nep-reg New Economics Papers
on Regulation
Issue of 2015‒05‒22
eleven papers chosen by
Natalia Fabra
Universidad Carlos III de Madrid

  1. Mid-term contracting in Electricity Markets: What to consider in Market Design? By Neuhoff, Karsten; Schwenen, Sebastian
  2. Does EU Regulation Hinder or Stimulate Innovation? By Jacques Pelkmans; Andrea Renda
  3. Capacity Mechanism in the European Context: Can we ensure internal market synergies? By Neuhoff, Karsten; Schwenen,Sebastian
  4. Replacement or Additional Purchase: The Impact of Energy-Efficient Appliances on Household Electricity Saving By Kenichi Mizobuchi; Kenji Takeuchi
  5. Market-Based Mechanisms to Promote Renewable Energy in Asia By Venkatachalam ANBUMOZHI; Alex BOWEN; Puthusserikunnel Devasia JOSE
  6. Regulation, firm dynamics and entrepreneurship By Braunerhjelm, Pontus; Desai, Sameeksha; Eklund, Johan E.
  7. The Road Transportation Industry in Brazil: Market Structure, Performance and Government Regulation By Newton de Castro
  8. On the transition from nonrenewable energy to renewable energy By Yacoub Bahini; Cuong Le Van
  9. Poverty and Public Utilities Pricing By Thompson Almeida Andrade
  10. Assessing Residential Customer Satisfaction for Large Electric Utilities By Lea Kosnik; L. Douglas Smith; Satish Nayak; Maureen Karig; Mark Konya; Kristy Lovett; Zhennan Liu; Harrison Luvai
  11. Over-the-Counter Markets vs Double Auctions: A Comparative Experimental Study By Giuseppe Attanasi; Samuele Centorrino; Ivan Moscati

  1. By: Neuhoff, Karsten; Schwenen, Sebastian
    Abstract: Decarbonization goals of the European Commission foresee different future scenarios for the European power market of which all are exceeding 60% renewables in the power system.3 High shares of intermittent renewable sources require significant changes to the physical system and impact the profitability of conventional generation. While renewable remuneration mechanisms in many European power systems typically provide long‐term revenue guarantees for 15‐20 years, conventional generation assets combine mid-term contracts, covering between 1‐4 years, and vertical integration to reduce revenue volatility and secure operation, re‐investment, and closure choices. To this end the participants of the Future Power Market Platform reviewed the empirical situation with mid-term contracts, identified incentives to contract and discussed possible commercial and regulatory approaches to support MTC. The main conclusions are - For generation, mid-term contracts help to secure re-investment and inform closure choices – and thus contribute to generation adequacy - For load, mid-term contracts hedge energy (input) prices, improve revenue stability and inform (re-)investment decisions. It is however unclear whether load has capacity and incentives to sign sufficient MTC to meet needs from generation and from power systems perspective. - Commercial approaches to increase mid-term contracting volumes can comprise for example new contracts types like option contracts - Regulatory solutions to support MTC and coordinate investment in generation may amend existing regulation, such as with transmission contract design or retail market regulation - Obligations towards MTC can be seen as a capacity mechanism– but equally capacity mechanisms can undermine the ability of market participants to sign MTC and thus their own effectiveness.
