IDEAS home Printed from https://ideas.repec.org/a/eee/appene/v323y2022ics0306261922009084.html
   My bibliography  Save this article

Energy supply chain empowerment through tradable green and white certificates: A pathway to sustainable energy generation

Author

Listed:
  • Safarzadeh, Soroush
  • Hafezalkotob, Ashkan
  • Jafari, Hamed

Abstract

In the last decades, due to the increasing environmental concerns such as energy-resource depletion and global warming, energy efficiency instruments and renewable energy production has been promoted more than ever. This paper investigates a comprehensive comparison between two energy markets, i.e., the tradable white certificate (TWC) market and the tradable green certificate (TGC) market. How to coordinate the two energy markets and what the coordination impacts become the main issues under a reward-penalty mechanism. This multi-agent problem is discussed in an electricity supply chain consisting of two populations of traditional energy suppliers who want to decide about using one of them under government intervention. In this regard, the behavior of the suppliers is analyzed under three different Scenarios, including traditional power generation, energy efficiency program (EEP), and renewable portfolio standards (RPSs). An evolutionary game is applied to formulate the problem. The results show that a mandatory fine policy is more useful than an energy-saving subsidy to motivate the traditional suppliers to move toward sustainable energy generation. This policy also helps governments to meet their sustainable-oriented goals, as we discussed in this work. The findings can be applied to extend sustainable-based energy projects in developing countries.

Suggested Citation

  • Safarzadeh, Soroush & Hafezalkotob, Ashkan & Jafari, Hamed, 2022. "Energy supply chain empowerment through tradable green and white certificates: A pathway to sustainable energy generation," Applied Energy, Elsevier, vol. 323(C).
    • Handle: RePEc:eee:appene:v:323:y:2022:i:c:s0306261922009084
    DOI: 10.1016/j.apenergy.2022.119601
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0306261922009084
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.apenergy.2022.119601?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Rasti-Barzoki, Morteza & Moon, Ilkyeong, 2020. "A game theoretic approach for car pricing and its energy efficiency level versus governmental sustainability goals by considering rebound effect: A case study of South Korea," Applied Energy, Elsevier, vol. 271(C).
    2. Li, Ming-Jia & Tao, Wen-Quan, 2017. "Review of methodologies and polices for evaluation of energy efficiency in high energy-consuming industry," Applied Energy, Elsevier, vol. 187(C), pages 203-215.
    3. Wirl, Franz, 2015. "White certificates — Energy efficiency programs under private information of consumers," Energy Economics, Elsevier, vol. 49(C), pages 507-515.
    4. Abrardi, Laura & Cambini, Carlo, 2015. "Tariff regulation with energy efficiency goals," Energy Economics, Elsevier, vol. 49(C), pages 122-131.
    5. Tesema, Gudise & Worrell, Ernst, 2015. "Energy efficiency improvement potentials for the cement industry in Ethiopia," Energy, Elsevier, vol. 93(P2), pages 2042-2052.
    6. Sirin, Selahattin Murat & Sevindik, Irem, 2021. "An analysis of Turkey's solar PV auction scheme: What can Turkey learn from Brazil and South Africa?," Energy Policy, Elsevier, vol. 148(PA).
    7. Yue, Hui & Worrell, Ernst & Crijns-Graus, Wina, 2021. "Impacts of regional industrial electricity savings on the development of future coal capacity per electricity grid and related air pollution emissions – A case study for China," Applied Energy, Elsevier, vol. 282(PB).
    8. Bertoldi, Paolo & Huld, Thomas, 2006. "Tradable certificates for renewable electricity and energy savings," Energy Policy, Elsevier, vol. 34(2), pages 212-222, January.
    9. Xin-gang, Zhao & Yi, Zuo & Hui, Wang & Zhen, Wang, 2022. "How can the cost and effectiveness of renewable portfolio standards be coordinated? Incentive mechanism design from the coevolution perspective," Renewable and Sustainable Energy Reviews, Elsevier, vol. 158(C).
