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Research & Markets - Renewable Electricity Trading Report

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image Renewable Energy Trading

The report is targeted at companies active in the power generation and supply market and in related markets.

It aims to provide insights and stimulate discussion on how best to take advantage of the growth and development of renewable power, by monetizing it via market-based mechanisms. The focus is primarily on wholesale trading, although adjacent elements of the value chain are also considered.

Features and benefits

- Understand both the recent growth in renewable power generation and the medium-term trends emerging in today’s political and economic environment.

- Recognize how regulators incentivize renewable power generation through market-based tradable instruments, and how this affects industry participants.

- Evaluate the instruments, market frameworks and intermediaries available for wholesale trading of renewable power and their relevance to your company.

- Identify how wholesale trading of renewable power is affecting your business now, and how it is likely to evolve and impact your company in future.

- Gain confidence that your company’s investment strategy and business model are “future-proof” and in line with the emerging power market trends.

Highlights

There are three main levers available to governments to incentivize renewable power: cost, revenue, and financing terms. It is the first two of these that form the basis of tradable instruments that an act as proxies for renewable power as such: tax exemptions (in the form of environmental tax waivers) and renewable power quotas or obligations.

Economic benefits associated with renewable power tend to be traded separately from the power itself, in the form of instruments such as Renewable Obligation Certificates, Renewable Energy Guarantees of Origin, and Climate Change Levy exemption certificates. As the market is not yet very liquid, specialist brokers have sprung up to facilitate this.

Currently, trading in renewable instruments is a peripheral activity for utilities, little integrated with core business processes. Its impact is mostly felt through higher compliance costs and increased administrative complexity, reflecting the subscale nature of renewable power at present. This will change once renewables reach a “critical mass.”

Your key questions answered

- What are the economic and regulatory drivers behind the recent growth of renewable power trading, and how are they likely to evolve in the future?

- What are the organizational arrangements and market instruments through which industry participants engage in trading renewable power?

- How is renewable power trading impacting energy utilities today, and how is this likely to change if and when renewable power grows in scale?

- What are the main barriers preventing renewable power from being a more central part of the electricity value chain, including wholesale trading?

- When might the “critical mass” of renewable power production be reached in the world’s leading markets, and are all the conditions in place for that?

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