Feed-in tariff and tradable green certificate in oligopoly

Tamás, Mészáros Mátyás; Shrestha, Sudhir; Zhou, Huizhong

doi:10.1016/j.enpol.2010.03.028

Cited by 96 publications

(34 citation statements)

References 13 publications

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“…They argue that TGCs are not the right instrument for the deployment of RES-E. Zhou and Tamas (2010) investigate the interaction between TGCs and the output markets in the presence of market power. In a follow-up paper, Tamas et al (2010) show that even under imperfect competition, uniform FITs and green certificates are equivalent. Morthorst (2003a,b) studies TGC markets in a multi-country model.…”

Section: Introductionmentioning

confidence: 97%

Green tradable certificates versus feed-in tariffs in the promotion of renewable energy shares

Requate

2014

Environ Econ Policy Stud

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. The paper analyzes the relationship between CO2 mitigation policy and promotion policies designed to deploy renewable energy sources for electricity production (RES-E). If an emission cap is the only policy target, an optimal mix consisting of high and low carbon use of fossil fuels, deployment of RES-E, and energy savings can best be achieved by either setting a uniform carbon tax or by implementing a cap-and-trade system covering all CO2 Terms of use: Documents in EconStor maysources. An additional RES-E share target causes higher costs in achieving the cap. Conversely, a more ambitious emission target automatically increases the RES-E share. In a second step we investigate different policies for inducing an RES-E quota. Such a quota can be efficiently achieved either by a system of tradable green certificates or by a budgetbalancing premium system. A budget-balancing FIT system, by contrast, is not efficient, since it generates excessive fiscal distortion. We also show that differentiated, technology-specific FITs are even more inefficient.JEL-Code: L380, L510, L940, Q280, Q420, Q550.Keywords: feed-in tariffs, tradable green certificates, premium systems, emission cap, cap and trade. IntroductionFor the period 2008-2012, Annex I countries that have ratified the Kyoto protocol are committed to an average reduction of their CO 2 emissions to 5.2% below the 1990 level.Broadly speaking, there are four ways of achieving this target: reducing the output of primary and secondary energy use and of other CO 2 -intensive products, enhancing energy efficiency (i.e. producing the same amount of output with less carbon input), substituting low-carbon fossil fuels (such as natural gas) for carbon-intensive fuels (like lignite and hard coal), and generally replacing fossil fuels by increasing the share of renewable energy sources (RES).An efficient mix of all these measures would be the optimal solution. To make the allocation of such CO 2 reduction efforts work, the marginal opportunity costs of all these measures have to be equal. Following this rule, CO 2 reductions will be maximal given a fixed amount of financial resources. To meet their joint target at the lowest possible cost, signatory countries could implement a rigorous cap-and-trade system (or charge a corresponding uniform carbon tax) covering all their CO 2 sources. If the whole world implemented a cap-and-trade system (or a uniform carbon tax) covering all sources of carbon, that of course would be bet...

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Section: Introductionmentioning

confidence: 97%

Green tradable certificates versus feed-in tariffs in the promotion of renewable energy shares

Requate

2014

Environ Econ Policy Stud

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“…From the viewpoint of renewable energy industries, FIT, which can provide a stable and profitable market, is more favorable than RPS, which may create a market uncertainty and lower overall profit [13][14][15]. On the contrary, from the viewpoint of social welfare, a RPS is more preferred because it introduces market competition into the renewable energy field [16]. However, few of these studies focus on the government's fiscal interests.…”

Section: Introductionmentioning

confidence: 99%

Substitution effect of renewable portfolio standards and renewable energy certificate trading for feed-in tariff

et al. 2018

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• The substitution effect of RPS and REC trade for the FIT was calculated and analyzed.• A multi-region power market model was proposed and developed.• REC trade can reduce the government's expenditure on subsidies for renewable energy.• FIT subsidy provides guarantees of the local power sectors' profit.• RPS, REC trade and FIT subsidy need to be considered together. A R T I C L E I N F O Keywords:Renewable portfolio standard Renewable energy certificate Feed-in tariff Subsidies A B S T R A C TThe Feed-in Tariff (FIT) has been successfully used to promote the development of renewable energy; nevertheless, it may cause financial burden on the governments at the same time. Compared with FIT, Renewable Portfolio Standards (RPS) and the Renewable Energy Certificate (REC) trading have been considered to reduce the government's expenditure caused by the subsidization. To examine the effectiveness of RPS and REC trading, the development of renewable energy and the environmental and economic benefits under different policies have been quantitatively investigated by using a multi-region power market model and China has been chosen as a case study. The obtained results show that: (i) REC trading can efficiently reduce the government's expenditure on subsidies for the development of renewable energy; (ii) Compared to FIT, RPS and REC trading will reduce the power sectors' profit; and (iii) RPS and REC trading may not be enough to achieve the target on renewable energy especially when the capital cost is high, therefore, RPS, REC trade and FIT subsidy should be implemented as complementary policies, not independent.

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“…However, they do not incorporate into their work the regulatory structure of the market and its unique features. Several recent economic analyses of European green certificate markets are available, but these focus primarily on evaluating the success of existing mechanisms, comparing with feed-in tariffs, and discussing future prospects (see for example Aune et al (2012), Haas et al (2011), Tamas et al (2010)). In contrast, we shall focus exclusively on understanding and modeling price dynamics, incorporating relationships with all important features of market structure and key fundamental price drivers.…”

Section: Introductionmentioning

confidence: 99%

SMART-SREC: A stochastic model of the New Jersey solar renewable energy certificate market

Coulon

Khazaei

Powell

2015

Journal of Environmental Economics and Management

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Feed-in tariff and tradable green certificate in oligopoly

Cited by 96 publications

References 13 publications

Green tradable certificates versus feed-in tariffs in the promotion of renewable energy shares

Green tradable certificates versus feed-in tariffs in the promotion of renewable energy shares

Substitution effect of renewable portfolio standards and renewable energy certificate trading for feed-in tariff

SMART-SREC: A stochastic model of the New Jersey solar renewable energy certificate market

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