The Effects of Carbon Price Pass-through Rate on the
Electricity Cost Savings of Eco-friendly Facility

doi:10.12972/ksmer.2014.51.5.678

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2014 Vol.51, Issue 5 Preview Page Next Page

Research Paper

The Effects of Carbon Price Pass-through Rate on the Electricity Cost Savings of Eco-friendly Facility 탄소비용의 전가율이 친환경 시설 전력비용절감에 미치는 영향: 윤정선 · 최정현
Jeongsun Yun, Jung Hyun Choi

31 October 2014. pp. 678-686

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Abstract

This paper provides a case analysis to examine impacts of carbon cost incurred by ETS(Emission Trading System) on the incentives of economic entities to invest in eco-friendly facility. We estimate the present value of the savings of the energy cost(PVS) of ECC building of Ewha Womans University relative to a traditional building for the analysis of the economic value of eco-friendly facilities. Increases in electricity price due to the pass-through effect of carbon costs are taken into consideration to estimate PVS. We first find that PVS increases as the rate of pass-through increases. However, this increase is less prominent as the pass-through is delayed as a result of the governmental effort to reduce the carbon cost. The results suggest that ETS may increase incentives to invest in eco-friendly facilities and the increase in the incentives is greater as the pass-through is prompt and the rate of the pass-through is higher.

Keywords

Eco-friendly facility

Carbon cost

Pass-through rate

ETS(Emission Trading System)

본 연구는 탄소배출권거래제 도입에 따른 전력요금인상이 친환경 시설 도입에 미치는 영향을 사례분석을 통하여 검증하였다. 탄소 비용의 일부 혹은 전부 이상이 전력요금인상으로 전가될 경우를 가정하고 친환경 시설의 경제성을 추정하였다. 또한, 친환경 시설의 경제성이 배출권거래제 도입 방식에 따라 달라질 수 있으므로, 탄소배출권의 점진적 도입에 따른 전가지연현상이 발생할 경우 친환경 시설의 경제성을 추정하였다. 분석 결과 친환경 시설의 경제성은 전가율이 높을수록 증가하지만, 정부의 규제를 바탕으로 전가가 지연될 경우에는 경제성이 다소 감소하는 것으로 나타났다. 이와 같은 분석결과는 탄소배출권거래제 도입이 친환경 시설을 유인할 수 있으며, 이와 같은 유인 효과는 동 제도의 도입이 보다 즉각적으로 이루어질수록 더 크게될 것임을 시사한다.

키워드

친환경 시설

탄소 비용

전가율

탄소배출권거래제

References

Bauer, C. and Zink, J., 2005, “Korrelation zwischen Strompreisen und CO₂-Zertifikatepreisen,” Energiewirtschaftliche Tagesfragen, Vol. 55, No. 8, pp. 574-577.
Bunn, D. and Fezzi C., 2007. “Interaction of European Carbon Trading and Energy Prices,” London Business School, London.
Chen, Y., Sijm, J., Hobbs, B.F. and Lise, W., 2008, “Implications of CO₂ emissions trading for short-run electricity market outcomes in northwest Europe,” J. of Regulation Economics, Vol. 34, pp. 251-281.
Chung, C., 2007, “ECC, Ewha Campus Center Hardware Design Practices,” Korean Institue of Architectural Sustainable Environment and BUilding Systems, Vol. 1, No. 1, pp. 52-65.
Kim, J. and Yoo, T.H., 2012, “A critical review on the greenhouse gas emission trading schemes,” Trends and Prospects, Vol. 85, pp. 330-357.
Korea Development Institute(KDI), 2012, Introduction to the Framenwork and Analytic Methodology for Preliminary Feasibility Study of Business by Public Companies and Para-Government Agencies.
Lee, J., Choi, M., Choi, J. and Hong, S., 2012, “A study on the regulation impact and acceptance improvement depending on the introduction of ETS,” KIPA(Korea Institute of Public Administration).
Levy, C., 2005, I “mpact of Emission Trading on Power Prices: A Case Study from the European Emission Trading Scheme,” University Paris Dauphine and DEA d’Economie Industrielle, Paris.
Riechmann, C., Etten, M. and Elms, N., 2006, “The Role of CO₂ in power markets - in line with Competition,” Frontier Economics, London.
Shin, S., Rho, J., Cho, Y., Park, H. and Han, J., 2010, “An Assessment of the feasibility of the emission trading system for the electric power sector in Korea,” KEI(Korea Environment Institute).
Sijm, J., Bakker, S., Chen, Y., Harmsen, H. and Lise, W., 2005, “CO₂ price dynamics: The impications of EU emissions trading for the price of electricity,” ECN Policy Studies, ECN-C-05-081, Energy Research Center of the Netherlands (ECN).
Sijm, J., Hers, S., Lise, W. and Wetzelaer, B., 2008, “The impact of the EU ETS on on electricity price,” ECN-E- 08-007, Petten/Amsterdam.
Sijm, J., Neuhoff, K. and Chen, Y., 2006, “CO₂ cost pass through and windfall profits in the power sector,” Climate Policy, Vol. 6, pp. 29-72.
Wee, D. and Choi, J., 2013, “Analysis of energy cost savings by an eco-friendly building in a university campus,” J. of the Korean Society of Mineral and Energy Resources Engineers, Vol. 50, No. 2, pp. 195-203.
Yun, J., Lee, J. and Choi, J., 2014, “Effects of Carbon Emission Trading System on the Economic Value of Wood Pellet Boiler,” J. of the Korean Society of Mineral and Energy Resources Engineers, Vol. 51, No. 3, pp. 358-365.

