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on Energy Economics |
| By: | Kraas, Birk (Solar Millennium AG); Schroedter-Homscheidt, Marion (German Remote Sensing Data Center, German Aerospace Center (DLR)); Pulvermüller, Benedikt (Solar Millennium AG); Madlener, Reinhard (E.ON Energy Research Center, Institute for Future Energy Consumer Needs and Behavior (FCN), RWTH Aachen University) |
| Abstract: | Forecasts of power production are necessary for the electricity market participation of Concentrating Solar Power (CSP) plants. Deviations from the production schedule may lead to penalty charges. the mitigation impact on deviation penalties of an electricity production forecasting tool for Therefore, the accuracy of direct normal irradiance (DNI) forecasts is an important issue. This paper elaborates the 50 MWel parabolic trough plant Andasol 3 in Spain. A commercial DNI model output statistics (MOS) forecast for the period July 2007 to December 2009 is assessed and compared to the two-day persistence approach, which assumes yesterday’s weather conditions and electricity generation also for the following day. Forecasts are analyzed both with meteorological forecast verification methods and from the perspective of a power plant operator. Using MOS, penalty charges in the study period are reduced by 47.6% compared to the persistence case. Finally, typical error patterns of DNI forecasts and their financial impact are discussed. |
| Keywords: | direct normal irradiance; DNI; irradiance forecast; model output statistics; production forecast; CSP-FoSyS; CSP; Andasol; plant simulation; renewable energy |
| Date: | 2011–05 |
| URL: | http://d.repec.org/n?u=RePEc:ris:fcnwpa:2011_012&r=ene |
| By: | Boerema, Nicholas; Kay, Merlinde; MacGill, Iain |
| Abstract: | This paper examines how key characteristics of the underlying wind and solar resources may impact on their energy value within the Australian National Electricity Market(NEM). Analysis has been performed for wind generation using half hour NEM data for South Australia over the 2008-9 financial year. The potential integration of large scale solar generation has been modelled using direct normal solar radiant energy measurements from the Bureau of Meteorology for six sites across the NEM. For wind energy, the level and variability of actual wind farm outputs in South Australia is analysed. High levels of wind generation in that State have been found to have a strong secondary effect on spot prices. Wind generationâs low operating costs will see it displacing higher operating cost fossil-fuel plant at times of high wind. At the same time, the increased variability of wind may impose additional challenges and costs on conventional plant which will also be reflected in wholesale spot market prices. It is shown that this is proving particularly important during high wind penetration periods, which are contributing to an increased frequency of low or even negative prices. The solar resource in South Australia is shown to be highly variable; however, as seen with wind power, geographical dispersion of generators can significantly reduce power variability, even with as few as six sites. The correlation of the solar resource with spot prices also appears to be superior to wind generation. Modelling using the Adelaide solar resource showed that, for electricity sold into the spot market, two-axis tracking solar generators would achieve an average price that is over twice that received by wind generators over the year 2008-9 analysed. Of course, significant solar generation deployment might drive similar price impacts as seen with wind generation, thereby reducing this advantage. Considering the potential implications of both major wind and solar generation within South Australia, the solar and wind resources within the State appear, on average, to be non-correlated for the magnitude, and the change in magnitude, across half an hour. The analysis shows that solar and wind resources within the NEM have key characteristics that can markedly impact on their energy value within the wholesale electricity market. High levels of renewable electricity are already affecting spot prices, highlighting the need for low bidding renewable generators to attain power purchase contracts and for developers to consider this effect when choosing a site location for renewable generators. Other generators within the NEM may also be significantly impacted by major renewable energy deployment. The long-term success of renewable generation will likely depend on maximising the energy value that it contributes to the electricity industry. |
| Keywords: | Energy value, Integration, NEM, Solar, Variability, Wind, Environmental Economics and Policy, Resource /Energy Economics and Policy, |
| Date: | 2010–09 |
| URL: | http://d.repec.org/n?u=RePEc:ags:eerhrr:107740&r=ene |
| By: | Boerema, Nicholas; MacGill, Ian |
| Abstract: | The impacts of transmission congestion and network investment on the development of the Australian wind energy industry have received growing attention from wind farm developers as well as relevant policy stakeholders such as the Australian Energy Market Commission (AEMC). There are many potential wind farm sites across the country with excellent wind regimes yet only limited transmission capacity. At least one wind farm in South Australia has spent a period following construction where its output was curtailed by transmission constraints (NEMMCO, 2009). Current market rules do not guarantee dispatch to an existing wind farm as more wind generation connects to the same transmission. Given the expense of transmission network extension and augmentation, there are interesting questions of what economic impacts such constraints might have for wind farm operators. This paper examines this issue in the context of the South Australian region of the Australian National Electricity Market (NEM). The State currently hosts almost half of total Australian wind generation