Impacts of integration of production of black and green energy

Zhou, Huizhong; Tamás, Mészáros Mátyás

doi:10.1016/j.eneco.2009.06.019

Cited by 20 publications

(6 citation statements)

References 7 publications

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“…Jensen and Skytte (2002) study the interaction between the electricity output market and TGC markets. 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.…”

Section: Introductionmentioning

confidence: 99%

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: 99%

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

Requate

2014

Environ Econ Policy Stud

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“…This result can be explained by the elimination of the double marginalization as described by Zhou and Mészáros [16]. When the market is more concentrated, then the price of the certificates increases on average by 3.7 and by 14.55 GBP when is increased.…”

Section: Resultsmentioning

confidence: 85%

Modelling of green electricity effects on oligopoly market

Mészáros

Shrestha

2011

Proceedings of the Institution of Mechanical Engineers, Part A:

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This article builds a simulation model to analyse the effect of a change in the main policy variables of the British Renewable Obligation System, i.e. how the increase in the minimum requirement of green electricity can affect the prices and quantities in the electricity market under oligopoly market structure. The results show that the increasing quota obligation increases the price of electricity. The outcomes of this computational model emphasize the importance of the capacity limit which can constrain the market power and increase the competition in the market. In addition, the simulation shows that the integration of fossil-fuel and renewable producers has very small effect on production and prices because of the capacity limits.

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“…Because of the intermittence and randomness, renewable energy generation needs costs, such as operation and maintenance cost, spinning reserve cost. Following the assumption of many existing work (Amundsen and Bergmen, 2012; Tanaka and Chen, 2013; Xiao et al, 2016; Zhou and Tamas, 2010) the cost function of renewable firms takes the following form of quadratic function…”

Section: The Two-stage Joint Modelmentioning

confidence: 99%

“…It is assumed that the consumers and retailers need to undertake RPS obligation and show that the producers with abundant renewable resource may exercise the market power using TGC market by holding back TGCs. Zhou and Tamas (2010) developed an equilibrium model to examine the market power problem when the conventional firm was merged with the renewable firm. The model assumed that both the electricity wholesale and TGC markets were imperfect, but only one renewable firm was considered, the TGC market was monopolistic.…”

Section: Introductionmentioning

confidence: 99%

Two-stage joint equilibrium model of electricity market with tradable green certificates

Zhang

et al. 2018

Transactions of the Institute of Measurement and Control

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Renewable portfolio standard (RPS) with tradable green certificate (TGC) scheme has important influences on the market equilibrium outcomes and generation firms’ strategic behaviors. The main objective of this paper is to investigate that under the RPS with TGC scheme, who and how to exercise the market power, and to what extent market powers are exercised in the electricity wholesale and TGC markets. This is achieved by firstly proposing a two-stage joint equilibrium model based on the oligopolistic competition equilibrium theory. The model is then formulated as an equilibrium problem with equilibrium constraints (EPEC) by using the backward induction method, which is further solved by the nonlinear complementarity approach. Finally, simulation results show that renewable firms tend to withhold some of TGCs to raise the TGC prices when the RPS is relatively low, otherwise they choose to cut down their electricity output to reduce the volume of TGC and raise the TGC price. Moreover, facing the increasing TGC price, fossil fuel firms tend to withhold their electricity output to decrease the demand of TGCs and lower the TGC price. This study has meaningful implications for design of the electricity markets with TGC market.

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Impacts of integration of production of black and green energy

Cited by 20 publications

References 7 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

Modelling of green electricity effects on oligopoly market

Two-stage joint equilibrium model of electricity market with tradable green certificates

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