ITEE Innovation Expo 2008 : Project Details

Impact of implementing emissions trading and distributed generation in the NEM

Global warming and climate changing concerns have increasingly been in the spotlight in the last decade. This pushes the need for countries around the world to reduce the amount of greenhouse gas emissions by implementing emission trading schemes. According to 2006 figures, stationary gas was accountable for 50% of Australia’s total emissions. Of this 50%, energy generation made up half of that percentile. On 3 December 2008, Australia signed the instrument of ratification of the Kyoto Protocol and it had come into effect on 11 March 2008.

The National Emissions Trading Taskforce (NETT) was setup to look into the different Emission Trading Schemes (ETS).With reference to the European Union Emission Trading Scheme (EU-ETS), a similar cap-and-trade scheme model was proposed by the NETT, and may be scheduled for 2010.

The aim of this thesis is to build up simulation methods using Plexos for implementing the different kinds of emission trading schemes and the distributed generation into the Australian National Electricity Market (NEM), as well as to study the impacts of what the different schemes have on the market operators, including generator companies’ profits, market power as well as other economical and environmental factors.

Simulated results show an increase in electricity prices with the introduction of Emissions Trading. This resultant increase will be passed on to customers.