Tradable Green Certificates as a Policy Instrument? A Discussion on the Case of Poland

Quota obligation schemes based on tradable green certificates have become a popular policy instrument to expand power generation from renewable energy sources (RES). Their application, however, can neither be justified as a first-best response to a market failure, nor, in a second-best sense, as an instrument mitigating distortionary effects of the emissions externality, if an emissions trading system exists that fully covers the energy industry. We study how ancillary reasons, in form of overcoming various barriers for RES use and establishing beneficial side-effects, such as industry development, energy security, and abatement of pollutants not covered under the ETS, apply to the scheme recently introduced in Poland. While setting substantial expansion incentives, an advantage for local industry or job-market development or energy security can hardly be seen. With rising power prices for end consumers and awareness that the extra rents from the schemes mostly accrue to foreign investors and renewable and polluting generators, we expect a negative impact on social acceptance for RES and RES deployment support policies.tradable green certificates, environmental policy, Poland, Resource /Energy Economics and Policy,

Smart Grid Enabling Low Carbon Future Power Systems Towards Prosumers Era

In efforts to meet the targets of carbon emissions reduction in power systems, policy makers formulate measures for facilitating the integration of renewable energy sources and demand side carbon mitigation. Smart grid provides an opportunity for bidirectional communication among policy makers, generators and consumers. With the help of smart meters, increasing number of consumers is able to produce, store, and consume energy, giving them the new role of prosumers. This thesis aims to address how smart grid enables prosumers to be appropriately integrated into energy markets for decarbonising power systems. This thesis firstly proposes a Stackelberg game-theoretic model for dynamic negotiation of policy measures and determining optimal power profiles of generators and consumers in day-ahead market. Simulation results show that the proposed model is capable of saving electricity bills, reducing carbon emissions, and increasing the penetration of renewable energy sources. Secondly, a data-driven prosumer-centric energy scheduling tool is developed by using learning approaches to reduce computational complexity from model-based optimisation. This scheduling tool exploits convolutional neural networks to extract prosumption patterns, and uses scenarios to analyse possible variations of uncertainties caused by the intermittency of renewable energy sources and flexible demand. Case studies confirm that the proposed scheduling tool can accurately predict optimal scheduling decisions under various system scales and uncertain scenarios. Thirdly, a blockchain-based peer-to-peer trading framework is designed to trade energy and carbon allowance. The bidding/selling prices of individual prosumers can directly incentivise the reshaping of prosumption behaviours. Case studies demonstrate the execution of smart contract on the Ethereum blockchain and testify that the proposed trading framework outperforms the centralised trading and aggregator-based trading in terms of regional energy balance and reducing carbon emissions caused by long-distance transmissions

Gas generation and wind power: A review of unlikely allies in the United Kingdom and Ireland

No single solution currently exists to achieve the utopian desire of zero fossil fuel electricity generation. Until such time, it is evident that the energy mix will contain a large variation in stochastic and intermittent sources of renewable energy such as wind power. The increasing prominence of wind power in pursuit of legally binding European energy targets enables policy makers and conventional generating companies to plan for the unique challenges such a natural resource presents. This drive for wind has been highly beneficial in terms of security of energy supply and reducing greenhouse gas emissions. However, it has created an unusual ally in natural gas. This paper outlines the suitability and challenges faced by gas generating units in their utilisation as key assets for renewable energy integration and the transition to a low carbon future. The Single Electricity Market of the Republic of Ireland and Northern Ireland and the British Electricity Transmission Trading Agreement Market are the backdrop to this analysis. Both of these energy markets have a reliance on gas generation matching the proliferation of wind power. The unlikely and mostly ignored relationship between natural gas generation and wind power due to policy decisions and market forces is the necessity of gas to act as a bridging fuel. This review finds gas generation to be crucially important to the continued growth of renewable energy. Additionally, it is suggested that power market design should adequately reward the flexibility required to securely operate a power system with high penetrations of renewable energy, which in most cases is provided by gas generation

Power Shift: Germany\u27s Energy Transition

This project is an analysis of the German energy transition, called the Energiewende, and the dual power shift that is underway in the country’s electric sector. It is both a physical shift from conventional fossil fuels to renewable energy, as well as a socio-political shift in power from centralized utilities to community ownership of energy. The project examines three policy mechanisms — the feed-in tariff, emissions trading, and auctions — through the lens of ordoliberalism, a German variant of economic liberalism that believes in state intervention to maximize fair market competition. Using qualitative research of Anglophone sources, this project draws most heavily upon the book Energy Democracy: Germany’s Energiewende to Renewables by Craig Morris and Arne Jungjohann. The project argues that the power shift in Germany, while vastly changing the ownership and diversity of electricity sources, is not truly democratizing the energy sector