    10. Melikoglu, Mehmet, 2016. "The role of renewables and nuclear energy in Turkey׳s Vision 2023 energy targets: Economic and technical scrutiny," Renewable and Sustainable Energy Reviews, Elsevier, vol. 62(C), pages 1-12.
    11. Pan, Yuling & Dong, Feng, 2022. "Design of energy use rights trading policy from the perspective of energy vulnerability," Energy Policy, Elsevier, vol. 160(C).
    12. Oikonomou, Vlasis & Jepma, Catrinus & Becchis, Franco & Russolillo, Daniele, 2008. "White Certificates for energy efficiency improvement with energy taxes: A theoretical economic model," Energy Economics, Elsevier, vol. 30(6), pages 3044-3062, November.
    13. Safarzadeh, Soroush & Rasti-Barzoki, Morteza, 2019. "A game theoretic approach for assessing residential energy-efficiency program considering rebound, consumer behavior, and government policies," Applied Energy, Elsevier, vol. 233, pages 44-61.
    14. Lin, Boqiang & Zhao, Hongli, 2016. "Technological progress and energy rebound effect in China׳s textile industry: Evidence and policy implications," Renewable and Sustainable Energy Reviews, Elsevier, vol. 60(C), pages 173-181.
    15. Yushchenko, Alisa & Patel, Martin Kumar, 2017. "Cost-effectiveness of energy efficiency programs: How to better understand and improve from multiple stakeholder perspectives?," Energy Policy, Elsevier, vol. 108(C), pages 538-550.
    16. Dissanayake, Pavani Dulanja & You, Siming & Igalavithana, Avanthi Deshani & Xia, Yinfeng & Bhatnagar, Amit & Gupta, Souradeep & Kua, Harn Wei & Kim, Sumin & Kwon, Jung-Hwan & Tsang, Daniel C.W. & Ok, , 2020. "Biochar-based adsorbents for carbon dioxide capture: A critical review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 119(C).
    17. Mizobuchi, Kenichi & Takeuchi, Kenji, 2016. "Replacement or additional purchase: The impact of energy-efficient appliances on household electricity saving under public pressures," Energy Policy, Elsevier, vol. 93(C), pages 137-148.
    18. Bae, Jeong Hwan & Rishi, Meenakshi & Li, Dmitriy, 2021. "Consumer preferences for a green certificate program in South Korea," Energy, Elsevier, vol. 230(C).
    19. Transue, Morghan & Felder, Frank A., 2010. "Comparison of energy efficiency incentive programs: Rebates and white certificates," Utilities Policy, Elsevier, vol. 18(2), pages 103-111, June.
    20. Caragliu, Andrea, 2021. "Energy efficiency-enhancing policies and firm performance: Evidence from the paper and glass industries in Italy," Energy Policy, Elsevier, vol. 156(C).
    21. Lawrence, Akvile & Karlsson, Magnus & Nehler, Therese & Thollander, Patrik, 2019. "Effects of monetary investment, payback time and firm characteristics on electricity saving in energy-intensive industry," Applied Energy, Elsevier, vol. 240(C), pages 499-512.
    22. Afshari, Afshin & Friedrich, Luiz, 2016. "A proposal to introduce tradable energy savings certificates in the emirate of Abu Dhabi," Renewable and Sustainable Energy Reviews, Elsevier, vol. 55(C), pages 1342-1351.
    23. Argun, Irem Duzdar & Kayakutlu, Gulgun & Ozgozen, Neslihan Yilmaz & Daim, Tugrul U., 2021. "Models for Energy Efficiency Obligation Systems through different perspectives," Technology in Society, Elsevier, vol. 64(C).
