The project empirically investigated whether the launch of the EU emissions trading scheme has granted electric utilities strategic options to exert market power. To this end, two methods were used: Laboratory experiments and econometric analysis. Firstly, experiments were used to test theoretical predictions regarding competition in supply functions. Furthermore, the effects of cost fluctuations in emissions trading on electricity prices were investigated. Secondly, in the econometric part of the project, the interaction between electricity prices and allowance prices was investigated using recent field data.
01.11.2008 - 30.11.2010