capacity and has significant transmission capacity limitations for further development. Half hour wholesale electricity spot prices were used along with generation data from nine South Australian wind farms over the 2008-9 and 2009-10 financial years to assess the potential impact that transmission constraints might have had on wind farm revenue. Results showed that a number of the wind farms would have suffered only very limited revenue reductions from having significantly greater wind farm capacity than the rating of their transmission connection to the NEM. Importantly, some wind farms could be limited to a maximum power output of half their rated capacity and still achieve higher capacity factors then other already existing unconstrained wind farms. The key reasons for this are that wind farms do not generate at rated capacity for a great deal of the time over the year, periods of high wind generation appear to be associated with lower wholesale prices and there is significant variance between the wind farms capacity factors. Our findings suggest that there may be circumstances where wind farm developers might benefit from installing more wind turbines than the capacity of their transmission connection. |
| Keywords: | Integration, market price, NEM, South Australia, Wind, Environmental Economics and Policy, Farm Management, Resource /Energy Economics and Policy, |
| Date: | 2010–09 |
| URL: | http://d.repec.org/n?u=RePEc:ags:eerhrr:107741&r=ene |
| By: | Nicolosi, Marco |
| Abstract: | The operation of the power markets is strongly aected by the presence of high shares of electricity from renewable energy sources (RES-E) in the market. Especially in times of high RES-E infeed, rm market situations can lead to extreme results, even to negative power prices. The behavior of RES-E in potential oversupply situations depends on the RES-E support scheme and in particular on the dened curtailment rules. By now, dierent curtailment rules have not been taken into account in long-run capacity expansion analyses. The present research investigates the impact of curtailment rules on the operation and the investment decisions through the utilization of "The High Temporal Resolution Electricity Market Analysis Model" (THEA) for the German power market under consideration of the neighboring countries. In general the results show that RES-E can provide exibility to the system if low burdens for curtailment are applied. This comes with the cost of lacking market signals which could trigger investments in exible generation capacities. However, if RES-E are forced into the market at any cost, the burden for consumers increases and the market signals high demand for alternative exibilities. |
| Keywords: | Power market modeling; RES-E integration; curtailment rules |
| JEL: | Q41 D41 Q42 |
| Date: | 2011–04 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:31835&r=ene |
| By: | Carsten Lynge Jensen (Institute of Food and Resource Economics, University of Copenhagen); Lars Gårn Hansen (Institute of Food and Resource Economics, University of Copenhagen); Troels Fjordbak (IT-Energy); Erik Gudbjerg (Lokalenergi) |
| Abstract: | Experimental evidence of the effect of providing cheap energy saving technology to households is sparse. We present results from a field experiment in which autopoweroff plugs are provided free of charge to randomly selected households. We use propensity score matching to find treatment effects on metered electricity consumption for different types of households. We find effects for single men and couples without children, while we find no effect for single women and households with children. We suggest that this could be because of differences in saving potential (e.g. some households do not have appliances where using a plug is relevant), differences in the skills relevant for installing the technology and differences in the willingness to spend time and effort on installation. We conclude that targeting interventions at more responsive households, and tailoring interventions to target groups, can increase efficiency of programmes. |
| Keywords: | autopoweroff plugs, treatment effect, energy consumption, types of households |
| JEL: | C21 D12 Q41 |
| Date: | 2011–06 |
| URL: | http://d.repec.org/n?u=RePEc:foi:wpaper:2011_10&r=ene |
| By: | Sukanya Ghosh (Head of Management Science Department, Meghnad Saha Institute of Technology, Kolkata, India); Prof. Dr. P.P. Sengupta (Department of Humanities & Social Science, National Institute of Technology, Durgapur, India) |
| Abstract: | Energy is an important input for economic development, but world’s energy supply is still largely based on fossil fuels and nuclear power. These sources of energy will not last forever and have proved to be contributors to our environmental problems. India’s energy demand is increasing with the robust growth in economy. The country is heavily dependent on fossil sources of energy for most of its demand. However, power generation through fossil fuels raises serious concern due to the depletion of resources and environmental pollution. Hence the challenge is to meet the energy needs in a sustainable manner. In order to insulate itself from any future supply disruption and price shocks of fossil fuels and to achieve energy security and also to meet global climate change objectives, renewable energy appears to be the most plausible option for the country to rely on. This has necessitated the country to start aggressively pursuing alternative energy sources like, solar, wind, biofuels, small hydro and more. Unfortunately India does not appear to be prepared for change over to such alternative sources due to absence of requisite technology, equipment, knowledge & investment. Therefore, present researchers have developed a model based on Auto Regressive Integrated Moving Average (ARIMA) to depict the future prospects of Indian power sector and have tried to develop some strategic recommendations from Indian point of view for gradual change over of power generation from thermal to renewable energy production through generation and maximizing the utilisation of renewable energy for sustainable development in the perspective of global environmental crisis |
