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Tangible and fungible energy: Hybrid energy market and currency system for total energy management. A Masdar City case study


  • Sgouridis, Sgouris
  • Kennedy, Scott


We propose the introduction of an energy-based parallel currency as a means to ease the transition to energy-conscious living. Abundant fossil energy resources mask the internal and external energy costs for casual energy consumers. This situation is challenging communities that draw a significant fraction of their primary energy consumption from renewable energy sources. The Masdar Energy Credit (MEC) system is a way of translating the fundamental aspects behind energy generation and usage into a tangible reality for all users with built-in fungibility to incentivize collectively sustainable behavior. The energy credit currency (ergo) corresponds with a chosen unit of energy so that the total amount of ergos issued equals the energy supply of the community. Ergos are distributed to users (residents, commercial entities, employees, and visitors) on a subscription basis and can be surrendered in exchange for the energy content of a service. A spot market pricing mechanism is introduced to relate ergos to "fiat" currency using a continuously variable exchange rate to prevent depletion of the sustainable energy resource. The MEC system is intended to: (i) meet the sustainable energy balance targets of a community (ii) support peak shaving or load shifting goals, and (iii) raise energy awareness.

Suggested Citation

  • Sgouridis, Sgouris & Kennedy, Scott, 2010. "Tangible and fungible energy: Hybrid energy market and currency system for total energy management. A Masdar City case study," Energy Policy, Elsevier, vol. 38(4), pages 1749-1758, April.
  • Handle: RePEc:eee:enepol:v:38:y:2010:i:4:p:1749-1758

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    References listed on IDEAS

    1. Berry, David, 2002. "The market for tradable renewable energy credits," Ecological Economics, Elsevier, vol. 42(3), pages 369-379, September.
    2. Robert H. Patrick & Frank A. Wolak, 2001. "Estimating the Customer-Level Demand for Electricity Under Real-Time Market Prices," NBER Working Papers 8213, National Bureau of Economic Research, Inc.
    3. Lijesen, Mark G., 2007. "The real-time price elasticity of electricity," Energy Economics, Elsevier, vol. 29(2), pages 249-258, March.
    4. Chandley, John D., 2001. "A Standard Market Design for Regional Transmission Organizations, ," The Electricity Journal, Elsevier, vol. 14(10), pages 27-53, December.
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    Cited by:

    1. Mihaylov, Mihail & Rădulescu, Roxana & Razo-Zapata, Iván & Jurado, Sergio & Arco, Leticia & Avellana, Narcís & Nowé, Ann, 2019. "Comparing stakeholder incentives across state-of-the-art renewable support mechanisms," Renewable Energy, Elsevier, vol. 131(C), pages 689-699.
    2. Abbas Hassan & Hyowon Lee, 2015. "The paradox of the sustainable city: definitions and examples," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 17(6), pages 1267-1285, December.
    3. Almansoori, Ali & Betancourt-Torcat, Alberto, 2015. "Design optimization model for the integration of renewable and nuclear energy in the United Arab Emirates’ power system," Applied Energy, Elsevier, vol. 148(C), pages 234-251.
    4. Kennedy, Scott & Sgouridis, Sgouris, 2011. "Rigorous classification and carbon accounting principles for low and Zero Carbon Cities," Energy Policy, Elsevier, vol. 39(9), pages 5259-5268, September.
    5. Marinakis, Vangelis & Doukas, Haris & Karakosta, Charikleia & Psarras, John, 2013. "An integrated system for buildings’ energy-efficient automation: Application in the tertiary sector," Applied Energy, Elsevier, vol. 101(C), pages 6-14.


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