Selling and Saving Energy: Energy Efficiency Obligations in Liberalized Energy Markets

Louis-Gaëtan Giraudet, Matthieu Glachant, and Jean-Philippe Nicolaï
Authors registered in the RePEc Author Service: Matthieu Glachant

The Energy Journal, 2020, vol. Volume 41, issue Special Issue

Abstract: In Europe, energy efficiency obligations are imposed on energy retailers competing in liberalized energy markets. They comply by subsidizing energy efficiency investments made by energy end-users from within or outside their customer base. We develop a model describing how competition in the energy market affects compliance strategies. We find that, instead of selecting the most cost-effective investments options, firms may either target their most elastic customers, which enables them to increase their retail price, or their competitor's customers, which protects their sales. Allowing firms to trade obligations can restore cost-effectiveness, but reduces consumer surplus. Overall, the degree of flexibility that should be incorporated into such programs crucially depends on the degree of heterogeneity across investment costs and the relative weights governments assign to cost-effectiveness and consumer surplus.

JEL-codes: F0 (search for similar items in EconPapers)
Date: 2020
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://www.iaee.org/en/publications/ejarticle.aspx?id=3683 (text/html)
Access to full text is restricted to IAEE members and subscribers.

Related works:
Journal Article: Selling and Saving Energy: Energy Efficiency Obligations in Liberalized Energy Markets (2020)
Working Paper: Selling and Saving Energy: Energy Efficiency Obligations in Liberalized Energy Markets (2020)
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:aen:journl:ej41-si1-giraudet

Ordering information: This journal article can be ordered from
http://www.iaee.org/en/publications/ejsearch.aspx

Access Statistics for this article

More articles in The Energy Journal from International Association for Energy Economics Contact information at EDIRC.
Bibliographic data for series maintained by David Williams ().