Studying the effects of CO2 emissions trading on the electricity market - A multi-agent-based approach

In this paper, we present a basic approach for modelling electricity and emissions markets under the paradigm of agent-based computational economics (ACE). Different market players will be modelled as independent entities using au- tonomous software agents; they operate and communicate independently on the power market and the market for emission allowances. The agent types involved and their relationships are described. The aim of the model is to investigate the in- terplay between the market players, with a focus lying on the dynamics in a market for CO2 emission allowances and its effects on the electricity market. Simulations with this model will enable us to draw conclusions about the economic efficiency of different possible emissions trading options. These findings can possibly help deci- sion makers to evaluate the testing phase of the EU emissions trading scheme (from 2005 to 2007) in a qualified way