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Carbon Cap-and-Trade: Implications for Electricity Utility Costs in the US
GlobalData, Nov 2010, Pages: 6
Carbon Cap-and-Trade: Implications for Electricity Utility Costs in the US
Summary
Electricity costs in the US utility market will be affected with the changes to the pricing of emission allowances. This structure will have implications for the electricity rate design and load management programs. Under the cap-and-trade program to control carbon dioxide emissions, all of the carbon emitting processes covered by the law, such as electric utilities and generators, would have to obtain permits (allowances) for the carbon emitted in the process of producing goods and services. This structure of total revenue requirements from utilities depends on the way allowances are allocated or auctioned, the effect on auction revenue, the total allowances available each year and on the actions taken to reduce emissions. These factors might impact the way that utilities’ marginal costs for energy change and the potential effects on policies whose goal is to influence consumer behavior. The cost difference between peak and the off-peak hours can change not only with time, but also with changes in the assumed price of carbon dioxide (CO2) allowances. Also, under certain conditions, these changes can reduce the economic value of technologies designed to shift the consumption of electricity over a period of time.
Scope
- Market prospects for Carbon Cap-and-trade in the US
- Key factors impacting the Utilities in US due to Carbon Cap-and-trade
- Role of Cap-and-Trade program in changing the cost structure of Utilities in the US
Reasons to buy
- Identify key growth and investment opportunities with Carbon Cap-and-trade in the Utility Market of the US
- Gain insight on the Carbon Cap-and-trade costing structure in the US
- Facilitate decision making by evaluating the impacts of Carbon Cap-and-trade in the Utilities Market of the US.
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