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This paper analyses which sources of low-carbon hydrogen for the Northwest European market are most competitive, taking into account costs of local production, conversion and transport. Production costs of electrolysis are strongly affected by local renewable electricity costs and capacity factors. Transport costs are the lowest by pipelines for distances under 10,000 km, with costs linearly increasing with distance. For larger distances, transport as ammonia is more efficient, with less relation to distance, despite higher conversion costs. The most competitive low-carbon hydrogen supply to the Northwest European market appears to be local Steam Methane Reforming with Carbon Capture and Storage when international gas prices return back to historical levels. When gas prices, however, remain high, then import from Morocco with electrolysis directly connected to offshore wind generation is found to be the most competitive source of low-carbon hydrogen. These conclusions are robust for various assumptions on costs and capacity factors.

he transition from high- to lower-carbon production systems increasingly creates regulatory and market risks for high-emitting firms. We test to what extent equity market investors demand a premium to compensate for such risks and thus might raise firms' cost of equity capital (CoE). Using data for 1,897 firms spanning 50 countries over the years 2008–2016, we find a distinct and robust positive impact of carbon intensity (carbon emissions per unit of output) on CoE: On average, a standard deviation higher (sector-adjusted) carbon intensity is associated with a CoE premium of 6 (9) basis points or 1.7% (2.6%). This effect is primarily explained by systematic risk factors: high-emitting assets are significantly more sensitive to economy-wide fluctuations than low-emitting ones. The CoE impact of carbon intensity is more pronounced in high-emitting sectors, EU countries, and firms subject to carbon pricing regulation. Our results suggest that carbon emission reduction might serve as a valuable risk mitigation strategy.

In het debat over kernenergie wordt, behalve over de veiligheids- en milieueffecten, vaak gesproken over de hoge investeringskosten. Maar hoe ziet het totale economische plaatje van kernenergie in de Nederlandse elektriciteitsmarkt eruit? En hoe verandert dat wanneer de vraag naar elektriciteit significant toeneemt?

The most efficient way to coordinate various activities within a supply chain is to make use of markets. Markets can be defined as institutional solutions which enable economic agents to obtain inputs from other agents for their production or consumption activities or to supply their outputs to other agents. The more developed these energy markets are, the less economic agents need to realize the required inputs within their organization themselves. This chapter first discusses the various dimensions of markets (Sect. 3.2), before going into the main characteristics of the markets for coal, oil, gas, electricity and heat (Sect. 3.3). This chapter concludes by introducing the role of governments in organizing these markets, both as an active player in the supply chain and as regulator (Sect. 3.4).

A fundamental characteristic of energy markets is their vulnerability to the presence of market power, which is that one or more suppliers can influence market prices. This vulnerability is related to a number of factors: low price sensitivity of demand, inflexibility of supply, limited abilities to store energy, and restricted capacities of the transportation network. These characteristics are discussed in Sect. 9.3. First, Sect. 9.2 discusses the general conditions and welfare consequences of the presence of firms using market power. Afterwards, Sect. 9.4 discusses how the presence and use of market power in energy markets can be monitored. Finally, Sect. 9.5 discusses a number of regulatory options to address the market failure of market power.

Knowledge of the physical characteristics of energy and the various types of activities within energy supply chains is necessary before being able to analyse the optimal regulation of energy markets. Therefore, this chapter introduces the various types of energy carriers, distinguishing primary from secondary carriers and non-renewable from renewable sources (Sect. 2.2). This chapter also discusses the concept of the energy balance, which describes the origins of supply and the destinations of use of energy within an economy. The chapter proceeds by describing the various layers in the supply chains, starting from exploration of energy resources, production, conversion, storage, transport until consumption of energy (Sect. 2.3). This chapter concludes by discussing how these energy supply chains of activities can be organized (Sect. 2.4).

