CO2 Allowances on Nordic Electricity Exch.

Allowances to emitt carbon di-oxide, the bulk bi-product from burning fossil fuels, are now trading at the nordic electricity exchange Nord Pool: CO2 Allowances The allowance are given under the EU Emission Trading Scheme, and the purpose is to "counter the threat of greenhouse gases". Currently trading slightly above 7Eur per (metric) tonne, it would cout about 3Eur to buy allowances to burn a barrel of oil (using the formula for heating oil here). Burning the barrel gives about 1.7 MWh of thermal energy, from which one could perhaps produce 0.5 MWh of electricity. Each MWh produced this way would hence cost an extra 6 Eur if one would have to buy emission allowance. The MWh is now trading around 20 Eur. Analysts have estimated the price impact from new CO2 rules to be about 4 Eur/MWh. It might be useful to keep an eye on these figures for us Scandinaves. One tend to think that electricity is produced by nukes and hydropower facilities, but the Danish coal-powered plants should not be forgotten in this.


As I've got some readers to this post sent to me from the Swedish blog "Sänd mina rötter regn", I just thought it should be worth to update the post. According to people referred to as trustworhty sources from within the industry, their estimates for the price-increase on Nordic electricity is 25-50 Norweigian Krona per MWh, less than 2.5-5 Eur/MWh.

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