    24. Abbasi, Kashif Raza & Abbas, Jaffar & Tufail, Muhammad, 2021. "Revisiting electricity consumption, price, and real GDP: A modified sectoral level analysis from Pakistan," Energy Policy, Elsevier, vol. 149(C).
    25. Craig, Christopher A. & Feng, Song, 2017. "Exploring utility organization electricity generation, residential electricity consumption, and energy efficiency: A climatic approach," Applied Energy, Elsevier, vol. 185(P1), pages 779-790.
    26. Irfan, Mohd, 2021. "Integration between electricity and renewable energy certificate (REC) markets: Factors influencing the solar and non-solar REC in India," Renewable Energy, Elsevier, vol. 179(C), pages 65-74.
    27. Kumar, Rajesh & Agarwala, Arun, 2013. "Energy certificates REC and PAT sustenance to energy model for India," Renewable and Sustainable Energy Reviews, Elsevier, vol. 21(C), pages 315-323.
    28. Yu, Xianyu & Ge, Shengxian & Zhou, Dequn & Wang, Qunwei & Chang, Ching-Ter & Sang, Xiuzhi, 2022. "Whether feed-in tariff can be effectively replaced or not? An integrated analysis of renewable portfolio standards and green certificate trading," Energy, Elsevier, vol. 245(C).
    29. Trianni, Andrea & Cagno, Enrico & De Donatis, Alessio, 2014. "A framework to characterize energy efficiency measures," Applied Energy, Elsevier, vol. 118(C), pages 207-220.
    30. Eirik S. Amundsen and Torstein Bye, 2018. "Simultaneous use of black, green, and white certificate systems," The Energy Journal, International Association for Energy Economics, vol. 0(Number 4).
    31. Sorrell, Steve & Harrison, David & Radov, Daniel & Klevnas, Per & Foss, Andrew, 2009. "White certificate schemes: Economic analysis and interactions with the EU ETS," Energy Policy, Elsevier, vol. 37(1), pages 29-42, January.
    32. Acharya, Rajesh H. & Sadath, Anver C., 2017. "Implications of energy subsidy reform in India," Energy Policy, Elsevier, vol. 102(C), pages 453-462.
    33. Hafezalkotob, Ashkan, 2017. "Competition, cooperation, and coopetition of green supply chains under regulations on energy saving levels," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 97(C), pages 228-250.
    34. Bertoldi, Paolo & Rezessy, Silvia & Lees, Eoin & Baudry, Paul & Jeandel, Alexandre & Labanca, Nicola, 2010. "Energy supplier obligations and white certificate schemes: Comparative analysis of experiences in the European Union," Energy Policy, Elsevier, vol. 38(3), pages 1455-1469, March.
    35. Siderius, Hans-Paul, 2014. "Setting MEPS for electronic products," Energy Policy, Elsevier, vol. 70(C), pages 1-13.
    36. Safieddin Ardebili, Seyed Mohammad, 2020. "Green electricity generation potential from biogas produced by anaerobic digestion of farm animal waste and agriculture residues in Iran," Renewable Energy, Elsevier, vol. 154(C), pages 29-37.
    37. Stede, Jan, 2017. "Bridging the industrial energy efficiency gap – Assessing the evidence from the Italian white certificate scheme," Energy Policy, Elsevier, vol. 104(C), pages 112-123.
    38. Gong, Chengzhu & Tang, Kai & Zhu, Kejun & Hailu, Atakelty, 2016. "An optimal time-of-use pricing for urban gas: A study with a multi-agent evolutionary game-theoretic perspective," Applied Energy, Elsevier, vol. 163(C), pages 283-294.
    39. Langniss, Ole & Praetorius, Barbara, 2006. "How much market do market-based instruments create? An analysis for the case of "white" certificates," Energy Policy, Elsevier, vol. 34(2), pages 200-211, January.
    40. Oikonomou, V. & Patel, M.K. & van der Gaast, W. & Rietbergen, M., 2009. "Voluntary agreements with white certificates for energy efficiency improvement as a hybrid policy instrument," Energy Policy, Elsevier, vol. 37(5), pages 1970-1982, May.
