Disclaimer 2

Abstract 3

Acknowledgements 4

Executive summary 7

1 Introduction 9

2 Excess capacity and low emission capacity developments 10

  The visible impact on capacity developments 10

3 Excess capacity as a hindrance to the transition 18

  The profitability channel 18

  The price channel 25

4 Transition policies as levers to address excess capacity 28

  Transition policy instruments and their capacity implications 28

  Transition policies as levers to address excess capacity 32

References 37

Notes 44