IDEAS home Printed from https://ideas.repec.org/a/aen/journl/33-2-05.html
   My bibliography  Save this article

Green Certificates and Market Power on the Nordic Power Market

Author

Listed:
  • Eirik S. Amundsen and Lars Bergman

Abstract

The purpose of this study is to elucidate under which circumstances, how, and to what extent market power on a Tradable Green Certificates (TGC) market can be used to affect an entire electricity market. There are basically two reasons for being concerned with this. One is that a small number of companies may have exclusive access to first rate sites for wind power generation. The other is that withdrawal of a small number of TGCs implies a multiple reduction of electricity consumption, with corresponding increases of end user prices. We formulate both an analytical model to investigate economic principles and a numerical model based on that to investigate the Swedish TGC market operating in a setting of a common Nordic electricity market. The analysis shows that Swedish producers may exercise market power using the TGC-market but that this problem will be eliminated by opening the TGC-market for other Nordic countries.

Suggested Citation

  • Eirik S. Amundsen and Lars Bergman, 2012. "Green Certificates and Market Power on the Nordic Power Market," The Energy Journal, International Association for Energy Economics, vol. 0(Number 2).
    • Handle: RePEc:aen:journl:33-2-05
    as

    Download full text from publisher

    File URL: http://www.iaee.org/en/publications/ejarticle.aspx?id=2478
    Download Restriction: Access to full text is restricted to IAEE members and subscribers.
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Amundsen, Eirik S. & Nese, Gjermund, 2009. "Integration of tradable green certificate markets: What can be expected?," Journal of Policy Modeling, Elsevier, vol. 31(6), pages 903-922, November.
    2. Dominique Finon & Philippe Menanteau, 2003. "The Static and Dynamic Efficiency of Instruments of Promotion of Renewables," Post-Print halshs-00001300, HAL.
    3. Tomas Kåberger & Thomas Sterner & Max Zamanian & Anna Jürgensen, 2004. "Economic Efficiency of Compulsory Green Electricity Quotas in Sweden," Energy & Environment, , vol. 15(4), pages 675-697, July.
    4. Amundsen, Eirik S. & Mortensen, Jorgen Birk, 2001. "The Danish Green Certificate System: some simple analytical results," Energy Economics, Elsevier, vol. 23(5), pages 489-509, September.
    5. Unger, Thomas & Ahlgren, Erik O., 2005. "Impacts of a common green certificate market on electricity and CO2-emission markets in the Nordic countries," Energy Policy, Elsevier, vol. 33(16), pages 2152-2163, November.
    6. Richard Green, 2005. "Electricity and Markets," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 21(1), pages 67-87, Spring.
    7. Amundsen, Eirik S. & Nese, Gjermund, 2004. "Market Power in Interactive Environmental and Energy Markets: The case of Green Certificates," MPRA Paper 10559, University Library of Munich, Germany.
    8. Amundsen, E.S. & Mortensen, J.B., 2001. "The Danish Green Certificate System: Some Simple Analytical Results," Norway; Department of Economics, University of Bergen 226, Department of Economics, University of Bergen.
    9. Knutsson, David & Werner, Sven & Ahlgren, Erik O., 2006. "Combined heat and power in the Swedish district heating sector--impact of green certificates and CO2 trading on new investments," Energy Policy, Elsevier, vol. 34(18), pages 3942-3952, December.
    10. Bergek, Anna & Jacobsson, Staffan, 2010. "Are tradable green certificates a cost-efficient policy driving technical change or a rent-generating machine? Lessons from Sweden 2003-2008," Energy Policy, Elsevier, vol. 38(3), pages 1255-1271, March.
    11. Thure Traber & Claudia Kemfert, 2009. "Impacts of the German Support for Renewable Energy on Electricity Prices, Emissions, and Firms," The Energy Journal, International Association for Energy Economics, vol. 0(Number 3), pages 155-178.
    12. Amundsen, Eirik S. & Nese, Gjermund, 2004. "Market power in interactive environmental and energy markets: The case of Green Certificates," Working Papers in Economics 14/04, University of Bergen, Department of Economics.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Nils‐Henrik M. von der Fehr & Stephanie Ropenus, 2017. "Renewable Energy Policy Instruments and Market Power," Scandinavian Journal of Economics, Wiley Blackwell, vol. 119(2), pages 312-345, April.
