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on Regulation |
| By: | Johannes Karl Herrmann (Friedrich Schiller University of Jena, Faculty of Economics and Business Administration); Ivan Savin (Friedrich Schiller University of Jena, Faculty of Economics and Business Administration, and Chair for Economic Policy, Karlsruhe Institute of Technology) |
| Abstract: | The diffusion of renewable electricity generating technologies is widely considered as crucial for establishing a sustainable energy system in the future. However, the required transition is unlikely to be achieved by market forces alone. For this reason, many countries implement various policy instruments to support this process, also by re-distributing related costs among all electricity consumers. This paper presents a novel history-friendly agent-based study aiming to explore the efficiency of different mixes of policy instruments by means of a Differential Evolution algorithm. Special emphasis of the model is devoted to the possibility of small scale renewable electricity generation, but also to the storage of this electricity using small scale facilities being actively developed over the last decade. Both combined pose an important instrument for electricity consumers to achieve partial or full autarky from the electricity grid, particularly after accounting for decreasing costs and increasing efficiency of both due to continuous innovation. Among other things, we find that the historical policy mix of Germany introduced too strong and inflexible demand-side instruments (like feed-in tariff) too early, thereby creating strong path-dependency for future policy makers and reducing their ability to react to technological but also economic shocks without further increases of the budget. |
| Keywords: | differential evolution, electricity storage, energy grid, feed-in tariff, renewable energy |
| JEL: | C63 Q41 Q42 Q48 |
| Date: | 2016–03–08 |
| URL: | http://d.repec.org/n?u=RePEc:jrp:jrpwrp:2016-004&r=reg |
| By: | Kazukauskas, Andrius (CERE and the Department of Economics, Umeå University); Broberg, Thomas (CERE and the Department of Economics, Umeå University) |
| Abstract: | Households typically receive utility bills where all electricity use during a fixed period of time is lumped together. The lack of direct feedback in the form of marginal costs of using specific electric appliances reduces the attention people give to their energy consumption and potentially leads to biased cost perceptions and mistakes in households’ decision making. In this paper we empirically investigate whether people who are inattentive to energy-related issues have different perceptions regarding the cost of using electricity. We conclude that many households base their decisions regarding electricity use on poor knowledge about the costs involved, that cost perceptions on average tend to be upward biased, and that cost perceptions generally are higher among inattentive respondents. This result somewhat contradicts the common notion that inattention causes lower price (cost) perceptions and, subsequently, too much energy use. Finally, we also find that a substantial share of the sampled households, in particular households with poor knowledge about their energy consumption, are not willing to receive customized information on their energy use and costs. This suggests that some households do not expect to benefit from such information. |
| Keywords: | DSM; energy efficiency; energy policy; inattention; information; nudge |
| JEL: | D12 Q41 Q48 |
| Date: | 2016–02–22 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:slucer:2016_002&r=reg |
| By: | Michael Hübler (Institute for Environmental Economics and World Trade, Leibniz Universität Hannover); Oliver Schenker (Centre for European Economic Research (ZEW)); Carolyn Fischer (Resources for the Future (RFF)) |
| Abstract: | This paper studies policy instruments that correct insufficient learning-by-doing (LbD) and research and development (R&D) of renewable electricity technologies and insufficient investments in energy efficiency (EE) in the presence of carbon pricing. The theoretical model analysis shows how to re-adjust the first-best in second-best situations, in which one of the policy instruments is restricted. Calibrated to the European power sector, the first-best choice of all instruments reduces the climate policy cost by one third. Feed-in tariffs turn out to be good substitutes for LbD, but not for R&D or EE subsidies. |
| Keywords: | Second-best, Climate Policy, Energy Policy, Feed-in tariff, Power Sector, EU |
| JEL: | C61 O33 Q48 Q54 Q55 |
| Date: | 2015–10 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2015.106&r=reg |
| By: | Meier, Helena (Energiewirtschaftliches Institut an der Universitaet zu Koeln (EWI)); Tode, Christian (Energiewirtschaftliches Institut an der Universitaet zu Koeln (EWI)) |
| Abstract: | Governments worldwide spend increasing amounts of money on policy schemes to reduce energy consumption and related carbon emissions. We investigate the actual treatment effect of energy efficiency measures and therein compare actual demand responses to technological potentials. Based on a demand system analysis of household data and by approximating unobserved energy awareness, we find economic and behavioural responses that counteract expected savings from energy efficiency. Results show strong rebound and even backfiring effects but also suggest heterogeneity of the effectiveness driven by behavioural concepts, such as sunk cost fallacy or habit formation. Understanding these can contribute to target-oriented policy designs and increased effectiveness and efficiency of policies. |
| Keywords: | Policy evaluation; household demand; unobserved heterogeneity; energy efficiency; |
| JEL: | C21 D12 Q58 |
| Date: | 2015–06–02 |
| URL: | http://d.repec.org/n?u=RePEc:ris:ewikln:2015_004&r=reg |
| By: | Pench, Alberto |
| Abstract: | The paper addresses the problem of information asymmetry between a regulator and the polluting firms and proposes a very simple mechanism where the regulator is free to choose, without communicating in advance to the firms, between two instruments: an effluent fee or a standard: as a result in a real world setting this uncertainty might induce firms to a truthful revelation. Moreover, under the assumption of linear marginal abatement or marginal social damage functions, in many cases the resulting optimal behaviour might be an under reporting for some firms and an over reporting for others so that the resulting marginal aggregate benefit function might be not so far from the true one and the aggregate pollution level attained by the mechanism not so far from optimal. |