    41. Ikegami, Masako & Wang, Zijian, 2016. "The long-run causal relationship between electricity consumption and real GDP: Evidence from Japan and Germany," Journal of Policy Modeling, Elsevier, vol. 38(5), pages 767-784.
    42. Gill, Carrie & Lang, Corey, 2018. "Learn to conserve: The effects of in-school energy education on at-home electricity consumption," Energy Policy, Elsevier, vol. 118(C), pages 88-96.
    43. Duzgun, B. & Komurgoz, G., 2014. "Turkey's energy efficiency assessment: White Certificates Systems and their applicability in Turkey," Energy Policy, Elsevier, vol. 65(C), pages 465-474.
    44. Ouazzani Chahidi, Laila & Fossa, Marco & Priarone, Antonella & Mechaqrane, Abdellah, 2021. "Energy saving strategies in sustainable greenhouse cultivation in the mediterranean climate – A case study," Applied Energy, Elsevier, vol. 282(PA).
    45. Ari, Izzet & Yikmaz, Riza Fikret, 2019. "The role of renewable energy in achieving Turkey's INDC," Renewable and Sustainable Energy Reviews, Elsevier, vol. 105(C), pages 244-251.
    46. Kelly, Geoff, 2012. "Sustainability at home: Policy measures for energy-efficient appliances," Renewable and Sustainable Energy Reviews, Elsevier, vol. 16(9), pages 6851-6860.
    47. Verma, Piyush & Patel, Nitish & Nair, Nirmal-Kumar C. & Brent, Alan C., 2018. "Improving the energy efficiency of the New Zealand economy: A policy comparison with other renewable-rich countries," Energy Policy, Elsevier, vol. 122(C), pages 506-517.
    48. Kumar, Rajesh & Agarwala, Arun, 2013. "Renewable Energy Certificate and Perform, Achieve, Trade mechanisms to enhance the energy security for India," Energy Policy, Elsevier, vol. 55(C), pages 669-676.
    49. Ajanovic, Amela & Haas, Reinhard, 2017. "The impact of energy policies in scenarios on GHG emission reduction in passenger car mobility in the EU-15," Renewable and Sustainable Energy Reviews, Elsevier, vol. 68(P2), pages 1088-1096.
    50. Menz, Fredric C., 2005. "Green electricity policies in the United States: case study," Energy Policy, Elsevier, vol. 33(18), pages 2398-2410, December.
    51. Safarzadeh, Soroush & Rasti-Barzoki, Morteza, 2019. "A game theoretic approach for pricing policies in a duopolistic supply chain considering energy productivity, industrial rebound effect, and government policies," Energy, Elsevier, vol. 167(C), pages 92-105.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Liping Liao & Chukun Huang & Minzhe Du, 2022. "The Effect of Energy Quota Trading on Energy Saving in China: Insight from a Quasi-Natural Experiment," Energies, MDPI, vol. 15(22), pages 1-17, November.
    2. Reema Gh. Alajmi, 2024. "Total-Factor Energy Efficiency (TFEE) and CO 2 Emissions for GCC Countries," Sustainability, MDPI, vol. 16(2), pages 1-14, January.
    3. Du, Minzhe & Wu, Fenger & Ye, Danfeng & Zhao, Yating & Liao, Liping, 2023. "Exploring the effects of energy quota trading policy on carbon emission efficiency: Quasi-experimental evidence from China," Energy Economics, Elsevier, vol. 124(C).
    4. Zhou, Dequn & Dong, Zhuojia & Sang, Xiuzhi & Wang, Qunwei & Yu, Xianyu, 2023. "Do feed-in tariff reduction and green certificate trading effectively promote regional sustainable development？," Energy, Elsevier, vol. 283(C).
