Renewable Electricity in a Liberalised Market – The Concept of Green Certificates

Abstract

Liberalisation of energy markets in Europe has altered many aspects of energy policy. In order to realise environmental targets in a liberalising market, the design and implementation of policy measures and incentive schemes have to be in accordance with free market principles. Current incentive schemes, most of which have been established in the pre-liberalisation situation, might not be able to fulfil this requirement (European Commission, 1999). This emphasises the need for new policy measures that are more in coherence with the new market. Such measures are discussed, thereby focussing on the green certificate system.