Abstract
A hydro-thermal market model is applied to a description of the north-European electricity system. The paper describes how modelling uncertain gas and CO 2 prices affects uncertainty in calculated electricity prices. Gas and CO 2 price uncertainty are modelled using historic price variations. With this new uncertainty modelling, the resulting electricity price uncertainty increases significantly compared to the deterministic modelling of thermal marginal costs that is standard in these types of models. Changes in electricity price uncertainty are shown using visual and quantitative measures for some representative price areas in the modelled system. Price forecasts from hydro-thermal models are among others used for hydro investment analysis. An underestimation of the future price uncertainty leads to less investment in flexibility which is much needed in the future electricity system with large shares of new renewables.