| Keywords: | Fossil fuels, Renewable energy, ARIMA, Sustainable development, Environmental crisis |
| JEL: | M0 |
| Date: | 2011–06 |
| URL: | http://d.repec.org/n?u=RePEc:cms:1icm11:2011-002-091&r=ene |
| By: | Angelica Gianfreda (Department of Economics (University of Verona)); Luigi Grossi (Department of Economics (University of Verona)) |
| Abstract: | In the last few years we have observed deregulation in electricity markets and an increasing interest of price dynamics has been developed especially to consider all stylized facts shown by spot prices. Only few papers have considered the Italian Electricity Spot market since it has been deregulated recently. Therefore, this contribution is an investigation with emphasis on price dynamics accounting for technologies, market concentration and congestions. We aim to understand how technologies, concentration and congestions affect the zonal prices since these ones combine to bring about the single national price (prezzo unico d’acquisto, PUN). Hence, understanding its features is important for drawing policy indications referred to production planning and selection of generation sources, pricing and risk–hedging problems, monitoring of market power positions and finally to motivate investment strategies in new power plants and grid interconnections. Implementing Reg–ARFIMA–GARCH models, we assess the forecasting performance of selected models showing that they perform better when these factors are considered. |
| Keywords: | Electricity prices, Production technologies, Market power (HHI, RSI), Congestions, Fractional Integration, Forecasting |
| JEL: | C1 Q4 |
| Date: | 2011–01 |
| URL: | http://d.repec.org/n?u=RePEc:ver:wpaper:01/2011&r=ene |
| By: | Hasnain, Zahid; Matsuda, Yasuhiko |
| Abstract: | This paper takes advantage of unique intra-country variation in the Philippines power sector to examine under what conditions politicians have an incentive to"capture"an electric utility and use it for the purposes of rent-seeking. The authors hypothesize that the level of capture is determined by the incentives of, and the interactions between, local and national politicians, where the concepts of"local"and"national"are context specific. A local politician is defined as one whose electoral jurisdiction lies within the utility’s catchment area; by contrast, a national politician is defined as one whose electoral jurisdiction includes two or more utility catchment areas. These jurisdictional differences imply different motivations for local and national politicians: because of"spillover"effects, local politicians have a greater incentive to use the utility for rent-seeking than a national politician as they capture only a portion of the political gains from utility performance improvements as some of the benefits of improved service will go to other electoral jurisdictions within the utility’s catchment area. The authors posit that three variables impact the magnitude of these incentives of local and national politicians: (i) the local economic context, specifically the scale of rents that can be extracted from an electricity cooperative (ii) the degree of competitiveness of local politics; and (iii) the political salience of an electricity cooperative’s catchment area for national politicians. The authors illustrate this framework through case studies of specific power utilities, and suggest some policy implications. |
| Keywords: | Public Sector Corruption&Anticorruption Measures,Political Systems and Analysis,Politics and Government,Political Economy,Economic Theory&Research |
| Date: | 2011–06–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:5704&r=ene |
| By: | Kristie M. Engemann; Michael T. Owyang; Howard J. Wall |
| Abstract: | Much of the literature examining the effects of oil shocks asks the question “What is an oil shock?” and has concluded that oil-price increases are asymmetric in their effects on the US economy. That is, sharp increases in oil prices affect economic activity adversely, but sharp decreases in oil prices have no effect. We reconsider the directional symmetry of oil-price shocks by addressing the question Where is an oil shock? , the answer to which reveals a great deal of spatial/directional asymmetry across states. Although most states have typical responses to oil-price shocks—they are affected by positive shocks only—the rest experience either negative shocks only (5 states), both positive and negative shocks (5 states), or neither shock (5 states). |
| Keywords: | Petroleum industry and trade ; Power resources - Prices |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedlwp:2011-016&r=ene |
| By: | Le, Thai-Ha; Chang, Youngho |
| Abstract: | This study examines the response of stock markets to oil price volatilities in Japan, Singapore, Korea and Malaysia by applying the generalized impulse response and variance decomposition analyses to the monthly data spanning 1986:01 – 2011:02. The results suggest that the reaction of stock markets to oil price shocks varies significantly across markets. Specifically, the stock market responds positively in Japan while negatively in Malaysia; the sign for Singapore and South Korea is unclear. We find that the stock market inefficiency, among others, appeared to have slowed the responses of the stock market to aggregate shocks such as oil price surges. |
| Keywords: | oil price fluctuation; stock return; exchange rate; emerging market; VAR model. |
| JEL: | G14 G15 F3 Q43 |
| Date: | 2011–06–16 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:31753&r=ene |
| By: | Vipin Arora; Pedro Gomis-Porqueras |
