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Decision-making behavior of power suppliers in the green certificate market: A system dynamics analysis

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  • Zhang, Feng
  • Li, Yun
  • Li, Fengling
  • Yuan, Jiahang
  • Li, Yanbin

Abstract

Green certificate trading systems have been developed to improve renewable energy support policies and innovative development mechanisms. To more intuitively analyze the decision-making behavior of power suppliers under green certificate schemes, we constructed a system dynamics-based model and carried out a case study using the scenario analysis method. The model clearly shows the complex logical relationship among the factors involved and reveals the decision-making process of the power producers of green certificates. This paper is also relevant for scholars from various countries seeking to understand the trading strategies of green certificate mechanisms and provides a reference for concerned decision-making bodies. The results indicate that under different scenarios and considering the restrictions and effects of the renewable portfolio standard (RPS) quota ratio, the transaction cost ratio and penalty mechanisms, compared with green power enterprises, thermal power enterprises are willing to enter the green certificate market for trading as the government's support for RPS increases. Finally, relevant policy suggestions are put forward to promote the development of renewable energy in China.

Suggested Citation

  • Zhang, Feng & Li, Yun & Li, Fengling & Yuan, Jiahang & Li, Yanbin, 2022. "Decision-making behavior of power suppliers in the green certificate market: A system dynamics analysis," Energy Policy, Elsevier, vol. 171(C).
    • Handle: RePEc:eee:enepol:v:171:y:2022:i:c:s0301421522005158
    DOI: 10.1016/j.enpol.2022.113296
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    References listed on IDEAS

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