nep-ene New Economics Papers
on Energy Economics
Issue of 2013‒04‒27
thirty papers chosen by
Roger Fouquet
Basque Climate Change Centre, Bilbao

  1. New Technology Adoption for Russian Regional Energy Generation: Moscow Case Study By Alexandra Bratanova; Jacqueline Robinson; Liam Wagner
  2. The Global Energy Outlook By Richard G. Newell; Stuart Iler
  3. An Economic Evaluation of US Biofuel Expansion Using the Biofuel Breakeven Program with GHG Accounting By Rosburg, Alicia; Miranowski, John
  4. Fossil Fuel Producing Economies have Greater Potential for Interfuel Substitution By Steinbuks, Jevgenijs; Badri Narayanan
  5. Accuracy Improvement Measures for Energy Consumption Statistics of Japan (Japanese) By KAINOU Kazunari
  6. Cumulative Carbon Emissions and the Green Paradox By Frederick van der Ploeg
  7. The Signaling Effect of Environmental and Health-Based Taxation and Legislation for Public Policy: An Empirical Analysis By Brockwell, Erik
  8. Should marginal abatement costs differ across sectors ? the effect of low-carbon capital accumulation By Vogt-Schilb, Adrien; Meunier, Guy; Hallegatte, Stephane
  9. Taxe carbone globale, effet taille de marché et mobilité des firmes By Nelly Exbrayat; Carl Gaigné; Stéphane Riou
  10. Energy Production and Health Externalities: Evidence from Oil Refinery Strikes in France By Emmanuelle Lavaine; Matthew J. Neidell
  11. Long-Term Biofuel Projections Under Different Oil Price Scenarios By Miranowski, John; Rosburg, Alicia
  12. A Study on Industrial Green Transformation in China By Li Ping; Yang Danhui; Li Pengfei; Ye Zhenyu; Deng Zhou
  13. Quo Vadis European Biofuel Policy: The Case of Rapeseed Biodiesel By Gernot Pehnelt; Christoph Vietze
  14. Environmental tax reform and induced technological change By YAMAGAMI, Hiroaki
  15. Does long memory matter in forecasting oil price volatility? By Delavari, Majid; Gandali Alikhani, Nadiya; Naderi, Esmaeil
  16. Trade, Transboundary Pollution and Market Size By Forslid, Rikard; Okubo, Toshihiro; Sanctuary, Mark
  17. How Do Firms Hedge Risks? Empirical Evidence from U.S. Oil and Gas Producers By Mohamed Mnasri; Georges Dionne; Jean-Pierre Gueyie
  18. The Costs of Power Interruptions in Germany - an Assessment in the Light of the Energiewende By growitsch, christian; Malischek, Raimund; Nick, Sebastian; Wetzel, Heike
  19. "An Overview on Survey Results on Industrial electricity demand in Japan" (in Japanese) By Daiya Isogawa; Hiroshi Ohashi; Tsuyoshi Nakamura; Shin-ichi Hanada
  20. A Cost-Benefit Analysis of Concentrator Photovoltaic Technology Use in South Africa: A Case Study By Mario du Preez, Justin Beukes and E. Ernest van Dyk
  21. The Impact of Ownership Unbundling on Cost Efficiency: Empirical Evidence from the New Zealand Electricity Distribution Sector By Filippini, Massimo; Wetzel, Heike
  22. Uncertainty and decision in climate change economics By Geoffrey Heal; Antony Millner
  23. Do pay-as-bid auctions favor collusion? - Evidence from Germany’s market for reserve power By Sven Heim; Georg Götz
  24. Irish and British Historical Electricity Prices and Implications for the Future By Deane, Paul; FitzGerald, John; Malaguzzi Valeri, Laura; Tuohy, Aidan; Walsh, Darragh
  25. Smart City Block: a new level of intervention for city renovation and reducing energy consumption By Frédéric Klopfert; Olivier Mortehan; Hélène Joachain; Caroline Lhoir
  26. Interrogating Protective Space: Shielding, Nurturing and Empowering Dutch Solar PV By Bram Verhees; Rob Raven; Frank Veraart; Adrian Smith; Florian Kern
  27. Resource curse By Xavier Lhote
  28. The Geography of Inter-State Resource Wars By Francesco Caselli; Massimo Morelli; Dominic Rohner
  29. Fast-tracking “green” patent applications: an empirical analysis By Antoine Dechezleprêtre
  30. Tarifications dynamiques et efficacité énergétique et environnementale By Claire Bergaentzlé; Cédric Clastres; Haikel Khalfallah

  1. By: Alexandra Bratanova (Department of Economics, University of Queensland); Jacqueline Robinson (Department of Economics, University of Queensland); Liam Wagner (Department of Economics, University of Queensland)
    Abstract: Russia is frequently referred to as a country with sufficient energy efficiency and renewable energy potential [2, 3]. Although an improvement has been shown (energy-GDP ratios were improved by 35% between 2000-2008 [4]), the contribution of technological progress is estimated to account for only 1% of the energy-GDP ratio reduction, the existing share of renewable energy sources (RES) based electricity generation is estimated at 0.1%. Analysis shows that regional and federal levels of governance in Russia are missing efficient mechanisms for stimulation of energy saving, technological development [5] and RES deployment. This research aims to develop an analytical tool for energy sector economic analysis for technological development planning to support policy decision making. The paper adapts the levelized cost of energy (LCOE) methodology of Wagner and Foster [6], which has been upgraded to facilitate combined energy generation processes, to examine the cost structures associated with energy system and applies it to a Russian regional case study. The model run for two fuel price scenarios allowed us to conclude that the regional energy supply system is dependent on natural gas price. We conclude that new and RES based technologies become cost-effective for electricity generation as domestic natural gas prices reach parity with export prices. However, strong political and financial support is needed to boost technological development and RES application.
