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An equilibrium market power model for power markets and tradable green certificates, including Kirchhoff's Laws and Nash-Cournot competition

Per Ivar Helgesen and Asgeir Tomasgard

Energy Economics, 2018, vol. 70, issue C, 270-288

Abstract: We investigate the economic impacts of introducing tradable green certificates to promote electricity produced from renewable energy sources. We formulate a mixed complementarity, multi-region, partial equilibrium model, clearing both the electricity and green certificate markets under the assumption of Nash-Cournot market competition. We introduce a mixed complementarity formulation of the tradable green certificate policy scheme. The main contribution of this paper is to combine a public support scheme for electricity production with a power market model in which strategic generators compete and exercise market power in a capacitated transmission network with spatial energy exchange.

Keywords: Tradable green certificates; Equilibrium modeling; Market power; Energy policy; Electric power; Electric transmission (search for similar items in EconPapers)
JEL-codes: C61 D43 L94 Q48 (search for similar items in EconPapers)
Date: 2018
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Energy Economics is currently edited by R. S. J. Tol, Beng Ang, Lance Bachmeier, Perry Sadorsky, Ugur Soytas and J. P. Weyant

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