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on Energy Economics |
By: | Nababan, Tongam Sihol |
Abstract: | In Indonesia, the activities of supplying of electricity energy or generating of electricity power is still dominated by PT PLN (Persero). The supply of electricity has not been able to meet the demand of electricity by PT PLN. The electricity supply can be affected by amount of generation units, installed capacity, power capacity, investment, energy produced, fuel consumption, unit price of fuel, energy losses, the length of transmission and distribution network, interruption of distribution network, and captive power. The aim of this study is to analyze the factors affecting on the supply of electricity in Indonesia. Based on the characteristics of the data available on each units of PT PLN or provinces, the data used in this study is panel data in period of year 2009 - 2014. Based on the results of Chow Test and Hausman Test, to analyze the pooled data it is better by using Fixed Effect Model. The result of estimation shows that the factors affecting the supply of electricity in Indonesia are the price (tariff) of electricity, the price of fuel, the length of transmission lines, the energy losses. The the price (tariff) of electricity affects positively and significantly (α = 0.01) and elastic on the supply of electriciy. The price of fuel, the length of transmission lines and the energy losses affect negatively and significantly (α = 0.01) and inelastic on the supply of electriciy. While the number of distribution interruption has no significant effect on the supply of electriciy. Statistically, all dummy variables of individuals (PLN operational unit/province) and time (year 2009 – 2014) affect significantly (α = 0.01) on the supply of electriciy. It means that the patterns of electricity supply of PLN operational units and time patterns of electricity supply are different from the benchmarks. It is hoped that PT PLN focusing attention on tariff policy, to diversify the input of power generating units, to optimize the length of transmission lines, and also to minimize the electricity energy losses. |
Keywords: | electricity, energy losses, pooled data, price (tariff), transmission and distribution |
JEL: | C4 C5 D2 |
Date: | 2016–04–30 |
URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:76910&r=ene |
By: | Kennedy, Sean; Lyons, Sean; Morgenroth, Edgar; Walsh, Keith |
Abstract: | Consistently cheaper fuel prices in one jurisdiction compared to a neighbouring jurisdiction should, holding other factors constant, lead to greater demand for fuel in the country with the lower price, due in part to legal fuel tourism. Fuel tourism, cross-border demand for fuel, represents an important source of tax revenues to the Exchequer but also contributes significantly to a country’s national greenhouse gas (GHG) emissions. The econometric analysis in this paper aims to estimate the level and determinants of fuel demand from Northern Irish consumers in the Republic of Ireland taking account of market size, proximity to major roads, level of local competition and station characteristics. The analysis is based on an unbalanced panel dataset of retail sales among 543 border stations from April 2013 to March 2015. The results show that the set of stations close to the border have higher than expected average diesel and petrol sales by 54.4% and 14.6% respectively. Greater levels of fuel tourism for diesel may partly be attributable to heavy goods and other vehicles which avail of cheaper prices near the border before making long distance journeys on to the Continent. The combined Excise Duty, Carbon Tax and VAT contribution to the Irish Exchequer associated with fuel tourism is estimated at €202 million for diesel and €28 million for petrol based on 2015 levels. CO2 emissions from these cross-border sales are about 1.17 million tonnes per annum, or 2% of Ireland’s national GHG emissions. |
Keywords: | Fuel tourism, cross border shopping, fuel demand, Ireland |
JEL: | F14 H20 Q41 Q48 |
Date: | 2017–02–19 |
URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:76961&r=ene |
By: | Ketter, W.; Collins, J.; de Weerdt, M.M. |
