Final Free CO2 Permits May Prompt Power Closures, Barclays Says
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The final grant of free-of-charge European Union carbon allowances to power utilities next month may be followed by a wave of fossil-fuel station closures, said a Barclays Capital analyst.
“Incentives for closing plants should increase after February, when the last free allocations of carbon permits are given,” Trevor Sikorski, an analyst at the bank in London, said today in an e-mailed research note. “After that occurs, the only reason not to close plants would be for ancillary-service revenue that could be earned for providing system back-up to balance the variable nature of renewable generation,” he said.