.E. Grohnheit, and B.O.G. Mortensen Competition in the market for space heating. District heating as the infrastructure for competition among fuels and technologies Energy Policy 31 9 2003 817 826 (Pubitemid 36339740)
15. IEA Combined Heat and Power 2008 OECD/IEA Paris
16. IEA IEA Information Paper - Combined Heat & Power and Emissions Trading: Options for Policy Makers 2008 IEA/OECD Paris July
17. J. Korhonen A material and energy flow model for co-production of heat and power Journal of Cleaner Production 10 6 2002 537 544 (Pubitemid 34660482)
18. G. Kumbarolu, R. Madlener, and M. Demirel A real options evaluation model for the diffusion prospects of new renewable power generation technologies Energy Economics 30 4 2008 1882 1908 (Pubitemid 351663970)
19. H. Laurikka, and T. Koljonen Emissions trading and investment decisions in the power sector - a case study in Finland Energy Policy 34 9 2006 1063 1074 (Pubitemid 43193321)
20. R. Lazzarand M. Noro Local or district heating by natural gas: which is better from energetic, environmental and economic point of views? Applied Thermal Engineering 26 2-3 2005 244 250
21. A.B. Lovins, E.K. Datta, T. Feiler, K.R. Rábago, J.N. Swisher, A. Lehmann, and K. Wicker Small is Profitable - The Hidden Economic Benefits of Making Electrical Resources the Right Size 2002 Rocky Mountain Institute Snowmass, Colorado, U.S
22. R. McDonald, and D. Siegel The value of waiting to invest Quarterly Journal of Economics 101 4 1986 707 723
23. E. Näsäkkälä, and S.E. Fleten Flexibility and technology choice in gas-fired power plant investments Review of Financial Economics 14 3-4 2005 371 393 (Pubitemid 43008572)
24. D. Phylipsen, K. Blok, and E. Worrell Handbook on International Comparisons of Energy Efficiency in the Manufacturing Industry April 1998 Department of Science, Technology & Society, Utrecht University
25. R. Pindyck Irreversibility, uncertainty and investment Journal of Economic Literature 29 3 1991 1110 1152
26. R. Pindyck Investments of uncertain cost Journal of Financial Economics 34 1 1993 53 76
27. R. Pindyck Irreversible investment, capacity choice, and the value of the firm American Economic Review 79 5 1998 969 985
28. K. Rogge, and C. Linden Comparison of Allocation Rules of EU Member States (2008-2012) for the power sector December 2008 Fraunhofer Institute Systems and Innovation Research (Fh-ISI) Karlsruhe, Germany
29. F.A. Roques Technology choices for new entrants in liberalized markets: the value of operating flexibility and contractual arrangements Utilities Policy 16 4 2008 245 253
30. M.A. Rosen Allocating carbon dioxide emissions from cogeneration systems: descriptions of selected output-based methods Journal of Cleaner Production 16 2 2008 171 177 (Pubitemid 47532718)
31. A.S. Siddiqui, and K. Maribu Investment and upgrade in distributed generation under uncertainty Energy Economics 31 1 2009 25 31
32. A.G. Tsikalakis, and N.D. Hatziargyriou Environmental benefits of distributed generation with and without emissions trading Energy Policy 35 6 2007 3395 3409 (Pubitemid 46506130)
33. Umweltbundesamt Entwicklung der spezifischen Kohlendioxid-Emissionen des deutschen Strommix 1990-2008 und erste Schätzung 2009 Status Online at: http://www.umweltbundesamt.de/energie/archiv/co2-strommix.pdf March, 2010 Department FG I 2.5 (accessed Dec 27, 2010)
34. 2 emissions Energy Policy 20 12 1992 1207 1214 (Pubitemid 23367516)
35. G. Westner, and R. Madlener Development of cogeneration in Germany: A mean-variance portfolio analysis of individual technology's prospects in vew of the new regulatory framework Energy 36 8 2011 5301 5313
36. G. Westner, and R. Madlener Investment in new power generation under uncertainty: benefits of CHP vs condensing plants in a copula-based analysis Energy Economics 2011 in press, doi:10.1016/j.jclepro.2011.02.014
37. G. Westner, and R. Madlener The benefit of regional diversification of cogeneration investments in Europe: a mean-variance portfolio analysis Energy Policy 38 12 2010 7911 7920
38. M. Wickart, and R. Madlener Optimal technology choice and investment timing: a stochastic model of industrial cogeneration vs. heat-only production Energy Economics 29 4 2007 934 952 (Pubitemid 46796620)