Abstract: | This is the specification for the Power Trading Agent Competition for 2017 (Power TAC 2017). Power TAC is a competitive simulation that models a “liberalized” retail electrical energy market, where competing business entities or “brokers” offer energy services to customers through tariff contracts, and must then serve those customers by trading in a wholesale market. Brokers are challenged to maximize their profits by buying and selling energy in the wholesale and retail markets, subject to fixed costs and constraints; the winner of an individual “game” is the broker with the highest bank balance at the end of a simulation run. Costs include fees for publication and withdrawal of tariffs, and distribution fees for transporting energy to their contracted customers. Costs are also incurred whenever there is an imbalance between a broker’s total contracted energy supply and demand within a given time slot. The simulation environment models a wholesale market, a regulated distribution utility, and a population of energy customers, situated in a real location on Earth during a specific period for which weather data is available. The wholesale market is a relatively simple call market, similar to many existing wholesale electric power markets, such as Nord Pool in Scandinavia or FERC markets in North America, but unlike the FERC markets we are modeling a single region, and therefore we approximate locational-marginal pricing through a simple manipulation of the wholesale supply curve. Customer models include households, electric vehicles, and a variety of commercial and industrial entities, many of which have production capacity such as solar panels or wind turbines. All have “real-time” metering to support allocation of their hourly supply and demand to their subscribed brokers, and all are approximate utility maximizers with respect to tariff selection, although the factors making up their utility functions may include aversion to change and complexity that can retard uptake of marginally better tariff offers. The distribution utility models the regulated natural monopoly that owns the regional distribution network, and is responsible for maintenance of its infrastructure. Real-time balancing of supply and demand is managed by a market-based mechanism that uses economic incentives to encourage brokers to achieve balance within their portfolios of tariff subscribers and wholesale market positions, in the face of stochastic customer behaviors and weather-dependent renewable energy sources. Changes for 2017 are focused on a more realistic wholesale market, reducing the market power of brokers by making the simulation scenario into a relatively small part of a larger market, and are highlighted by change bars in the margins. See Section 5.3 for details. |
Keywords: | Autonomous Agents, Electronic Commerce, Energy, Preferences, Portfolio Management, Power, Policy Guidance, Sustainability, Trading Agent Competition |
Date: | 2017–02–13 |
URL: | http://d.repec.org/n?u=RePEc:ems:eureri:96687&r=ene |
By: | Abrell, Jan; Rausch, Sebastian |
Abstract: | This paper analyzes hybrid emissions trading systems (ETS) under partitioned environmental regulation when firms’ abatement costs and future emissions are uncertain. We show that hybrid policies that introduce bounds on the price or the quantity of abatement provide a way to hedge against differences in marginal abatement costs across partitions. Price bounds are more efficient than abatement bounds as they also use information on firms’ abatement technologies while abatement bounds can only address emissions uncertainty. Using a numerical stochastic optimization model with equilibrium constraints for the European carbon market, we find that introducing hybrid policies in EU ETS reduces expected excess abatement costs of achieving targeted emissions reductions under EU climate policy by up to 89 percent. We also find that under partitioned regulation there is a high likelihood for hybrid policies to yield sizeable ex-post cost reductions. |
JEL: | H23 Q54 C63 |
Date: | 2016 |
URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc16:145726&r=ene |
By: | Valeria Di Cosmo (Fondazione Enrico Mattei); Laura Malaguzzi Valeri (Economic and Social Research Institute) |
Abstract: | We evaluate how increasing wind generation affects wholesale electricity prices, balancing payments and the cost of subsidies using the Irish Single Electricity Market (SEM) as a test system, with hourly data from 1 January 2008 to 28 August 2012. We measure the effect of wind on the marginal cost of generating electricity using a system of seemingly unrelated regressions (SUR) where the regressions are the 24 hours of the day. Wind has a negative impact on the system marginal price. In particular, every MWh increase in wind generation (equal to about 0.2% of the average wind generation in our sample) leads to a decrease of the system marginal price of €0.018/MWh, or about 0.3% of its average value in our sample. Using time series models we show that wind generation increases balancing payments, as do the forecast errors of demand and wind. Lack of storage significantly increases the impact of wind on balancing payments whereas the lack of interconnection has no effect. Overall, wind decreases costs through its effect on the electricity price more than it increases constraint payments, even when storage is on outage. The effect of wind remains positive after including the subsidies given to wind generation. |
Keywords: | Wind generation, constraints, storage, interconnection, wind subsidies |
