Optimisation of electricity energy markets and assessment of CO2 trading on their structure: a stochastic analysis of the greek power sector

Athanasios I. Tolis, Athanasios A. Rentizelas, Ilias P. Tatsiopoulos

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Power production was traditionally dominated by monopolies. After a long period of research and organisational advances in international level, electricity markets have been deregulated allowing customers to choose their provider and new producers to compete the former Public Power Companies. Vast changes have been made in the European legal framework but still, the experience gathered is not sufficient to derive safe conclusions regarding the efficiency and reliability of deregulation. Furthermore, emissions' trading progressively becomes a reality in many respects, compliance with Kyoto protocol's targets is a necessity, and stability of the national grid's operation is a constraint of vital importance. Consequently, the production of electricity should not rely solely in conventional energy sources neither in renewable ones but on a mixed structure. Finding this optimal mix is the primary objective of the study. A computational tool has been created, that simulates and optimises the future electricity generation structure based on existing as well as on emerging technologies. The results focus on the Greek Power Sector and indicate a gradual decreasing of anticipated CO2 emissions while the socioeconomic constraints and reliability requirements of the system are met. Policy interventions are pointed out based on the numerical results of the model. (C) 2010 Elsevier Ltd. All rights reserved.

Original languageEnglish
Pages (from-to)2529-2546
Number of pages18
JournalRenewable and Sustainable Energy Reviews
Issue number9
Publication statusPublished - Dec 2010


  • real options
  • emissions trading
  • power sector
  • stochastic forecast
  • uncertainty
  • optimisation

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