WestLB publishes "German power utilities - caught in the CO2 trap?" - a joint research project with the 'Potsdam Institute for Climate Impact Research'

With the current conditions in the German electricity market, the incentives to conduct replacement investments in new power plants appear very limited. Particularly when CO2 prices are low, new fossil-fuel powered plants have significant profitability issues. Using a model of the German electricity market, the study aims to estimate the profitability of the companies' power plant portfolios depending on different investment strategies and under various price trend scenarios for CO2 emissions and fuel costs. The surprising finding of the study is that an ambitious climate protection policy with high CO2 prices in many cases is the best scenario for companies and investors from a financial perspective. The SuperSmart Grid approach could prove to offer an opportunity of avoiding the investment pitfalls outlined in this study.
More information:hendrik.garz@westlb.de

Published in sections: Eurosif ::