Information

Publisher :The Korean Society of Mineral and Energy Resources Engineers
Publisher(Ko) :한국자원공학회
Journal Title :Journal of the Korean Society of Mineral and Energy Resources Engineers
Journal Title(Ko) :한국자원공학회지
Volume : 51
No :5
Pages :678-686
DOI :https://doi.org/10.12972/ksmer.2014.51.5.678

[1] Bauer, C. and Zink, J., 2005, “Korrelation zwischen Strompreisen und CO₂-Zertifikatepreisen,” Energiewirtschaftliche Tagesfragen, Vol. 55, No. 8, pp. 574-577.

[2] Bunn, D. and Fezzi C., 2007. “Interaction of European Carbon Trading and Energy Prices,” London Business School, London.

[3] Chen, Y., Sijm, J., Hobbs, B.F. and Lise, W., 2008, “Implications of CO₂ emissions trading for short-run electricity market outcomes in northwest Europe,” J. of Regulation Economics, Vol. 34, pp. 251-281.

[4] Chung, C., 2007, “ECC, Ewha Campus Center Hardware Design Practices,” Korean Institue of Architectural Sustainable Environment and BUilding Systems, Vol. 1, No. 1, pp. 52-65.

[5] Kim, J. and Yoo, T.H., 2012, “A critical review on the greenhouse gas emission trading schemes,” Trends and Prospects, Vol. 85, pp. 330-357.

[6] Korea Development Institute(KDI), 2012, Introduction to the Framenwork and Analytic Methodology for Preliminary Feasibility Study of Business by Public Companies and Para-Government Agencies.

[7] Lee, J., Choi, M., Choi, J. and Hong, S., 2012, “A study on the regulation impact and acceptance improvement depending on the introduction of ETS,” KIPA(Korea Institute of Public Administration).

[8] Levy, C., 2005, I “mpact of Emission Trading on Power Prices: A Case Study from the European Emission Trading Scheme,” University Paris Dauphine and DEA d’Economie Industrielle, Paris.

[9] Riechmann, C., Etten, M. and Elms, N., 2006, “The Role of CO₂ in power markets - in line with Competition,” Frontier Economics, London.

[10] Shin, S., Rho, J., Cho, Y., Park, H. and Han, J., 2010, “An Assessment of the feasibility of the emission trading system for the electric power sector in Korea,” KEI(Korea Environment Institute).

[11] Sijm, J., Bakker, S., Chen, Y., Harmsen, H. and Lise, W., 2005, “CO₂ price dynamics: The impications of EU emissions trading for the price of electricity,” ECN Policy Studies, ECN-C-05-081, Energy Research Center of the Netherlands (ECN).

[12] Sijm, J., Hers, S., Lise, W. and Wetzelaer, B., 2008, “The impact of the EU ETS on on electricity price,” ECN-E- 08-007, Petten/Amsterdam.

[13] Sijm, J., Neuhoff, K. and Chen, Y., 2006, “CO₂ cost pass through and windfall profits in the power sector,” Climate Policy, Vol. 6, pp. 29-72.

[14] Wee, D. and Choi, J., 2013, “Analysis of energy cost savings by an eco-friendly building in a university campus,” J. of the Korean Society of Mineral and Energy Resources Engineers, Vol. 50, No. 2, pp. 195-203.

[15] Yun, J., Lee, J. and Choi, J., 2014, “Effects of Carbon Emission Trading System on the Economic Value of Wood Pellet Boiler,” J. of the Korean Society of Mineral and Energy Resources Engineers, Vol. 51, No. 3, pp. 358-365.

Journal of the Korean Society of Mineral and Energy Resources Engineers ISSN:2288-0291(Print) 2288-2790(Online) 한국자원공학회지

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