Market power in interactive environmental and energy markets: The case of green certificates

Eirik Schrøder Amundsen () and Gjermund Nese ()
Additional contact information
Eirik Schrøder Amundsen: Department of Economics, University of Bergen, Postal: P.O.Box 7800, 5020 Bergen, Norway, http://www.uib.no/en/persons/Eirik.Schr%C3%B8der.Amundsen
Gjermund Nese: Norwegian Competition Authority., Postal: P.O.Box 439 Sentrum, 5805 Bergen, Norway

No 04/16, Working Papers in Economics from University of Bergen, Department of Economics

Abstract: A market for Tradable Green Certificates (TGCs) is strongly interwoven in the electricity market as the producers of green electricity are also the suppliers of TGCs. Therefore, strategic interaction may result. We formulate an analytic equilibrium model for simultaneously functioning electricity and TGC markets, and focus on the role of market power (i.e. Stackelberg leadership). One result is that a certificate system faced with market power may collapse into a system of per unit subsidies. Also, the model shows that TGCs may be an imprecise instrument for regulating the generation of green electricity.

Keywords: Renewable energy; Electricity; Green Certificates; Market power (search for similar items in EconPapers)
JEL-codes: C70 Q28 Q42 Q48 (search for similar items in EconPapers)
Pages: 18 pages
Date: 2016-06-27
New Economics Papers: this item is included in nep-com, nep-ene, nep-env and nep-res
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://ekstern.filer.uib.no/svf/2016/Working%20paper%2004-16.pdf Full text (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:hhs:bergec:2016_004

Access Statistics for this paper

More papers in Working Papers in Economics from University of Bergen, Department of Economics Institutt for økonomi, Universitetet i Bergen, Postboks 7802, 5020 Bergen, Norway. Contact information at EDIRC.
Bibliographic data for series maintained by Kjell Erik Lommerud ().