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on Regulation |
| By: | Gerster, Andreas |
| Abstract: | In Germany, substantial drops in wholesale power prices have become a regular phenomenon. While such price drops have far-reaching implications for the functioning of the power market, their underlying determinants remain poorly understood. To fill this gap, we propose a Markov regime-switching model to investigate low-price events at the European Power Exchange. Our analysis focuses on the role of energy policies that promote renewable energies and have led to significant reductions of nuclear capacities after the Fukushima accident. We find that high electricity infeed from renewable sources increases negative price spike probabilities, while the decommissioning of nuclear plants under the Nuclear Moratorium had an opposing effect. Simulations of market outcomes under different energy policies indicate that reaching ambitious renewable energy targets increases the frequency of low-price events and compromises the financial viability of conventional generation units, while a nuclear phase-out or an increase in storage capacities mitigates these effects. |
| Abstract: | Im deutsch-österreichischen Marktgebiet der Strombörse European Power Exchange (EPEX) kam es in den letzten Jahren zu einem vermehrten Auftreten sehr niedriger und sogar negativer Preise. Obwohl solche negativen Preisspitzen weitreichende Folgen für das Funktionieren des Strommarkts haben, gibt es bislang nur wenige Untersuchungen zu ihren treibenden Ursachen. Um diese Lücke zu füllen, entwickelt dieser Artikel ein Markov Regime Switching-Modell zur Analyse ihres Auftretens an der EPEX. Im Mittelpunkt der Analyse stehen die Effekte einer Förderung erneuerbarer Energien und einer Reduktion von Kapazitäten nuklearer Kraftwerke im Rahmen des Atom-Moratoriums nach dem Unfall in Fukushima. Die Modellergebnisse zeigen auf, dass ein Anstieg von Strom aus erneuerbaren Quellen die Wahrscheinlichkeit von negativen Preisspitzen erhöht, während das Atom-Moratorium einen gegensätzlichen Effekt hatte. Weitere Simulationen von Marktergebnissen unter unterschiedlichen Politik-Szenarien legen nahe, dass das Erreichen ambitionierter Ziele für den Ausbau erneuerbarer Energien das Aufkommen von negativen Preisspitzen weiter fördern und die Rentabilität vieler konventioneller Kraftwerke in Frage stellen würde. Diese Effekte könnten allerdings sowohl durch einen vollständiger Atomausstieg oder einen Ausbau an Speicherkapazitäten abgemildert werden. |
| Keywords: | renewable energies,nuclear phase-out,day-ahead prices,regimeswitching models,price spikes |
| JEL: | C32 L94 Q40 Q41 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:rwirep:636&r=reg |
| By: | Daniel Daví Arderius (Cátedra de Sustentabilidad, Universidad de Barcelona); María-Eugenia Sanin (EPEE, Université d´Evry Val d´Essonne); Elisa Trujillo-Baute (University of Warrick) |
| Abstract: | Worldwide, countries are implementing policies to develop greener energy markets. In Europe, the ¨2030 Energy and Climate Package¨ asks for further reductions of GHG, renewable sources integration, and energy efficiency targets. These objectives may counterbalance each other modifying the electricity flows, and hence, affecting the electricity losses. Precisely, the extra amount of energy necessary to cover losses is the departure point from which we analyze the impact of losses on CO2 emissions. With this purpose we use Spanish market and system data with hourly frequency from 2011 to 2013. Our results show that electricity losses significantly explain CO2 emissions, with higher CO2 emissions when covering losses that those on the average system. Additionally, we find that the market closing technologies used to cover losses have positive and significant impacts on CO2 emissions: when polluting technologies (coal or combined cycle) close the market, the impact of losses on CO2 emissions is greater in comparison with the rest of technologies (CHP, renewables or hydropower). From these results we make some policy recommendations to reduce the impact of losses on CO2 emissions. |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:eve:wpaper:16-08&r=reg |
| By: | Jitsuzumi, Toshiya |
| Abstract: | Because broadband is widely believed to be a precondition for economic prosperity and social progress, many governments have been improving the broadband environments in their respective countries. Net neutrality, which in its most basic form requires "equal" treatment for all Internet traffic, should be considered only as a means of improving broadband rather than as a stand-alone policy goal. Net neutrality has been a major topic of interest for telecom regulators in developed nations for nearly a decade. However, treating net neutrality as the ultimate target may prevent a more important goal from being achieved. Policy targets and priorities should be tailored to the broadband development stage of each market. In this study, the author argues that a strict net neutrality principle is not optimal and should be relaxed to accommodate the local needs of individual markets and reflect their development stages. In addition, discussion, especially in developed nations, should focus not on quality-of-service-based net neutrality but on quality-of-experience for optimal resource allocation. |
