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on Regulation |
| By: | Paolo Falbo; Cristian Pelizzari; Luca Taschini |
| Abstract: | We investigate the combined effect of an Emission Trading System (ETS) and renewable energy sources on electricity generation investment in energy-only markets. We propose a simple representation of the capacity expansion decision between fossil fuel and renewable production, where electricity demand is uncertain. Increasing renewable capacity creates a tradeoff for large electricity producers: a higher share of renewable production can be priced at the higher marginal cost of fossil fuel production, yet the likelihood of achieving higher profits is reduced because more demand is met by cheaper renewable production. A numerical application of the model shows that producers prefer withholding investments in renewable energy sources, calling into question the long-term efficacy of an ETS in achieving decarbonisation goals. |
| Date: | 2016–07 |
| URL: | http://d.repec.org/n?u=RePEc:lsg:lsgwps:wp246&r=reg |
| By: | Ieva Linkeviciute (Copenhagen Business School) |
| Abstract: | Aggregation of demand-side flexibility for balancing purposes is seen as one way to cope with the challenges imposed by increasing share of renewable energy sources in the future power system. The value of demand-side flexibility has attracted attention of researchers and industry a while ago. However, there is still a lack of discussion whether the composition of various flexibility sources could bring additional value in optimizing schedules of flexible load. This paper examines the role of flexible demand aggregators and the effects of their portfolio choice on payments in balancing market and compensations to flexibility providers. It also proposes a game theoretical model which allows to determine optimal flexible load schedules ensuring highest savings in balancing market. Seven scenarios representing portfolios with different compositions of flexibility sources are set to investigate the Nordic power market. Results show that the aggregator’s payments in balancing market and compensations to consumers for provided flexibility depend on the type of flexibility sources in the portfolio. Also, the difference in forecasted and actual reductions in imbalance payments is affected by the portfolio composition. However, there is no significant value in combining all flexibility sources in the portfolio. This means that in order to maximize the value of flexible demand the aggregators might choose to specialize in certain types of flexibility sources. |
| Keywords: | Demand-side management, flexibility, aggregation, electricity market, smart grid |
| URL: | http://d.repec.org/n?u=RePEc:sek:iacpro:4006610&r=reg |
| By: | Grimm, Michael; Peters, Jörg |
| Abstract: | Solar off -grid technologies have become a lower-cost alternative to grid-based electrification in rural Africa. As a contribution to the United Nations' electricity for all goals, policy currently promotes branded solar products based on the assumption that high-quality standards are necessary. We provide evidence suggesting that nonbranded technologies have already made widespread inroads to rural households. Quality is not necessarily worse, in particular if the considerably lower end-user prices are accounted for. A justification of branded solar promotion programs can thus not only be based on energy access arguments, but rather on environmental concerns related to electronic waste. Moreover, we show that if poorer strata are to be reached, end-user subsidies are required. |
| Keywords: | rural electrification,energy access,energy poverty,technology adoption |
| JEL: | O13 O33 Q41 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:rwirep:619&r=reg |
| By: | Robert Basedow; Celine Kauffmann |
| Abstract: | Good Regulatory Practices encompassing the use of regulatory impact assessments, stakeholder engagement and ex post evaluation are a critical tool in the hands of governments to ensure that regulation achieves its objectives. Over the past several years, attention has grown for the trade costs of regulatory divergence. Diverging regulation may increase the costs to trade goods and services across borders. While regulatory divergence is often the result of diverging national public policy objectives, it may be the undesired result of rule-making ignoring the international regulatory environment and interconnectedness of our societies and economies. Good Regulatory Practices provide governments with tools, processes and strategic approaches that can help them identify and evaluate the trade impacts of their regulatory action. The paper reviews the theoretical and practical contribution of GRP to mainstreaming international trade considerations in regulatory decision-making and to addressing regulatory divergence. It does so by reviewing the relevant academic literature, GRP guidelines of a number of OECD members and examples of how GRP and in particular regulatory impact assessments are used to consider the trade impacts of regulation. Building on the available evidence, the paper discusses how decision-makers may enhance the use of GRP to address international trade considerations in regulatory policy-making. |