    Keywords: Russian Electricity Sector; Levelised Cost of Energy; Electricity Generation;
    JEL: Q40 G12 Q48
    Date: 2013–04
  2. By: Richard G. Newell; Stuart Iler
    Abstract: We explore the principal trends that are shaping the future landscape of energy supply, demand, and trade. We take a long-term view, assessing trends on the time scale of a generation by looking 25 years into the past, taking stock of the current situation, and projecting 25 years into the future. We view these market, technology, and policy trends at a global scale, as well as assess the key regional dynamics that are substantially altering the energy scene. The shift from West to East in the locus of energy growth and the turnaround of North American gas and oil production are the most pronounced of these currents. Key uncertainties include the strength of economic and population growth in emerging economies, the stringency of future actions to reduce carbon emissions, the magnitude of unconventional natural gas and oil development in non-OPEC countries, and the stability of OPEC oil supplies.
    JEL: Q41 Q43 Q47
    Date: 2013–04
  3. By: Rosburg, Alicia; Miranowski, John
    Abstract: We present results from an application of the Biofuel Breakeven program (BioBreak) to 14 US cellulosic ethanol markets that vary by feedstock and location.  BioBreak estimates the economic costs of cellulosic biofuel production for each market and identifies the necessary conditions to sustain long-run markets.  Based on current market conditions, our results suggest that long-run cellulosic ethanol production is not sustainable without significant government intervention or high long-run oil prices ($135-$170 per barrel).  Using life-cycle analysis for cellulosic ethanol and conventional gasoline, we extend the BioBreak program results to derive an implicit value of reduced greenhouse gas emissions embodied in cellulosic ethanol.  For the markets considered in our analysis, sustaining cellulosic ethanol production is equivalent to valuing the reduction in CO2 equivalents between $141 and $282 per metric ton.
    Keywords: biofuel; Biofuel policies; biomass; carbon tax; cellulosic ethanol; Greenhouse gas emissions; life-cycle analysis; renewable fuel standard
    Date: 2013–04–15
  4. By: Steinbuks, Jevgenijs; Badri Narayanan
    Abstract: This study extends the literature on interfuel substitution by investigating the role of transactions costs and technological adjustment, focusing specifcally on differences across countries with different potential for fossil fuel production. We find that fossil fuel producing economies have higher elasticities of interfuel substitution. Our simulations show that, compared to the baseline case of uniform elasticities, energy and climate policies result in a greater substitution among different sources of energy for countries with larger potential to produce fossil fuels. These results are important because they imply lower economic cost for policies aimed at climate abatement and more efficient utilization of energy resources in energy-intensive economies.
    Date: 2013
  5. By: KAINOU Kazunari
    Abstract: Energy Consumption Statistics of Japan that started in 2005 by Ministry of Economy, Trade and Industry, Agency of Natural Resources and Energy is a large scale general official statistics in Japan in order to identify energy consumption by industrial classification and region. But the author evaluated the statistic's accuracy using supply side statistics from 2006 to 2010 that concluded that the statistics includes 20 per cent of error in electricity, town gas and heavy fuel oil A, and that the statistics does not have enough accuracy and not adequate to use as a base statistics of General Energy Statistics.<br />In order to identify the root cause of the problem, the author made error cause analysis observing the energy consumption data distribution directly using questionnaire's answer sheets. The analysis showed that three digit or four digit errors and imperfect answers are frequently and unstably seen in the answer due to the statistics mainly covers small scale companies in the tertiary industry and manufacturing industry. But the present statistics applies only conventional erroneous data exclusion system such that box plot measures, so error data frequently and unstably passed the error data exclusion system and incomplete data are mostly discarded by mistake.<br />Based on the root cause analysis, the author improved and re-designed the erroneous data exclusion system for the statistics and proved that less than 5 per cent errors in average from 2005 to 2009 and maximum 7 per cent errors level of estimation accuracy is achievable for major energy sources such as electricity, town gas and heavy fuel oil A.<br />But, the new erroneous data exclusion system has side effects that only a small number of energy types are able to estimate and energy transformation efficiency such as auto power generation or steam heat generation are not directly able to estimate, so further improvement of statistics answer recovery ratio and the erroneous data exclusion system are deemed to be necessary from now on.