| Keywords: | broadband,net neutrality,QoS,QoE |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:itsr15:146328&r=reg |
| By: | Kuroda, Toshifumi; Ida, Takanori; Koguchi, Teppei |
| Abstract: | Product bundling may benefit or harm consumers dependingon the correlation betweenconsumer willingness to pay for the bundledgoods and the levels of market dominance of firms. We develop astructural demand model that allows for correlatedconsumer's willingness to pay and flexible complementarities/substitutabilities. We estimate thismodel using data fromthree surveys conducted bythe JapanMinistry of Internal Affairs and Communications. The estimation results show that fixed broadband and mobile communications are complements for theJapanese telecommunication incumbentbut ambiguousfor competitors. To assess the effect of asymmetric regulation on product bundling by the incumbent, we conduct a counterfactual analysis of a two-stage game where firms choose whether to set bundle discount or not to set for fixed-broadband and mobile communications at stage one and set prices at stage two. The subgame perfect Nash equilibrium ofthetwo-stage game with/without asymmetric regulation shows that mixed-bundling is the dominant strategy for the incumbent. To avoid cannibalization, the incumbent set large discounts for bundle and set high prices for separate goods. Along with high market dominance of the incumbent, this strategy decreases the consumer surplus by 18.8%. Under subgame perfect Nash equilibrium, thediffusion ratesof fixed broadband decreases from 88.9% to 88.0% andthe diffusion rates of mobile communications increases from 95.25 to 95.71%.We also find that pure bundling,asa toolfor leverage,is not a subgame perfect Nash equilibrium. |
| Keywords: | Fixed-to-mobile substitution,Bundles,Leverage,Discrete-Choice Model |
| JEL: | L96 D43 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:itsr15:146318&r=reg |
| By: | Christoph Lakner (Poverty and Equity Global Practice - World Bank); Maria Ana Lugo (Poverty and Equity Global Practice - World Bank); Jorge Puig (CEDLAS - UNLP); Leandro Salinardi (CEDLAS - UNLP); Martha Viveros (Poverty and Equity Global Practice - World Bank) |
| Abstract: | More than a decade of energy and transport subsidies have weakened Argentina’s fiscal capacity. Following the 2001 crisis, public services tariffs were frozen in an attempt to offset the negative effects on households’ real purchasing power. However, these subsidies steadily increased over the years, particularly since 2006, becoming a significant fiscal burden. Though subsidies can be a tool to protect the poor, in Argentina they led to distortions and a large share have been absorbed by upper classes and non-residential consumers. This paper first analyzes the incidence of the 2014 system of residential federal subsidies to residential public services (defined as electricity, gas, water and transport) and then simulates the distributional impacts of alternative subsidy structures. Simulations on the electricity sector suggest that targeting consumption levels through a simple lifeline tariff is not sufficient to achieve a propoor incidence of subsidies. Instead, explicit targeting is necessary (though not sufficient) and needs to ensure comprehensive coverage of the poorest households. Similarly, on the transport sector show that the existing tariffs are not well-targeted, but that an expanded set of social programs could improve coverage of the poorest. Gas subsidy simulations showed that a social tariff would virtually eliminate the subsidy, suggesting that there is little overlap between the receipt of social programs and access to piped gas. |
| Date: | 2016–08 |
| URL: | http://d.repec.org/n?u=RePEc:dls:wpaper:0201&r=reg |
| By: | Tsai, Hsin-yi Sandy; Bauer, Johannes M. |
