Isra-Mart srl: Next phase of carbon trading will hike Europe's power prices by up to 20 per cent

European wholesale power prices are set to rise between 7 and 20 per cent per megawatt hour from 2013 as a result of changes to the European Union Emissions Trading System (EU ETS), according to Standard & Poor's.


The ratings agency issued that warning after assessing the impact of the third phase of the EU ETS which comes into force in January 2013.
The increase in power prices is expected because generators will no longer receive any free carbon allowances and will have to buy them at auction, pointed out S&P.
It also warned that energy utilities with significant power generation would suffer deteriorating creditworthiness as a result.