Some challenges related to introducing tradable green certificates

Denmark is about to implement a tradable green certificate (TGC) system. This paper presents and discusses some of the obstacles related to using TGCs as a part of the energy policy. The most prominent obstacles are related to managing the coexistence of multiple types of RES-E suppliers with just one policy instrument. The first problem considered relates to the creation of incentives for new RES-E deployment. The second problem relates to unfortunate mixes of RES-E sources. The final problem discussed relates to the problem of production overflow.