| Abstract: | We show the importance of endogenous oil prices and production in the real business cycle framework. Endogenising these variables improves the model’s predictions of business cycle statistics, oil related and non-oil related, relative to a situation where either is exogenous. This result is robust to the standard extensions (variable capacity utilisation and monopolistic competition) used in the literature. In particular, we first show that with either exogenous oil prices or production the standard real business cycle model and variants cannot match the oil-related and business cycle facts. In contrast, when both of these variables are endogenous, we can substantially improve the corresponding co-movements and slightly improve standard business cycle properties for consumption and investment. |
| JEL: | E37 F47 Q43 |
| Date: | 2011–06 |
| URL: | http://d.repec.org/n?u=RePEc:acb:camaaa:2011-17&r=ene |
| By: | José Manuel Belbute (Departamento de Economia, CEFAGE-UE, Universidade de Évora) |
| Abstract: | The purpose of this paper is to measure the degree of persistence of the overall, core, food and energy Harmonized Indexes of Consumer Prices for the European Monetary Zone (HICP-EAs) and to identify its implications for decision-making in the private sector and in public policy. Using a non-parametric approach, our results demonstrate the presence of a statistically significant level of persistence in four HICP-EAs: headline, core, food and energy. Moreover, contrary to popular belief, the core index does not reflect permanent price changes. We also find evidence that the food and energy price indexes are more volatile and more persistent than the other two price indexes. Our results also show a reduction in persistence for both the headline and the core price indexes after the implementation of the single monetary policy, but not for food and energy. These results have important implications for both the private sector and for policymakers who use the core as a reference price index for their decision-making because the use of this index can lead to an erroneous perception of price movements. |
| Keywords: | Harmonized Index of Consumption Prices, Core Inflation, Euro Area, Persistence. |
| JEL: | C14 C22 E31 E52 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:cfe:wpcefa:2011_14&r=ene |
| By: | Ian W.H. Parry |
| Abstract: | Fiscal instruments are potentially among the most effective, and cost-effective, options for addressing externalities related to poor air quality, urban road congestion, and greenhouse gases. This paper takes a case study, focused on Mauritius (a pioneer in the use of green taxes) to illustrate how existing taxes, especially on fuels and vehicles, could be reformed to better address these externalities. We discuss, in particular, an explicit carbon tax; a variety of options for reforming vehicle taxes to meet environmental, equity, and revenue objectives; and a progressive transition to usage-based vehicle taxes to address congestion |
| Date: | 2011–06–01 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:11/124&r=ene |
| By: | Michael Anderson; Maximilian Auffhammer |
| Abstract: | Heavier vehicles are safer for their own occupants but more hazardous for the occupants of other vehicles. In this paper we estimate the increased probability of fatalities from being hit by a heavier vehicle in a collision. We show that, controlling for own-vehicle weight, being hit by a vehicle that is 1,000 pounds heavier results in a 47% increase in the baseline fatality probability. Estimation results further suggest that the fatality risk is even higher if the striking vehicle is a light truck (SUV, pickup truck, or minivan). We calculate that the value of the external risk generated by the gain in fleet weight since 1989 is approximately 27 cents per gallon of gasoline. We further calculate that the total fatality externality is roughly equivalent to a gas tax of $1.08 per gallon. We consider two policy options for internalizing this external cost: a gas tax and an optimal weight varying mileage tax. Comparing these options, we find that the cost is similar for most vehicles. |
| JEL: | H23 I18 Q48 Q58 R41 |
| Date: | 2011–06 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:17170&r=ene |
| By: | Anthony J. Venables |
| Abstract: | This paper develops a model in which supply of a non-renewable resource can adjust through two margins: the rate of depletion and the rate of field opening. Faster depletion of existing fields means that less of the resource can ultimately be extracted, and optimal depletion of open fields follows a (modified) Hotelling rule. Opening a new field involves sinking a capital cost, and the timing of field opening is chosen to maximize the present value of the field. Output dynamics depend on both depletion and field opening, and supply responses to price changes are studied. In contrast to Hotelling, the long run equilibrium rate of growth of prices is independent of the rate of intereset, depending instead on characteristics of demand and geologically determined supply. |
| Keywords: | Natural resource, Depletion, Hotelling, Fossil fuel, Carbon tax |
| JEL: | Q3 Q5 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:oxf:wpaper:554&r=ene |
| By: | Le, Thai-Ha; Chang, Youngho |
| Abstract: | This study using the monthly data spanning 1986:01-2011:04 to investigate the relationship between the prices of two strategic commodities: gold and oil. We examine this relationship through the inflation channel and their interaction with the index of the US dollar. We used different oil price proxies for our investigation and found that the impact of oil price on the gold price is not asymmetric but non-linear. Further, results show that there is a long-run relationship existing between the prices of oil and gold. The findings imply that the oil price can be used to predict the gold price. |
| Keywords: | oil price fluctuation; gold price; inflation; US dollar index; cointegration. |
| JEL: | E3 |
| Date: | 2011–06–23 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:31795&r=ene |
