Abstract
An equilibrium model of the energy market is extended by a carbon emissions market. In addition, the mix of renewable energy sources is optimized given a limit on total generation. These two new features are integrated into an existing model to assess the effects of a carbon emissions market in a case study of the northern European power system. First, a fixed carbon emissions tax is deployed, revealing that carbon emissions can be greatly influenced by the availability of energy storage. Further, a carbon emission quota is implemented and the tax necessary to enforce the limit is calculated by the model. Based on the case studies, it is discussed how quota level and the availability of energy storage influence, among others, optimal system design and power market stakeholders.