    Date: 2013–04
  6. By: Frederick van der Ploeg
    Abstract: The Green Paradox states thata gradually more ambitious climate policy such as a renewables subsidy or an anticipated carbon tax induces fossil fuel owners to extract more rapidly and accelerate global warming However, if extraction becomes more costly as reserves are depleted, such policies also shorten the fossil fuel era, induce more fossil fuel to be left in the earth and thus curb cumulative carbon emissions. This is relevant as global warming depends primarily on cumulative emissions. There is no Green Paradox for a specific carbon tax that rises at less than the market rate of interest. Since this is the case for the growth of the optimal carbon tax, the Green Paradox is a temporary second-best phenomenon. There is also a Green paradox if there is a chance of a breakthrough in renewables technology occurring at some random future date. However, there will also be less investment in opening up fossil fuel deposits and thus cumulative carbon emission will be curbed.
    Keywords: global warming, Green Paradox, carbon tax, renewables subsidy, second best, technological breakthrough
    JEL: D81 H20 Q31 Q38
    Date: 2013
  7. By: Brockwell, Erik (CERE, Centre for Environmental and Resource Economics)
    Abstract: The main objective of this article is to examine how taxes affect consumption of commodities that are detrimental to health and the environment: tobacco, alcoholic beverages, household energy and petroleum fuel (petrol) for transportation. Specifically, we examine if a tax increase leads to a significantly larger change in consumption than a producer price change, which is referred to as the signaling effect from taxation. This objective is achieved through an empirical analysis using the Linear Almost Ideal Demand System. The analysis uses aggregated cross sectional time series data and information on major legislation introductions in Sweden, Denmark and the United Kingdom from 1970 to 2009. We find the main result to be that the signaling effect is significant for “Alcoholic Beverages” and “Electricity” in Sweden, “Electricity” in Denmark and “Electricity and Gas” and “Electricity” the United Kingdom. This implies that tax policy is more effective in tackling consumption of commodities which produce negative public effects (negative externalities affecting the social good such as pollution) than those for negative private effects (negative externalities affecting the private good such as health).
    Keywords: environmental taxation; health-based taxation; public policy
    JEL: I18 Q58
    Date: 2013–04–19
  8. By: Vogt-Schilb, Adrien; Meunier, Guy; Hallegatte, Stephane
    Abstract: The optimal timing, sectoral distribution, and cost of greenhouse gas emission reductions is different when abatement is obtained though abatement expenditures chosen along an abatement cost curve, or through investment in low-carbon capital. In the latter framework, optimal investment costs differ in each sector: they are equal to the value of avoided carbon emissions, minus the value of the forgone option to invest later. It is therefore misleading to assess the cost-efficiency of investments in low-carbon capital by comparing levelized abatement costs, that is, efforts measured as the ratio of investment costs to discounted abatement. The equimarginal principle applies to an accounting value: the Marginal Implicit Rental Cost of the Capital (MIRCC) used to abate. Two apparently opposite views are reconciled. On the one hand, higher efforts are justified in sectors that will take longer to decarbonize, such as urban planning; on the other hand, the MIRCC should be equal to the carbon price at each point in time and in all sectors. Equalizing the MIRCC in each sector to the social cost of carbon is a necessary condition to reach the optimal pathway, but it is not a sufficient condition. Decentralized optimal investment decisions at the sector level require not only the information contained in the carbon price signal, but also knowledge of the date when the sector reaches its full abatement potential.
    Keywords: Climate Change Mitigation and Green House Gases,Climate Change Economics,Investment and Investment Climate,Economic Theory&Research,Environment and Energy Efficiency
    Date: 2013–04–01
  9. By: Nelly Exbrayat; Carl Gaigné; Stéphane Riou
    Abstract: [Paper in French] We analyze the impact and the determinants of a global carbon tax maximizing social welfare in an imperfectly integrated economy. Using a model of trade and location with two countries with different population size, we first show that agglomeration of firms in the larger country raises total CO2 emissions. Nevertheless, the introduction of a global carbon tax induces a partial relocation of firms from the larger to the smaller country. Thus, even though the carbon tax is identical in both countries, environmental taxation is not neutral for the location of economic activity. Finally, this partial relocation of firms in the smaller country improves the ability of the carbon tax to reduce total CO2 emissions.
    Keywords: green house gas, GHG, carbon tax, international trade, firm location, environmental efficiency
    JEL: F2 Q5
    Date: 2013
  10. By: Emmanuelle Lavaine; Matthew J. Neidell
    Abstract: This paper examines the effect of energy production on newborn health using a recent strike that affected oil refineries in France as a natural experiment. First, we show that the temporary reduction in refining lead to a significant reduction in sulfur dioxide (SO2) concentrations. Second, this shock significantly increased birth weight and gestational age of newborns, particularly for those exposed to the strike during the third trimester of pregnancy. Back-of-the-envelope calculations suggest that a 1 unit decline in SO2 leads to a 196 million euro increase in lifetime earnings per birth cohort. This externality from oil refineries should be an important part of policy discussions surrounding the production of energy.
