Energyforum

Speaking to Montel Powernews at the sidelines of the Carbon Expo in Cologne on Thursday, Ertel argued against full auctioning of EUAs in the third phase of the EU ETS. “This would be a mistake,” he concluded, maintaining that a situation where all utilities were short from the start would increase the leverage of speculators.

Although stressing that speculative was not necessarily negative, as it resulted in more trading and higher liquidity, Ertel argued that full auctioning would add an extra dimension to the price of carbon, and thereby to the power price. “It could cause an electricity price shock,” he said.

Thus, a compromise solution would be to auction off 10-20 per cent, he maintained. “This way, one would ensure that everyone is short to some extent in the beginning, and at the same time prevent the electricity sector getting a price shock,” he maintained.