| Abstract: | The importance of accessing the Internet anywhere anytime has been high on the agenda of policy makers and businesses. Despite this awareness of the importance of mobile broadband access, there continue to be significant differences in mobile broadband adoption and uses among countries. Although many studies have examined the factors affecting broadband penetration rates, few studies thus far have focused on mobile broadband. Consequently, reasons for the gap on mobile broadband penetration rates among countries and potential remedies to address them remain muddy. This paper uses Qualitative Comparative Analysis (QCA) to systematically examine factors related to mobile broadband penetration. Policies and other economic and social factors usually interact with each other. OCA allows a systematic examination of the complexity of various combinations of policy and economic factors. This allows a deeper understanding of necessary and/or sufficient conditions for higher mobile broadband (high speed mobile Internet) penetration rates. The results reveal the complexity of the interaction of various conditions for mobile broadband penetration. The findings suggest that there are multiple paths toward high mobile broadband penetration, each depending on the context of institutional and non-institutional factors. An appropriate combination of spectrum policy, market access conditions, and supplementary policies to support access to disadvantaged regions and groups remains critical and has noticeable effects on sector outcomes. |
| Keywords: | QCA (Qualitative Comparative Analysis),broadband penetration,adoption |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:itsr15:146336&r=reg |
| By: | Arturo L. Vásquez Cordano (GERENS Graduate School of Business and Osinergmin); Abdel M. Zellou (Clear Future Consulting) |
| Abstract: | There was an upward trend in energy commodity prices since 2000, but with the surge in supply coming from unconventional oil and gas resources in North and South America, the trend in natural gas prices has become downward in recent years. However, the exploitation of these resources is generating public concerns due to the possible adverse environmental impacts of using hydraulic fracturing and other techniques on underground water. The purpose of this paper is to address the following questions: are there super cycles in natural gas prices? What are the environmental consequences in Latin America of the exploitation of unconventional gas given the cyclical behavior of gas prices and how can governments implement environmental policies to regulate unconventional gas extraction? Three super cycles in natural gas prices are identified with the last peak occurring in 2006. Our analysis indicates that the instable political situation and institutional weakness, the governmental intervention through asset nationalization and state-owned oil companies, the lack of transparent investment rules, high capital expenditures to develop LNG export projects and the exploration of shale resources, as well as the pre-salt discoveries in Brazil make uncertain that the shale gas boom achieve a large impact in Latin America during the current gas price super cycle. |
| Keywords: | Super Cycles, Long Cycles, Exhaustible Resources, Natural Gas Prices, Environment, Shale Gas, Trend-Cycle Decomposition, Christiano-Fitzgerald Band-Pass Filter |
| JEL: | E32 L71 Q41 E37 L51 Q48 Q58 |
| Date: | 2016–09 |
| URL: | http://d.repec.org/n?u=RePEc:apc:wpaper:2016-071&r=reg |
| By: | Francisco Javier Eransus (Instituto Complutense de Análisis Económico (ICAE) – Facultad de Ciencias Económicas y Empresariales, Universidad Complutense de Madrid) |
| Abstract: | The aim of this paper is to suggest a simple methodology to be used by renewable power generators to bid in Spanish markets in order to minimize the cost of their imbalances. As it is known, the optimal bid depends on the probability distribution function of the energy to produce, of the probability distribution function of the future system imbalance and of its expected cost. We assume simple methods for estimating any of these parameters and, using actual data of 2014, we test the potential economic benefit for a wind generator from using our optimal bid instead of just the expected power generation. We find evidence that Spanish wind generators savings would be from 7% to 26%. |
| Keywords: | Power markets, Renewable energy, Uncertainty, Optimal bidding, Forecasting. |
| JEL: | C22 C44 |
| Date: | 2016–02 |
| URL: | http://d.repec.org/n?u=RePEc:ucm:doicae:1613&r=reg |
| By: | Massaro, Maria; Pogorel, Gérard |
| Abstract: | Increasing demand for access to the radio spectrum is setting the stage for a revision of existing radio spectrum management practices. A new wave of spectrum policy reforms can be envisaged, with a potential shift of policy focus from static to dynamic efficiency. This might translate into a new generation of radio spectrum management tools more centred on spectrum sharing solutions. Spectrum sharing could ensure more flexibility in spectrum use and certainty of radio spectrum access, which might eventually encourage investment and innovation, i.e. dynamic efficiency. Among several forms of spectrum sharing, the concept of Licensed Shared Access has recently been under scrutiny, in particular in the European Union and in the United States. Against this background, this paper is intended as a progress report on the discussion upon the LSA regime. This paper is based on an extensive bibliography on LSA, which