| By: | Raveh, Ohad |
| Abstract: | Do reduced costs of factor mobility mitigate ‘Dutch Disease’ symptoms, to the extent that they are reversed? The case of federations provides an indication they do. By investigating 'Resource Curse' effects in all federations with available state-level data, it is observed that within federations resource abundance is a blessing, while between federations it is a curse, similar to results observed in previous cross-country studies. A theory is then presented in an attempt to explain the opposite results of the intra and cross federal (and previous cross-country) analyses. It is argued that the reduced costs of factor mobility within federations trigger an ‘Alberta Effect’ –where resource abundant regions exploit the fiscal advantage, provided by resource rents, to compete more aggressively in the inter-regional competition over capital, and as a result attract vast amounts of capital– which in turn mitigates, and even reverses, ‘Dutch Disease’ symptoms, so that ‘Resource Curse’ effects do not apply. Thus, this paper emphasizes the significance of the mitigating role of factor mobility in 'Dutch Disease' theory, and presents a novel mechanism (the ‘Alberta Effect’) through which this mitigation, and possible reversion, process occurs. The paper concludes with empirical evidence for the main implications of the model, taking the United States as a case study. |
| Keywords: | Natural Resources; Factor Mobility; Dutch Disease; Resource Curse; Tax Competition; Economic Growth |
| JEL: | H71 |
| Date: | 2010–11 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:31744&r=ene |
| By: | Joelle Morana (LET - Laboratoire d'économie des transports - CNRS : UMR5593 - Université Lumière - Lyon II - Ecole Nationale des Travaux Publics de l'Etat); Jesus Gonzalez-Feliu (LET - Laboratoire d'économie des transports - CNRS : UMR5593 - Université Lumière - Lyon II - Ecole Nationale des Travaux Publics de l'Etat) |
| Abstract: | La logistique urbaine est une discipline née dans les années 1990, avec pour objet de répondre aux questions qui se posent autour des nuisances provoquées par le transport de marchandises en ville. Très étudiée en termes de politiques publiques et de méthodes d'aide à la décision publique, cette discipline a néanmoins laissé dans un deuxième plan la dimension supply chain management et le lien avec la chaîne d'approvisionnement global, fondamental pour la survie des systèmes de distribution urbaine avec une forte volonté de respect de l'environnement. Cet article compte répondre à ce manque à travers les enseignements d'une étude de cas, celle de Cityporto Padoue (Italie). A travers une analyse des pratiques et les décisions qui font de ce système le plus ancien dans le monde qui n'a plus besoin d'aides publiques pour survivre, nous décrivons les éléments principaux d'un système urbain vert pour la distribution du dernier kilomètre, et nous traçons des lignes guide pour les entreprises et les opérateurs logistiques, pour une bonne intégration de ces systèmes dans les chaînes d'approvisionnements des différentes activités économiques urbaines. |
| Keywords: | Supply Chain Management; logistique urbaine; transport de marchandises; planification stratégique; planification tactique; pratiques durables |
| Date: | 2011–06–21 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-00493701&r=ene |
| By: | Jesús Lechuga Montenegro; Fernando García de la Cruz |
| Abstract: | El paradigma energético vigente es tema de amplio debate por el cambio climático y los incrementos de precios del combustible fósil. El nuevo entramado es impulsado principalmente por Estados Unidos y Brasil por su ventaja tecnológica en la producción de biocombustibles. En México bajo la Ley de Promoción de los Bioenergéticos se implementan políticas para impulsar alternativas sustentables, concordando así con el Protocolo de Kyoto. En ambos casos la estrategia es cuestionable, pues las ventajas de una tecnología verde, sin las políticas adecuadas en la expansión de producción de bioenergía con base en el cambio de uso del suelo agrícola o la incorporación de nuevas tierras para este fin, ocasionarían problemas alimentarios y de destrucción del hábitat, así como incremento de precios en los insumos utilizados. |
| Date: | 2010–11–30 |
| URL: | http://d.repec.org/n?u=RePEc:col:000418:008792&r=ene |
| By: | Shawkat Hammoudeh (Lebow College of Business, Drexel University, USA); Soodabeh Sarafrazi (Lebow College of Business, Drexel University, USA); Chia-Lin Chang (Department of Applied Economics, Department of Finance, National Chung Hsing University Taichung, Taiwan.); Michael McAleer (Econometrisch Instituut (Econometric Institute), Faculteit der Economische Wetenschappen (Erasmus School of Economics), Erasmus Universiteit, Tinbergen Instituut (Tinbergen Institute).) |
| Abstract: | This paper examines the short- and long-run daily relationships for a grain-energy nexus that includes the prices of corn, crude oil, ethanol, gasoline, soybeans, and sugar, and their open interest. The empirical results demonstrate the presence of these relationships in this nexus, and underscore the importance of ethanol and soybeans in all these relationships. In particular, ethanol and be considered as a catalyst in this nexus because of its significance as a loading factor, a long-run error corrector and a short-run adjuster. Ethanol leads all commodities in the price discovery process in the long run. The negative cross-price open interest effects suggest that there is a money outflow from all commodities in response to increases in open interest positions in the corn futures markets, indicating that active arbitrage activity takes place in those markets. On the other hand, an increase in the soybean open interest contributes to fund inflows in the corn futures market and the other futures markets, leading to more speculative activities in these markets. In connection with open interest, the ethanol market fails because of its thin market. Finally, it is interesting to note that the long-run equilibrium (cointegrating relationship), speeds of adjustment and open interest across markets have strengthened significantly during the 2009-2011 economic recovery period, compared with the full and 2007-2009 Great Recession periods. |