The analytical framework for the economic analysis of regulating energy markets is derived from microeconomics. Section 4.2 discusses the basic microeconomic concepts and the theoretical benchmark of perfectly functioning markets. It shows that in such markets optimal welfare is achieved, which means that the allocation of goods is done in the best possible way. This chapter also explains the conditions for having perfectly functioning markets and that, in practice, almost never all conditions are satisfied. Although energy markets have become fairly mature in most regions, many of them suffer from market failures. Besides discussing the various types of market failures, attention is paid to the possibility of regulatory failures. Section 4.3 discusses how costs of and benefits of regulatory measures can be assessed.

When international trade in energy is restricted, several negative welfare effects may occur. Removing trade barriers, therefore, can contribute to the functioning of energy markets. This chapter first discusses the negative effects of international trade barriers on productive efficiency (i.e. costs per unit of production), allocative efficiency (i.e. intensity of competition and international differences in prices) and security of supply (Sect. 10.3). Then, Sect. 10.4 discusses what kind of international trade barriers exist in energy markets and by what kind of regulatory measures these barriers may be reduced. Among others, attention is paid to both network extension and a higher utilization of existing infrastructure. Finally, this Chapter analyses the implications of an improved international integration of markets for the effectiveness of national energy policies (Sect. 10.5).

Well-functioning markets result, by definition, in efficient market outcomes, but this does not mean that the outcomes are always socially accepted as the optimal outcomes. This chapter shows that there are many possible efficient market outcomes depending on the initial allocation of endowments. In Sect. 11.2, it will become clear that the concepts of allocative efficiency and distribution have different meanings. The other two sections of this chapter discuss regulatory measures to redistribute welfare. Section 11.3 addresses the question how resource rents can be redistributed within society, while Sect. 11.4 discusses the issues of energy poverty and fairness and what types of regulatory measures can be used to make the distribution of welfare more aligned with social objectives.

This textbook has analysed the characteristics of energy markets and how the functioning of these markets can be improved through regulation. This analysis has departed from the public-interest approach which provides the analytical framework in order to search for optimal regulatory measures to address market failures. This final chapter summarizes the lessons learned regarding the key conditions for well-functioning energy markets and by what kind of regulatory measures governments may help to improve the functioning of these markets. Section 12.2 discusses the fundamental components of regulating energy markets and realizing energy transition, while Sect. 12.3 discusses the economic criteria for defining the optimal regulatory measures. Section 12.4 concludes this textbook by applying the lessons learned to the analysis of the optimal policies to promote energy transition.

This paper investigates to which extent the Dutch feed-in premium scheme for on-shore wind projects has resulted in windfall profits during 2003-2018, a period in which the design of the scheme changed several times. Using Monte Carlo simulations, for 2003, 2009 and 2018, years that represent distinct scheme designs, we estimate the distributions of the required subsidy across virtually all potential on-shore wind projects, and compare them to the granted subsidies. We find that the average windfall profits of randomly drawn projects from the pool of potential investments have decreased over time, largely as a result of differentiating in the subsidy level among projects on the basis of the wind speed at the turbine's location. Despite these improvements, actual investments still experience substantial windfall profits, implying that investors successfully seek out projects that yield the highest windfall profits. Overall, the results imply that accounting for heterogeneity by differentiating in the subsidy level contributes to mitigating windfall profits.

The use of internal carbon prices (ICPs) is a practice by which companies voluntarily attach a hypothetical cost to their carbon emissions to help prioritize low-carbon investment projects. We find that ICP use is driven by external carbon constraints and by firms' exposure to formal carbon pricing systems, next to various firm and society characteristics. The size of the gap between countries' actual and intended emissions alone, without a translation into stringent climate policies, does not play a role. These findings inform policymakers and investors about when and why firms account for future carbon constraints internally. A key societal risk is that corporate investments are not sufficiently directed at a future low-carbon economy. Stringent climate policies that provide predictable pathways appear to help firms mitigate the misalignment of their investments by using ICPs and thereby contribute to a less erratic and less expensive transition of the energy system. Publisher PDF

