Climate change impacts in the Electricity Sector

Climate change will have impacts on electricity markets, both on demand and supply. In Norway, important likely impacts are that the supply of hydropower and wind power will be boosted by weather changes, while warmer winters will dampen heating demand. H owever, in other European countries, the climate change impacts in this sector will be different. The focus of this research is how the impacts for Norway and other Nordic countries thereby depend on electricity market integration and climate policies dom estically and in Europe. With emphasis on Norway and less on other European countries, CELECT analyses the effects of climate change on demand for and supply of electricity in Europe. The analysed effects are allowed to interact in market models under alt ernative assumptions about regulatory and other developments in the energy and electricity markets, and in terms of policies addressing climate change. The analysis emphasizes welfare effects, but includes issues such as including the identification of wi nners and losers. An important part of this research is to analyse policy options for Norway. The value of Norwegian renewable energy resources to its owners likely depends crucially not only on climate change but on energy and climate change policies dom estically and in the rest of Europe.