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[An analytic model of an environmentally friendly electricity market]
There is concern that prices in a market for Green Certificates (GCs) primarily based on volatile wind power will fluctuate excessively, leading to corresponding volatility of electricity prices. Applying a rational expectations simulation model of competitive storage and speculation of GCs the paper shows that the introduction of banking of GCs may reduce price volatility considerably and lead to increased social surplus. Banking lowers average prices and is therefore not necessarily to the benefit of “green producers”. Proposed price bounds on GC-prices will reduce the importance of banking and even of the GC system itself.
|Date of creation:||2003|
|Date of revision:|
|Publication status:||Published in Icelandic Journal of Science and Mathematics 2.1(2003): pp. 1-9|
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Web page: http://mpra.ub.uni-muenchen.de
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- repec:cup:cbooks:9780521326162 is not listed on IDEAS
- Deaton, A. & Laroque, G., 1989.
"On The Behavior Of Commodity Prices,"
145, Princeton, Woodrow Wilson School - Public and International Affairs.
- Morthorst, P. E., 2000. "The development of a green certificate market," Energy Policy, Elsevier, vol. 28(15), pages 1085-1094, December.
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