Green Certificates and Competition in Electricity Markets

A number of studies have analysed how green certificates affect the functioning of electricity markets, both with respect to short-term price formation and long-term investment. One result is that green certificates may undermine the efficiency of energy markets by increasing price volatility. In addition, green certificates may provide market participants with the possibility of exploiting market power by imposing so-called "margin squeezes". In this project we study the importance of green certificates for electricity markets, and analyse how potentially negative effects may be counteracted by suitable regulation.