| Keywords: | Energy-grain price nexus, open interest, futures prices, ethanol, crude oil, gasoline, corn, soybean, sugar, arbitrage, speculation. |
| JEL: | E43 Q11 Q13 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ucm:doicae:1118&r=ene |
| By: | Luca Di Corato (SLU - Uppsala); Michele Moretto (University of Padova) |
| Abstract: | In a stochastic dynamic frame, we study the technology choice problem of a continuous co- digestion biogas plant where input factors are substitute but need to be mixed together to provide output. Given any initial rule for the composition of the feedstock, we consider the possibility of revising it if economic circumstances make it profitable. Flexibility in the mix is an advantage under randomly fluctuating input costs and comes at a higher investment cost. We show that the degree of flexibility in the productive technology installed depends on the value of the option to profitably re-arrange the input mix. Such option adds value to the project in that it provides a device for hedging against fluctuations in the input relative convenience. Accounting for such value we discuss the trade-off between investment timing and profit smoothing flexibility. |
| Keywords: | Real Options, Flexibility, Technological Choice, Renewable Energy, Biomass, Anaerobic Digestion. |
| JEL: | C61 D24 Q42 |
| Date: | 2011–06 |
| URL: | http://d.repec.org/n?u=RePEc:pad:wpaper:0134&r=ene |
| By: | Valdes, Alberto; Foster, William |
| Abstract: | This study examines recent effective rates of protection across the Egyptian economy, using an ad valorem price wedge introduced by nontariff barriers and energy subsidies, and compares today's effective rates of protection with those of a decade ago. The study uses 23 aggregated sectors from input-output matrix information. Although trade liberalization since the late-1990s has had a considerable impact in reducing protection of some industries, some sectors, such as the food and tobacco sector, remain relatively highly protected, due to tariff escalation and nontariff barriers, and due to energy subsidies. Energy subsidies are not formally sector specific but do favor sectors that are energy intensive (of particular note is the electricity sector). It appears that energy pricing is part of a strategy to subsidize and promote certain industries and in effect offset the dis-protection or taxation that results from tariffs on intermediate inputs. The case of the cement sector is notable because energy subsidies appear to almost exactly offset the negative impacts of tariffs and indirect taxes. The fertilizer sector has zero nominal tariffs, benefiting agriculture, and so a negative effective rate of protection due simply to tariffs on intermediate inputs. However, the fertilizer sector ends up with a very high a positive total effective rate of protection due to energy subsidies. |
| Keywords: | Transport Economics Policy&Planning,Energy Production and Transportation,Economic Theory&Research,Taxation&Subsidies,International Trade and Trade Rules |
| Date: | 2011–06–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:5685&r=ene |
| By: | Campo Robledo, Jacobo; Sarmiento Guzmán, Viviana |
| Abstract: | In this paper estimates the long-term relationship in the relationship Energy Consumption - GDP and GDP - Energy Consumption for 10 Latin America countries during the period 1971 to 2007. Through Cointegration test of Westerlund (2006) for panel data, which takes into account the possible dependence between countries (Cross-Section) and any existing structural breaks in long-run relationship, we calculate the elasticities, both individual and regional level. Above, to provide empirical evidence on the ability to design and implement policies those promote energy conservation. Cointegration is found to exist in both directions, energy consumption to GDP, and GDP to energy consumption. It shows the energy dependence of some countries, as well as the possibility of implementing energy conservation in others. |
| Keywords: | Consumo de Energía; Estacionariedad en Panel; Cointegración Panel; América Latina. |
| JEL: | O40 C33 Q43 |
| Date: | 2011–06–23 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:31772&r=ene |
| By: | Gregmar Galinato; Suzette Galinato (School of Economic Sciences, Washington State University) |
| Abstract: | This article formulates a structural empirical model that measures the short run and long run effect of economic growth, political stability and corruption control on carbon dioxide (CO2) emissions from deforestation. Income has a negative effect on forest cover in the short run but it does not have any long run effect. In contrast, political stability and corruption have relatively smaller effects on forest cover in the short run but they have lingering long run effects. We derive a U-shaped forest-income curve where political stability and corruption control do not significantly affect the income turning point but both variables shift the curve up or down. The resulting CO2 emission-income curve is downward sloping and is based on changes in the levels of variables affecting forest cover. Increased political stability flattens the CO2 emissions-income curve leading to smaller changes of CO2 emissions per unit change in income. |
| Keywords: | Deforestation, Environmental Kuznets Curve, Political stability |
| JEL: | O10 Q23 |
| Date: | 2010–06 |
| URL: | http://d.repec.org/n?u=RePEc:wsu:wpaper:galinato-5&r=ene |
| By: | Carlos Ordás Criado (ETH Zurich, Center for Energy Policy and Economics (CEPE).); Simone Valente (ETH Zurich, Center of Economic Research (CER).); Thanasis Stengos (University of Guelph.) |
