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on Regulation |
| By: | Nick, Sebastian (Energiewirtschaftliches Institut an der Universitaet zu Koeln); Wetzel , Heike (Energiewirtschaftliches Institut an der Universitaet zu Koeln) |
| Abstract: | In this study, we address a major problem in the measurement of firm performance and the regulation of natural monopolies, namely the intertemporal character of long-term investment decisions. In specific, we focus on the impact of adjustment costs of investments on estimates of firms' technical and cost inefficiency. We apply nonparametric dynamic data envelopment analysis to investigate the dynamic inefficiency of electricity distribution and transmission companies in the US during the years 2004 to 2011 and compare our results with their static counterparts. Our empirical findings reveal that ignoring long-term investments and their corresponding adjustment costs does significantly distort both firm-specific and industrial inefficiency estimates and may thus create misleading incentives for the regulated firms to cut investments. |
| Keywords: | Dynamic Inefficiency; Dynamic Directional Distance Function; Dynamic Data Envelopment Analysis; Electricity Transmission and Distribution |
| JEL: | D22 D24 D61 D92 L51 |
| Date: | 2014–03–04 |
| URL: | http://d.repec.org/n?u=RePEc:ris:ewikln:2014_003&r=reg |
| By: | Narbel, Patrick A. (Dept. of Business and Management Science, Norwegian School of Economics) |
| Abstract: | Intermittent renewable energy sources, including solar and wind power, typically remain more expensive than conventional power sources. As a consequence, few intermittent power projects would have been deployed if specific policy instruments had not been implemented. Existing policy instruments facilitating the deployment of intermittent renewable energy technologies include the feed-in tariff, the feed-in premium and the quota system. Based on a numerical analysis, it is shown that these specific policy instruments do not necessarily facilitate the deployment of valuable energy sources because they ignore the cost of intermittency. A valuable intermittent energy source is defined here as a source of energy which requires little financial support and which limits the need for capacity payments in order to ensure the security of supply. Based on insights from the numerical analysis, a new policy instrument is suggested: a multiplicative premium. This type of policy instrument would increase the likelihood that valuable intermittent energy assets are deployed in priority. |
| Keywords: | Intermittent renewables; value of energy; security of supply |
| JEL: | Q40 Q50 |
| Date: | 2014–04–14 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:nhhfms:2014_017&r=reg |
| By: | Zhang, Xiao-Bing (Department of Economics, School of Business, Economics and Law, Göteborg University) |
| Abstract: | This paper investigates the strategic interactions between carbon taxation by a resource-consumers’ coalition and (wellhead) energy pricing by a producers’ cartel under possible innovation in a cheap carbon-free technology through a dynamic game. The arrival time of innovation is uncertain, but can be affected by the amount spent on R&D. The results show that the expectation of possible innovation decreases both the initial carbon tax and producer price, resulting in higher initial resource extraction or carbon emissions. Even though this 'green paradox' effect will appear in the cooperative case (no strategic interactions) as well, the presence of strategic interactions between resource producers and consumers can somewhat restrain such an effect. The optimal R&D to stimulate innovation is an increasing function of the initial CO2 concentration for both the resource consumers and a global planner. However, the resource consumers can over-invest in R&D (compared with the global efficient investment. |
| Keywords: | Carbon taxation; Innovation; Uncertainty; Dynamic game |
| JEL: | C73 H21 Q23 Q54 |
| Date: | 2014–04 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:gunwpe:0589&r=reg |
| By: | Amigues, Jean-Pierre; Lafforgue, Gilles; Moreaux, Michel |