    JEL: I12 Q4
    Date: 2013–04
  11. By: Miranowski, John; Rosburg, Alicia
    Abstract: With rapid expansion of biofuel production, major concerns have arisen over higher food costs and competition between food, feed, and biofuel for energy-rich commodities.  Most projections are based on short- and intermediate-term commodity price shocks.  We estimate long-term biofuel demand and cost-minimizing supply functions for feedstock and biofuel in developed and developing countries.  We assume input and output coefficients and substitution elasticities adjust over time in response to changing prices in a dynamic market environment with productivity growth.  Three alternative oil price scenarios are considered for biofuel feedstock production and conversation.  The price of oil puts both a floor and ceiling on feedstock price.  We conclude that global biofuel expansion will be limited in the absence of government incentives and mandates, unless high real oil prices prevail.  Countries and regions need large, excess feedstock supplies (price-elastic response) if biofuel expansion is to be competitive with oil or other liquid fuels.
    Keywords: biofuel; biomass; feedstock price ceiling; feedstock price floor; land use change; long-term biofuel projections; productivity growth
    Date: 2013–04–15
  12. By: Li Ping (Institute of Quantitative and Technological Economics, Chinese Academy of Social Sciences); Yang Danhui (Institute of Quantitative and Technological Economics, Chinese Academy of Social Sciences); Li Pengfei (Institute of Quantitative and Technological Economics, Chinese Academy of Social Sciences); Ye Zhenyu (Institute of Quantitative and Technological Economics, Chinese Academy of Social Sciences); Deng Zhou (Institute of Quantitative and Technological Economics, Chinese Academy of Social Sciences)
    Abstract: China’s speedy industrialization has undertaken mostly a crude path with extensive energy consumption and severe environmental damage. In face of the challenge of global warming and resource restrictions, it calls for urgent green transformation for the sustainable development of China’s industry. With huge potentials and more general benefits than costs, the industrial green transformation in China will have more positive effects and accelerate the whole process of the development of China’s green economy. From this perspective, China needs to adopt a comprehensive and open mechanism for green transformation with more strict environmental regulations, effective energy conservation and emissions reduction, green technology R&D and application, as well as international cooperation in the related fields with market-oriented reform, government strategies and regulations, proactive response from the industry sector, self-initiative of enterprises and active public participation.
    Keywords: Industry, Green Transformation, Technology Roadmap, Cost and Benefit
    JEL: Q5 Q55
    Date: 2013–03
  13. By: Gernot Pehnelt (GlobEcon and Friedrich-Schiller-University of Jena); Christoph Vietze (School of Economics and Business Administration, Friedrich-Schiller-University Jena)
    Abstract: The European Union's (EU) Renewable Energy Directive (RED) continues to be the focus of much debate over the validity of biofuel sustainability. The debate is driven in part by ongoing concerns of transparency and regional variations of emissions from feedstock cultivation and processing. In a working paper, Pehnelt and Vietze (2012) undertook a general analysis of rapeseed biodiesel greenhouse gas (GHG) savings. In light of the recent effort to decentralize assessments to regional (i.e. Member State) authorities to assess the sustainability of biofuel feedstocks, we have done the same for three Member States, incorporating the comments and critique we received on our latest working paper (Pehnelt and Vietze 2012). Using publicly available cultivation and production figures from Germany (the largest producer and consumer of rapeseed biodiesel), Poland and Romania, we analyse the greenhouse gas (GHG) emissions savings of rapeseed biodiesel which we then compare to the values of GHG savings identified in the RED. Under average conditions and conservative assumptions on N2O emissions, German rapeseed biodiesel meets the GHG savings requirements of 35 percent in the RED. However, in years with unfavourable weather conditions and lower yields, German rapeseed biodiesel may fail to reach the 35 percent threshold even with efficient production technologies in the subsequent steps of the supply chain. Taking into account higher N2O emissions due to fertilizer input as suggested by some researchers, German rapeseed biodiesel clearly fails to fulfil the 35 percent criterion required by the RED. Meanwhile, in no instance Polish or Romanian rapeseed biodiesel meet the RED's 35% GHG savings threshold. The assessment of the sustainability of rapeseed biodiesel heavily depends on the very production conditions and assumptions regarding the N2O field emissions. As a matter of fact, not every liter of rapeseed biodiesel produced in the EU is 'sustainable' in the sense of RED. Therefore, the use of standard values (e.g. default values) in order to categorize rapeseed biodiesel - or any other biofuel - as sustainable or not is not justifiable. With renewable energy strategies proliferating throughout the world, the validity of technical criteria has become increasingly critical to the success of these strategies - particularly the fiercely debated RED. The application of technical criteria remains inconsistent, and in the case of the RED, resulting in unreliable assessments of biofuel feedstocks and heated debates over the authority of these assessments.
