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Performance of markets for European renewable energy certificates

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  • Hulshof, Daan
  • Jepma, Catrinus
  • Mulder, Machiel

Abstract

To address the problem of information asymmetry in renewable electricity markets, European governments have introduced certification schemes. While certification appears to be an increasingly important trade mechanism for renewable electricity, it is unclear to what extent certificate markets are functioning properly. In addition, countries have chosen very different designs for their certification schemes. In order to assess the performance of markets for Guarantee of Origin certificates in twenty European countries, we construct four market performance indicators and analyse their development over 2001–2016: the churn rate, price volatility, the certification rate and the expiration rate. We also investigate the relationship between market performance and two design features of certification schemes: the public/private nature of the certifier and the presence of an international standard. We find that, despite increasing shares of renewable electricity are being certified, certificate markets suffer from poor liquidity and very volatile prices. In addition, we conclude that adopting an international standard fosters the development of certificate systems.

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  • Hulshof, Daan & Jepma, Catrinus & Mulder, Machiel, 2019. "Performance of markets for European renewable energy certificates," Energy Policy, Elsevier, vol. 128(C), pages 697-710.
    • Handle: RePEc:eee:enepol:v:128:y:2019:i:c:p:697-710
    DOI: 10.1016/j.enpol.2019.01.051
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    14. El Khoury, Rim & Alshater, Muneer M. & Li, Yanshuang & Xiong, Xiong, 2024. "Quantile time-frequency connectedness among G7 stock markets and clean energy markets," The Quarterly Review of Economics and Finance, Elsevier, vol. 93(C), pages 71-90.
    15. Huang, Pei & Copertaro, Benedetta & Zhang, Xingxing & Shen, Jingchun & Löfgren, Isabelle & Rönnelid, Mats & Fahlen, Jan & Andersson, Dan & Svanfeldt, Mikael, 2020. "A review of data centers as prosumers in district energy systems: Renewable energy integration and waste heat reuse for district heating," Applied Energy, Elsevier, vol. 258(C).
    16. Shiwei Yu & Chengzhu Gong & Weidong Jia & Li Ma, 2024. "A tripartite evolutionary game model for tradable green certificate transaction strategies in China," Operational Research, Springer, vol. 24(4), pages 1-29, December.
    17. Solangi, Yasir Ahmed & Longsheng, Cheng & Shah, Syed Ahsan Ali, 2021. "Assessing and overcoming the renewable energy barriers for sustainable development in Pakistan: An integrated AHP and fuzzy TOPSIS approach," Renewable Energy, Elsevier, vol. 173(C), pages 209-222.
    18. Hulshof, Daan & Mulder, Machiel, 2020. "The impact of renewable energy use on firm profit," Energy Economics, Elsevier, vol. 92(C).

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