| Abstract: | Stabilizing pollution levels in the long run is a pre-requisite for sustainable growth. We develop a neoclassical growth model with endogenous emission reduction predicting that, along optimal sustainable paths, pollution growth rates are (i) positively related to output growth (scale effect) and (ii) negatively related to emission levels (defensive effect). This dynamic law reduces to a convergence equation that is empirically tested for two major and regulated air pollutants - sulfur oxides and nitrogen oxides - with a panel of 25 European countries spanning the years 1980-2005. Traditional parametric models are rejected by the data. More flexible regression techniques confirm the existence of both the scale and the defensive effect, supporting the model predictions. |
| Keywords: | Air pollution, convergence, economic growth, nonparametric regressions. |
| JEL: | C14 C23 O13 Q53 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:gue:guelph:2011-06.&r=ene |
| By: | Chevallier, Julien |
| Abstract: | This paper deals with carbon price variations using a multi time scale decomposition based on the theory of wavelets. Our approach is based on wavelet packet transforms. This original approach enables us to identify that the periods which contribute the most to EUA spot, EUA futures, and CER futures price variations are February-April 2008, October-November 2008, and the recent 2009-2011 business cycle which correspond to major institutional uncertainties and changes in macroeconomic fundamentals. This wavelet decomposition therefore provides additional evidence on the drivers of carbon prices being institutional events and economic activity. |
| Keywords: | Carbon; price variations; wavelet decomposition; wavelet packet transforms; |
| JEL: | C02 E31 Q43 L72 |
| Date: | 2011–06 |
| URL: | http://d.repec.org/n?u=RePEc:ner:dauphi:urn:hdl:123456789/6515&r=ene |
| By: | Restiani, Phillia; Betz, Regina |
| Abstract: | This paper employs a theoretical model to examine compliance incentives and market efficiency under three penalty types: the fixed penalty rate, which uses a constant marginal financial penalty; the make-good provision (quantity penalty), where each missing permit in the current period is to be offset with a ratio (restoration rate) in the following period; and a mixed penalty, which combines the two penalty types. Using a simple two-period model of firmâs profit maximisation, we analyse compliance decisions and the efficient penalty level under each penalty type. Firmsâ compliance strategies are modelled as an irreversible investment in abatement measures and permit buying in the market. Our findings indicate that the penalty type does not affect compliance decisions provided that the efficient penalty level is applied. Market efficiency is retained regardless of penalty types. Nevertheless, the mixed penalty design provides the strongest compliance incentives. Hence this finding supports the practice in which this penalty design is widely used in the existing and the proposed trading schemes. Furthermore, we discuss the policy implications of the findings with regard to permit price discovery process and the Australian proposal of tying the penalty level to the permit price |
| Keywords: | emissions trading, penalty design, compliance, Environmental Economics and Policy, Resource /Energy Economics and Policy, |
| Date: | 2010–12 |
| URL: | http://d.repec.org/n?u=RePEc:ags:eerhrr:107585&r=ene |
| By: | Restiani, Phillia; Betz, Regina |
| Abstract: | This paper investigates the behavioural implications of penalty designs on market performance using an experimental method. Three penalty types and two penalty levels are enforced in a laboratory permit market with auctioning, including the Australian Carbon Pollution Reduction Scheme proposed design of tying the penalty rate to the auction price. Compliance strategies are limited to undertaking irreversible abatement investment decisions or buying permits. We aim to assess how penalty design under the presence of subjectsâ risk preferences might affect compliance incentives, permit price discovery, and efficiency. In contrast to theory, we find that penalty levels serve as a focal point that indicates compliance costs and affects compliance strategies. The make-good provision penalty provides stronger compliance incentives than the other penalty types. However, the theory holds with regard to permit price discovery, as we find no evidence of the effect of penalty design on auction price. Interestingly, risk preference does not directly affect compliance decision, but it does influence price discovery, which evidently is a significant factor in compliance decisions as well as efficiency. Most importantly, a trade-off between investment incentives and efficiency is observed. |
| Keywords: | emissions trading, penalty design, experiment, auction, irreversible investment, abatement, compliance, Environmental Economics and Policy, Resource /Energy Economics and Policy, |
| Date: | 2010–12 |
| URL: | http://d.repec.org/n?u=RePEc:ags:eerhrr:107586&r=ene |
| By: | LanFen Chu (Institute of Economics, Academia Sinica, Taipei, Taiwan.); Michael McAleer (Econometrisch Instituut (Econometric Institute), Faculteit der Economische Wetenschappen (Erasmus School of Economics), Erasmus Universiteit, Tinbergen Instituut (Tinbergen Institute).); Chi-Chung Chen (Department of Applied Economics, National Chung Hsing University) |
| Abstract: | The El Niños Southern Oscillations (ENSO) is a periodical phenomenon of climatic interannual variability, which could be measured through either the Southern Oscillation Index (SOI) or the Sea Surface Temperature (SST) Index. The main purpose of this paper is to analyze these two indexes in order to capture the volatility inherent in ENSO. The empirical results show that both the ARMA(1,1)-GARCH(1,1) and ARMA(3,2)-GJR(1,1) models are suitable for modelling ENSO volatility accurately. The empirical results show that 1998 is a turning point, which indicates that the ENSO strength has increased since 1998. Moreover, the increasing ENSO strength is due to the increase in greenhouse gas emissions. The ENSO strengths for SST are predicted for the year 2030 to increase from 29.62% to 81.5% if global CO2 emissions increase by 40% to 110%, respectively. This indicates that we will be faced with an even stronger El Nino or La Nina in the future if global greenhouse gas emissions continue to increase unabated. |
