EUETS and the price of electricity

A report on the link between the price of electricity and carbon has just been published.

It concludes what we approximately already know - that the creation of a trading scheme has increased the electricity price, and that electricity companies have been making windfall profits on the back of the scheme.

The report says that there are two ways around this:

Windfall taxes (on the carbon dioxide based windfall profits)

Actioning of the allowances in the first place.

I suspect that actioning will take place in the third phase of the scheme - so there is no call of the windfall taxes (however popular this will be with the trade unions).

I've only skimmed through the report (not read it properly), but there seems also to be another useful nugget of information:
without emission trading combined cycle gas turbine power stations are more expensive than coal
with emissions trading combined cycle gas turbine power stations are cheaper than coal
...based on a 2004 fuel price (and probably carbon price).

That's a little bit like sticking your finger in the air and saying "it will snow next week", but it hints that coal can be economic in a low carbon economy.