|
on Regulation |
| By: | Chao Luo; Yih-Fang Huang; Vijay Gupta |
| Abstract: | This paper presents a dynamic pricing and energy management framework for electric vehicle (EV) charging service providers. To set the charging prices, the service providers faces three uncertainties: the volatility of wholesale electricity price, intermittent renewable energy generation, and spatial-temporal EV charging demand. The main objective of our work here is to help charging service providers to improve their total profits while enhancing customer satisfaction and maintaining power grid stability, taking into account those uncertainties. We employ a linear regression model to estimate the EV charging demand at each charging station, and introduce a quantitative measure for customer satisfaction. Both the greedy algorithm and the dynamic programming (DP) algorithm are employed to derive the optimal charging prices and determine how much electricity to be purchased from the wholesale market in each planning horizon. Simulation results show that DP algorithm achieves an increased profit (up to 9%) compared to the greedy algorithm (the benchmark algorithm) under certain scenarios. Additionally, we observe that the integration of a low-cost energy storage into the system can not only improve the profit, but also smooth out the charging price fluctuation, protecting the end customers from the volatile wholesale market. |
| Date: | 2018–01 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:1801.02783&r=reg |
| By: | Sadek Boussena (LEPII - Laboratoire d'Economie de la Production et de l'Intégration Internationale - UPMF - Université Pierre Mendès France - Grenoble 2 - CNRS - Centre National de la Recherche Scientifique); Catherine Locatelli (GAEL - Laboratoire d'Economie Appliquée de Grenoble - Grenoble INP - Institut polytechnique de Grenoble - Grenoble Institute of Technology - INRA - Institut National de la Recherche Agronomique - CNRS - Centre National de la Recherche Scientifique - UGA - Université Grenoble Alpes) |
| Abstract: | Confronted with an increasingly competitive market in the European Union and the credible threat of a new entrant in the form of liquefied natural gas imports from the United States, Gazprom’s traditional export strategy is open to question. The company must decide whether it should launch a price war in order passively to adapt to impending competition and its role as a ‘residual supplier’ to the EU gas market, or whether it should take advantage of the current price uncertainty. This article explores the scope for long-term strategic action by Gazprom other than simply engaging in a price war. It is argued that Gazprom could forge a position as a key player in the EU gas market capable of playing the same role as Saudi Arabia does in the global oil market. |
| Keywords: | Gas, LNG, competition, EU, Russia, Gazprom |
| Date: | 2017–10–17 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-01618494&r=reg |
| By: | Erich Muehlegger; Richard L. Sweeney |
| Abstract: | The advent of hydraulic fracturing lead to a dramatic increase in US oil production. Due to regulatory, shipping and processing constraints, this sudden surge in domestic drilling caused an unprecedented divergence in crude acquisition costs across US refineries. We take advantage of this exogenous shock to input costs to study the nature of competition and the incidence of cost changes in this important industry. We begin by estimating the extent to which US refining’s divergence from global crude markets was passed on to consumers. Using rich microdata, we are able to decompose the effects of firm-specific, market-specific and industry-wide cost shocks on refined product prices. We show that this distinction has important economic and econometric significance, and discuss the implications for prospective policy which would put a price on carbon emissions. The implications of these results for perennial questions about competition in the refining industry are also discussed. |
| JEL: | H22 H23 Q40 Q54 |
| Date: | 2017–11 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:24025&r=reg |
| By: | Thomas Crossley (Institute for Fiscal Studies and Institute for Fiscal Studies, University of Essex); Federico Zilio (Institute for Fiscal Studies and Institute for Social & Economic Research) |
| Abstract: | Each year the UK records 25,000 or more excess winter deaths, primarily among the elderly. A key policy response is the “Winter Fuel Payment” (WFP), a labelled but unconditional cash transfer to households with a member above the Female State Pension Age. The WFP has been shown to raise fuel spending among eligible households. We examine the causal effect of the WFP on health outcomes, including self-reports of chest infection, measured hypertension and biomarkers of infection and inflammation. We find a robust and statistically significant six percentage point reduction in the incidence of high levels of serum fibrinogen. Reductions in other disease markers point to health benefits, but the estimated effects are not robustly statistically significant. |
