An equilibrium market power model for power markets and tradable green certificates, including Kirchhoff's Laws and Nash-Cournot competition

In markets with Cournot competition, where producers act strategically, green certificates help to increase market competition if new firms are able to enter the market. Existing firms will not be motivated to compete with new generation capacity. The consumer surplus from introducing tradable green certificates under Cournot competition may increase, despite the deadweight losses the policy incurs.