In the regulation of network tariffs, the compensation for the opportunity costs of capital through the Weighted Average Costs of Capital (WACC) plays a crucial role. Determining the appropriate level for the WACC is, though, problematic because of the uncertainty about the future conditions in capital markets. When the WACC is set above the future opportunity costs of capital, consumers will pay too much, while when the WACC is below that level, network operators may be unable to finance investments affecting quality of network services. In this paper, we explicitly take this uncertainty into account when we determine the optimal WACC for the tariff regulation of an electricity network. By trading off consumer surplus and expected disruption costs in the electricity grid, we conclude that from a social-welfare perspective in most cases the optimal WACC in tariff regulation is above the historical mean costs of capital. Only in case of high uncertainty about the true costs of capital while network operators are able to quickly increase investment levels, the optimal WACC is below the historical mean because then it is less likely that the WACC is constantly insufficient to cover actual costs of capital. However, when network operators cannot quickly increase investment levels the optimal WACC is always above the historical mean cost of capital.

In the last decade large data sets have become available, both in terms of the number of time series and with higher frequencies (weekly, daily and even higher). All series may suffer from seasonality, which hides other important fluctuations. Therefore time series are typically seasonally adjusted. However, standard seasonal adjustment methods cannot handle series with higher than monthly frequencies. Recently, Abeln et al. (2019) presented CAMPLET, a new seasonal adjustment method, which does not produce revisions when new observations become available. The aim of this paper is to show the attractiveness of CAMPLET for seasonal adjustment of daily time series. We apply CAMPLET to daily data on the gas system in the Netherlands.

In the last decade large data sets have become available, both in terms of the number of time series and with higher frequencies (weekly, daily and even higher). All series may suffer from seasonality, which hides other important fluctuations. Therefore time series are typically seasonally adjusted. However, standard seasonal adjustment methods cannot handle series with higher than monthly frequencies. Recently, Abeln et al. (2019) presented CAMPLET, a new seasonal adjustment method, which does not produce revisions when new observations become available. The aim of this paper is to show the attractiveness of CAMPLET for seasonal adjustment of daily time series. We apply CAMPLET to daily data on the gas system in the Netherlands.

This paper analyzes the economic potential of Power-to-Gas (PtG) as a source of flexibility in electricity markets with both high shares of renewables and high external demand for hydrogen. The contribution of this paper is that it develops and applies a short-term (hourly) partial equilibrium model of integrated electricity and hydrogen markets, including markets for green certificates, while using a welfare-economic framework to assess the market outcomes. We find that strongly increasing the share of renewable electricity makes electricity prices much more volatile, while the presence of PtG reduces this price volatility. However, a large demand for hydrogen from outside the electricity sector reduces the impact of PtG on the volatility of electricity prices. In a scenario with a high external hydrogen demand, PtG can deliver positive benefits for some groups as it can provide hydrogen at lower costs than Steam Methane Reforming (SMR) during hours when electricity prices are low, but these positive welfare effects are outweighed by the fixed costs of PtG assets plus the costs of replacing a less expensive energy carrier (natural gas) with a more expensive one (hydrogen). Investments in PtG are profitable from a social-welfare perspective when the induced reduction in carbon emissions is valued at 150–750 euro/ton. Hence, at lower carbon prices, PtG can only become a valuable provider of flexibility when installation costs are significantly reduced and conversion efficiencies of electrolysers increased.

Passenger car transportation is a major contributor to global carbon emissions. Despite a range of policy measures, the European passenger car fleet remains largely running on fossil fuels. It is questionable whether the lack of emission reductions can be attributed to a lack of consumer preferences for low-emission cars because consumers may have imperfect information about cars’ emissions and the availability of clean cars remains limited. This paper investigates the preferences of consumers for emission reductions in passenger car transport. We estimate the willingness to pay of passenger car buyers for $$\hbox {CO}_2$$CO2 emission reductions by means of a choice experiment amongst a sample of 1471 individuals that represents the Dutch adult population with the intention to buy a car. The main results are that the mean willingness to pay for emission reductions equals €199 per tonne, and that the majority of individuals is willing to pay more than the current market premium for two selected hybrid types. These results suggest there is a large market potential for emission reductions in passenger car transport. Our findings imply that providing consumers with trustworthy information can be considered a key policy tool for achieving emission reductions in passenger car transport.