| Abstract: | Using a standard Hotelling model of resource exploitation, we determine the optimal consumption paths of three energy resources: dirty coal, which is depletable and carbon-emitting; clean coal, which is also depletable but carbon-free thanks to an abatement technology (CCS: Carbon Capture and Storage), and solar energy which is renewable and carbon-free. Carbon emissions are released into the atmosphere and we assume that the atmospheric carbon stock cannot exceed a given ceiling. We consider learning-by-doing in the abatement technology, implying that the marginal CCS cost is decreasing in the cumulative consumption of clean coal. We show the following results. i) Learning-by-doing does not imply "early" capture, i.e. the clean coal exploitation must begin at the earliest once the carbon cap is reached. ii) The energy price path can evolve non-monotonically over time. iii) When the solar cost is low enough, there may exist unusual energy consumption sequence along which solar energy is interrupted for some time and replaced by clean coal. |
| Keywords: | Climate change; Energy substitution; Carbon Capture and Storage;Learning-by-doing. |
| JEL: | Q31 Q42 Q54 Q55 |
| Date: | 2014–02 |
| URL: | http://d.repec.org/n?u=RePEc:ide:wpaper:27921&r=reg |
| By: | Hud, Martin; Hussinger, Katrin |
| Abstract: | This study investigates the impact of R&D subsidies on R&D investment during the past financial crisis. We conduct a treatment effects analysis and show that R&D subsidies increased R&D spending among subsidized small and medium sized firms in Germany during the crisis years. In the first crisis year, the additionality effect induced by public support was, however, smaller than in other years. This temporary decrease may be caused by an altered innovation subsidy scheme in crisis years or by a different innovation investment behavior of the subsidy recipients. We do not find support for the countercyclical innovation subsidy scheme having caused the smaller additionality effect and conclude that it is likely to be driven by subsidy recipient behavior. -- |
| Keywords: | R&D,Subsidies,Policy Evaluation,Financial Crisis,Treatment Effects |
| JEL: | C14 C21 G01 H50 O38 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:14024&r=reg |
| By: | Maurer, Stephen M.; Scotchmer, Suzanne |
| Abstract: | The growing importance of shared networks, shared platforms and shared standards leads to a renewed discussion of the essential facilities doctrine of antitrust. This is an area where European law and American law have diverged. In Trinko (2007), the U.S. Supreme Court came close to abolishing it. At the same time, it was reinvigorated by the European Commission, which asserted it successfully in E.C. v. Microsoft, and then, facing criticism, clarified the doctrine in a Guidance document. We harmonize the main cases around the doctrine’s original but often forgotten purpose namely, harvesting economic synergies through sharing. We argue that, absent such a doctrine, these synergies could be lost as firms either avoid sharing to avoid antitrust liability, or create sharing arrangements that undermine competition. We show how and why the original purpose of the doctrine has become entangled with other antitrust issues, in particular, leveraging. We systematize the sharing rules that have been imposed or allowed, with an emphasis on how to harvest synergies while mitigating any harm to competition. |
| Keywords: | Competitions policy, antitrust, Sherman Act, essential facility |
| JEL: | K21 L40 L41 |
| Date: | 2014–03–10 |
| URL: | http://d.repec.org/n?u=RePEc:tse:wpaper:27978&r=reg |
| By: | Koesler, Simon; Swales, Kim; Turner, Karen |
| Abstract: | This paper proposes that the national focus of energy 'rebound' studies should be extended to an international context in the presence of supra-national agreements such as EU 20-20-20. The potential for energy efficiency improvements in one nation to impact energy use in others means that national targets and actions cannot be considered independently. This paper develops a general equilibrium analysis of increased efficiency in productive energy use, identifying a range of channels through which spillover effects may be transmitted as a result of trade in goods and services. The results show that energy efficiency in one nation does impact energy use in others. However, the sectoral and spatial distribution of positive and negative effects depends on the nature of the efficiency improvement and factor supply conditions. In particular, changes in relative competitiveness and energy supply conditions act to dampen economy-wide rebound as the boundaries of the economy are expanded. -- |
| Keywords: | energy supply,energy demand,rebound effects,energy efficiency,general equilibrium,trade spillover |
| JEL: | D58 Q41 Q43 F18 Q56 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:14025&r=reg |