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on Regulation |
| By: | Talat S. Genc (Department of Economics, University of Guelph, Guelph ON Canada); Stanley S. Reynolds (Department of Economics, University of Arizona, Tucson, Arizona 85721 USA) |
| Abstract: | We investigate the market implications of ownership of a new low-cost production technology. We relate our theoretical findings to measuring the impact of renewable energy penetration into electricity markets and examine how the ownership of renewable capacity changes market outcomes (prices, outputs, emissions). As the current public policies influence the renewable energy ownership, this research provides useful insights for policy makers. We show that ownership of renewable capacity will matter when there is market power in energy market. We apply our findings to the Ontario wholesale electricity market to analyze the impact of different ownership structures for wind capacity expansions. We show that consumers enjoy better air quality under the largest firm's ownership, but at the expense of higher prices. We find that market structure and the shape of generation cost functions are the key drivers explaining the impact of renewable ownership on market outcomes. |
| Keywords: | Market structure, technology ownership, renewable energy, greenhouse gas emissions |
| JEL: | D4 L1 Q5 Q4 Q2 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:gue:guelph:2017-03&r=reg |
| By: | Vincent Bertrand |
| Abstract: | This paper analyses the effect of recognizing co-firing coal with biomass as a renewable energy sources (RES) so as to meet the mandatory obligations in electricity. We provide simulations for the French and German electricity mix, with investigations about consequences for cost savings in the power sector and CO2 emissions. Results indicate that, if co-firing is recognized as a RES, coal would crowd-out traditional RES, not only with increased generation from existing coal plants, but also with additional investments in coal that would be substituted for traditional RES. Investments in coal may be more significant in France than in Germany, which may correspond to adding up to 243% of coal capacity in French electricity by 2030, whereas the same progression is 27% in Germany. Regarding CO2 emissions, we find sharp increases when co-firing is recognized as a RES. The rise is more significant in Germany due to more coal capacities. In the case of France, the magnitude of increased emissions highly depends on the share of nuclear electricity, with fewer increase when old nuclear stations are prolonged. Finally, we find that including co-firing in the set of RES reduces the overall costs associated with managing the power system. We also balanced the cost saving for the power sector with the increased social cost from higher CO2 emissions. Results show that the cost saving is dominated by the increased carbon cost for the society if the carbon valuation is around 100 Euros per tCO2, except in France when old nuclear stations are prolonged. |
| Keywords: | Co-firing, Biomass, Renewable electricity obligation, Electricity mix, CO2 emissions, Social cost of carbon |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:cec:wpaper:1704&r=reg |
| By: | Géraldine Ang (OECD); Pralhad Burli (Montclair State University); Dirk Röttgers (OECD) |
| Abstract: | This working paper undertakes econometric analysis to assess the impacts of climate mitigation policies and the quality of the investment environment on investment and innovation in renewable power in OECD and G20 countries. It also assesses how countries’ investment environments interact with climate mitigation policies to influence investment and patent activity in renewable power. The paper gathered and tested data across OECD and G20 countries on more than 70 explanatory variables, which were analysed using two Poisson-family regression models: one to investigate determinants of investment flows in renewable power from 2000 until 2014; and one to investigate determinants of patent counts in renewable-power technologies from 2000 until 2012. Results of the econometric analysis are consistent with the main hypothesis in this paper that beyond setting climate mitigation policies, policy makers need to strengthen the general investment environment and align it with climate mitigation policies in order to mobilise investment and innovation in renewable power across OECD and G20 countries. |
| Keywords: | climate change, climate finance, estimation, public intervention, regression |
| JEL: | F30 H23 L94 O3 Q42 Q48 Q54 Q55 Q58 |
| Date: | 2017–05–31 |
| URL: | http://d.repec.org/n?u=RePEc:oec:envaaa:123-en&r=reg |
| By: | Marc Baudry; Clément Bonnet |
