Interactions between measures for the support of electricity from renewable energy sources and CO2 mitigation

As Europe wants to move towards a secure, sustainable and competitive energy market, it has taken action, amongst other, to support electricity from renewable energy sources (RES-E) and to mitigate CO2 emissions. This paper first qualitatively discusses price- and quantity-based measures for RES-E deployment as well as CO2 mitigation. Next, a simulation model is developed to quantitatively discuss the effects of a tradable green certificate system, a premium mechanism, a tradable CO2 allowance system and a CO2 tax on both RES-E deployment and CO2 mitigation. A three-regional model implementation representing the Benelux, France and Germany is used. In a first step of simulations, all measures are implemented separately. In a second step, combinations of both RES-E supporting and CO2 mitigating measures are simulated and discussed. Significant indirect effects are demonstrated, especially for RES-E supporting measures on the reduction of CO2 emissions. Interactions between different measures show that the price level of quantity-based measures can be strongly influenced.