Advanced

Market behaviour and the to-trade-or-not-to-trade dilemma in 'Tradable White Certificate' schemes

Mundaca, Luis LU ; Neij, Lena LU ; Labanca, Nicola; Duplessis, Bruno and Pagliano, Lorenzo (2008) In Energy Efficiency 1(4). p.323-347
Abstract
This paper provides an empirical analysis of

market behaviour under ‘Tradable White Certificate’

(TWC) schemes. It focuses on the entire set of ‘flexibilities’

granted to obliged parties to meet a mandatory

energy-saving target cost-effectively, i.e. range eligible

measures, eligible end-use sectors, banking provision,

market engagement of non-obliged parties, and trading as

such. We found that market behaviour responds to the

unique design and context in which TWC schemes are

implemented. Contrary to expectations, limited trading is

observed so the ‘to-trade-or-not-to-trade’ dilemma is

further analysed. A real TWC market has emerged... (More)
This paper provides an empirical analysis of

market behaviour under ‘Tradable White Certificate’

(TWC) schemes. It focuses on the entire set of ‘flexibilities’

granted to obliged parties to meet a mandatory

energy-saving target cost-effectively, i.e. range eligible

measures, eligible end-use sectors, banking provision,

market engagement of non-obliged parties, and trading as

such. We found that market behaviour responds to the

unique design and context in which TWC schemes are

implemented. Contrary to expectations, limited trading is

observed so the ‘to-trade-or-not-to-trade’ dilemma is

further analysed. A real TWC market has emerged only

in Italy, where obliged parties (i.e. energy distributors)

show preference towards ‘to-trade’. In Great Britain and

France, an autarky compliance approach is identified,

with obliged parties (i.e. energy suppliers) showing preference

towards ‘not-to-trade’ driven by, among many

factors, commercial benefits of non-trading (e.g.

increased competitiveness). At the same time, results

show clearer indications of cost-effectiveness for Great

Britain than for Italy. In general, high energy-saving effectiveness

is observed, but low ambitious saving targets

and pitfalls in the regulatory framework need to be

considered to further develop TWC markets. Initial

market and institutional conditions strongly suggest that

trading might not be an immediate outcome. Ambitious

energy targets can trigger a more dynamic usage of all

flexibilities by eligible parties and thus active behaviour

in TWC markets. (Less)
Please use this url to cite or link to this publication:
author
organization
publishing date
type
Contribution to journal
publication status
published
subject
keywords
Tradable white certificate schemes . Market behaviour . Commercial benefits of nontrading. Ex-post policy evaluation
in
Energy Efficiency
volume
1
issue
4
pages
323 - 347
publisher
Springer
external identifiers
  • scopus:54349109064
ISSN
1570-646X
language
English
LU publication?
yes
id
667f638f-486c-40a8-94ed-5e283887d838 (old id 1278565)
date added to LUP
2009-01-19 13:13:53
date last changed
2017-10-22 03:57:52
@article{667f638f-486c-40a8-94ed-5e283887d838,
  abstract     = {This paper provides an empirical analysis of<br/><br>
market behaviour under ‘Tradable White Certificate’<br/><br>
(TWC) schemes. It focuses on the entire set of ‘flexibilities’<br/><br>
granted to obliged parties to meet a mandatory<br/><br>
energy-saving target cost-effectively, i.e. range eligible<br/><br>
measures, eligible end-use sectors, banking provision,<br/><br>
market engagement of non-obliged parties, and trading as<br/><br>
such. We found that market behaviour responds to the<br/><br>
unique design and context in which TWC schemes are<br/><br>
implemented. Contrary to expectations, limited trading is<br/><br>
observed so the ‘to-trade-or-not-to-trade’ dilemma is<br/><br>
further analysed. A real TWC market has emerged only<br/><br>
in Italy, where obliged parties (i.e. energy distributors)<br/><br>
show preference towards ‘to-trade’. In Great Britain and<br/><br>
France, an autarky compliance approach is identified,<br/><br>
with obliged parties (i.e. energy suppliers) showing preference<br/><br>
towards ‘not-to-trade’ driven by, among many<br/><br>
factors, commercial benefits of non-trading (e.g.<br/><br>
increased competitiveness). At the same time, results<br/><br>
show clearer indications of cost-effectiveness for Great<br/><br>
Britain than for Italy. In general, high energy-saving effectiveness<br/><br>
is observed, but low ambitious saving targets<br/><br>
and pitfalls in the regulatory framework need to be<br/><br>
considered to further develop TWC markets. Initial<br/><br>
market and institutional conditions strongly suggest that<br/><br>
trading might not be an immediate outcome. Ambitious<br/><br>
energy targets can trigger a more dynamic usage of all<br/><br>
flexibilities by eligible parties and thus active behaviour<br/><br>
in TWC markets.},
  author       = {Mundaca, Luis and Neij, Lena and Labanca, Nicola and Duplessis, Bruno and Pagliano, Lorenzo},
  issn         = {1570-646X},
  keyword      = {Tradable white certificate schemes .
Market behaviour . Commercial benefits of nontrading. Ex-post policy evaluation},
  language     = {eng},
  number       = {4},
  pages        = {323--347},
  publisher    = {Springer},
  series       = {Energy Efficiency},
  title        = {Market behaviour and the to-trade-or-not-to-trade dilemma in 'Tradable White Certificate' schemes},
  volume       = {1},
  year         = {2008},
}