Download Climate change and Emission trading. Tool of investment

Climate change and Emission trading. Tool
of investment
Reducing of CO2-Emissions
How can the government provide reduction of emissions?
• Governmental
requirements and orders
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• Market-orientated solutions
– Subsidies
– Taxes
– Certificates
Climate change and Emission trading. Tool of investment.
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Emission Trading in the EU
• Cap and Trade system
• Cap: a certain amount of CO2-emissions for every
member state
• Allocation (and/or auction) of CO2-certificates
(=permits) among the emitters exceeding a certain size
• Trade: market participants can deal now with the
certificates to each other
Price formation for certificates
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Climate change and Emission trading. Tool of investment.
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Emission Trading in the EU
• Supply and demand of certificates depends of the
marginal abatement costs of the individual company
• Companies with low abatement costs reduce their
emissions and sell certificates and vice versa
• Companies with high abatement buy certificates
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Climate change and Emission trading. Tool of investment.
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Emission Trading, why?
Important Features
• Economical efficiency
–
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If there are no market defects,
you reach your aim to the
minimum costs for the society
• Ecological effectiveness
–
Because of a predefined cap you
definitely reach the aim
Climate change and Emission trading. Tool of investment.
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Problems?
• Baseline-problem
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How to set the cap
How to allocate the permits
• Control and transaction costs
• Hot Air - problem
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Climate change and Emission trading. Tool of investment.
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The TIMES-Model
• Linear optimisation models
• Meta language for an efficient developing of energy models
Consists of two parts:
• Reference Energy System (RES)
– Description of all possible energy, material and cash flows
– Description of all possible storage, conversion and transmission processes
• Values
– Prices and costs for specification of the processes
– Exogenous requirements
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Climate change and Emission trading. Tool of investment.
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Investigation area
Greifswald, a middle-sized city in the
northeast of Germany
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~ 55.000 citizens
Main employer is the old university
Hardly any industry
Supply with electricity, district heat and gas is done mainly
by the public services
Electricity and district heat are produced by modern
combined-heat-and-power plants (CHP)
Heat demand is satisfied:
– 45% by district heating (gas)
– 45% by decentralise gas heating
– Rest is spread among oil, liquid gas, coal, wood
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Climate change and Emission trading. Tool of investment.
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SOL
WIND
OIL_G
GAS_G
OIL_P
GAS_P
COL
CER_FREE
CER_BUY
ELC
DHEA_CHP_1-2
HEA
CO2
ROOM_HEA
HEA_LIV_SP
HOUSEHOLDS
ENV_GREIF
ELC_HEA
HOUSING
HEAPU_HEA
BUILD_TYP_1
IMPORT_NRG
_WORLD
NO_RECON
CO2_CER
_SUPPLY
WINDOWS_RECON
CO2_CER
_EXPORT
WALL_RECON
WIND_PL
FULL_RECON
SOL_PL
CHP_PL_1
CHP_PL_2
HEAPU_DHEA
OIL_HEA
GAS_HEA
COL_HEA
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Climate change and Emission trading. Tool of investment.
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Work status
• The Greifswald-Model is in a very early
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development stage
We hope, that it will be a tool, to get creative
and new solutions for energy supply and
climate protection
For the future, we want to link the energymodel with a regional-economic-model to
forecast the effects of emission trading and
climate protection to economy
Climate change and Emission trading. Tool of investment.
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Example I
Development of reconstruction processes at increasing certificate prices
2.000,00
Thousand square meters
1.800,00
1.600,00
1.400,00
Full Reconstruction
1.200,00
Wall Reconstruction
1.000,00
Window Reconstruction
800,00
No Reconstruction
600,00
400,00
200,00
0,00
2005
2010
2015
2020
2025
2030
2035
2040
Year
• Good Visualisation of the right time for insulation and
reconstruction processes
• Different scenarios for different basic conditions
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Climate change and Emission trading. Tool of investment.
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Example II
• By a high certificate price, it can be profitable
for an heat supplier to invest in energy saving
measures by customers
• Profit of selling certificates can be higher
then costs for energy saving
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Climate change and Emission trading. Tool of investment.
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Tool of investment?
• Emission trading will accelerate investments
•
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when certificate price increase
Permits have to be shorten by and by
Problem: Maybe it comes to a relocation to
smaller systems which are not involved in
emission trading
Climate change and Emission trading. Tool of investment.
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Thank you
for your attention!!!
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Climate change and Emission trading. Tool of investment.
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