includes official documents, academic papers, position papers and reports. Given the shift of spectrum policy focus from static to dynamic efficiency, the aim of this paper is to provide a preliminary assessment of the impact of LSA on dynamic efficiency. In this regard, selected elements of the LSA regime are assessed in terms of potential contribution to dynamic efficiency. These elements are: contract length; sharing arrangements; assignment procedures for LSA licences; implementation of RRS technologies; monitoring and enforcement. The preliminary assessment presented in this paper shows that the LSA regime needs to be refined to ensure that dynamic efficiency is promoted, in particular aspects of enforcement have to be carefully designed. The authors of this paper would recommend further studies on the LSA regime, which could represent a valuable element of the regulatory toolkit for spectrum management under a radio spectrum regulation aimed at increasing dynamic efficiency. The authors share the idea that different regimes can coexist and be applied depending upon spectrum bands and radio-based services under consideration. |
| Keywords: | Licensed Shared Access,spectrum sharing,static efficiency,dynamic efficiency |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:itsr15:146322&r=reg |
| By: | Bendery, Christian M.; Goetz, Georg |
| Abstract: | This paper models competition between two firms, which provide broadband In-ternet access in regional markets with different population densities. The firms, an incumbent and an entrant, differ in two ways. First, consumers bear costs when switching to the entrant. Second, the entrant faces a make-or-buy decision in each region and can choose between service-based and facility-based entry. The usual trade-off between static and dynamic efficiency does not apply in the sense that higher access fees might yield both, lower retail prices and higher total coverage. This holds despite a strategic effect in the entrant's investment decision. While investment lowers marginal costs in regions with facility-based entry, it intensifies competition in all regions. We show that the cost-reducing potential of investments dominates the strategic effect: Higher access fees increase facility-based competition, decrease retail prices and increase total demand. |
| Keywords: | Broadband access markets,facility- and service-based entry,investments,economies of density,switching costs |
| JEL: | D43 L13 L51 L96 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:itsr15:146317&r=reg |
| By: | T. BALINT (Université Paris I, Panthéon -Sorbonne and CNRS); F. LAMPERTI (Université Paris I Panthéon - Sorbonne and CNRS Institute of Economic and LEM, Scuola Superiore Sant'Anna); A. Mandel (Université Paris1, Panthéon-Sorbonne and CNRS PSE Paris School of Economics Author-Name : M. Napoletano Author-Workplace-Name : OFCE Sciences PO and SKEMA Business School); A. Roventini Author-Workplace-Name : OFCE-Sciences Pp and SKEMA Businees School; A. Sapio Author-Workplace-Name : Parathenope Universtiy of Naples |
| Abstract: | We provide a survey of the micro and macro economics of climate change from a complexity science perspective and we discuss the challenges ahead for this line of research. We identify four areas of the literature where complex system models have already produced valuable insights: (i) coalition formation and climate negotiations, (ii) macroeconomic impacts of climate-related events, (iii) energy markets and (iv) di usion of climate-friendly technologies. On each of these issues, accounting for heterogeneity, interactions and disequilibrium dynamics provides a complementary and novel perspective to the one of standard equilibrium models. Furthermore, it highlights the potential economic benefits of mitigation and adaptation policies and the risk of under-estimating systemic climate change-related risks. |
| Keywords: | climate change, climate policy, climate economics, complex systems, agent-based models, socio-economic networks |
| JEL: | C63 Q40 Q50 |
| Date: | 2016–07 |
| URL: | http://d.repec.org/n?u=RePEc:fce:doctra:1623&r=reg |
| By: | Maria Eugenia Sanin (EPEE, Université d´Evry Val d´Essonne; Chaire Energie et Prospérité - École Polytechnique; Chaire European Electricity Markets - Dauphine Foundation.) |
| Abstract: | In this paper we study how the electricity market character- istics determines the choices made by electricity generators in the U.S. market for SO2 allowances. Counterparts can be cho- sen among three alternatives: market makers, brokers or another generator. We find that the SO2 allowances market is de facto regionalized due to the regionalization of the electricity market. The national dimension only appears when there are local im- balances in the electricity market that give strong incentives to search for a better price outside of the region. Additionally, we identify the influence of the regulatory framework, i.e. the divi- sion in phases and the chosen allowance surrender date. Finally, we show that the previous results are robust to Enron's abnormal behavior during 2000-2001 and its posterior bankruptcy. |
