Market behaviour and the to-trade-or-not-to-trade dilemma in ‘tradable white certificate’ schemes

Mundaca, Luis; Neij, Lena; Labanca, Nicola; Duplessis, Bruno; Pagliano, Lorenzo

doi:10.1007/s12053-008-9026-6

Cited by 17 publications

(29 citation statements)

References 9 publications

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“…Albeit a matter of concern by itself (Mundaca and Neij, 2009), we will not discuss here the intrinsic ambition of the target but readily examine its 17 A number of features of white certificates schemes are considered as "flexibilities" by some authors (Bertoldi and Rezessy, 2008;Langniss and Praetorius, 2006). According to Mundaca et al (2008), such flexibilities cover: the range of eligible measures; the number of eligible end-use sectors; the banking provision for surplus of white certificates; the market engagement of non-obliged parties; the trading option to equalise marginal compliance costs. Unlike those authors, we do not consider design features as "flexibilities" per se, but rather as drivers of the overall flexibility.…”

Section: Effectiveness Of the Savingsmentioning

confidence: 99%

“…As obliged suppliers compete on energy retail markets, some commercial benefits might arise from non-trading, like market share preservation and cost increase for competitors. Through a game simulation involving real energy suppliers, Mundaca et al (2008) show that potential losses associated with trading can exceed additional costs of non-trading in Great-Britain. As a result, obliged suppliers show preference towards autarkic strategies 34 .…”

Section: Overall Activity Of the Markets For White Certificatesmentioning

confidence: 99%

“…This reminds us that under quantity instruments, the market is just a way among others to comply with the elementary "command and control" component. 33 In their extensive analysis of the market activity, Mundaca et al (2008) review a large set of explanations, including: commercial benefits of non-trading; excess supply; limited number of parties and market power; perceived high transaction costs; banking options. 34 Nevertheless, this does not prevent optimization behaviour at the margin.…”

Section: Overall Activity Of the Markets For White Certificatesmentioning

confidence: 99%

“…According to different authors (Eyre et al, 2009;Lees, 2008;Mundaca et al, 2008), British energy suppliers develop close relationships with insulation contractors, managing agents, housing promoters, retailers and manufacturers, and develop partnerships with social housing programs and charity organisations. The market for insulation contractors is dominated by a few actors and 100% of insulation measures have relied on subcontracting.…”

Section: Vertical Trade and "Upstream" Transactionsmentioning

confidence: 99%

“…It is thus expected that the British scheme provides a high level of effectiveness and that Italian and French schemes provide a high level of cost-effectiveness. This is subject to the proviso acknowledged by some authors that a wide coverage is also likely to bear additional costs from administrative tasks that might hamper cost-effectiveness (Bertoldi and Rezessy, 2008;Langniss and Praetorius, 2006;Mundaca et al, 2008).…”

mentioning

confidence: 99%

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On the Road to a Unified Market for Energy Efficiency: The Contribution of White Certificates Schemes

Giraudet

Finon

2010

SSRN Journal

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SummaryWhite certificates schemes mandate competing energy companies to promote energy efficiency with flexibility mechanisms, including the trading of energy savings. So far, stylized facts are lacking and outcomes are mainly country-specific. By comparing results of British, Italian and French experiences, we attempt to identify the core determinants of their performances. We show that (i) white certificates schemes are depicted in theoretical works as mandatory subsidies on energy efficiency goods recovered by an end-use energy tax, whereby white certificates exchanges are not a central feature; (ii) at current stages, existing schemes are cost-effective and economically efficient, with large discrepancies though; (iii) the hybrid subsidy-tax mechanism seems valid but conditional to cost pass through permissions; otherwise, obliged energy companies merely promote information on the "downstream" side (i.e. at the consumer level); (iv) although white certificates exchange between different types of actors involved can be important as in Italy, trade among obliged companies is negligible; instead, flexibility sustains vertical relationships between obliged parties and "upstream" partners (i.e. installers, energy service companies). In this respect, we support the view that white certificates schemes are a policy instrument of multi-functional nature (subsidisation, information, technology diffusion), whose static and dynamic efficiency depends upon the consistency between a proper definition of long-term energy savings, the appropriate cost-recovery permission and a fine coordination with other instruments. We finally propose a four stages deployment pattern, along which fragmented markets for energy efficient technologies get closer to create a unified market delivering energy efficiency as a homogeneous good. We show that (i) white certificates schemes are depicted in theoretical works as mandatory subsidies on energy efficiency goods recovered by an end-use energy tax, whereby white certificates exchanges are not a central feature; (ii) at current stages, existing schemes are cost-effective and economically efficient, with large discrepancies though; (iii) the hybrid subsidy-tax mechanism seems valid but conditional to cost pass through permissions; otherwise, obliged energy companies merely promote information on the "downstream" side (i.e. at the consumer level); (iv) although white certificates exchange between different types of actors involved can be important as in Italy, trade among obliged companies is negligible; instead, flexibility sustains vertical relationships between obliged parties and "upstream" partners (i.e. installers, energy service companies).In this respect, we support the view that white certificates schemes are a policy instrument of multi-functional nature (subsidisation, information, technology diffusion), whose static and dynamic efficiency depends upon the consistency between a proper definition of long-term energy savings, the appropriate cost-recovery permission and a fine coord...

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Section: Effectiveness Of the Savingsmentioning

confidence: 99%

Section: Overall Activity Of the Markets For White Certificatesmentioning

confidence: 99%

Section: Overall Activity Of the Markets For White Certificatesmentioning

confidence: 99%

Section: Vertical Trade and "Upstream" Transactionsmentioning

confidence: 99%

mentioning

confidence: 99%

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On the Road to a Unified Market for Energy Efficiency: The Contribution of White Certificates Schemes

Giraudet

Finon

2010

SSRN Journal

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Energy Efficiency Governance

Steuwer¹

2013

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Consistency of the French white certificates evaluation system with the framework proposed for the European energy services

Broc¹,

Osso²,

Baudry³

et al. 2010

Energy Efficiency

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International audienceAccording to the directive on energy end-use efficiency and energy services (ESD), the European Member States shall adopt a national indicative energy savings target of 9% (or beyond) in 2016. The issue of the energy savings evaluation is crucial for its implementation. The French White Certificates (FWC) scheme is one of the important measures for France to fulfill its ESD target. However, the accountings of energy savings in the FWC scheme and in the ESD are different. Therefore, an analysis of the consistency of the two systems is needed. A concrete example of actions on residential buildings is used to illustrate the challenges for policy marker and stakeholders to set harmonized evaluation rules. The FWC and ESD calculations appear to be consistent from a physics point of view, as long as calculations are well-documented. But due to differences in the policy objectives, calculation routines may be necessary to convert national energy savings unit (e.g., kWh cumac) into supranational energy savings unit (e.g., ESD kWh). Finally, the work done to establish a transparent evaluation system brings additional benefits (e.g., increased visibility and quality of the actions), which will improve the results of the energy efficiency policies on long term

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Market behaviour and the to-trade-or-not-to-trade dilemma in ‘tradable white certificate’ schemes

Cited by 17 publications

References 9 publications

On the Road to a Unified Market for Energy Efficiency: The Contribution of White Certificates Schemes

On the Road to a Unified Market for Energy Efficiency: The Contribution of White Certificates Schemes

Energy Efficiency Governance

Consistency of the French white certificates evaluation system with the framework proposed for the European energy services

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