Modelling of green electricity effects on oligopoly market

Abstract: This article builds a simulation model to analyse the effect of a change in the main policy variables of the British Renewable Obligation System, i.e. how the increase in the mini-mum requirement of green electricity can affect the prices and quantities in the electricitymarket under oligopolymarket structure. The results show that the increasing quota obligation increases the price of electricity. The outcomes of this computational model emphasize the importance of the capacity limit which can constrain the market power and increase the competition in the market. In addition, the simulation shows that the integration of fossil-fuel and renewable pro-ducers has very small effect on production and prices because of the capacity limits