    5. Teng, Minmin & Lv, Kunfeng & Han, Chuanfeng & Liu, Pihui, 2023. "Trading behavior strategy of power plants and the grid under renewable portfolio standards in China: A tripartite evolutionary game analysis," Energy, Elsevier, vol. 284(C).
    6. Li, Jialin & Hu, Yu & Chi, Yuanying & Liu, Dunnan & Yang, Shuxia & Gao, Zhiyuan & Chen, Yuetong, 2024. "Analysis on the synergy between markets of electricity, carbon, and tradable green certificates in China," Energy, Elsevier, vol. 302(C).
    7. Tsao, Yu-Chung & Ai, Ho Thi Thu & Lu, Jye-Chyi & Wang, Chao, 2024. "Game theory-based electricity pricing decisions incorporating prosumer energy preferences and renewable portfolio standard," Energy, Elsevier, vol. 306(C).
    8. Lijun Zeng & Wencheng Zhang & Muyi Yang, 2023. "A Bi-Level Optimization Model for Inter-Provincial Energy Consumption Transfer Tax in China," Energies, MDPI, vol. 16(21), pages 1-20, October.
    9. Amiri-Pebdani, Sima & Alinaghian, Mahdi & Khosroshahi, Hossein, 2023. "A game theoretic approach for time-of-use pricing with considering renewable portfolio standard effects and investment in energy storage technologies under government interventions," Energy, Elsevier, vol. 282(C).
    10. Guo, Xiaopeng & Zhang, Xinyue & Zhang, Xingping, 2024. "Incentive-oriented power‑carbon emissions trading-tradable green certificate integrated market mechanisms using multi-agent deep reinforcement learning," Applied Energy, Elsevier, vol. 357(C).
    11. Stamatios K. Chrysikopoulos & Panos T. Chountalas & Dimitrios A. Georgakellos & Athanasios G. Lagodimos, 2024. "Green Certificates Research: Bibliometric Assessment of Current State and Future Directions," Sustainability, MDPI, vol. 16(3), pages 1-45, January.
    12. Wang, Delu & Li, Chunxiao & Mao, Jinqi & Yang, Qing, 2023. "What affects the implementation of the renewable portfolio standard? An analysis of the four-party evolutionary game," Renewable Energy, Elsevier, vol. 204(C), pages 250-261.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Safarzadeh, Soroush & Rasti-Barzoki, Morteza & Hejazi, Seyed Reza, 2020. "A review of optimal energy policy instruments on industrial energy efficiency programs, rebound effects, and government policies," Energy Policy, Elsevier, vol. 139(C).
    2. Liping Liao & Chukun Huang & Minzhe Du, 2022. "The Effect of Energy Quota Trading on Energy Saving in China: Insight from a Quasi-Natural Experiment," Energies, MDPI, vol. 15(22), pages 1-17, November.
    3. Soroush Safarzadeh & Morteza Rasti-Barzoki & Jörn Altmann & Ilkyeong Moon, 2024. "A game theoretic approach for tradable white certificates regarding energy rebound and government intervention," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 26(11), pages 29643-29676, November.
    4. Giacomo Di Foggia & Massimo Beccarello & Marco Borgarello & Francesca Bazzocchi & Stefano Moscarelli, 2022. "Market-Based Instruments to Promote Energy Efficiency: Insights from the Italian Case," Energies, MDPI, vol. 15(20), pages 1-16, October.
    5. Du, Minzhe & Wu, Fenger & Ye, Danfeng & Zhao, Yating & Liao, Liping, 2023. "Exploring the effects of energy quota trading policy on carbon emission efficiency: Quasi-experimental evidence from China," Energy Economics, Elsevier, vol. 124(C).
    6. Safarzadeh, Soroush & Rasti-Barzoki, Morteza & Hejazi, Seyed Reza & Piran, Md Jalil, 2020. "A game theoretic approach for the duopoly pricing of energy-efficient appliances regarding innovation protection and social welfare," Energy, Elsevier, vol. 200(C).