In Europe, gas market mergers aim at reducing restrictions on gas wholesale markets. Market mergers also allow network users to book transport capacity at different gas transmission system operators (TSOs), which may give rise to inter-TSO competition. Our theoretical analysis reveals the incentive for TSOs, operating under a revenue-cap regulation in merged markets, to charge lower tariffs at borders where different TSOs offer capacity, compared to borders where only one TSO offers capacity. This incentive does not directly result from revenue-cap regulation but is due to efficiency benchmarking. We test this hypothesis by applying a panel data analysis to tariffs charged at German border points between 2015 and 2018. In line with our hypothesis, we find lower tariffs at those border points where network users have a choice between different TSOs. An additional sensitivity analysis differentiating between transit and meshed networks confirms this result. We conclude that German TSOs, operating in merged markets and under a revenue-cap regime with efficiency benchmarking, compete for demand at borders at which different TSOs offer capacity.

This paper examines market structure, regulation, and market performance of the Dutch electricity retail market for households since its opening in 2004. Using data containing monthly prices for all products offered in the Dutch retail electricity markets over the period 2008–2014, we provide quantitative results on the intensity of retail competition and the benefits to consumers. Regulation of the retail electricity market is relatively intensive and encompasses structural measures, contractual restrictions, rules on information provision, price surveillance and market monitoring. In contrast to most other countries, the Dutch regulation includes a kind of price regulation which is that the regulator surveys all new retail prices before market introduction in order to prevent too high retail prices. The Dutch retail electricity market has remained relatively concentrated, with retailers offering an increasing variety of retail products, often using multiple brands. Competition is characterized by product innovation, especially for green energy, rather than price competition on homogenous products. Gross retail margins remain relatively high, as is price dispersion across retailers. The market matured, as evidenced by fewer consumer complaints and higher switching rates.

Energy networks, such as the networks for the transportation of electricity and gas, are natural monopolies, which implies that competition among these networks is not possible. In order to protect network users against monopoly prices and to give the network operators the incentive to operate efficiently, many countries have implemented tariff regulation. After discussing the economic consequences of natural monopolies and the need for regulation, this chapter briefly compares the various types of tariff regulation, discussing the incentive power, the ability to make a profit, and the reward on the costs of capital. The chapter concludes by discussing how tariff regulation may enable network operators to finance the necessary investments to connect new renewable energy production facilities.

This textbook explains the main economic mechanisms behind energy markets and assesses how governments can implement policies to improve these markets’ performance. Adopting a microeconomic perspective, it systematically analyses the various types of market failures on the electricity and gas markets as well as coal, oil, hydrogen and heat markets in order to identify government policies that can improve welfare. Critical factors in this regard include the natural monopoly and the public-goods character of energy infrastructures; market power structures resulting from inflexibility of supply and demand; international trade restrictions; negative externalities concerning the use of fossil energy; positive externalities concerning innovative new energy technologies; information asymmetries with regard to the product characteristics of energy commodities; and other public concerns, such as energy poverty. In turn, readers will learn about various measures that governments can use to address these market failures, including incentive regulations for electricity grids; international integration of wholesale energy markets; environmental regulatory measures like emissions trading schemes; subsidy schemes for new technologies; green-energy certificate schemes; and energy taxes.This second, updated and expanded edition addresses recent developments in international energy markets that have resulted in extremely high prices and concerns about the markets’ ability of to provide a secure energy supply. Further, it examines several countries’ intensified measures to implement the transition to a low-carbon energy system. Given its scope, the book will appeal to upper-undergraduate and graduate students from various disciplines who want to learn more about the economics and regulation of energy systems and markets.

In well-functioning markets, economic agents are incentivized to take into account all effects of their decisions. Sometimes this is not possible because of externalities. Examples of externalities in energy markers are the environmental effects of using fossil energy and the impact of importing fossil energy on security of supply. This chapter first discusses how the various types of externalities in energy markets distort market outcomes (Sect. 8.2). Then, the chapter goes into the design of environmental taxes (Sect. 8.3), support schemes (Sect. 8.4) and emissions trading schemes (Sect. 8.5), before discussing how these three types of environmental regulation affect electricity markets and how they interact with each other (Sect. 8.6). The chapter concludes by discussing the regulation of security of supply externalities (Sect. 8.7).

