Substituting the Visible Hand for the market: The impact of the decarbonating European electricity systems

International audienceEnergy expert communities are quite unaware of the long term impacts that carbon policies directly focused on the development of low carbon technologies produce on the electricity market regime. Public co-ordination with long term arrangements needs to be introduced as a substitute to long term co-ordination by the market. Indeed, the current market co-ordination makes carbon prices ineffective at orienting investors towards low carbon technologies which are capital intensive. So, in order to avoid delayed investment aiming at the decarbonisation of electricity systems, a number of new market arrangements which lower the investment risk of these technologies and organize output-based subsidization are being selected by governments who could choose between different central coordination. But, as these low carbon equipment develop, long term co-ordination by the market for the other technologies (peaking units, CCGT) will fade away because they alter the market price setting. That means that in the future, public co-ordination and planning will probably replace market players' decisions, not only for low carbon technologies, but for every capacity development