6. Emission Trading and Market Access of Renewables

In this chapter we look at the impact of different carbon emission prices combined with the Real-Time Pricing (RTP) to the promotion of renewable energy (wind) to enter the Nordic power market. We show that regardless of the carbon price the amount of wind entering to the market increases with the share of the consumers on RTP. The amount of wind entering to the market is also really increasing with the emission permit price. The increase in the amount of wind power is shown also as reduced emissions of carbon dioxide. The reduction is bigger the higher is the emission price. The decrease in emissions is strengthening as the share of the customers in RTP increases. Notably, even though wind power is entering to the market as the carbon price increases we do not reach the aggregate national target level for wind power even with very high carbon price at least if we assume risk averse wind power investors. Consequently if we want to see high levels of installed wind power capacity also other support mechanisms are needed.