The Carbon Price Is Not Serving Any Purpose

Carbon prices are too low to encourage gas fired generation to run ahead of coal. Even at 99 euros a ton, gas is so much more expensive than coal that you would have needed a carbon price in August. It takes three years for the gas price on the forward curve to come down to a level where today's carbon price will be consistent with fuel switching among power plants. The silver lining from this dreadful war being waged by Russia is that it really forces everybody to focus on the need to accelerate the transition to renewable energy.