 The EU electricity market: Renewables targets, Tradable Green Certificates and electricity tradeOurania Karakosta and Dimitra Petropoulou Energy Economics, 2022, vol. 111, issue C Abstract: Several EU member states have introduced national systems of Tradable Green Certificates (TGCs), which stipulate the percentage of total energy consumption to be obtained from renewable sources. The Renewable Energy Directive sets a binding EU-wide target of 32% but without imposing legally binding national targets. To assess incentives for the choice of national percentage requirements we develop a two-country, Cournot duopoly model of the electricity market, with one “green” and one “black” supplier in each country. We show that nationally determined percentage requirements do not align with the EU-welfare maximising renewable energy target due to cross-country externalities arising from trade in electricity and the market price of TGCs and examine the direction of misalignment. Our results cast doubts on the feasibility of EU renewable energy policy in the absence of binding national targets and inform how national targets should be shaped. Keywords: Tradable Green Certificates; Renewable targets; Renewable energy (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:eneeco:v:111:y:2022:i:c:s0140988322002031 DOI: 10.1016/j.eneco.2022.106034 Access Statistics for this article Energy Economics is currently edited by R. S. J. Tol, Beng Ang, Lance Bachmeier, Perry Sadorsky, Ugur Soytas and J. P. Weyant More articles in Energy Economics from Elsevier |
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