Impact Assessment case study: EU ETS and investment decision-making of power generators

Abstract

Tato prace se zabyva hodnocenim dopadů regulatorni nejistoty spojene s Evropskym systemem obchodovatelnych emisnich povoleni (EU ETS) na investični rozhodovani elektrarenskych společnosti. V současne době probiha v ramci ČR i EU debata, jejimž předmětem je nutnost vystavby novych elektrarenskych kapacit, ktere by byly schopny i v budoucnu uspokojit rostouci poptavku po elektřině. Tyto investice jsou však ohrožovany nejasnostmi ohledně budouciho vyvoje regulatorniho ramce EU ETS, ktery podmiňuje ceny obchodovatelnych emisnich povoleni. Tato prace s využitim modelu realne opce analyzuje dopady různych variant budouciho vyvoje cen povolenek na investice do vystavby novych elektraren a identifikuje regulatorni nejistotu jako jeden z hlavnich důvodů, proč jsou investice do vystavby novych zdrojů ze strany investorů odkladany. Analyza je zasazena do širšiho kontextu obecneho vykladu o EU ETS a hodnoceni dopadů provaděneho Evropskou komisi.

This thesis is focused on the assessment of impacts of the regulatory uncertainty related to the EU Emission Trading System (EU ETS) on investment decision- making of power generators. The need for investments in new power generation capacities that would be capable to satisfy in the future the growing electricity demand is currently a discussed topic on the Czech as well as on the EU level. These investments are endangered by the uncertainty regarding the future development of the EU ETS regulatory framework, which is a major price driver of the tradable emission allowances. This thesis uses the real option model to analyze the impacts of potential future developments of the emission allowance prices on the investments into new power plants and identifies the regulatory uncertainty as one of the major causes, why investors postpone the investment into the construction of new sources. The analysis is embedded into a broader framework depicturing the EU ETS and the impact assessment procedure conducted by the European Commission.