Gain without pain: an international case for a tradable green certificates system to foster renewable energy development in Ukraine
-
DOIhttp://dx.doi.org/10.21511/ppm.17(3).2019.37
-
Article InfoVolume 17 2019, Issue #3, pp. 464-476
- Cited by
- 870 Views
-
172 Downloads
This work is licensed under a
Creative Commons Attribution 4.0 International License
This paper elaborates on the theoretical and methodological fundamentals of a tradable green certificates system to foster renewable energy development in Ukraine. It proposes a management mechanism premised on the classical market model of tradable green certificates aiming at increasing the share of electricity from renewable energy sources in the country’s energy mix. Organizational stages of the mechanism formation at the national level and a methodological approach to assess green electricity generation cost are developed. The modeling has shown that the annual increase in the cap for green electricity consumption by 1% will raise the electricity tariff by 3%, which is not a significant financial burden for consumers. The proposed changes in the tradable green certificates system can be an effective management tool to achieve the required amount of electricity from renewable energy sources in the country’s total electricity consumption and to foster the development of the Ukrainian renewable energy sector.
- Keywords
-
JEL Classification (Paper profile tab)Q20, Q21, Q28
-
References38
-
Tables3
-
Figures1
-
- Figure 1. The wholesale and retail electricity markets operating scheme with combination of electricity sold by the feed-in tariff and a TGCS
-
- Table 1. The LCOE and the GC price for different types of RE plants in Ukraine
- Table 2. Number of GCs that producers of electricity from different types of RES would have obtained per 1 MWh and cost of electricity generation from RES
- Table 3. Projected annual amount of electricity generation by the operating RE plants; projected annual amount of electricity generation supported by credit GCs; and the average weighted number of certificates in circulation in the reporting year
-
- Abolhosseini, S., & Heshmati, A. (2014). The main support mechanisms to finance renewable energy development.
- Baker Tilly. (2015). Report on the assessment of impact of feed-in tariff change on investment attractiveness of renewable energy projects (13 p.).
- Cavallaro, C., Pearce, J., & Sidortsov, R. (2017). Decarbonizing the boardroom? Aligning electric utility executive compensation with climate change incentives. Energy Research and Social Science, 37.
- Damodaran, A. (2018). Country default spreads and risk premiums.
- Devenyi, R., & Mladenova, I. (2012). International markets for renewable energy certificates.
- Engineering company “Rentehno”. (2016). Technical and economic characteristics of solar power plant with a total installed capacity of 1 MW: information letter No. 11/04-2.
- Hanne, S. (2010). A green certificate market in Norway and its implications for the market participants.
- Holt, E., & Bird, L. (2005). Emerging markets for renewable energy certificates: opportunities and challenges.
- International Atomic Energy Agency. (2015). Climate change and nuclear power.
- International Energy Agency. (2015). Projected costs of generating electricity.
- International Atomic Energy Agency. (2010). World Energy Outlook.
- Imbrescu, C., & Codruta, P. (2013). The accounting treatment of green certificates. Lucrări Științifice, 18, 119-126.
- International Renewable Energy Agency. (2012). Summary for policy makers: renewable power generation costs.
- Khatib, H. (2010). The World Energy Congress 2010 – A review. Energy Policy, 39, 2213-2215.
- Kubatko, O., & Kubatko, O. (2017). Economic estimations of pollution related cancer and nerves morbidity. International Journal of Ecology & Development, 32(1), 33-43.
- Kubatko, O., & Kubatko, O. (2019). Economic estimations of air pollution health nexus. Environment. Development and Sustainability, 21(3), 1507-1517.
- Kurbatova, T. (2018). Economic benefits for producers of biogas from cattle manure within energy co-operatives in Ukraine. International Journal of Sustainable Energy Planning and Management, 18, 69-80.
- Lukosevicius, V., & Werring, L. (2011). Building for sustainable energy regulation in Eastern Europe and Central Asia (113 p.). ERRA, Budapest,
- Moraru, D. (2015). The need for win regulations regarding the harmonization of advantages for the renewable energy sector and the concerns about the environment. Management & Marketing, Challenges for the Knowledge Society, 10(1), 61-71.
- National Bank of Ukraine. (2019). Official exchange rate of hryvnia against foreign currencies as of February 1, 2019.
- National Commission for State Regulation of Energy and Public Utilities (1998). Resolution: on the procedure for determining the classes of consumers No. 1052, 3.08.1998.
- National Commission for State Regulation of Energy and Public Utilities (2015). Resolution on the establishment of tariffs for electricity sold to the population No. 220, 26.02.2015.
- National Commission for State Regulation of Energy and Public Utilities (2019). Report on the results NCSREPU activity in 2018: decree No. 440, 29.03.2019.
- National Renewable Energy Laboratory (2014). Status and trends in the U.S. voluntary green power market.
- National Conference of State Legislators. (2019). State Renewable Portfolio Standards and Goals.
- Nilsson, M., & Sundqvist, T. (2007). Using the market at a cost: How the introduction of green certificates in Sweden led to market inefficiencies. Utility Policy, 15(1), 49-59.
- Papież, M., Śmiech, S., & Frodyma, K. (2018). Determinants of renewable energy development in the EU countries. A 20-year perspective. Renewable and Sustainable Energy Reviews, 91, 918-934.
- REN21. (2017). Renewables. Global Status Report.
- Schaeffer, G., Boots, M., Martens, J., & Voogt, M. (1999). Tradable green certificates: a new market-based incentive scheme for renewable energy.
- Sineviciene, L., Kubatko, O., Derykolenko, O., & Kubatko, O. (2018). The impact of economic performance on environmental quality in developing countries. International Journal of Environmental Technology and Management, 21(5-6), 222-237.
- Sotnyk, I. (2016). Energy efficiency of Ukrainian economy: problems and prospects of achievement with the help of ESCOs. Actual Problems of Economics, 1, 192-199.
- Sovacool, B., Sidortsov, R., & Jones, B. (2014). Energy security, equality, and justice (240 p.). Routledge.
- State Statistics Service of Ukraine. (2019). Energy balance of Ukraine for 2018.
- The Verkhovna Rada Ukraine. (1997). Law of Ukraine “On Electric Power Industry”, No. 575/97-ВР.
- Ukraine Sustainable Energy Lending Facility. (2014). Програма фінансування альтернативної енергетики України (USELF): посібник для девелоперів [Prohrama finansuvannia alternatyvnoi enerhetyky Ukrainy (USELF): posibnyk dlia developeriv].
- Ukrainian Wind Energy Association. (2016). Technical and economic characteristics of wind power plant with a total installed capacity of 1 MW: information letter No. 34.
- Visser, E., & Held, A. (2014). Methodologies for estimating Levelised Cost of Electricity (LCOE).
- Wholesale Market of Electricity in Ukraine (2019). Analysis of prices on the WEM from September 1, 2018 till February, 1, 2019.