JEL: | L94 Q42 |
Date: | 2016 |
URL: | http://d.repec.org/n?u=RePEc:ieb:wpaper:doc2016-30&r=ene |
By: | Tomás Gómez San Román (Universidad Pontificia Comillas) |
Abstract: | The integration of large amounts of distributed energy resources (DERs) as photovoltaic solar generation, micro-cogeneration, electric vehicles, distributed storage or demand response pose new challenges and opportunities on the power sector. In this paper, we review the current trends on: i) how consumers adopting DERs can self-provide energy services and provide other services at system level, ii) what can be expected at distribution networks and how retail markets will evolve with more proactive and market engaged consumers, iii) what are the effects and integration of DERs on wholesale markets, and iv) what are the challenges that DERs pose on cybersecurity and the opportunities for improving system resilience. Several recommendations are given for achieving an efficient integration of DERs. For instance, the design of a comprehensive system of prices and charges and the elimination of existing barriers for market participation are crucial reforms to achieve a level playing field between distributed and centralized resources when providing electricity services. This paper summarizes part of the work developed under the MIT Utility of the Future study. |
Keywords: | Distributed energy resources, distribution networks, power systems, wholesale and retail electricity markets, locational marginal prices |
JEL: | D4 L94 L95 L98 |
Date: | 2017 |
URL: | http://d.repec.org/n?u=RePEc:ieb:wpaper:doc2017-02&r=ene |
By: | Böhringer, Christoph; Schneider, Jan; Asane-Otoo, Emmanuel |
Abstract: | Carbon-based import tariffs are discussed as policy measures to reduce carbon leakage and increase the global cost-effectiveness of unilateral CO2 emission pricing. We assess how the potential of carbon tariffs to increase cost-effectiveness of unilateral climate policy depends on the magnitude and composition of carbon embodied in trade. For our assessment, we combine multi-region input-output (MRIO) analysis with computable general equilibrium (CGE) analysis based on data from the World Input-Output Database (WIOD) for the period 1995 to 2007. The MRIO analysis confirms that carbon embodied in trade has sharply increased during this period. Yet, the CGE analysis suggests that the effectiveness of carbon tariffs in reducing leakage and improving global-cost effectiveness of unilateral climate policy does not increase over time, whereas the potential to shift the economic burden of CO2 emissions reduction from abating developed regions to non-abating developing regions increases substantially. |
JEL: | Q58 D57 D58 |
Date: | 2016 |
URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc16:145628&r=ene |
By: | Raphael Raduzzi; Antonio Ribba |
Abstract: | In this work we provide an analysis over the period 1999 - 2015 of the effects of oil shocks on prices and GDP in a group of small Euro-area economies. The group includes Austria, Belgium, Finland, Greece, Ireland, Italy, Netherlands, Portugal and Spain. We use the structural near-VAR methodology and are thus able to model the joint interaction of area-wide macroeconomic variables and national variables. We find that under the EMU oil price shocks have been important drivers of business cycle fluctuations in almost all these countries. Moreover, an increase in oil prices produces significant recessionary effects in all the countries included in the investigation. Thus, although there are different sizes in the responses of output in the investigated countries, our main conclusion is that oil prices (still) matter for European economies |
Keywords: | Oil Shocks; Business Cycles; Near-Structural VARs; Euro area |
JEL: | E31 E32 Q43 C32 |
Date: | 2017–02 |
URL: | http://d.repec.org/n?u=RePEc:mod:recent:127&r=ene |
By: | Richter, Philipp; Schiersch, Alexander |
Abstract: | This study analyses whether exporting firms produce less CO2 emission-intensively than non-exporting competitors. It exploits a novel and unique dataset for Germany, a major exporting country. We make use of the particularity that CO2 emissions are directly linked to the type of fuel consumed. This allows us to directly estimate CO2 emission intensity within a production function framework. We show that such an integrated approach solves the issue of omitted variable bias that standard regressions approaches on CO2 emission intensity of firms are exposed to. It furthermore enables us to apply latest econometric techniques from the productivity literature that solve the problem of endogeneity. Our findings suggest a positive relation between export intensity and CO2 productivity—the inverse of emission intensity. This exporter’s environmental premium holds for most of the German manufacturing industries at the two-digit level. |
JEL: | F18 D22 L60 |
Date: | 2016 |
URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc16:145706&r=ene |
By: | Ben Jebli, Mehdi; Ben Youssef, Slim |
Abstract: | The autoregressive distributed lag (ARDL) bounds approach to cointegration and Granger causality tests are used to investigate the dynamic short and long-run causality relationships between per capita renewable energy (RE) consumption, carbon dioxide (CO2) emissions, real gross domestic product (GDP), agricultural value added (AVA), and arable land use (LUSE) for the case of Morocco during the period 1980-2013. Two models are used: the first with the AVA variable, and the second with the LUSE variable. The Wald test confirms the existence of a long-run relationship between variables for each considered model. Our long-run estimates indicate that an increase in economic growth, agricultural production, and arable land use contribute to increase the use of renewable energy, while a decrease in CO2 emissions increases renewable energy consumption. Granger causality tests reveal the existence of a short-run unidirectional causality running from AVA and from LUSE to RE consumption; a long-run unidirectional causality running from LUSE to RE, and a long-run bidirectional causality between AVA and RE. We recommend that Morocco should continue to encourage renewable energy use because this latter is not in competition with agricultural production for land use, but rather it is a complementary activity. |
Keywords: | Autoregressive distributed lag; Granger causality; renewable energy; agricultural value added; arable land use; Morocco. |
JEL: | C3 Q1 Q15 Q42 Q54 |
Date: | 2017–02–01 |
URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:76798&r=ene |
By: | Jeannie Oliver, Benjamin Sovacool |
Abstract: | This article argues that smart grid technologies enable policy-makers and communities to successfully manage enduring energy policy concerns. It defines what ‘smart’ energy technologies, grids and policies mean, and then evaluates how the smart grid can enable policy-makers to respond to an emerging energy ‘trilemma’. Drawing on case studies from the United States, the article suggests that the automated communications enabled by smart grid technologies significantly benefit each dimension of the energy trilemma: economic, social and environmental. However, successful smart grid implementation requires smart communication beyond technology. Failure to engage with customers through targeted communication, or to adequately address customers' privacy concerns, risks alienating customers, threatening the value of the smart grid investment. This article concludes that, with smart communication, both technical and human, the smart grid is an important step towards a sustainable energy future for stakeholders well beyond the United States. |
Keywords: | smart grid, energy trilemma, energy security, sustainable development, communication |
Date: | 2017–02–16 |
URL: | http://d.repec.org/n?u=RePEc:een:appswp:201705&r=ene |
By: | Ben P. Heard, Barry W. Brook |
Abstract: | A large and growing market exists for the management of used nuclear fuel. Urgent need for service lies in Asia, also the region of the fastest growth in fossil fuel consumption. A logical potential provider of this service is acknowledged to be Australia. We describe and assess a service combining approved multinational storage with an advanced fuel reconditioning facility and commercialisation of advanced nuclear reactor technologies. We estimate that this project has the potential to deliver a net present value of (2015) AU$30.9 billion. This economic finding compares favourably with recent assessment based on deep geological repository. Providing service for used nuclear fuel and commercialisation of next generation nuclear technology would catalyse the expansion of nuclear technology for energy requirements across Asia and beyond, aiding efforts to combat climate change. Pathways based on leveraging advanced nuclear technologies are therefore worthy of consideration in the development of policy in this area. |
Keywords: | used nuclear fuel, integral fast reactor, PRISM, pyroprocessing, technology, climate change |
Date: | 2017–02–16 |
URL: | http://d.repec.org/n?u=RePEc:een:appswp:201712&r=ene |
By: | Janda, Karel; Quarshie, Gregory |
Abstract: | Using panel data from 1980 to 2010 on 34 sub-Saharan African countries, this paper examines whether institutionalised authority, which is a proxy for state authority, can change the negative relationship between natural resources and economic growth. The key finding is that, institutionalised authority can alter the negative relationship that exists between natural resources and economic growth. We also model the relationship between the oil revenue (fuel exports) and economic growth, and how institutionalised authority can alter this relationship as well. |