    Keywords: Biofuel, Rapeseed, Biodiesel, RED, Renewable Energy Directive, Default Values, Typical Values, GHG-emissions
    JEL: F14 F18 O13 Q01 Q15 Q27 Q56 Q57
    Date: 2013–04–19
  14. By: YAMAGAMI, Hiroaki
    Abstract: This paper examines the importance of induced technological change in considering the efficiency costs of environmental policy. In particular, in modeling an endogenous formation of energy-saving technology through a variety of intermediates, the paper studies the welfare effects of environmental tax reform in a general equilibrium model. Using this model, the paper shows that environmental tax reform induces an expansion of the variety of intermediates by increasing rents from innovating new intermediates and, thereby, brings technological change. Then, the induced variety expansion by environmental tax reform achieves positive externalities and plays an important role both to decrease the efficiency costs and to improve the environmental quality.
    Keywords: Double dividend, Energy saving, Environmental tax reform, Induced technological change, Tax-interaction effect
    JEL: D62 H23 Q55 Q58
    Date: 2013–04
  15. By: Delavari, Majid; Gandali Alikhani, Nadiya; Naderi, Esmaeil
    Abstract: This study attempts to introduce an appropri¬¬ate model for modeling and forecasting Iran’s crude oil price volatility. Therefore, this hypothesis will be tested about whether long memory feature matters in forecasting the price of this commodity. For this purpose, using the Iran’s weekly crude oil price data, the long memory feature will be considered in the return and volatilities series, and the fractal markets hypothesis will also be examined about Iran’s oil market. In addition, from among the different conditional heteroscedasticity models, the best model for forecasting oil price volatilities will be selected based the forecasting error criterion. The main hypothesis of the study will be tested out using Clark-West test (2006). The results of our study confirmed the existence of long memory feature in both mean and variance equations of these series. But from among the conditional heteroscedasticity models, the ARFIMA-FIGARCH model was selected as the best model based on the Akaike and Schwarz information criteria (for modeling), and also the MSE criterion (for forecasting). Finally, the Clark-West test showed that the long memory feature is important in forecasting oil price volatilities.
    Keywords: Oil Price Volatility, Long Memory, FIGARCH, Clark-West.
    JEL: C12 C58 E37 Q47
    Date: 2013–04–19
  16. By: Forslid, Rikard (Dept. of Economics, Stockholm University); Okubo, Toshihiro (Keio University); Sanctuary, Mark (Dept. of Economics, Stockholm University)
    Abstract: This paper uses a monopolistic competitive framework with many sectors to study the impact of trade liberalization on local and global emissions. We focus on the interplay of the pollution haven effect and the home market effect and show how a large-market advantage can counterbalance a high emission tax, implying that trade liberalization leads to lower global emissions. Generally, our results suggest that relative market size, the level of trade costs, the ease of abatement, and the degree of product differentiation at the sector level are relevant variables for empirical studies on trade and pollution.
    Keywords: market size; emission tax; trade liberalization
    JEL: D21 F12 F15
    Date: 2013–04–17
  17. By: Mohamed Mnasri; Georges Dionne; Jean-Pierre Gueyie
    Abstract: Using a unique, hand-collected data set on hedging activities of 150 US oil and gas producers, we study the determinants of hedging strategy choice. We also examine the economic effects of hedging strategy on firms’ risk, value and performance. We model hedging strategy choice as a multi-state process and use several dynamic discrete choice frameworks with random effects to mitigate the unobserved individual heterogeneity problem and the state dependence phenomena. We find strong evidence that hedging strategy is influenced by investment opportunities, oil and gas market conditions, financial constraints, the correlation between internal funds and investment expenditures, and oil and gas production specificities (i.e., production uncertainty, production cost variability, production flexibility). Finally, we present novel evidence of the real implications of hedging strategy on firms’ stock return and volatility sensitivity to oil and gas price fluctuations, along with their accounting and operational performance
    Keywords: Risk management, derivative choice determinants, hedging strategies, linear and non-linear hedging, state dependence, dynamic discrete choice models, economic effects, oil and gas industry
    JEL: D8 G32
    Date: 2013
  18. By: growitsch, christian (Energiewirtschaftliches Institut an der Universitaet zu Koeln); Malischek, Raimund (Energiewirtschaftliches Institut an der Universitaet zu Koeln); Nick, Sebastian (Energiewirtschaftliches Institut an der Universitaet zu Koeln); Wetzel, Heike (Energiewirtschaftliches Institut an der Universitaet zu Koeln)
    Abstract: The German Energiewende’s potential effects on the reliability of electricity supply as well as the corresponding economic consequences have recently entered both the political and scientific debate. However, empirical evidence of power outage costs in Germany is rather scarce. Following a macroeconomic approach, we analyse the economic costs imposed by potential power interruptions in Germany. Investigating a rich data set on industry and households we estimate both Values of Lost Load (VoLLs) and associated costs of power interruptions for different German regions and sectors and every hour of the year. This disaggregated approach allows for conclusions for optimal load shedding in case of technical necessity and the economic efficiency of measures to improve security of supply. We find that interruption costs vary significantly over time, between sectors and regions. Peaking on midday of a Monday in December at 750 Mioe per hour, the average of total national outage costs amount to approximately 430 Mioe per hour. Our results emphasize the prominent regional aspect of the German Energiewende as the regions with the highest estimated cost of interruptions in South and West Germany coincide with the areas which face nuclear power plant shut downs in the near future.
