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on Regulation |
| By: | Böckers, Veit; Giessing, Leonie; Rösch, Jürgen |
| Abstract: | We estimate the impact of renewable energy sources on the merit order and the wholesale price in Spain. We use a structural vectorautoregressive model for the merit order of production and argue that wind and solar production are exogenous to the system. As expected the overall effect is negative for the wholesale price and the produced quantities of most generation technologies. The estimated impact, however, is biggest for mid-merit plants. This finding sheds light on the theoretical discussion about which power plants are affected most by renewable energy sources. The effect is also mainly driven by wind power. Solar energy increases wholesale prices as peak plants enlarge their production with more solar power. -- |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:dicedp:104&r=reg |
| By: | Mads, Greaker (Statistics Norway); Kristoffer, Midttømme (Dept. of Economics, University of Oslo) |
| Abstract: | Network externalities could be present for many low or zero emission technologies. One obvious example is alternative fuel cars, whose use value depends on the network of service stations. The literature has only briefy looked at environmentally benefcial technologies. Yet, the general literature on network effects is mixed on whether governments need to intervene in order to correct for network externalities. In this paper we study implications of network effects on environmental policy in a discrete time dynamic game. Firms sell a durable good. One type of durable is causing pollution when being used, while the other type is "clean". Consumers' utility increase in the number of other users of the same type of durable, which gives rise to the network effect. We find that the optimal tax depends on the size of the clean network. If starting from a situation in which the dirty network dominates, the optimal tax may exceed the marginal environmental damage, thereby charging consumers for more than just their own emissions. Applying a Pigovian tax may, on the contrary, fail to introduce a socially beneficial clean network. |
| Keywords: | Network eects; lock-in; enviromnetal taxes |
| JEL: | H23 Q55 Q58 |
| Date: | 2013–06–15 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:osloec:2013_015&r=reg |
| By: | Janosch Ondraczek (University of Hamburg, Research Unit Sustainability and Global Change) |
| Abstract: | Despite the rapid decline in the cost of solar photovoltaic (PV) systems in the past five years, even recent academic research suggests that the cost of generating PV electricity remains too high for PV to make a meaningful contribution to the generation of grid electricity in developing countries. This assessment is reflected in the views of policymakers throughout Africa, who often consider PV as a technology suited only to remote locations and small-scale applications. This paper therefore analyzes whether, in contrast to conventional wisdom, PV is already competitive with other generation technologies. Analytically, the paper is based on a levelized cost of electricity (LCOE) model to calculate the cost of PV electricity in Kenya, which serves as a case study. Based on actual technology costs and Kenya’s solar resource, the LCOE from PV is estimated at USD 0.21/kWh for the year 2011, with scenario results ranging from USD 0.17-0.30/kWh. This suggests that the LCOE of grid-connected PV systems may already be below that of the most expensive conventional power plants, i.e. medium-speed diesel generators and gas turbines, which account for a large share of Kenya’s current power mix. This finding implies that researchers and policymakers may be mistaken in perceiving solar PV as a costly niche technology, rather than a feasible option for the expansion of power generation in developing countries. |
| Keywords: | solar photovoltaic electricity, on-grid electricity supply, levelized cost of electricity, developing countries, Africa |
| JEL: | C29 O12 Q42 Q48 |
| Date: | 2013–04–18 |
| URL: | http://d.repec.org/n?u=RePEc:sgc:wpaper:200&r=reg |
| By: | Ladislav Kristoufek; Petra Lunackova |
| Abstract: | We analyze long-term memory properties of hourly prices of electricity in the Czech Republic between 2009 and 2012. As the dynamics of the electricity prices is dominated by cycles -- mainly intraday and daily -- we opt for the detrended fluctuation analysis, which is well suited for such specific series. We find that the electricity prices are non-stationary but strongly mean-reverting which distinguishes them from other financial assets which are usually characterized as unit root series. Such description is attributed to specific features of electricity prices, mainly to non-storability. Additionally, we argue that the rapid mean-reversion is due to the principles of electricity spot prices. These properties are shown to be stable across all studied years. |
| Date: | 2013–09 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:1309.0582&r=reg |
| By: | Felix Groba; Barbara Breitschopf |
| Abstract: | Technological changes in renewable energy technologies play an important role in the context of climate change as they contribute to a reduction of technology costs and lead to an increasing market penetration of emission reducing technologies. This paper provides a comprehensive literature review highlighting numerous motivations and necessities underlying the introduction of renewable energy policies. Starting with a brief overview on the induced innovation hypothesis, we show that policy intervention has been an effective tool to change relative prices, thus, incentivizing innovation, but that also various influencing factors are at play. We show that the literature agrees on the need for specific renewable energy policies in order to overcome concomitant market failures and barrier. We highlight that technology specific policies are generally understood as necessary complements to environmental non-technology specific policies in order to generate <br /> <br /> adequate demand in energy markets. However, in that respect, we outline the ongoing debate on the effectiveness of different technology specific policies on the demand-pull side and the role of technology-push policies. Additionally we provide a summary on methodological approaches to measure policy efforts and technological change respecting different impact levels and stages within the technological change process. Finally, by focusing on international competitiveness and technology cost we highlight two aspects of the effects renewable technology innovation and respective policy support. |
