Markets for environmental externalities are typically closely related to the markets causing such externalities, whereupon strategic interaction may result. Along these lines, the market for Green Certificates is strongly interwoven in the electricity market as the producers of green electricity...

We formulate an analytic equilibrium model for simultaneously functioning electricity market and a market for Green Certificates. The major focus of the paper is the effect of market power in a Green Certificate system. One of the main results from the analysis is that the certificate system...

We study a policy game between exporting and importing countries in vertically linked industries. In a successive international Cournot oligopoly, we let the governments in the importing and exporting countries use tax instruments strategically to shift rents up or down the vertical value-chain....

Many countries plan to increase the proportion of their electricity supply obtained from renewable sources relative to nonrenewable sources. Recently, the EU has implemented a system of tradable emission permits and many countries have introduced systems of tradable green certificates (TGCs). In...

We consider energy investment, when a choice has to be made between fossil fuel and biomass fired production technologies. A dynamic model is presented to illustrate the effect of the different degrees of input price uncertainty on the choice of technology and the timing of the investment. It is...

The starting point of this paper is a mixed oligopoly market consisting of n privately owned profit maximizing firms and 1 state-owned welfare maximizing firm. Motivated by the trend of mergers and acquisitions in the liberalized electricity markets, and by the debate about public or private...

In this paper we set out to investigate the price and quantity fluctuations in Western Denmark, which took place during the winter season 2002-2003. This was a period, which exhibited critical supply conditions in the Nordic area due to a shortage of hydropower. On average, the market in Western...

The supply shock that hit the Nordic electricity market in 2002-2003 put the market to a severe test. A sharp reduction in inflow to hydro reservoirs during the normally wet months of late autumn pushed electricity prices to unprecedented levels. We take this event as the starting point for...

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...

The general opinion among power industry representatives and electricity market analysts is that the Nordic electricity market has worked well. The purpose of this paper is to explore why the Nordic electricity market has performed well and to consider to what extent the Nordic experiences are...