Simulation of a green-certificate market for the promotion of wind energy in Belgium

Renewable sources used for the generation of electricity have today quite high production costs in Europe. The liberalisation of the electricity market makes their advancement still more difficult, as it is expected to exert pressures towards lower prices. There are however strong arguments supporting renewable electricity. First, it is highly recommended to preserve the non-renewable fossil natural resources. Second, the use of renewable resources reduces the emissions of CO2, considered as being the most important greenhouse gas. In Belgium the most promising renewable production source for electricity is wind energy. Suitable policies shall amplify a virtuous cycle rendering this type of production competitive with fossil sources on a short-time basis. The present paper presents a simulation with system dynamics of a supporting policy based on the creation of a green-certificate market. The objective of the study is to demonstrate the feasibility of this approach, and to provide to regulators a decision tool for properly designing the main policy parameters as necessary conditions for its success.