Keywords: | Economic Growth; Natural Resources; Oil; Institutions; Dutch Disease; Sub-Saharan Africa |
JEL: | C33 O43 P52 Q43 |
Date: | 2017–02–10 |
URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:76749&r=ene |
By: | Jaime DE MELO (Ferdi) |
Abstract: | The Paris Agreement (PA) signed by 175 parties is now a Treaty since a quorum of signatories has been obtained. This Treaty is really the first important step taken to limit temperature increase, as pledges, if sustained and far more ambitious beyond 2030, would drastically limit the projected temperature increase from projections in the absence of measures to limit emissions of greenhouse gases. Contributions however fall short of the intentions to limit temperature increase to the +1.5° to +2° Celsius range since the onset of industrialization. Drawing on recent contributions, this paper reviews where we stand in tackling four challenges ahead: (i) taking fuller cognizance of the accumulating scientific evidence calling for urgent action; (ii) designing an architecture that will render effective the blend of ‘bottom-up’ and ‘top-down’ approaches; (iii) choosing policy options and tackling the slow transition to a low-carbon economy, and; (iv) raising finance and addressing burden sharing. |
JEL: | O44 F18 |
Date: | 2016–11 |
URL: | http://d.repec.org/n?u=RePEc:fdi:wpaper:3333&r=ene |
By: | Yasuhiro Sakai (Faculty of Economics, Shiga University) |
Abstract: | This paper aims to discuss the problem of nuclear power generation from the viewpoint of the economics of risk and uncertainty. Although we have experienced the two major nuclear disasters, Chernobyl and Fukushima, in recent times, it is quite unfortunate that risk-economic studies in nuclear power generation have been extremely rare so far. This may show intentional neglect in the academic circle. The purpose of this paper is to duly mend such a regrettable tendency. Before 11 March 2011, there were many people who more or less believed in the myth of absolute safety. The Great East Japan Earthquake, however, has completely changed their concept of risk for nuclear power generation, thus requiring the need to take a new risk-economic approach to nuclear energy. As saying goes, we can learn new lessons in old teachings: we have to reexamine the economics of J.M. Keynes and Frank Knight. There are many possibilities for future research. |
Keywords: | Risk, uncertainty, nuclear power generation, Keynes, Knight |
URL: | http://d.repec.org/n?u=RePEc:shg:dpapea:23&r=ene |
By: | Andor, Mark; Gerster, Andreas; Sommer, Stephan |
Abstract: | Energy labels have been introduced in many countries to make consumers more attentive to energy use in purchase decisions of durables. Despite their wide application, however, little is known about the effects of specific label designs. In this paper, we explore how energy labels can help to address inattention of consumers to energy efficiency. Our analysis is based on a (randomized controlled) discrete choice experiment among about 5,000 households in which we implement treatments that vary the label design. We find that supplementing the label with annual cost information increases attention to operating cost and promotes the choice of durables with higher energy efficiency. Moreover, simplifying the label has similar positive effects, most notably for individuals with low education. Finally, we show that a substantial share of individuals employ decision heuristics, focusing primarily on efficiency classes while neglecting more detailed information on energy consumption. |
JEL: | D12 D83 Q48 |
Date: | 2016 |
URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc16:145778&r=ene |
By: | Hanna-Liisa Kangas; David Lazarevic (Royal Institute of Technology (KTH)); Paula Kivimaa (Government of the Republic of Finland - Finnish Environment Institute) |
Abstract: | Energy inefficiency in the building stock is a substantial contributor to climate change. Integrated energy service companies (IESCs) have a potentially important role in improving energy efficiency. However, there are numerous barriers to energy efficiency, preventing the growth of energy service markets. We analyse energy efficiency barriers to overcoming the energy efficiency gap in the Finnish building sector. Taking a novel supply side perspective, we place IESCs at the centre of the emerging energy services business ecosystem to identify the barriers and hindering factors (real world illustrations of barriers). From this perspective, we also examine cause-effect relationships between the hindering factors and the actors. Hindering factors, reported by IESCs, were categorised under a revised barrier taxonomy consisting of economic market failures and economic market, behavioural, organisational and institutional barriers. The most salient hindering factors—lack of technical skills, disinterest in energy efficiency improvements and non-functional regulation—were analysed with respect to ecosystem actors causing and affected by these factors. Public actors have a key role in overcoming these barriers, for instance by creating new possibilities for entrants to take part in decision-making, increasing the functionality and practicality of policies and by providing up-to date energy efficiency information. |
