Impact of carbon taxes on the interconnected central European power system of 2030

As the EU's Emissions Trading Scheme has, up to date, had little impact on the reduction of CO₂ emissions in Europe, direct carbon taxes have been proposed. In this work, high spatial and temporal resolution optimal power flow simulations are conducted to assess the impact of carbon taxes on the inter-connected power system in central Europe. As both individual transmission lines and individual power plants are modeled, this work provides new insights into effects within the European power market. A carbon price of 40 €/tCO₂ or more is shown to be necessary in 2030 to achieve the EU emissions targets. This tax burden is borne mainly by Poland and the Czech Republic, who lose more than 2bn € annually in power exports. Consumers in Switzerland face the highest increases in electricity prices, despite consuming very carbon-friendly electricity.