Gas, electricity and heat markets depend on the reliability of the physical networks for transport. This reliability can be seen as a semi-public good and, as a consequence, its provision is not fully secured by the market. This chapter first explains how the functioning of energy markets and networks is interrelated before discussing regulatory measures which can be taken to ensure reliability of energy supply. Section 7.3 goes into the organization of financial incentives to network users related to network capacity; Sect. 7.4 discusses how financial incentives can be given to market participants to contribute to system balancing, while Sect. 7.5 discusses how to assure that there is always sufficient production capacity and that all production is priced even if the market is not able to clear.

This chapter explains why the economic analysis of energy markets is relevant for current societal debates and how the optimal regulation of these markets can be determined. Energy is an essential commodity for economic growth, and, therefore, its availability at efficient prices is crucial for societies. Using energy, however, has significant negative environmental effects, as it is still mainly based on fossil energy. The challenge for policy makers is, hence, to foster an efficient supply of energy, while mitigating negative environmental effects. This chapter introduces the public-interest approach as a tool to find the optimal regulation to realize the societal objectives regarding energy markets. This approach departs from the theoretical benchmark of perfectly functioning markets and analyzes how fundamental shortcomings can be overcome.

Firms buy renewable energy at premiums and report environmental concerns as motivation to do so. The bulk of the literature on environmental corporate social responsibility suggests that this type of behavior even results in higher profit. However, a product-differentiation framework with perfect competition predicts that renewable energy use has no effect on profit. This paper tests this prediction by investigating the relationship between firms' renewable energy use and profit on the basis of panel data for 920 firms over 2014–2018. We do not find evidence for an impact of renewable energy use on profit. Hence, a ‘win-win’ in the form of higher profit and a better environment does not seem to exist. In addition, the results appear to suggest that firms do not have a positive willingness to pay for renewable energy as contribution to the environment. This implies that firms are only willing to contribute to climate-change mitigation through buying renewable energy when this is aligned with the profit-maximization objective.

International policy actions to constrain carbon emissions create substantial risks and opportunities for firms. In particular, production processes that are relatively high emitting will be more sensitive to uncertain costs of emitting carbon dioxide and might further reflect productive inefficiencies. We employ a productive efficiency model to evaluate firms’ carbon emission levels relative to those of best practice (efficient) peers with comparable production structures. By accounting for total factor productivity and sector-relative performance aspects, this measure of carbon efficiency helps to quantify and rank firms’ relative dependency on carbon in the production process. We investigate the impact of carbon efficiency on various financial performance outcomes, and evaluate the role of general resource efficiency in explaining these impacts. Using an international sample of 1,572 firms over the years 2008-2016, we find superior financial performance in carbon efficient (best-practice) firms. On average, a 0.1 higher carbon efficiency is associated with a 1.0% higher profitability and 0.6% lower systematic risk. While carbon efficiency closely relates to resource efficiency, it also has distinct financial performance impacts, particularly lowering systematic risk. Overall, our findings suggest that carbon efficient production can be valuable from both operational and risk management perspectives. Publisher PDF

In the past, networks of natural gas transmission system operators (TSOs) determined the gas market areas in the European Union. However, gas markets mergers introduce the possibility to book the transmission capacity of alternative TSOs. One necessary condition for competition among TSOs is the absence of restrictions in capacity booking. This paper analyses whether this holds for Germany. As German TSOs distinguish a number of capacity types to deal with network constraints, market mergers have created transport alternatives for only 32% of cross-border capacity products. In almost all cases, we find that gas transmission network users make efficient booking decisions.

