Renewable portfolio standard and certificates trading on the Dutch electricity market Online publication date: Wed, 30-Jul-2003
by Jens Drillisch
International Journal of Global Energy Issues (IJGEI), Vol. 15, No. 1/2, 2001
Abstract: In 1996, the Dutch distribution companies signed a voluntary agreement to reduce CO 2 emissions. As one element of the agreement, a renewable portfolio standard (RPS) for the electricity distribution companies with certificates trading was introduced (groen label system). The analysis reveals that the total volume of the obligation (3%) can be considered as modest. In addition, it seems more appropriate to replace the distribution companies' current monopoly for the issuing of the certificates by an independent institution. A flexibility mechanism (e.g., a certificates' banking system), which prevents high volatilities in the certificates' market price, and a clear sanction mechanism are needed. A drawback of the current Dutch system is the discriminatory financing of the RPS, which is only provided by MAP tariff customers. Nevertheless, the Dutch RPS may induce an efficient allocation of financial means to support renewable energies. It provides valuable experiences in the functioning of the new system, from which other countries may gain.
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