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Provision of Renewable Energy using Green Certificates: Market Power and Price Limits

Author

Listed:
  • Amundsen, Eirik S.

    (University of Bergen, Department of Economics)

  • Nese, Gjermund

    (Institute for Research in Economics and Business Administration (SNF))

Abstract

We formulate an analytic equilibrium model for simultaneously functioning electricity market and a market for Green Certificates. The major focus of the paper is the effect of market power in a Green Certificate system. One of the main results from the analysis is that the certificate system faced with market power basically may collapse into a system of per unit subsidies.

Suggested Citation

  • Amundsen, Eirik S. & Nese, Gjermund, 2012. "Provision of Renewable Energy using Green Certificates: Market Power and Price Limits," Working Papers in Economics 25/02, University of Bergen, Department of Economics.
    • Handle: RePEc:hhs:bergec:2002_025
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    Keywords

    Firm Behavior: Theory; Oligopoly and Other Forms of Market Imperfection; Externalities; Redistributive Effects; Environmental Taxes and Subsidies; Production; Pricing; and Market Structure; Size Distribution of Firms; Electric Utilities;
    All these keywords.

    JEL classification:

    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities

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