| Keywords: | Effluent Fee, Standards, Asymmetric Information, Truthful Revelation, Public Economics, H23, Q5, |
| Date: | 2016–03–10 |
| URL: | http://d.repec.org/n?u=RePEc:ags:feemet:232718&r=reg |
| By: | Giovanni Marin (IRCrES-CNR and SEEDS); Alessandro Palma (IEFE Bocconi – Centre for Research on Energy and Environmental Economics and Policy and SEEDS) |
| Abstract: | Traditional large appliances absorb a large share of residential electricity consumption and represent important targets of energy policy strategies aimed at achieving energy security. Despite being characterized by rather mature technologies, this group of appliances still offers large potential in terms of efficiency gains due to their pervasive diffusion. In this paper we analyse the electricity consumption of a set of four traditional ‘white goods’ in a panel of ten EU countries observed over 21 years (1990-2010), with the aim of disentangling the amount of technical efficiency from the overall energy saving. The technical efficiency trend is modelled through a set of technology components representing both the invention and adoption process by means of specific patents weighted by production and bilateral import flows, which allows to overcome the rigid Stochastic Frontier framework in modelling the effect of technical change. Our results show that the derived energy demand and inefficiency trends are both related to changes in the amount of available technology embodied in energy efficient appliances. The effect is significant both in its domestic and international components and suggests an active role of innovation and trade policies for achieving efficiency targets which directly impact the amount of electricity consumed by households. |
| Keywords: | Energy Efficiency, Technological Diffusion, Electrical Appliances, Stochastic Frontier Analysis, Residential Sector |
| JEL: | O33 Q55 Q41 |
| Date: | 2015–10 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2015.104&r=reg |
| By: | Bérangère Legendre (IREGE - Institut de Recherche en Gestion et en Economie - USMB [Université de Savoie] [Université de Chambéry] - Université Savoie Mont Blanc); Olivia Ricci (CEMOI - Centre d'Économie et de Management de l'Océan Indien - Université de la Réunion - IAE - Institut d'Administration des Entreprises - Université de la Réunion) |
| Abstract: | Fuel poverty is a growing concern in France. Following the hike in energy prices that started in 2004, the problem of energy affordability for low-income households entered the political debate with the " Grenelle de l " environnement " in 2007. According to the standard UK definition (10% ratio) 3.8 million households were subject to fuel poverty in France in 2006. We question the way fuel poverty is currently measured and compare the impact of alternative measurement approaches on the extent and composition of fuel poverty in France. Then, we identify and characterize vulnerable households that are not ordinarily poor, but can be pushed into poverty because of their fuel bills. A logit, a clog log and a mixed effect logit model are used to analyze which factors influence the probability of vulnerable households to fall into poverty. The study indicates that the proportion of fuel poor people and their characteristics differ significantly depending on the fuel poverty measure chosen. The econometric results show that the probability of falling into poverty is higher for those who are retired living alone, rent their home, use an individual boiler for heating, cook with butane or propane and have poor roof insulation. Current French fuel poverty reduction policies appear to be inappropriate given our conclusions. |
| Keywords: | Fuel poverty,vulnerable households,poverty indicators,clog log model |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-01283999&r=reg |
| By: | Møller, Niels Framroze |
| Abstract: | This research contains an econometric analysis of energy demand in trade and industry which allows for substitution between electricity and other energy carriers when relative prices change. Long-run substitution towards electricity is a means of electrifying energy demand and therefore contributes to paving the way for a renewable-based energy sys-tem. For eight subsectors of the Danish economy, time series (1966-2011) are modeled by means of partial Cointegrated VARs. Long-run demand relations are identified for all subsectors and robust price elasticities are supported in five cases. The results are used in a small impulse-response experiment which suggests a potential for taxation to move energy consumption away from fossil-based fuels and towards electricity. |
| Keywords: | Energy Demand, Electrification, Energy substitution, Industrial energy consumption, Cointegrated VAR, Electricity demand, Impulse-response analysis. |
| JEL: | C01 C32 Q4 |
| Date: | 2015–12–04 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:69931&r=reg |
| By: | Malischek, Raimund (Energiewirtschaftliches Institut an der Universitaet zu Koeln (EWI)); Trueby, Johannes (Energiewirtschaftliches Institut an der Universitaet zu Koeln (EWI)) |
| Abstract: | Nuclear power is an important pillar in electricity generation in France. However, France’s nuclear power plant fleet is ageing, and the possibility of reducing its share in power generation or even a complete phase-out has been increasingly discussed. Our research therefore focuses on three questions: First, what are the costs of phasing-out nuclear power in France under different scenarios? Second, who has to bear these costs, i.e., how much of the costs will be passed on to the rest of the European power system? And third, what effect does the uncertainty regarding future nuclear policy in France have on system costs? Applying a stochastic optimization model for the European electricity system, we show that additional system costs in France of a nuclear phase-out amount up to 76 billion EUR2010. Additional costs are mostly borne by the French power system. Surprisingly, we find that the costs of uncertainty are rather limited. Based on our results, we conclude that a commitment regarding nuclear policy reform is only mildly beneficial in terms of system costs. |
| Keywords: | nuclear policy; uncertainty; investment; France; electricity market modeling |
| JEL: | C61 L94 Q40 Q48 |
| Date: | 2014–11–09 |
| URL: | http://d.repec.org/n?u=RePEc:ris:ewikln:2014_015&r=reg |