Fossil fuel divestment campaigns urge investors to sell their stakes in companies that supply coal, oil, or gas. However, avoiding investments in such companies might impose a financial cost on the investor because of foregone potentially profitable investments and reduced opportunities for portfolio diversification. We compare financial performance of investment portfolios with and without fossil fuel companies over the period 1927-2016. Contrary to theoretical expectations, we find that fossil fuel divestment does not seem to impair portfolio performance. These findings can be explained by the fact that, so far, fossil fuel company stocks do not outperform other stocks on a risk-adjusted basis and provide relatively limited diversification benefits. A more pronounced performance impact of divestment can be observed over short time frames and when applied to less diversified market indices. Postprint

The increase in the supply of intermittent renewable energy and the higher electricity use lead to stronger variation in network usage, which either requires costly network extensions or the implementation of incentives to reduce peaks. This paper focuses on the latter, namely dynamic tariffs. However, a tension may exist between economic arguments for dynamic pricing and people perceiving such pricing as unfair. This paper seeks to assess the fairness of dynamic tariffs through a combination of theoretical and empirical research. Fairness is defined broader than inequality; it is understood more objectively than just people's perceptions and thus requires engagement with ethical theory; and the fairness analysis is not only based on abstract ethical reflectionbut also on analysing the underlying arguments for people's perceptions. Both the theoretical fairness assessment and the survey among Dutch households reveal that dynamic tariffs are less fair than transport and capacity tariffs and fairer than Ramsey pricing. The fairness of dynamic tariffs depends on implementation conditions such as: clear, non-economic arguments as justification, guarantying basic-needs fulfilment, decreasing perception that ‘peak use is only for the rich’, and increasing predictability.

Many governments aim to reduce the dependence on coal-fired generation to decrease carbon emissions. At the same time power markets with competition between independently operating power firms have been created which leave the actual decisions concerning electricity production to these firms. This paper analyzes the interaction between climate policies and policies to foster power markets. Using hourly plant-level data on the Dutch power market over 2006-2014, we find that the dispatch of fossil-fuel power plants is strongly influenced by relative fuel prices, despite the existence of several climate policy measures. Coal-fired power plants have become more important in the Dutch market since 2006, not only in share of total production, but also as provider of flexibility. Examining the short-term dispatch decisions and the past volatility in relative fuel prices, the maximum CO2 price which was needed to provide incentives for power producers to dispatch a gas-fired plant instead of a coal-fired plant was 43 euro/ton. We conclude that internalizing the external (CO2) costs by raising the CO2 price is a more appropriate measure than a forced closure of coal-fired power plants to align the principles of a market-based power industry and the wish to implement effective climate-policy measures at relatively low costs.

In this paper we analyze the effect of the design of yardstick competition on consumer prices, by means of a theoretical analysis as well as an economic experiment. We compare four different designs: the uniform yardstick, the unweighted uniform yardstick, the discriminatory yardstick, and the best-practice yardstick. The effect of a specific design on prices depends on two separate mechanisms, one which affects the incentive power to increase productive efficiency and another which affects the risk of collusion. We show theoretically that for the best-practice yardstick, which is widely applied in several industries in a number of countries, these two mechanisms point in the same direction (high prices), which is confirmed by the experiment. Both the theoretical analysis as well as the economic experiment show that the discriminatory yardstick results in lower prices than the unweighted uniform yardstick. The theory, however, does not give a clear answer on the relative performance of the discriminatory versus the weighted uniform yardstick. In the experimental analysis, we find that the advantage of the discriminatory yardstick in terms of giving incentives to improve productive efficiency exceeds the disadvantage of a relatively higher risk of collusion. This conclusion appears to be robust for different degrees of heterogeneity of the industry. Hence the discriminatory yardstick yields the lowest prices for consumers. (C) 2017 Elsevier B.V. All rights reserved.

The Australian government receives poor revenue returns from the Petroleum Resource Rent Tax (‘PRRT’), a tax regime that applies to integrated offshore, gas projects. By contrast the Netherlands has captured significant tax revenues from gas. We ask whether Australian government PRRT revenue would increase from an alternative method of gas pricing (known as the gas transfer price) by modelling four large gas projects. The Dutch case explains their gas market evolution and how high revenues have been maintained. We find that Australia’s current PRRT regulated pricing method for integrated gas projects is problematic and change is needed. The Dutch case study contextualises the discussion of an alternative gas transfer pricing method for offshore gas projects in Australia. The energy justice framework is used for analysis. This article contributes to the current government review of the PRRT regulations on the gas transfer pricing method.