    Keywords: electricity markets,Mid-term contracting
    JEL: Q41 Q42 Q48 L94 L95
    Date: 2013–09–27
  2. By: Jacques Pelkmans (Centre for European Policy Studies (CEPS), Brussels, Belgium); Andrea Renda (Centre for European Policy Studies (CEPS), Brussels, Belgium)
    Abstract: ‘Does EU regulation hinder or stimulate innovation’ is a frequently heard query in the EU, but there is little systematic analytical literature on the issue. Fragmented evidence or anecdotes dominate debates among EU regulatory decision-makers and in European business, insofar as there is a genuine debate at all. This text focuses on the multi-faceted, ambiguous and complex relationship between (EU) regulation and innovation in the economy, and discusses the innovation-enhancing potential of certain regulatory approaches as well as factors that tend to reduce incentives to innovate. We adopt an 'ecosystem' approach to both regulation and innovation and study the interactions between the two ecosystems. This general analysis and survey are complemented by seven case studies of EU regulation enabling and disabling innovation, two horizontal and five sectoral ones. The case studies are preceded by a broader contextual analysis of trends in EU regulation over the last three decades. These trends show the significant transformation of the nature as well as improvement of the quality of EU regulation, largely in the deepened internal market, which tend to have a favourable and lasting effect on the rate of innovation in the EU (other things being equal). Our findings include the following: Regulation can at times be a powerful stimulus to innovation. EU regulation matters at all stages of the innovation process. Different types of regulation can be identified in terms of innovation impact: general or horizontal, innovation specific and sector-specific regulation. More prescriptive regulation tends to hamper innovative activity, whereas the more flexible EU regulation is, the better innovation can be stimulated. Lower compliance and red-tape burdens have a positive effect on innovation. We recommend incorporating a specific test on innovation impacts in the ex-ante impact assessment of EU legislation as well as in ex-post evaluation. There is ample potential for fostering innovation by reviewing the EU regulatory acquis.
    Keywords: EU regulation, innovation in economy
    JEL: D02 D23 G38 K23 L51
  3. By: Neuhoff, Karsten; Schwenen,Sebastian
    Abstract: Using generating and demand resources across national borders brings synergies and improves supply adequacy in Europe as a whole. However, national capacity remuneration mechanisms (CRMs) may pose barriers for the participation of energy resources across borders. This ultimately challenges the idea of a common internal market. Given the current experience with the newly imposed CRMs, indeed the integration of foreign capacities seems challenging as certain regulatory requirements, for instance on interconnector capacity, have to be met. Although all current CRMs in the EU are explicitly of temporary nature, given the current divergence in EU power market design, the question will be not whether but how to agree and coordinate on different forms of capacity remuneration in the EU for the years to come.
    Date: 2014
  4. By: Kenichi Mizobuchi (Department of Economics, Matsuyama University); Kenji Takeuchi (Graduate School of Economics, Kobe University)
    Abstract: This study examined the influence of additional and replacement purchases of energy-efficient air-conditioners on power savings. We used a questionnaire survey and measured electricity use data from 339 Japanese households, collected from two city areas with different level of government-requested electricity-saving rates, namely, Osaka (10%) and Matsuyama (5%). The main findings of our study are as follows: 1) Households that purchased energy-efficient air-conditioners saved more electricity than those that did not. 2) gAdditional-purchase householdsh showed significant energy savings, whereas greplacement householdsh did not. The rebound effect may negate the energy-saving effects of a new air-conditioner. 3) Altruistic attitude is associated with more active participation in power saving. 4) Households in Osaka saved more electricity than those in Matsuyama, probably because the government call to save electricity was more forceful.
    Keywords: electricity demand; energy efficiency; home appliances; electricity conservation directives; carbon dioxide emissions
    Date: 2015–05
  5. By: Venkatachalam ANBUMOZHI (Economic Research Institute for ASEAN and East Asia); Alex BOWEN (London School of Economics and Political Sciences, UK); Puthusserikunnel Devasia JOSE (Indian Institute of Management Bangalore, India)
    Abstract: Market-based instruments such as Renewable Energy Certificate (REC) are increasingly favoured as an alternative to command-and-control legislation to increase the uptake of renewable energy. Focusing on the renewable energy industry and policy situation in Asia, this paper analysed the strengths and weaknesses of market-based approaches in the long-term interest of developing Asia. It found that approaches such as REC are disadvantaged by a lack of both market acceptance and a strong institutional and programme support. To identify gaps in the REC system in India, a comparative analysis with the United Kingdom (UK) model was made. This revealed some fundamental issues around market-based approaches in Asia, underscoring the need for a policy design to address the concerns of buyers and sellers in the market.