    Keywords: Security of Supply; Value of Lost Load (VoLL); German Energiewende; Electricity outage costs
    JEL: D61 L94 Q40 Q41
    Date: 2013–04–23
  19. By: Daiya Isogawa (Graduate School of Economics, University of Tokyo); Hiroshi Ohashi (Faculty of Economics, University of Tokyo); Tsuyoshi Nakamura (Faculty of Economics, Tokyo Keizai University); Shin-ichi Hanada (Faculty of Economics, Kanazawa Seiryo University)
    Abstract: This report summarizes main results from the questionnaire concerning industrial electricity demand conducted to individual Japanese factories located in the Kanto and Kinki regions in the fall of 2012. The questionnaire is particularly interested in evaluating a new price scheme for the purpose of containing the peak demand. Three results are reported by use of the panel data analysis: (1) the new price scheme dropped the electricity bill charge by about 12 percent; (2) It reduced the electricity consumption (in terms of kWh), more than the peak demand (in terms of kW), worsening the load factor; (3) the larger the plant size, the greater the discount on the electricity bill charge due to the new price scheme, but the peak demand is relatively stable by plant size.
    Date: 2013–04
  20. By: Mario du Preez, Justin Beukes and E. Ernest van Dyk
    Abstract: The South African government currently faces the dual problems of climate change mitigation and the rollout of electricity provision to rural, previously disadvantaged communities. This paper investigates the economic efficiency of the implementation of concentrator photovoltaic (CPV) technology in the Tyefu area in the Eastern Cape, South Africa as a means of addressing these problems. A cost-benefit analysis (CBA), both from a social and a private perspective, is carried out in the study. The CBA from a private perspective investigates the desirability of the CPV project from a private energy investor’s point of view, whilst the CBA from a social perspective investigates the desirability of the CPV project from society’s point of view. The CBA from a social perspective found that the project was socially viable and was, thus, an efficient allocation of government resources. The CBA from a private perspective, on the other hand, found that investing in a CPV project was not financially viable for a private investor. It is recommended that the government consider CPV as an alternative to grid-connected electricity provision to rural, previously disadvantaged communities.
    Keywords: Cost-benefit analysis, concentrator photovoltaic technology, social discount rate
    Date: 2013
  21. By: Filippini, Massimo (Energiewirtschaftliches Institut an der Universitaet zu Koeln); Wetzel, Heike (Energiewirtschaftliches Institut an der Universitaet zu Koeln)
    Abstract: Several countries around the world have introduced reforms to the electric power sector. One important element of these reforms is the introduction of an unbundling process, i.e., the separation of the competitive activities of supply and production from the monopole activity of transmission and distribution of electricity. There are several forms of unbundling: functional, legal and ownership. New Zealand, for instance, adopted an ownership unbundling in 1998. As discussed in the literature, ownership unbundling produces benefits and costs. One of the benefits may be an improvement in the level of the productive efficiency of the companies due to the use of the inputs in just one activity and a greater level of transparency for the regulator. This paper analyzes the cost efficiency of 28 electricity distribution companies in New Zealand for the period between 1996 and 2011. Using a stochastic frontier panel data model, a total cost function and a variable cost function are estimated in order to evaluate the impact of ownership unbundling on the level of cost efficiency. The results indicate that ownership separation of electricity generation and retail operations from the distribution network has a positive effect on the cost efficiency of distribution companies in New Zealand. The estimated effect of ownership separation suggests a positive average one-off shift of 23 percent in the level of cost efficiency in the shortrun and 15 percent in the long-run.
    Keywords: Electricity distribution; Ownership separation; Cost efficiency; Total cost function; Variable cost function; Stochastic frontier analysis
    JEL: D24 L51 L94
    Date: 2013–02–10
  22. By: Geoffrey Heal; Antony Millner
    Abstract: Uncertainty is intrinsic to climate change: we know that the climate is changing, but not precisely how fast or in what ways. Nor do we understand fully the social and economic consequences of these changes, or the options that will be available for reducing climate change. Furthermore the uncertainty about these issues is not readily quantified and expressed in probabilistic terms: we are facing deep uncertainty or ambiguity rather than risk in the classical sense, rendering the classical expected utility framework of limited value. We review the sources of uncertainty about all aspects of climate change and resolve these into various components, commenting on their relative importance. Then we review decision-making frameworks that are appropriate in the absence of quantitative probabilistic information, including non-probabilistic approaches and those based on multiple priors, and discuss their application in climate change economics.
    Date: 2013–03
  23. By: Sven Heim (ZEW, University of Giessen); Georg Götz (University of Giessen)
    Abstract: We analyze a drastic price increase in the German auction market for reserve power, which did not appear to be driven by increased costs. Studying the market structure and individual bidding strategies, we find evidence for collusive behavior in an environment with repeated auctions, pivotal suppliers and inelastic demand. The price increase can be traced back to an abuse of the auction’s pay-as-bid mechanism by the two largest firms. In contrast to theoretical findings, we show that pay-as-bid auctions do not necessarily reduce incentives for strategic capacity withholding and collusive behavior, but can even increase them.