| Keywords: | regulatory impact assessment, good regulatory practices, stakeholder engagement, ex post evaluation, regulatory policy |
| JEL: | F10 H11 K2 K4 |
| Date: | 2016–07–20 |
| URL: | http://d.repec.org/n?u=RePEc:oec:govaah:4-en&r=reg |
| By: | Ignacio Pérez Domínguez (European Commission – JRC); Thomas Fellmann (European Commission – JRC); Franz Weiss (European Commission – JRC); Peter Witzke (EuroCARE GmbH); Jesús Barreiro-Hurlé (European Commission – JRC); Mihaly Himics (European Commission – JRC); Torbjörn Jansson (Swedish University of Agricultural Sciences); Guna Salputra (European Commission – JRC); Adrian Leip (European Commission – JRC) |
| Abstract: | The project 'Economic Assessment of GHG mitigation policy options for EU agriculture (EcAMPA)' is designed to assess some aspects of a potential inclusion of the agricultural sector into the EU 2030 climate policy framework. In the context of possible reductions of non-CO2 emissions from EU agriculture, the scenario results of the EcAMPA 2 study highlight issues related to production effects, the importance of technological mitigation options and the need to consider emission leakage for an effective reduction of global agricultural GHG emissions. |
| Keywords: | greenhouse gas emissions, agriculture, mitigation policy, climate policy, EU, CAPRI model, agricultural markets, emission leakage |
| JEL: | Q18 Q58 Q02 Q11 |
| Date: | 2016–06 |
| URL: | http://d.repec.org/n?u=RePEc:ipt:iptwpa:jrc101396&r=reg |
| By: | Collins, Matthew; Curtis, John |
| Abstract: | Energy performance certificates provide a measure of and raise the awareness of the energy efficiency of homes. The Sustainable Energy Authority of Ireland (SEAI) operates a grant aid scheme to incentivise residential energy efficient retrofits known as the Better Energy Homes (BEH) scheme, which was implemented in 2009. Since June 2010, participating homes have been required to undertake independent Building Energy Rating (BER) assessments of the home prior to and after the completion of energy efficient works. This study analyses the distribution of pre- and post-works BERs among participant households, using a regression discontinuity design to examine the significance of discontinuities at each BER grade threshold and to estimate the number of affected BERs in our sample. We find evidence of bunching at the more efficient side of thresholds of post-works BERs, while no evidence of bunching on the more efficient side was found among pre-works BERs. We find slight evidence of bunching on the less efficient side of certain thresholds in the pre-works distribution. We estimate counter-factual distributions around each threshold to examine the number of dwellings which may have been affected by potentially incorrect assessments. We analyse whether adjustment of BER assessments is systemic and whether market forces provide an incentive to adjust assessments. We find significant evidence of the misrepresentation of Building Energy Ratings but this is not found to be systemic. We also examine potential sources of adjustment, finding discontinuities in certain parameters coinciding with the areas where bunching is found to occur. |
| Date: | 2016–07 |
| URL: | http://d.repec.org/n?u=RePEc:esr:wpaper:wp535&r=reg |
| By: | Ted Temzelides (Rice University); Borghan Narajabad (Federal Reserve); Bernardino Adao (Banco de Portugal) |
| Abstract: | We study the adaptation of new technologies by renewable energy-producing firms in a dynamic general equilibrium model where energy is an input in the production of goods. Energy can come from fossil or renewable sources. Both require the use of capital, which is also needed in the production of final goods. Renewable energy firms can invest in improving the productivity of their capital stock. The actual improvement is subject to spillovers and comes at the cost of some renewable energy output. Together with spill-overs, this leads to under-investment in improving the productivity of renewable energy capital. In the presence of environmental externalities, the optimal allocation can be implemented through a Pigouvian tax on fossil fuel, together with a policy which promotes adaptation of new renewable technologies. We study numerical examples using world-economy data. |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:red:sed016:6&r=reg |
| By: | Li, Zhigang (Asian Development Bank); Xu, Hangtian (Hunan University) |
| Abstract: | This study addresses the debate on whether high-speed railroad (HSR) polarizes or balances economic geography. We find that both can occur: while the service sector tends to agglomerate, the manufacturing sector may decentralize; moreover, economic activities may agglomerate from distant areas to the core, while dispersing from the core toward its periphery at the same time. The service sector is crucial in this process because, unlike other land transport infrastructure, HSR mainly saves transport time for people, but not cargo. Incorporating this feature to the model of Ottaviano et al. (2002), we show that HSR can lead to either polarization or diffusion depending on sector and distance between cities. This is supported by empirical evidence from the 1982 opening of two major HSRs in Japan (Shinkansen), which saved intercity travel time by as much as half. We find that in noncore areas service employment decreased by 7%, while manufacturing employment increased by 21%; cities within approximately 100 kilometers of Tokyo expanded, while more distant cities shrank. In net, Tokyo metropolitan area agglomerates as a result of HSR. |