    Keywords: Market-based Mechanisms, Renewable Energy, Renewable Obligation, Regulatory Intervention
    JEL: Q41 Q42 Q48
    Date: 2015–04
  6. By: Braunerhjelm, Pontus (Swedish Entrepreneurship Forum, Department of Industrial Economics and Management, Centre of Excellence for Science and Innovation Studies (CESIS) & Royal Institute of Technology (KTH)); Desai, Sameeksha (Indiana University); Eklund, Johan E. (Swedish Entrepreneurship Forum and Jönköping International Business School)
    Abstract: Entrepreneurship can have important positive effects linked to job creation, wealth and income generation, innovation and industry competitiveness. Scholars and policy-makers around the world have turned to the regulatory environment as a mechanism through which entrepreneurship can be encouraged, grown and its economic benefits harnessed. The effect of regulatory conditions on entrepreneurship however is not well understood, and can be nuanced given the wide range of regulatory tools and possible areas of impact. This paper serves as the introduction to a special issue, which seeks to shed some light on the relationship between regulation, firm dynamics and entrepreneurship. We identify some foundational considerations relevant to this relationship and discuss key questions, followed by a brief overview of each of the papers contained in the special issue.
    Keywords: entrepreneurship; regulation; firm; entry
    JEL: K20 L30 L51 M13
    Date: 2015–05–11
  7. By: Newton de Castro
    Date: 2015–01
  8. By: Yacoub Bahini (Centre d'Economie de la Sorbonne); Cuong Le Van (Centre d'Economie de la Sorbonne - Paris School of Economics, IPAG Business School, VCREME)
    Abstract: In this paper we use the CMM model (Chakravorty et al., 2006) in discrete time and obtain more results concerning the exhaustion time of Non-Renewable Resource (NRE), the dynamic regimes of energy prices, of the stocks of pollution. We show that NRE is exhausted in finite time and is directly influenced by the initial stock of NRE and the costs of NRE and RE. Higher is the initial stock of NRE, far is the time of exhaustion of NRE. Higher is the cost of NRE (resp. the difference of unit costs between RE and NRE), far is the time of exhaustion of NRE. Furthermore, we show that the abatement intervenes, when necessary, not more than two periods. We also show that, when the unit extraction cost of RE is not very high, the stocks of emissions will never be binding if and only if, the initial stock of NRE is less than a critical value
    Keywords: Dynamic optimization; Natural resources; Energetic transition; Environment
    JEL: P28 Q01 Q32 Q42 Q48 Q52
    Date: 2015–05
  9. By: Thompson Almeida Andrade
    Date: 2015–01
  10. By: Lea Kosnik (Department of Economics, University of Missouri-St. Louis); L. Douglas Smith; Satish Nayak; Maureen Karig; Mark Konya; Kristy Lovett; Zhennan Liu; Harrison Luvai
    Abstract: Electric utilities, like other service organizations, rely on customer surveys to assess the quality of their services and customer relations. With responses to an in-depth survey of 2,216 residential customers, complementary data from geo-coded public sources, aggregate assessments of performance by J.D. Power & Associates from their independent surveys, historical records of individual customer usage and bill payments, streams of published media content and records of actual service delivery, we examine how measures of customer satisfaction are interrelated and how they relate to account activity, customer characteristics, and actual service delivery. We test our inferences against published J.D. Power ratings for 16 large Midwestern utilities in the same peer group. We find that ratings on different service dimensions are highly correlated and related to the customers’ total expenditures for electric service. Customer ratings for quality and reliability of service reflect their sentiments about frequency of outages, duration of outages and the communications that customers receive while power is being restored. Relationships with the actual reliability of service delivered to customers’ residences are much weaker. Experiments with automated text mining show some promise for augmenting statistical analysis with information from streams of published media content and social media.
    Keywords: electricity, utility, customer satisfaction.
    JEL: L9 H00
    Date: 2015–05
  11. By: Giuseppe Attanasi; Samuele Centorrino; Ivan Moscati
    Date: 2014

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