Kvikt likan af vistvænum raforkumarkadi

Amundsen, Eirik S. and Baldursson, Fridrik M. (2003): Kvikt likan af vistvænum raforkumarkadi. Published in: Icelandic Journal of Science and Mathematics , Vol. 1, No. 2 (2003): pp. 1-9.

Abstract

There is concern that prices in a market for Green Certificates (GCs) primarily based on volatile wind power will fluctuate excessively, leading to corresponding volatility of electricity prices. Applying a rational expectations simulation model of competitive storage and speculation of GCs the paper shows that the introduction of banking of GCs may reduce price volatility considerably and lead to increased social surplus. Banking lowers average prices and is therefore not necessarily to the benefit of “green producers”. Proposed price bounds on GC-prices will reduce the importance of banking and even of the GC system itself.

• Item Type: MPRA Paper
• English Title: An analytic model of an environmentally friendly electricity market
• Language: Icelandic
• Keywords: Electricity, Environment, Commodity Speculation, Green Certificates, Marketable permits, Uncertainty
• Subjects: C - Mathematical and Quantitative Methods > C6 - Mathematical Methods ; Programming Models ; Mathematical and Simulation Modeling > C63 - Computational Techniques ; Simulation Modeling; Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q2 - Renewable Resources and Conservation > Q28 - Government Policy; Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q4 - Energy > Q48 - Government Policy; Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q4 - Energy > Q42 - Alternative Energy Sources

References

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Morthorst,P.E., The development of a green certificate market, Energy Policy, 28,1085-1094 (2000)

Skytte,Klaus, Economic models for financing renewable electricity development, Topics on electricity trade, doktorsritgerð við Kaupmannahafnarháskóla 2001

Williams, J.C. and B.D. Wright, Storage and Commodity markets, Cambridge University Press, 1991