| Keywords: | benefits, health, biomarkers, heating, regression discontinuity |
| JEL: | H51 I12 |
| Date: | 2017–10–18 |
| URL: | http://d.repec.org/n?u=RePEc:ifs:ifsewp:17/23&r=reg |
| By: | Angelica Gianfreda; Francesco Ravazzolo; Luca Rossini |
| Abstract: | This paper compares alternative univariate versus multivariate models, probabilistic versus Bayesian autoregressive and vector autoregressive specifications for hourly day-ahead electricity prices, with and without renewable energy sources. The accuracy of point and density forecasts are inspected in four main European markets (Germany, Denmark, Italy and Spain) characterized by different levels of renewable energy power generation. Our results show that the Bayesian VAR specifications with exogenous variables dominate other multivariate and univariate specifications, in terms of both point and density forecasting. |
| Date: | 2018–01 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:1801.01093&r=reg |
| By: | Kelsey Jack; Seema Jayachandran; Sarojini Rao |
| Abstract: | Water use and electricity use, which generate negative environmental externalities, are susceptible to a second externality problem: with household-level billing, each person enjoys private benefits of consumption but shares the cost with other household members. If individual usage is imperfectly observed (as is typical for water and electricity) and family members are imperfectly altruistic toward one another, households overconsume even from their own perspective. We develop this argument and test its prediction that intrahousehold free-riding dampens price sensitivity. We do so in the context of water use in urban Zambia by combining billing records, randomized price variation, and a lab-experimental measure of intrahousehold altruism. We find that more altruistic households are considerably more price sensitive than are less altruistic households. Our results imply that the socially optimal price needs to be set to correct both the environmental externality and also the intrahousehold externality. |
| JEL: | D10 H21 H23 O10 Q56 |
| Date: | 2018–01 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:24192&r=reg |
| By: | Gabriel E. Lade; Ivan Rudik |
| Abstract: | Efficient pollution regulation equalizes marginal abatement costs across sources. Here we study a new flaring regulation in North Dakota's oil and gas industry and document its efficiency. Exploiting detailed well-level data, we find that the regulation reduced flaring 4 to 7 percentage points and accounts for up to half of the observed flaring reductions since 2015. We construct firm-level marginal flaring abatement cost curves and find that the observed flaring reductions could have been achieved at 20% lower cost by imposing a tax on flared gas equal to current public lands royalty rates instead of using firm-specific flaring requirements. |
| JEL: | L71 Q3 Q4 |
| Date: | 2017–12 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:24139&r=reg |
| By: | Eugenio J. Miravete; Katja Seim; Jeff Thurk |
| Abstract: | Government often chooses simple rules to regulate industry even when firms and consumers are heterogeneous. We evaluate the implications of this practice in the context of alcohol pricing where the regulator uses a single markup rule that does not vary across products. We estimate an equilibrium model of wholesale pricing and retail demand for horizontally differentiated spirits that allows for heterogeneity in consumer preferences based on observable demographics. We show that the single markup increases market power among upstream firms, particularly small firms whose portfolios are better positioned to take advantage of the policy. For consumers, the single markup acts as a progressive tax by overpricing products favored by the rich. It also decreases aggregate consumer welfare though 16.7% of consumers are better off under the policy. These consumers tend to be older, less wealthy or educated, and minorities. Simple policies therefore generate significant cross-subsidies and may be an effective tool for government to garner favor of key constituencies. |
| JEL: | D42 D63 H23 L43 L66 |
| Date: | 2017–12 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:24124&r=reg |
| By: | Vogler, Sabine; Paris, Valérie; Ferrario, Alessandra; Wirtz, Veronika J.; Joncheere, Kees de; Schneider, Peter; Pedersen, Hanne Bak; Dedet, Guillaume; Babar, Zaheer-Ud-Din |
