|Title||Environmental regulation in transmission-constrained electricity markets|
|Publication Type||Conference Paper|
|Year of Publication||2009|
|Authors||Anthony Papavasiliou, Yihsu Chen, Shmuel S Oren|
|Conference Name||2009 IEEE Power & Energy Society (PES) General Meeting|
|Conference Location||Calgary, Canada|
|Keywords||CERTS, electricity markets, reliability and markets, RM10-001|
We discuss potential competitive effects of regulating carbon emissions in a transmission constrained electricity market. We compare two regulatory instruments, renewable portfolio standards and taxing emmissions. We derive general conclusions about impacts on prices and output on a three node network. We find that renewable portfolio standards increase the market power of nonpolluting generators whereas the tax is market-power neutral. We verify our conclusions through simulations.