Modelling Linked Carbon and Electricity Markets

This project developed a new analytical tool for assessing the effects of uncertainty in both carbon and electricity markets, taking account of the strong links between the two.  The model includes an interface intended to allow companies to assess the performance of investment options available to them both in terms of generation capacity as well as carbon abatement and trading options.

Stochastic cost curve picture

This graphic shows a screen-shot from the tool, displaying the stochastic cost curves and generation stacks for the linked markets, together with forecast ranges for carbon and electricity prices.

To read the report, click here   (pdf).