ETS and the EU 20-20-20: insights from PRIMES model simulations

2014 Euro-CASE Energy Platform Conference in Brussels Introduction The PRIMES energy market model has been extensively used to project energy and GHG emissions for the EU to the horizon of 2020, 2030 and 2050 The EU policy package is asymmetric: it combines a price driver (EU ETS) with bottom-up policies to meet separate targets for Renewables (RES) and Energy Efficiency (EE) As the degree o. [...] efficiency and in the modelling it PRIMES simulates price-driven distinguishes between ETS and non-ETS equilibrium in simultaneous energy and To derive ETS carbon prices, PRIMES emission markets driven by actors’ assumes that allowances (EUA) are known behaviours, technology change and until 2050 policy instruments. [...] Emission reduction dynamically influences The modelling of behaviours is founded EUA surpluses/deficits in ETS and PRIMES on micro-economics and is subject to calculates carbon prices over the entire engineering-type constraints with explicit projection period using Hoteling-type present and future technologies modelling (surplus justified on the basis of Generally perfect anticipation is assu. [...] The impact of EE on -73.1 -28.8 % CHANGE carbon prices is higher than -44.0 that of RES Impact of EE & RES Impact of RES Impact of EE 6 E3MLab February 2014 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 ETS Carbon Prices (€'10/tCO2) 90 Sensitivity analysis of GHG45 a 45% GHG target 80 GHG45 & RES 68 for2030 70 EE a. [...] The -51.8 impact of EE on carbon prices is Impact of EE & RES Impact of RES Impact of EE higher than that of RES in 2030.