The liberalization and integration of natural gas markets in Europe have resulted in gas-to-gas competition on a European scale with closely related natural gas prices in the various markets. More recently, the European Union aims to become a resilient energy union which may call for additional policy measures. In this paper we discuss the need for such additional measures on top of the existing measures to liberalize and integrate markets. We test the hypothesis that the European natural gas market is resilient to adequately deal with external shocks by analyzing the five most dramatic supply disturbances in the European natural gas markets over the past decade. We find that the natural gas markets were able to trigger responses by market parties which prevented forced supply of gas to consumers in almost all cases. In one case, infrastructure bottlenecks prevented market players to adequately respond to a shock. Hence, we conclude that the best policy to create a resilient energy union is to further integrate European markets and to further remove barriers for market participants.

To address the problem of information asymmetry in renewable electricity markets, European governments have introduced certification schemes. While certification appears to be an increasingly important trade mechanism for renewable electricity, it is unclear to what extent certificate markets are functioning properly. In addition, countries have chosen very different designs for their certification schemes. In order to assess the performance of markets for Guarantee of Origin certificates in twenty European countries, we construct four market performance indicators and analyse their development over 2001–2016: the churn rate, price volatility, the certification rate and the expiration rate. We also investigate the relationship between market performance and two design features of certification schemes: the public/private nature of the certifier and the presence of an international standard. We find that, despite increasing shares of renewable electricity are being certified, certificate markets suffer from poor liquidity and very volatile prices. In addition, we conclude that adopting an international standard fosters the development of certificate systems.

This article analyzes Dutch consumers’ willingness to pay (WTP) for the welfare of broiler chickens and the consequences for nonhuman animal welfare policies. Using data from a discrete-choice experiment and a random parameter logit model, this study showed that consumers particularly value opportunities for outdoor access and the method used for anesthesia before slaughter. The WTP was also positively related to the number of consumers buying the same product, indicating that they experience the public-good dilemma. Moreover, the WTP was higher if consumers knew that animal welfare practices were subject to public or collective supervision. Women, people with more education, those with higher income, and nonreligious people had relatively high WTP values. For 87.5% of the respondents, the WTP exceeded the price difference between a broiler with a higher level of animal welfare and a regular chicken. The findings suggest that the Dutch market for broiler chickens can be improved by raising consumer confidence in the labeling system.

In European countries, retailers are obliged to disclose the energy source and the related environmental impacts of their portfolio over the preceding year. The electricity supplied in the Dutch retail market is presented as renewable energy for 34%, but this relatively high share is for 69% based on certificates (Guarantees of Origin) which are imported from in particular Norway. The certificates are used to sell green electricity to consumers. The premium for green electricity which is actually paid by Dutch consumers is no more than a few percentages of the retail price. The low level of this premium is related to the abundant supply of certificates at low marginal costs from Norway. This also means that the premium for green electricity is too low to give an incentive for investments in new capacity. Hence, the current labelling system for renewable electricity is mainly valuable, besides being an instrument for tracking and tracing of renewable energy, as a marketing instrument for electricity retailers. The effectiveness of Guarantees of Origin as a policy instrument to foster renewable electricity sources is weak. This effectiveness can be raised by implementing restrictions on the international trade or the issuance of new certificates. (C) 2016 Elsevier Ltd. All rights reserved.

After the liberalisation of the gas industry, trading hubs have emerged in Europe. Although these hubs appear to be liquid market places fostering gas-to-gas competition, the efficiency of the gas market remains a topic of interest as a fair share of gas is still traded through long-term contracts with prices linked to the oil price while the number of gas suppliers to the European market is limited. In order to assess the efficiency of the gas market, we analyse the day-ahead spot price at the Dutch gas hub over the period 2011–2014. We find that the oil price had a small positive impact on the gas price. Changes in the concentration on the supply side did not affect the movement in gas prices. The availability of gas in storages and the outside temperature negatively influenced the gas price. We also find that the gas price was related to the production of wind electricity. Overall, we conclude that the day-ahead gas prices are predominantly determined by gas-market fundamentals. Policies to further integrate gas markets within Europe may extend this gas-to-gas competition to a larger region.