    Keywords: Auctions, Collusion, Market Power, Energy Markets, Reserve Power, Balancing Power
    JEL: D43 D44 L11 L13
    Date: 2013
  24. By: Deane, Paul; FitzGerald, John; Malaguzzi Valeri, Laura; Tuohy, Aidan; Walsh, Darragh
    Abstract: This paper compares retail and wholesale electricity prices in SEM, the market of the island of Ireland, and BETTA in Great Britain. Wholesale costs are much lower in BETTA. We show that this is mostly because the wholesale price in BETTA is set too low to cover generation costs, although it is compensated by large retail margins. The substantial need for new investment in generation in Great Britain suggests that returns to generators will have to increase. Developing a market mechanism to compensate generators fairly while simultaneously reducing retail revenue will help in achieving this goal.
    Keywords: SEM/BETTA/electricity prices/simulation model
    JEL: C63 L94 L98
    Date: 2013–04
  25. By: Frédéric Klopfert; Olivier Mortehan; Hélène Joachain; Caroline Lhoir
    Abstract: The Directive 2002/91/CE on the energy performance of buildings requires that by end 2020, all new buildings within Member States are “nearly zero-energy”. Though this is technically feasible for any new construction, the problem of reducing the energy consumption of the existing building stock seems much trickier. Can or will all owners invest to renovate their houses? Are information and financial incentives sufficient? Will individual cost-benefits or return on investment calculation at micro level be enough to overcome the barriers to renovation?The Smart City Block project aims to promote renovation at the level of a city block. It thus directly tackles the insufficiently explored “meso level” where stakeholders with different motivations should interact to achieve a common goal. This interdisciplinary project proposes a variety of technical solutions including insulation techniques and highly energy-efficient equipment but also exploits energy savings that can only be achieved by behavioural changes related to new living organisations. As the proposed approach cannot be applied systematically to any city block, the first step was to develop a methodology for determining where such a block renovation is feasible, within the 5000 city blocks of Brussels.In order to evaluate the acceptance of households, a survey was conducted on four city blocks in Brussels, representing over 450 households. It was therefore necessary to expose the possible solutions in a comprehensive manner for a diverse set of inhabitants. A list of “elements” (including items such as architectural, building performance, HVAC, common living spaces, equipment and gardens or vegetable garden) was produced by specialists (engineers, architects, urban developers and sociologists). The last section of the paper provides the survey methodology and some early results showing inhabitants low attractiveness of energy saving technologies and limited desire to share energy consuming activities.
    Date: 2013–04–18
  26. By: Bram Verhees; Rob Raven; Frank Veraart; Adrian Smith; Florian Kern
    Abstract: This paper reviews the developments of solar photovoltaic technology in the Netherlands. Despite the recent boom in PV industries and deployment around the globe, the Dutch have until now not experienced major growth in the diffusion of PV electricity generation. But this is only part of the story. This paper focuses on the question why PV is still around in the Netherlands despite, at times, harsh policy and socio-economic contexts. It builds upon a recently developed framework from the field of transition studies that distinguishes between shielding, nurturing and empowerment of sustainable innovations. A historical description is combined with an analysis of niche space to show how PV advocates have been able to strategically secure and shape protective measures over four decades in the context of harsh regime selection environments. The paper suggests how further analysis with the shielding-nurturing-empowerment framework can learn from this exploratory study on PV innovation in the Netherlands.
    Keywords: Strategic Niche Management, protective space, shielding, nurturing, empowering, solar PV.
    Date: 2012–09
  27. By: Xavier Lhote (UP1 UFR02 - Université Paris 1, Panthéon-Sorbonne - UFR d'Économie - Université Paris I - Panthéon-Sorbonne - PRES HESAM)
    Abstract: Are natural resources a blessing or a curse? As a matter of fact, few countries with abundant natural resources have succeeded in combining growth and development. What may account for this apparent paradox? Our analysis suggests that the institutional development of a country (at the time of the discovery of the natural resources) is the key factor explaining why a vicious or a virtuous circle of growth may develop. If the institutions are sufficiently well-established and strong enough to face predation behaviours, the country will then benefit from its substratum. On the other hand, insecure property rights (as is typical of countries with weaker institutions) will fuel predation behaviours around rent-production. To secure their property rights, fi rms will have no other option but to resort to corruption by transferring part of their rents into bribes, exceptional taxes, extortion racket, etc. The increase in these predation behaviours then limits the direct investment flow from foreign countries and blocks the country's development. This in turn will establish a climate of corruption in an economy with low production development. In countries where natural resources are abundant, insecure property rights are thus detrimental in several ways. First, direct investment in the exploitation of resources is suboptimal. This has a proportional negative effect on the country's budget by lowering the tax revenue and limiting the country's development. The extraction potential, and thus the country's enrichment, is constrained by these insecure property rights. Besides, the climate of corruption, generated by the securing of these property rights, deters foreign investors from settling on the national market and locks the country in a poverty trap. The country only attracts firms belonging to sectors connected to natural resources and thus becomes dependent on the rate of raw materials and the exploitation of natural resources. When a state budget depends on exploitation rent at the expense of taxes on citizens, the democratic control of civil society is weakened and the convergence of the institutions towards an autocratic state is favoured, for lack of a strong system of checks and balances. In a moribund economy where investors (in particular foreign ones) are reluctant to value the country's potential, the inequalities generated by a corrupt government which grows richer through mining and oil revenues, and the empoverishment of the population, may result in political unrest leading to conflicts.
