Organising a joint green European electricity market: the model ElGreen

In this paper, the features and the most important results of the computer model ElGreen will be presented. With the help of the computer model it is possible to simulate various promotion strategies for different technologies in all EU countries. Policies that can be selected are the most important price driven strategies (feed-in tariffs, investment subsidies, tax incentives), capacity driven instruments (tradable green certificates, national or international wide trading system) and a voluntary green pricing system.The following recommendations are derived:

(i)Regardless of which strategy is chosen credible sources must guarantee that the promotional strategy will survive a specified planning horizon;

(ii)The differences between either national trading, international trading or feed-in tariffs are very small if the design of the promotional system is optimised;

(iii)When introducing a TGC system it is of paramount importance that no mix up between existing and new capacities takes place.