Simulating price patterns for tradable green certificates to promote electricity generation from wind |
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Authors: | Andrew Ford Klaus Vogstad Hilary Flynn |
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Affiliation: | 1. Program in Environmental Science and Regional Planning, Washington State University, Pullman, WA 99164-4430, USA;2. Department of Energy and Process Engineering, Norwegian University of Science and Technology, Kolbjorn Hejes vei 1B, 7491 Trondheim, Norway;3. Prometheus Institute for Sustainable Development, 20 Mount Auburn Street, Cambridge, MA 02138, USA |
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Abstract: | This article uses computer simulation to anticipate the price dynamics in a market for Tradable Green Certificates (TGCs). These markets have been used in Europe to promote generation of electricity from renewable resources like wind. Similar markets have been proposed in the United States of America (USA) where the certificates are called Renewable Energy Credits (RECs). The certificates are issued to the generating companies for each megawatt-hour of renewable electricity generation. The companies may sell the certificates in a market, and the revenues from certificate sales provide an extra incentive to invest in new generating capacity. Proponents argue that this market-based incentive can be designed to support government mandates for a growing fraction of electricity generation from renewable sources. In the USA, these mandates are set by the states and are known as Renewable Portfolio Standards (RPS). |
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Keywords: | Renewable portfolio standards Tradable green certificates Renewable energy credits |
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