    Date: 2012–07–12
  28. By: Francesco Caselli; Massimo Morelli; Dominic Rohner
    Abstract: We establish a theoretical as well as empirical framework to assess the role of resource endowments and their geographic location for inter-State conflict. The main predictions of the theory are that conflict tends to be more likely when at least one country has natural resources; when the resources in the resource-endowed country are closer to the border; and, in the case where both countries have natural resources, when the resources are located asymmetrically vis-a-vis the border. We test these predictions on a novel dataset featuring oilfield distances from bilateral borders. The empirical analysis shows that the presence and location of oil are significant and quantitatively important predictors of inter-State conflicts after WW2.
    JEL: Q34
    Date: 2013–04
  29. By: Antoine Dechezleprêtre
    Abstract: This paper presents the first empirical analysis of programmes to fast-track ‘green’ patent applications in place in seven Intellectual Property offices around the world. We find that only a small share of green patent applications (between 1% and 20% depending on the patent office) request accelerated examination, suggesting that patent applicants have a strong incentive to keep their patent applications in the examination process for as long as possible. Fast-tracking programmes reduce the examination process by several years compared to patents going through normal examination procedure and have seemingly accelerated the diffusion of technological knowledge in green technologies. In addition, we find that applicants require accelerated examination for patents of relatively higher value and that fast-tracking programmes seem to be particularly appealing to start-up companies in the green technology sector that are currently raising capital but still generate small revenue.
    Date: 2013–02
  30. By: Claire Bergaentzlé (PACTE - Politiques publiques, ACtion politique, TErritoires - Institut d'Études Politiques [IEP] - Grenoble - CNRS : UMR5194 - Université Pierre Mendès-France - Grenoble II - Université Joseph Fourier - Grenoble I); Cédric Clastres (PACTE - Politiques publiques, ACtion politique, TErritoires - Institut d'Études Politiques [IEP] - Grenoble - CNRS : UMR5194 - Université Pierre Mendès-France - Grenoble II - Université Joseph Fourier - Grenoble I); Haikel Khalfallah (PACTE - Politiques publiques, ACtion politique, TErritoires - Institut d'Études Politiques [IEP] - Grenoble - CNRS : UMR5194 - Université Pierre Mendès-France - Grenoble II - Université Joseph Fourier - Grenoble I)
    Abstract: L'activation de la demande électrique permet d'atteindre des objectifs d'efficacité énergétique et environnementale grâce à la maîtrise des consommations (ou DSM pour Demand Side Management). De nombreux pilotes menés ces dix dernières années permettent d'avoir une représentation robuste de l'impact des outils d'activation de la demande ; cependant, ces outils doivent être calibrés pour répondre à des enjeux bien identifiés. La présente étude suggère que des modèles différents de DSM soient choisis, selon les spécificités des mix de production des pays ainsi que leur capacité d'échange aux interconnexions. Un modèle est réalisé pour déterminer le niveau de DSM nécessaire pour atteindre les meilleurs bénéfices économiques et environnementaux pour cinq pays interconnectés et aux différents mix de production. Deux hypothèses d'interconnexion, illimitée et réelle, sont retenues et comparées à la situation d'un pays isolé. Dans un tel contexte, l'intégration des énergies intermittentes, la sortie du nucléaire, le niveau de risque de défaillance en pointe et le report des effacements vont être des déterminants majeurs dans l'adoption de mesures et d'outils DSM. Cette étude vise à apporter des recommandations concernant les instruments d'activation de la demande qui maximisent les efficacités énergétiques et environnementales pour les différents cas de pays étudiés. Cinq conclusions majeures sont à retenir de cette étude. Premièrement, les stratégies DSM dépendent fortement des mix de production des pays et ne sont pas automatiquement reproductibles. Deuxièmement, une vision de marché européen parfaitement intégré modifie le niveau d'effort à réaliser pour chaque pays, et demande une concertation et une coordination fortes dans les stratégies nationales de DSM. Troisièmement, la situation d'interconnexions limitées laisse apparaître les stratégies optimales de DSM et d'échange à adopter par chaque pays pour atteindre les objectifs d'efficacité les plus importants. Quatrièmement, il apparaît que l'efficacité augmente avec le niveau d'effort mais à taux décroissant, suggérant une préférence pour les outils DSM simples. Enfin, les résultats des programmes de DSM sont largement dépendants de l'effet de report des consommations, lequel, s'il n'est pas maîtrisé, peut éliminer les bénéfices de l'effacement, particulièrement en situation de parc fortement thermique.
    Keywords: réseaux intelligents ; effacement ; tarification Dynamique ; gestion de la demande ; efficacité énergétique ; efficacité environnementale
    Date: 2013–04

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