    7. Louis-Gaetan Giraudet and Dominique Finon, 2015. "European experiences with white certifirecate obligations: A critical review of existing evaluations," Economics of Energy & Environmental Policy, International Association for Energy Economics, vol. 0(Number 1).
    8. Safarzadeh, Soroush & Rasti-Barzoki, Morteza, 2019. "A game theoretic approach for assessing residential energy-efficiency program considering rebound, consumer behavior, and government policies," Applied Energy, Elsevier, vol. 233, pages 44-61.
    9. Rosenow, Jan & Bayer, Edith, 2017. "Costs and benefits of Energy Efficiency Obligations: A review of European programmes," Energy Policy, Elsevier, vol. 107(C), pages 53-62.
    10. Franzò, Simone & Frattini, Federico & Cagno, Enrico & Trianni, Andrea, 2019. "A multi-stakeholder analysis of the economic efficiency of industrial energy efficiency policies: Empirical evidence from ten years of the Italian White Certificate Scheme," Applied Energy, Elsevier, vol. 240(C), pages 424-435.
    11. Ünal, Berat Berkan & Onaygil, Sermin & Acuner, Ebru & Cin, Rabia, 2022. "Application of energy efficiency obligation scheme for electricity distribution companies in Turkey," Energy Policy, Elsevier, vol. 163(C).
    12. de la Rue du Can, Stephane & Pudleiner, David & Pielli, Katrina, 2018. "Energy efficiency as a means to expand energy access: A Uganda roadmap," Energy Policy, Elsevier, vol. 120(C), pages 354-364.
    13. Golmohamadi, Hessam, 2022. "Demand-side management in industrial sector: A review of heavy industries," Renewable and Sustainable Energy Reviews, Elsevier, vol. 156(C).
    14. Syed Asif Raza, 2022. "A bibliometric analysis of pricing models in supply chain," Journal of Revenue and Pricing Management, Palgrave Macmillan, vol. 21(2), pages 228-251, April.
    15. Zhao, Chuan & Guo, Qidong & Jia, Rongwen & Dong, Kangyin & Wang, Kun, 2023. "How does clean energy transition promote original design manufacturers? A three-party evolutionary game analysis," Energy Economics, Elsevier, vol. 126(C).
    16. Safarzadeh, Soroush & Rasti-Barzoki, Morteza, 2019. "A game theoretic approach for pricing policies in a duopolistic supply chain considering energy productivity, industrial rebound effect, and government policies," Energy, Elsevier, vol. 167(C), pages 92-105.
    17. Shrestha, Anil & Kakinaka, Makoto, 2023. "Nexus between renewable energy certificates and electricity prices in India: Evidence from wavelet coherence analysis," Renewable Energy, Elsevier, vol. 204(C), pages 836-847.
    18. Hesselink, Laurens X.W. & Chappin, Emile J.L., 2019. "Adoption of energy efficient technologies by households – Barriers, policies and agent-based modelling studies," Renewable and Sustainable Energy Reviews, Elsevier, vol. 99(C), pages 29-41.
    19. Sahoo, Nihar R. & Mohapatra, Pratap K.J. & Sahoo, Biresh K. & Mahanty, Biswajit, 2017. "Rationality of energy efficiency improvement targets under the PAT scheme in India – A case of thermal power plants," Energy Economics, Elsevier, vol. 66(C), pages 279-289.
    20. Rasti-Barzoki, Morteza & Moon, Ilkyeong, 2021. "A game theoretic approach for analyzing electric and gasoline-based vehicles’ competition in a supply chain under government sustainable strategies: A case study of South Korea," Renewable and Sustainable Energy Reviews, Elsevier, vol. 146(C).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:appene:v:323:y:2022:i:c:s0306261922009084. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/wps/find/journaldescription.cws_home/405891/description#description .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.