    2. Eirik S. Amundsen & Torstein Bye, 2016. "Simultaneous Use of Black, Green, and White Certificates Systems: A Rather Messy Business," CESifo Working Paper Series 5954, CESifo.
    3. Amundsen, Eirik Schrøder & Bergman, Lars, 2010. "Green Certificates and Market Power on the Nordic Power Market," Working Papers in Economics 12/10, University of Bergen, Department of Economics.
    4. Eirik S. Amundsen & Torstein Bye, 2016. "Simultaneous use of black, green, and white certificates systems: A rather messy business," IFRO Working Paper 2016/03, University of Copenhagen, Department of Food and Resource Economics.
    5. Amundsen, Eirik S. & Andersen, Peder & Mortensen, Jørgen Birk, 2018. "Addressing the climate problem: Choice between allowances, feed-in tariffs and taxes," Working Papers in Economics 3/18, University of Bergen, Department of Economics.
    6. Xin-gang, Zhao & Tian-tian, Feng & Lu, Cui & Xia, Feng, 2014. "The barriers and institutional arrangements of the implementation of renewable portfolio standard: A perspective of China," Renewable and Sustainable Energy Reviews, Elsevier, vol. 30(C), pages 371-380.
    7. Eirik S. Amundsen & Peder Andersen & Jørgen Birk Mortensen, 2018. "Addressing the Climate Problem: Choice between Allowances, Feed-in Tariffs and Taxes," CESifo Working Paper Series 6926, CESifo.
    8. Heimvik, Arild & Amundsen, Eirik S., 2021. "Prices vs. percentages: Use of tradable green certificates as an instrument of greenhouse gas mitigation," Energy Economics, Elsevier, vol. 99(C).
    9. Fridolfsson, Sven-Olof & Tangerås, Thomas P., 2013. "A reexamination of renewable electricity policy in Sweden," Energy Policy, Elsevier, vol. 58(C), pages 57-63.
    10. Ciarreta, Aitor & Espinosa, Maria Paz & Pizarro-Irizar, Cristina, 2017. "Optimal regulation of renewable energy: A comparison of Feed-in Tariffs and Tradable Green Certificates in the Spanish electricity system," Energy Economics, Elsevier, vol. 67(C), pages 387-399.
    11. Thomas P. Tangerås, 2015. "Renewable Electricity Policy and Market Integration," The Energy Journal, International Association for Energy Economics, vol. 0(Number 4).
    12. Heimvik, Arild & Amundsen, Eirik S., 2019. "Prices vs. percentages: Use of tradable green certificates as an instrument of greenhouse gas mitigation," Working Papers in Economics 1/19, University of Bergen, Department of Economics.
    13. Amundsen, Eirik Schrøder & Nese, Gjermund, 2016. "Market power in interactive environmental and energy markets: The case of green certificates," Working Papers in Economics 04/16, University of Bergen, Department of Economics.
    14. Orvika Rosnes, 2014. "Subsidies for renewable energy in inflexible power markets," Journal of Regulatory Economics, Springer, vol. 46(3), pages 318-343, December.
    15. Eirik S. Amundsen & Gjermund Nese, 2016. "Market Power in Interactive Environmental and Energy Markets: The Case of Green Certificates," CESifo Working Paper Series 5922, CESifo.
    16. Tsao, C.-C. & Campbell, J.E. & Chen, Yihsu, 2011. "When renewable portfolio standards meet cap-and-trade regulations in the electricity sector: Market interactions, profits implications, and policy redundancy," Energy Policy, Elsevier, vol. 39(7), pages 3966-3974, July.
    17. Currier, Kevin M., 2013. "A regulatory adjustment process for the determination of the optimal percentage requirement in an electricity market with Tradable Green Certificates," Energy Policy, Elsevier, vol. 62(C), pages 1053-1057.
    18. Wolfgang, Ove & Jaehnert, Stefan & Mo, Birger, 2015. "Methodology for forecasting in the Swedish–Norwegian market for el-certificates," Energy, Elsevier, vol. 88(C), pages 322-333.
    19. Jägemann, Cosima & Fürsch, Michaela & Hagspiel, Simeon & Nagl, Stephan, 2013. "Decarbonizing Europe's power sector by 2050 — Analyzing the economic implications of alternative decarbonization pathways," Energy Economics, Elsevier, vol. 40(C), pages 622-636.
    20. Arild Heimvik & Eirik S. Amundsen, 2019. "Prices vs. percentages: use of tradable green certificates as an instrument of greenhouse gas mitigation," CESifo Working Paper Series 7521, CESifo.

    More about this item

    JEL classification:

    • F0 - International Economics - - General

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:aen:journl:33-2-05. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: David Williams (email available below). General contact details of provider: https://edirc.repec.org/data/iaeeeea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.