Keywords: | Energy services; barriers; energy efficiency; ecosystem; energy service company; buildings |
Date: | 2017–02 |
URL: | http://d.repec.org/n?u=RePEc:sru:ssewps:2017-04&r=ene |
By: | Andreas Karpf (Centre d'Economie de la Sorbonne); Antoine Mandel (Paris School of Economics - Centre d'Economie de la Sorbonne); Stefano Battiston (Department of Banking and Finance - University of Zürich) |
Abstract: | This paper presents an analysis of the European Emission Trading System as a transaction network. It is shown that, given the lack of a centralized market place, industrial actors had to resort to local connections and financial intermediaries to participate in the market. This gave rise to a hierarchical structure in the transaction network. To empirically relate networks statistics to market outcomes a PLS-PM modeling technique is introduced. It is shown that the asymmetries in the network induced market inefficiencies (e.g. increased bid-ask spread). Albeit the efficiency of the market has improved from the beginning of Phase II, the asymmetry persists, imposing unnecessary additional costs on agents and reducing the effectiveness of the market as a mitigation instrument |
Keywords: | carbon market; network; climate economics |
JEL: | L14 D85 Q56 |
Date: | 2017–02 |
URL: | http://d.repec.org/n?u=RePEc:mse:cesdoc:17010&r=ene |
By: | Ryan M. Yonk (Utah State University); Landon Stevens (Strata Policy); Arthur R. Wardle (Institute of Political Economy); Joshua C. Hall (West Virginia University, Department of Economics) |
Date: | 2016–12 |
URL: | http://d.repec.org/n?u=RePEc:wvu:wpaper:16-30&r=ene |
By: | Maria Teresa Costa-Campi (Universitat de Barcelona & IEB); Néstor Duch-Brown (Institute for Prospective Technological Studies); José García-Quevedo (Universitat de Barcelona & IEB) |
Abstract: | Investment by energy firms in innovation can have substantial economic and environmental impacts and benefits. Internal R&D is the main input and driver of the innovation process, but innovation involves other activities, including capital purchases and other current expenditures. While the R&D activities of energy firms have been analysed, few studies have examined the typology of their innovation activities. Here, we analyse the impact of the main characteristics of the sector’s firms on their decisions to invest in each of three types of innovation activity: namely internal R&D; external R&D; and, the acquisition of advanced machinery, equipment or software. In conducting this analysis, we take the potential persistence of innovation activities into account. We also examine the role that different innovation objectives have on firms’ investment decisions. Given that engagement in a specific type of innovation may result from decisions that are not taken independently of each other, we analyse whether there is any complementarity between the three innovation activities. In carrying out the empirical analysis, we draw on data for private energy firms included in the Technological Innovation Panel (PITEC) for Spanish firms for the period 2004-2013. We use panel triprobit models to examine potential complementarity. |
Keywords: | Energy, R&D, innovation, regulation, complementarity |
JEL: | L94 Q40 O32 |
Date: | 2016 |
URL: | http://d.repec.org/n?u=RePEc:ieb:wpaper:doc2016-28&r=ene |
By: | Jean-Claude BERTHELEMY (Université Paris I Panthéon-Sorbonne) |
Abstract: | Cette communication met l’accent sur les questions de gouvernance à résoudre pour progresser dans l’objectif du développement durable n°7 sur l’accès à l’énergie. Le point de départ de l’analyse est le constat de problèmes majeurs de gouvernance dans les grands réseaux électriques des pays en retard en matière d’accès à l’électricité. Ces problèmes de gouvernance, qui induisent des couts élevés pour les utilisateurs du réseau, relèvent de l’interprétation d’Elinor Ostrom sur la tragédie des communs. Les projets de mini-réseaux, dont la faisabilité technico-économique a été renforcée ces dernières années du fait des progrès en matière de production d’électricité à partir de sources renouvelables, constituent une réponse possible réaliste à ces défis, dès lors qu’une gouvernance polycentrique permettrait, comme envisagé par Elinor Ostrom, de résoudre la tragédie des communs. Quelques retours d’expérience à partir de l’observation de projets récents d’électrification rurale permettent d’identifier les facteurs clés de la réussite de ces projets. |
Date: | 2016–11 |
URL: | http://d.repec.org/n?u=RePEc:fdi:wpaper:3335&r=ene |