Mutual Influences Among the Electricity Market, Carbon Emission Market, and Renewable Energy Certificate Market

With the advancement and development of the electricity market (EM), carbon emission market (CEM), and renewable energy certificate market (RECM), promoting the integration and growth of the EM alongside carbon emission trading, renewable energy certificate trading, and other related markets is beco...

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Bibliographic Details
Published in:Energies (Basel) 2024-12, Vol.17 (23), p.6139
Main Authors: Zou, Hongbo, Luo, Yuhong, Wen, Fushuan, Chen, Jiehao, Yang, Jinlong, Yang, Changhua
Format: Article
Language:English
Subjects:
Alternative energy sources
Bayesian time-varying stochastic volatility vector autoregression model (TVP-SV-VAR)
Carbon
carbon emission market
Commodities industry
Costs
Electric utilities
Electricity
electricity market
Emissions trading
Energy trading
Equilibrium
Prices
Profit margins
Quotas
Regression analysis
renewable energy certificate market
Renewable resources
Volatility
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Summary:With the advancement and development of the electricity market (EM), carbon emission market (CEM), and renewable energy certificate market (RECM), promoting the integration and growth of the EM alongside carbon emission trading, renewable energy certificate trading, and other related markets is becoming increasingly important for high-quality development of the power industry. Analyzing the intrinsic connections among these three types of markets can facilitate their coordinated development. In this study, we selected monthly data on European Union (EU) carbon emission futures, French electricity trading prices, and the price of Guarantees of Origin (GO) in France from March 2019 to March 2024 and utilized the Bayesian time-varying stochastic volatility vector autoregression model (TVP-SV-VAR) with time-varying parameters to effectively capture the dynamic changes among the three markets and to analyze the relationships and characteristics of the EM, CEM, and RECM across different historical contexts. Simulation results showed that the influences of the EM and CEM on the RECM were relatively low, with more pronounced short-term effects and relatively stable medium- and long-term effects. In contrast, the influences of the CEM and RECM on the EM were significant, with more pronounced short-term effects and stable medium- and long-term effects. The influences of the EM and RECM on the CEM were significant in the short term.
ISSN:1996-1073
1996-1073
DOI:10.3390/en17236139