MODELLING THE PRICE FORMATION PROCESS FOR GREEN ENERGY TO ACHIEVE CLIMATE NEUTRALITY

Abstract

Background and Objective: This paper investigates the process of setting tariffs in green energy under conditions of instability, aiming to ensure financial sustainability, attract investments, and achieve climate neutrality. The objective is to develop a comprehensive model that accounts for economic, social, political, technological and environmental factors influencing the formation of tariffs in the renewable energy sector.

Study Design/Materials and Methods: A multi-stage methodological approach is proposed, incorporating quantitative and qualitative indicators into composite indices. The study includes a literature review on tariff formation, dynamic pricing, and sustainability factors. The Harrington scale is applied to assess the management level of tariff formation under varying degrees of instability.

Results: The findings reveal that a higher level of management in tariff formation correlates with increased renewable energy production. The model underscores the significance of adaptive strategies to address economic, political, social, technological and ecological uncertainties, leading to the stable growth of green energy generation.

Practical Implications: The proposed composite index can be integrated into administrative and monitoring systems, enabling policymakers and energy market stakeholders to adjust tariffs promptly and adopt appropriate strategies such as stable, flexible, investment-oriented, crisis and participatory management to maintain market stability and foster sustainable energy development.

Conclusion and Summary: Regular monitoring and timely adjustments of tariff formation models are essential for mitigating risks posed by external uncertainties. The recommended framework facilitates comprehensive assessment and strategic decision-making, ultimately supporting climate neutrality goals and sustainable development in the green energy sector.