| Keywords: | radable emission permits, counterpart choice, acid rain market |
| JEL: | D22 D40 D62 L50 L94 Q58 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:eve:wpaper:16-01&r=reg |
| By: | Anna CRETI (Dauphine University and Ecole Polytechnique); María-Eugenia SANIN (EPEE, Evry-Val-d'Esssone University and Ecole Polytechnique) |
| Abstract: | This paper studies merger incentives for polluting Cournot firms under a competitive tradable emission permits market. Such setting is relevant to assess the observed mergers between power generators in the Regional Greenhause Gas Initiative (RGGI) allowing us to derive policy recommendations. We find that when firms are symmetric and marginal costs are constant, an horizontal merger that generates efficiency gains is welfare enhancing, but efficiency gains must be high enough with respect to the case without permits markets for the merger to take place. Secondly, the presence of a competitive (or monopolistic) outside market that also trades in the permits market makes profitable a merger that would not happen otherwise. When firms are vertically related in an input-output chain, an horizontal merger in one of the markets increases profits in that market and in the other market due to the decrease in permits price. Finally we consider an oligopoly-fringe model in which firms differ both in their marginal costs of production and in their pollution intensity. A merger between the oligopolistic firms decreases permits price and is always profitable as opposed to the symmetric Cournot case in which there is a critical size for profitability. |
| Keywords: | mergers, environmental externality, tradable emission permits, social welfare, Cournot competition |
| JEL: | L13 L41 Q51 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:eve:wpaper:16-07&r=reg |
| By: | Wendel, Julia |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:itsr15:146330&r=reg |
| By: | Ek, Kristina (Economics Unit, Luleå University of Technology); Persson, Lars (CERE and the Department of Economics, Umeå University) |
| Abstract: | The Water Framework Directive (WFD) explicitly acknowledges the role of economics in the process of reaching the environmental quality objectives. The purpose of this paper is to discuss the implementation of the WFD in Sweden based on standard economic theory regarding instruments for cost efficient- and effective solutions to environmental problems. A lesson is that although incentive based instruments are beneficial from a cost-efficiency perspective, the complexities associated with environmental water management may somewhat challenge their implementation. Flexibility is a key issue for cost-effectiveness and, since Swedish water management mainly consists of command-and control instruments, the cost effectiveness is likely to be limited. Furthermore, the paper also points at how policy instruments relate to the economic burden aspect and the PPP – both highlighted in the Directive. |
| Keywords: | The economics of the Water Framework Directive; cost efficiency and effectiveness; environmental water management; Polluter Pays Principle |
| JEL: | H23 Q53 |
| Date: | 2016–09–19 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:slucer:2016_016&r=reg |
| By: | Martínez, Luis; Álvarez San-Jaime, Oscar; Markendahl, Jan |
| Abstract: | The overall goal of the incorporation of QoE in the mobile networks deployment is related to optimizing end-user QoE, while making efficient use of network resources and maintaining a satisfied customer base that guarantees the commercial success of the provider's business model. However, the implementation of a QoE-based approach at the service provision, with the potential deployment of fast lanes for premium users, the prioritization of traffic, or the creation of user's categories, may affect the Net Neutrality principles. This paper presents an analysis of how the net neutrality principles will impact the implementation of QoE-based differentiation in the service provision at technical, business and market levels. We introduce a business model framed in the QoE-based differentiation approach analysing the implications of Net Neutrality in the proposed models. |
| Keywords: | Quality of Experience,Net Neutrality,Mobile Networks |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:itsr15:146319&r=reg |
| By: | Haire, Andrew J. |
| Keywords: | IoT policy,regulation of IoT,government authority,trust,identity |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:itsr15:146343&r=reg |
| By: | Levin, Stanford Lee; Schmidt, Stephen; Scott, Graham |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:itsr15:146346&r=reg |