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The recent EU Commission proposal for promoting the supply of power from renewable energy sources was originally based on a pan-European, harmonised tradable green certificate (TGC) scheme. We suggest, on the basis of a multi-disciplinary analysis, that a pan-EU TGC system is not the way forward for Europe. It is vital that the Commission (and the majority of Member States) avoids implementation of such policy designs put forward by a coalition of vested interests. They should instead look at, and act upon, the available evidence from those countries that have experimented with TGCs (e.g. Flanders, U.K. and Sweden) and design policies that stand a better chance of meeting the criteria of effectiveness, efficiency and equity. In particular, the policies must enable EU to meet the immense innovation/industrialisation challenge by inducing the development of a capital goods industry that can, eventually, diffuse a broad range of technologies that use renewable energy sources. Only then can we acquire an ability to implement an industrial revolution in the energy system in a way that broadly meets the criteria of effectiveness and dynamic efficiency.

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National audienceNone of the far-reaching experiments in electricity industry liberalisation was able to ensure the timely and optimal capacity mix development. The theoretical market model features market failures due to the specific volatility of prices, and the difficulty of creating complete markets for hedging. In this paper, we focused on a specific failure, i.e. the impossibility of allocating the various risks borne by the producer onto suppliers and consumers in order to allow capacity development. Promotion of short-term competition by mandating vertical de-integration tends to distort investments in generation by impeding efficient risk allocation.Following Joskow's (2006) line, we developed an empirical analysis of how to secure investments in generation through vertical arrangements between decentralised generators and large purchasers, suppliers or consumers. Empirical observations as risk analysis shows that adopting such arrangements may prove necessary. Various types of long-term contracts between generators and suppliers (fixed-quantity and fixed-price contract, indexed price contract, tolling contract, financial option) appear to offer effective solutions for risk allocation. Vertical integration appears to be another effective way to allocate risk. But it remains an important complementary condition to efficient risk allocation, i.e. that retail competition is sticky or legally limited in order to have a large part of risks borne by consumers on the different market segments

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International audienceWhite certificate schemes mandate energy companies to promote energy efficiency with flexibility mechanisms, including the trading of energy savings. A unified framework is used to estimate the costs and benefits of the schemes implemented in Great Britain in 2002, in Italy in 2005 and in France in 2006. 'Negawatt-hour cost' estimates reach 0. 009€/kWh saved in Great Britain and 0.037€/kWh saved in France, which compares favourably to energy prices in those countries. Moreover, the benefits of reduced energy bills and CO 2 emissions saved exceed the costs; thus, white certificate schemes pay for themselves. Overall, the policy instrument is cost-effective and economically efficient. A closer look at the differences amongst countries provides general insights about the conceptualization of the instrument: (a) Compared to utility demand-side management, to which they are related, white certificate schemes provide more transparency about energy savings, but less transparency around costs; (b) the substantial efficiency discrepancy between the British scheme and its French counterpart can be explained by differences in technological potentials, coexisting policies and supply-side systems in these countries and (c) the nature and amount of costs influence compliance strategies. Notably, if energy suppliers are allowed to set their retail price freely, they tend to grant subsidies to end-use consumers for energy efficient investments. 2011 Springer Science+Business Media B.V