| Keywords: | economic corridor; high-speed rail; inclusive growth |
| JEL: | H54 O18 R12 |
| Date: | 2016–05–31 |
| URL: | http://d.repec.org/n?u=RePEc:ris:adbewp:0485&r=reg |
| By: | Randy A. Becker |
| Abstract: | Water can be a scarce resource, particularly in certain places at certain times. Understanding both water use and conservation efforts can help ensure that limited supplies can meet the demands of a growing population and economy. This paper examines water use and recirculation in the U.S. manufacturing sector, using newly recovered microdata from the Survey of Water Use in Manufacturing, merged with establishment-level data from the Annual Survey of Manufactures and the Census of Manufactures. Results suggest that water use per unit of output is largest for larger establishments, in part because larger establishments use water for more purposes. Larger establishments are also found to recirculate water more — satisfying demand (water use) without necessarily increasing water intake. Various costs also appear to play a role in water recirculation. In particular, the water circulation rate is found to be higher when water is purchased from a utility. Relatively low (internal) prices for self-supplied water could suppress the incentive to invest in recirculation. Meanwhile, establishments with higher per-gallon intake treatment costs also recirculate more, as might be expected. The cost associated with water discharge – due to regulation or otherwise – also increases circulation rates. The aridity of a locale is found to have little effect on circulation rates. |
| Keywords: | water use, water recirculation, U.S. manufacturing |
| JEL: | Q25 L6 |
| Date: | 2016–06 |
| URL: | http://d.repec.org/n?u=RePEc:cen:wpaper:15-16r&r=reg |
| By: | Sylvain Weber (Institute of economic research IRENE, Faculty of Economics, University of Neuchâtel, Switzerland); Stefano Puddu (Institute of economic research IRENE, Faculty of Economics, University of Neuchâtel, Switzerland); Diana Pacheco (Institute of economic research IRENE, Faculty of Economics, University of Neuchâtel, Switzerland) |
| Abstract: | Photovoltaic systems generate electricity around noon, when many homes are empty. Conversely, residential electricity demand peaks in the evening, when production from solar sources is impossible. Based on a randomized control trial, we assess the effectiveness of alternative demand response measures aimed at mitigating these imbalances. More precisely, through information feedback and financial rewards, we encourage households to shift electricity consumption toward the middle of the day. Using a difference-in-differences approach, we find that financial incentives induce a significant increase of the relative consumption during the period of the day when most solar radiation takes place. Households mostly achieve this load shifting by decreasing evening consumption. Information feedback pushes households to decrease overall consumption, but induces no load shifting. |
| Keywords: | electricity usage, solar energy, demand response, randomized control trial, smart metering. |
| JEL: | C93 D12 L94 Q41 |
| Date: | 2016–07 |
| URL: | http://d.repec.org/n?u=RePEc:irn:wpaper:16-03&r=reg |
| By: | Sebastian Wehrle (Institute for Sustainable Economic Development, University of Natural Resources and Life Sciences Vienna. Wien Energie GmbH); Martin Kniepert (Institute for Sustainable Economic Development, University of Natural Resources and Life Sciences Vienna) |
| Abstract: | Low emission prices have stirred up discussion about political measures that aim to increase emission prices. District heating system operators, often municipal utilities, use a variety of heat generation technologies that are affected by the emission trading system. We examine whether district heating system owners have an incentive to support measures that increase emission prices in the short term. Therefore, we (i) develop a simplified analytical framework to analyse optimal decisions of a district heating operator, and (ii) investigate the market-wide effects of increasing emission prices, in particular the pass-through of emission prices to power prices. Using the clustered unit commitment model MEDEA of the common Austrian and German power system, we estimate a pass-through from emission prices to power prices between 1.1 and 0.75, depending on the absolute emission price level. Under reasonable assumptions regarding heat generation technologies, the pass-through from higher emission prices to power prices is about twice as high as required to make low-emission district heating system owners better off. |
| Keywords: | : Emission Price, Pass Through, Dispatch Model, District Heating, Optimization |
| JEL: | Q41 |
| Date: | 2016–06 |
| URL: | http://d.repec.org/n?u=RePEc:sed:wpaper:642016&r=reg |