Europe’s electricity producers host second round of simulated emissions trading

Eurelectric, the European electricity industry’s trade association, has announced that the expansion of its virtual emissions trading simulation will result in a report on the viability of such trading in time for the Climate Change Conference (COP6) in the Hague next November.

Unlike the first round (see related story), this new stage – running until June – will include virtual companies with business activities outside the electricity generation sector. “We want to simulate the real world, where there will be many actors on the market and we want to see what the interaction will be between the actual emissions market and those companies [that] take on specific targets related to improvements in, say, energy efficiency,” John Scowcraft of Eurelectric told edie.

The Greenhouse & Energy Trading Simulation (Gets2) will include virtual firms representing oil and gas distributors, steel, cement and paper companies, in addition to many of Eurelectric’s electricity producing members.

Gets2 will also try to simulate the role of Kyoto flexibility mechanisms, namely the Clean Development Mechanism (CDM) and Joint Implementation (JI). “We have yet to decide exactly how we will incorporate CDM and JI into the simulation,” says Scowcroft. Initially “we will probably offer CDM credits ‘over the counter’, with a more sophisticated approach” as the simulation progresses.

PricewaterhouseCoopers is creating the Gets2 framework and virtual company profiles, while ParisBourse is providing the internet trading infrastructure.