| Keywords: | ENSO, SOI, SOT, Greenhouse Gas Emissions, Volatility, GARCH, GJR, EGARCH. |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ucm:doicae:1121&r=ene |
| By: | Dobes, Leo |
| Abstract: | A factor common to all adaptation measures is the uncertainty that is the hallmark of climate change. The timing, intensity and location of climate change impacts is not known to any degree of precision. Because most deterministic analyses and policy prescriptions ignore this uncertainty, their recommendations are likely to waste community resources. Except by chance, adaptation measures will either be over-engineered, or they will be inadequate and result in harm. Applying real options thinking allows an incremental and flexible approach. Adaptation measures are implemented only as better knowledge becomes available over time. Several examples are given of real options in the Mekong Delta, with a comparison of net present values of two housing alternatives. It is essential to undertake net present value calculations when comparing different projects to ensure that the value of any options is weighed against other costs and benefits. |
| Keywords: | Environmental Economics and Policy, |
| Date: | 2010–11 |
| URL: | http://d.repec.org/n?u=RePEc:ags:eerhrr:107574&r=ene |
| By: | Mehdi Abbas (LEPII - Laboratoire d'Économie de la Production et de l'Intégration Internationale - CNRS : FRE3389 - Université Pierre Mendès-France - Grenoble II) |
| Abstract: | La lutte contre les changements climatiques a inscrit à l'agenda économique, politique et social la décarbonisation du capitalisme. Or, le basculement vers un régime d'accumulation compatible avec la lutte contre les changements climatiques est porteur d'enjeux de richesse et de puissance colossaux et se posant à une échelle humaine et géopolitique inédite. Cet article inscrit les changements climatiques dans la dynamique du système qui les a produits : le capitalisme. La crise écologique constitue une manifestation de la crise du régime actuel d'accumulation au stade financiarisé et globalisé. Dès lors, la lutte contre les changements climatiques, loin d'être une question environnementale, devient une problématique de mode de développement tant au Nord qu'au Sud. |
| Keywords: | POLITIQUE CLIMATIQUE ; DEVELOPPEMENT ECONOMIQUE ; CAPITALISME |
| Date: | 2011–01 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:halshs-00601701&r=ene |
| By: | Hans Gersbach (ETH Zurich, Switzerland); Noemi Hummel (ETH Zurich, Switzerland); Ralph Winkler (University of Bern, Switzerland) |
| Abstract: | We examine a global refunding scheme for mitigating climate change. Countries pay an initial fee into a global fund that is invested in long-run assets. In each period, part of the fund is distributed among the participating countries in relation to the emission reductions they have achieved in this period. We identify two possible types of sustainable treaty. A first-best sustainable treaty involves varying amounts of refunded wealth and a minimal amount of initial fees inducing socially desirable abatement efforts in each period. In a secondbest sustainable treaty with only two parameters – optimally selected initial fees and constant refunds equal to the interest earned on the fund – the stock of greenhouse gases converges to the socially optimal stock. Finally, we suggest ways for countries to raise money for the payment of initial fees that are neutral to tax payers and international capital markets. |
| Keywords: | climate change mitigation, refunding scheme, international agreements, sustainable treaty |
| JEL: | Q54 H23 H41 |
| Date: | 2011–06 |
| URL: | http://d.repec.org/n?u=RePEc:eth:wpswif:11-146&r=ene |
| By: | Jotzo, Frank |
| Abstract: | Following the Copenhagen climate Accord, developed and developing countries have pledged to cut their greenhouse gas emissions, emissions intensity or emissions relative to baseline. This analysis puts the targets for the major countries on a common footing, and compares them across different metrics. Targeted changes in absolute emissions differ markedly between countries, with continued strong increases in some developing countries but significant decreases in others including Indonesia, Brazil and South Africa, provided reasonable baseline projections are used. Differences are smaller when emissions are expressed in per capita terms. Reductions in emissions intensity of economies implicit in the targets are remarkably similar across developed and developing countries, with Chinaâs emissions intensity target spanning almost the same range as the implicit intensity reductions in the United States, EU, Japan, Australia and Canada. Targeted deviations from business-as-usual are also remarkably similar across countries, and the majority of total global reductions relative to baselines may originate from China and other developing countries. The findings suggest that targets for most major countries are broadly compatible in important metrics, and that while the overall global ambition falls short of a two degree trajectory, the targets by key developing countries including China can be considered commensurate in the context of what developed countries have pledged. |
| Keywords: | Copenhagen Accord, emissions targets, emissions intensity, business-as-usual, cross-country comparison., Environmental Economics and Policy, Resource /Energy Economics and Policy, |
| Date: | 2010–11 |
| URL: | http://d.repec.org/n?u=RePEc:ags:eerhrr:107577&r=ene |