| JEL: | N70 O31 O32 O57 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwwpp:dp1318&r=reg |
| By: | Francesco Vona (Ofce sciences-po, Skema Business School); Francesco Nicolli (Ceris/Cnr, University of Ferrara) |
| Abstract: | We analyse the impact of market liberalisation on renewable energy policies in OECD countries. To this end, we first develop an aggregated indicator of renewable energy policies using principal components analysis and then examine its determinants through panel data techniques. Our results are consistent with the predictions of political-economy models of environmental policies, as brown lobbying, proxied by entry barriers in the energy sector, and citizens preferences have the expected effects on policy. Brown lobbying has a negative effect on the policy indicator, even when accounting for endogeneity in its effects in a dynamic panel specification and using different policy indicators.Reducing income inequality,the ratification of the Kyoto protocol and stronger green parties all positively affect the approval of more ambitious policies but with less robust results. |
| Keywords: | Renewable energy policy,Energy market liberalisation,Political economy. |
| JEL: | Q42 Q48 D72 O38 |
| Date: | 2013–07 |
| URL: | http://d.repec.org/n?u=RePEc:fce:doctra:1310&r=reg |
| By: | A. Mahati (Indira Gandhi Institute of Development Research); Rupayan Pal (Indira Gandhi Institute of Development Research) |
| Abstract: | This paper examines how strategic managerial delegation affects firms' timing of adoption of a new technology under different modes of product market competition. It demonstrates that delegation has differential impacts on adoption dates under Cournot and Bertrand competition. Delegation with 'own-performance' based incentive schemes always leads to early adoption in markets with Bertrand competition compared to that under no-delegation, but not necessarily so in markets with Cournot competition. It also shows that the ranking of Cournot and Bertrand equilibria in terms of delay in adoption depends on the type of managerial incentive schemes. Adoption occurs earlier (later) in markets with Cournot competition than in markets with Bertrand competition, if product differentiation is high (low), regardless of whether there is no-delegation or delegation with 'own-performance' based incentive schemes. In contrast, under strategic delegation with 'relative-performance' based incentive schemes, adoption dates do not differ across markets with different modes of competition. |
| Keywords: | Technology adoption, Strategic delegation, Own-performance, Relative-performance, Cournot, Bertrand |
| JEL: | L13 L22 O31 O32 O33 |
| Date: | 2013–08 |
| URL: | http://d.repec.org/n?u=RePEc:ind:igiwpp:2013-016&r=reg |
| By: | Janosch Ondraczek (University of Hamburg, Research Unit Sustainability and Global Change); Nadejda Komendantova; Anthony Patt |
| Abstract: | The photovoltaic (PV) power industry has grown rapidly in recent years, and associated with that growth has been a decline in costs. There are indications that PV has already reached cost-parity with power off the grid in some markets and projections that it will attain such grid parity in many more markets over the coming decade. Analysts have suggested that the growth in PV has come at an unnecessarily high price, with unnecessarily high subsidies. However, the factors influencing the cost of PV, and the subsidies required to sustain its construction, include more than just the strength of the sun. While differences in costs of such factors as initial capital spending, operation and maintenance, and decommissioning are hard to ascertain, it is possible to account for the cost of capital, on a country-by-country basis. In this paper, we therefore map the cost of solar PV globally, accounting for both the quality of the solar resource and the cost of capital in order to differentiate levelized costs of electricity (LCOE) from PV. Our results suggest that northern countries may not be an unwise location to subsidize PV construction, and further suggest that efforts to expand PV installation in developing countries may benefit greatly from policies designed to make low cost finance more widely available. |
| Keywords: | solar photovoltaic, levelized cost of electricity, cost of capital, global model |
| JEL: | C29 Q42 Q48 |
| Date: | 2013–05–30 |
| URL: | http://d.repec.org/n?u=RePEc:sgc:wpaper:201&r=reg |
| By: | Daziano, Ricardo A.; Achtnicht, Martin |
| Abstract: | Previous literature on the distribution of willingness to pay has focused on its heterogeneity distribution without addressing exact interval estimation. In this paper we derive and analyze Bayesian confidence sets for quantifying uncertainty in the determination of willingness to pay for carbon dioxide abatement. We use two empirical case studies: household decisions of energy-efficient heating versus insulation, and purchase decisions of ultralow-emission vehicles. We first show that deriving credible sets using the posterior distribution of the willingness to pay is straightforward in the case of deterministic consumer heterogeneity. However, when using individual estimates, which is the case for the random parameters of the mixed logit model, it is complex to define the distribution of interest for the interval estimation problem. This latter problem is actually more involved than determining the moments of the heterogeneity distribution of the willingness to pay using frequentist econometrics. A solution that we propose is to derive and then summarize the distribution of point estimates of the individual willingness to pay under different loss functions. -- |
| Keywords: | Discrete Choice Models,Willingness to Pay,Credible Sets |
| JEL: | C25 D12 Q51 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:13059&r=reg |