| Abstract: | Renewable energy technologies are called to play a crucial role in the reduction of greenhouse gas (GHG) emissions. Since most of these technologies did not yet reach grid parity, public policies can rely on two types of approach to stimulate innovation: supply-push and demand-pull. The latter aims at creating demand for new technologies and at stimulating their diffusion. Nevertheless, due to the complex self-sustained dynamics of diffusion and to spillovers between the countries it is hard to determine whether newly installed capacities are imputable to national support policies and/or to policies implemented by neighbor countries. The paper addresses this problem. A micro-founded model of technology diffusion is developed and calibrated. It captures the influence of demand-pull policies on wind power installed capacities for six European countries over the last decade. A counter-factual analysis is carried out to assess the impact of demand-pull policies on wind power development by taking into account the interplay between national policies via spillovers. |
| Keywords: | Renewable energy, Technology diffusion, Demand pull instruments |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:cec:wpaper:1705&r=reg |
| By: | Rehman, Salma; Hussain, Zaki |
| Abstract: | India has set colossal renewable energy (RE) targets (achieving 175GW of renewable energy capacity by 2022) which need a clear strategy roadmap, integrated planning and a whole-of-system approach. However, the loopholes in institutional mechanisms are bound to hinder the process of policy formulation and implementation for the aspired quantum leap. This paper is an attempt to observe governance of renewable energy in India while exploring the issues and challenges that have been stalling the process of clean energy uptake. The paper finds that despite the comprehensive policy and regulatory frameworks, the large disconnect between the central policies and regional needs has created barriers for deployment of renewable technologies. The paper emphasizes the provision for clean energy financial support to be made available to the states for addressing the disparities between RE potential and the development cost, and planning for better grid management systems. The RE targets also demand an intensive capital market development and innovative financial support mechanisms and products. While aligning itself with the clean energy goals, India needs to focus significantly on the energy needs of the rural population which has been grappling with electricity cuts and brownouts. For regions with limited or no electricity supply, the government should aggressively promote the ideas of off-grid solar power and micro grids. The paper also recommends the possibilities for private sector investments, rural entrepreneurship and public- private ventures for filling in the gaps, and thus harnessing the potential of RE-rich states. |
| Keywords: | Renewable Energy, UN Sustainable Development Goals (SDGs), India, Clean Energy, Grid integration, Solar Mission, NAPCC, Climate change, Rural electrification |
| JEL: | Q2 Q20 Q28 Q5 Q50 Q56 Q58 |
| Date: | 2017–01–26 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:79361&r=reg |
| By: | Juan Jung (AQR-IREA, University of Barcelona); Enrique López-Bazo (AQR-IREA, University of Barcelona) |
| Abstract: | This paper analyses the incidence of broadband on regional productivity in Brazil, intending to find out if the economic impact is uniform across all territories of the country. The possibility of performing a regional approach, instead of the usual country-level analysis, means an opportunity to disentangle the economic impact of broadband at territories which share a common institutional and regulatory framework as are the regions inside a country. Results suggest that the impact of broadband on productivity is positive although not uniform across regions. On the one hand, it seems to depend on connection quality and network effects. Faster download speed and critical-mass accounting for network externalities in the region enhance the economic impact of broadband. On the other hand, higher productivity gains are estimated for the less developed regions. The fact that the less productive regions in Brazil seem to be benefiting more from broadband may suggest that it can constitute a factor favoring regional convergence in the country. |
| Keywords: | Broadband, Information and Communication Technologies, Regional Productivity JEL classification: O33, O47, R11 |
| Date: | 2017–05 |
| URL: | http://d.repec.org/n?u=RePEc:aqr:wpaper:201704&r=reg |
| By: | François Cohen; Antoine Dechezlepretre |
| Abstract: | In this paper the authors examine the heterogeneous impact of temperature shocks on mortality across income groups in Mexico using individual death records (1998–2010) and Census data. Random variation in temperatures is responsible for the death of around 45,000 people every year in Mexico, representing 8 per cent of deaths in the country. However, 88 per cent of weather-related deaths are induced by mildly cold days (of 10–20°C), while extremely hot days (over 32°C) kill a comparatively low number of people (less than 400 annually). Moreover, mildly cold temperatures only kill in the bottom half of the income distribution. The authors show that the Seguro Popular, a universal healthcare policy progressively rolled out during the sample period, reduced cold-related mortality among the poor by about 30 per cent. |
| Date: | 2017–05 |
| URL: | http://d.repec.org/n?u=RePEc:lsg:lsgwps:wp268&r=reg |