Smart grid enabling low carbon future power systems towards prosumers era

In efforts to meet the targets of carbon emissions reduction in power systems, policy makers formulate measures for facilitating the integration of renewable energy sources and demand side carbon mitigation. Smart grid provides an opportunity for bidirectional communication among policy makers, generators and consumers. With the help of smart meters, increasing number of consumers is able to produce, store, and consume energy, giving them the new role of prosumers. This thesis aims to address how smart grid enables prosumers to be appropriately integrated into energy markets for decarbonising power systems. This thesis firstly proposes a Stackelberg game-theoretic model for dynamic negotiation of policy measures and determining optimal power profiles of generators and consumers in day-ahead market. Simulation results show that the proposed model is capable of saving electricity bills, reducing carbon emissions, and increasing the penetration of renewable energy sources. Secondly, a data-driven prosumer-centric energy scheduling tool is developed by using learning approaches to reduce computational complexity from model-based optimisation. This scheduling tool exploits convolutional neural networks to extract prosumption patterns, and uses scenarios to analyse possible variations of uncertainties caused by the intermittency of renewable energy sources and flexible demand. Case studies confirm that the proposed scheduling tool can accurately predict optimal scheduling decisions under various system scales and uncertain scenarios. Thirdly, a blockchain-based peer-to-peer trading framework is designed to trade energy and carbon allowance. The bidding/selling prices of individual prosumers can directly incentivise the reshaping of prosumption behaviours. Case studies demonstrate the execution of smart contract on the Ethereum blockchain and testify that the proposed trading framework outperforms the centralised trading and aggregator-based trading in terms of regional energy balance and reducing carbon emissions caused by long-distance transmissions

The Complexity Dilemma in Policy Market Design

Regulators are increasingly pursuing their policy objectives by creating markets. To create a policy market, regulators require firms to procure a product that is socially useful but that confers little direct private benefit to the acquiring party. Examples of policy markets include pollutant emissions trading programs, renewable energy credit markets, and electricity capacity markets. Existing scholarship has tended to analyze policy markets simply as market-based regulation. Although not inaccurate, such inquiries are necessarily incomplete because they do not focus on the distinctive traits of policy markets. Policy markets are neither typical regulations nor typical markets. Concentrating on policy markets as a distinctive type of market brings to light common characteristics of such markets, which in turn generates insights into how they can be used more effectively to implement policy. In particular, this Article focuses on a recurring fundamental challenge in policy market design: managing complexity. Typical markets manage complexity through market forces. As a regulatory creation, however, policy markets require regulators to manage their complexity. This poses what we call the complexity dilemma, which requires regulators to balance strong pressures both toward and away from complexity. The central argument of this Article is that although policy markets are an important part of a regulator’s toolkit, they are also subject to complexity that limits their usefulness. Understanding the complexity dilemma and its crucial role in policy market design forms an essential step toward progress in improving the design and function of these markets

Policy additionality for UK emissions trading projects: a report for the Department of Trade & Industry

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The EU Climate Policy after the Climate Package and Copenhagen - Promises and Limits. Egmont Paper No. 38, September 2010

This paper aims to provide a global assessment of the European Union’s climate change policy after the Climate Package and Copenhagen. In order to do so, the paper firstly describes the climate threats for Europe as well as the birth and objectives of the EU climate and energy package adopted in 2009. Then, the different components of this package are highlighted: the EU Emissions Trading Scheme (ETS), the obligations of the non-ETS sectors, the 20% renewable energy objective, the promotion of carbon capture and storage and the framework on environmental subsidies. Thirdly, the other EU climate policy legislations are examined, comprising: energy efficiency, the GHG emissions of cars, the GHG emissions of fuels, and the Strategic Energy Technology Plan (SET-Plan). Next, adaptation to climate change is discussed, before examining the international aspects of the EU actions after Copenhagen. As a way of conclusion, the paper assesses the EU climate policy throughout four main questions: What has the EU achieved until now? What will be the costs? What will be the impact on the European Union? And, is the EU action sufficient

Optimisation of electricity energy markets and assessment of CO2 trading on their structure : a stochastic analysis of the greek power sector

Power production was traditionally dominated by monopolies. After a long period of research and organisational advances in international level, electricity markets have been deregulated allowing customers to choose their provider and new producers to compete the former Public Power Companies. Vast changes have been made in the European legal framework but still, the experience gathered is not sufficient to derive safe conclusions regarding the efficiency and reliability of deregulation. Furthermore, emissions' trading progressively becomes a reality in many respects, compliance with Kyoto protocol's targets is a necessity, and stability of the national grid's operation is a constraint of vital importance. Consequently, the production of electricity should not rely solely in conventional energy sources neither in renewable ones but on a mixed structure. Finding this optimal mix is the primary objective of the study. A computational tool has been created, that simulates and optimises the future electricity generation structure based on existing as well as on emerging technologies. The results focus on the Greek Power Sector and indicate a gradual decreasing of anticipated CO2 emissions while the socioeconomic constraints and reliability requirements of the system are met. Policy interventions are pointed out based on the numerical results of the model. (C) 2010 Elsevier Ltd. All rights reserved