| Abstract: | This article discusses pharmaceutical pricing and reimbursement policies in European countries with regard to their ability to ensure affordable access to medicines. A frequently applied pricing policy is external price referencing. While it provides some benchmark for policy-makers and has been shown to be able to generate savings, it may also contribute to delay in product launch in countries where medicine prices are low. Value-based pricing has been proposed as a policy that promotes access while rewarding useful innovation; however, implementing it has proven quite challenging. For high-priced medicines, managed-entry agreements are increasingly used. These agreements allow policy-makers to manage uncertainty and obtain lower prices. They can also facilitate earlier market access in case of limited evidence about added therapeutic value of the medicine. However, these agreements raise transparency concerns due to the confidentiality clause. Tendering as used in the hospital and offpatent outpatient sectors has been proven to reduce medicine prices but it requires a robust framework and appropriate design with clear strategic goals in order to prevent shortages. These pricing and reimbursement policies are supplemented by the widespread use of Health Technology Assessment to inform decision-making, and by strategies to improve the uptake of generics, and also biosimilars. While European countries have been implementing a set of policy options, there is a lack of thorough impact assessments of several pricing and reimbursement policies on affordable access. Increased cooperation between authorities, experience sharing and improving transparency on price information, including the disclosure of confidential discounts, are opportunities to address current challenges. |
| JEL: | I10 |
| Date: | 2017–06–01 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:68862&r=reg |
| By: | Imam, M.; Jamasb, T.; Llorca, M.; Llorca, M. |
| Abstract: | In order to reduce the influence of corruption on electricity sector performance, most Sub-Saharan African countries have implemented sector reforms. However, after nearly two and half decades of reforms, there is no evidence whether these reforms have mitigated or exacerbated corruption. Neither is there evidence of performance improvements of reforms in terms of technical, economic or welfare impact. This paper aims to fill this gap. We use a dynamic panel estimator with a novel panel data set of 47 Sub-Saharan African countries from 2002 to 2013. We analyse the impact of corruption and two key aspects of electricity reform model - creations of independent regulatory agencies and private sector participation - on three performance indicators: technical efficiency, access to electricity and income. We find that corruption can significantly reduce technical efficiency of the sector and constrain the efforts to increase access to electricity and national income. However, these adverse effects are reduced where independent regulatory agencies are established and privatisation is implemented. Our results suggest that well-designed reforms not only boost economic performance of the sector directly, but also indirectly reduce the negative effects of macro level institutional deficiencies such as corruption on micro and macro indicators of performance. |
| Keywords: | Panel data, dynamic GMM, electricity sector reform, corruption, Sub-Saharan Africa |
| JEL: | Q48 D02 K23 D73 |
| Date: | 2018–01–12 |
| URL: | http://d.repec.org/n?u=RePEc:cam:camdae:1801&r=reg |
| By: | Chao Luo; Yih-Fang Huang; Vijay Gupta |
| Abstract: | This paper presents a multi-stage approach to the placement of charging stations under the scenarios of different electric vehicle (EV) penetration rates. The EV charging market is modeled as the oligopoly. A consumer behavior based approach is applied to forecast the charging demand of the charging stations using a nested logit model. The impacts of both the urban road network and the power grid network on charging station planning are also considered. At each planning stage, the optimal station placement strategy is derived through solving a Bayesian game among the service providers. To investigate the interplay of the travel pattern, the consumer behavior, urban road network, power grid network, and the charging station placement, a simulation platform (The EV Virtual City 1.0) is developed using Java on Repast.We conduct a case study in the San Pedro District of Los Angeles by importing the geographic and demographic data of that region into the platform. The simulation results demonstrate a strong consistency between the charging station placement and the traffic flow of EVs. The results also reveal an interesting phenomenon that service providers prefer clustering instead of spatial separation in this oligopoly market. |
| Date: | 2018–01 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:1801.02135&r=reg |
| By: | Rachel Griffith (Institute for Fiscal Studies and IFS and Manchester); Martin O'Connell (Institute for Fiscal Studies and Institute for Fiscal Studies); Kate Smith (Institute for Fiscal Studies and Institute for Fiscal Studies) |
| Abstract: | We study optimal corrective taxation in the alcohol market. Consumption generates negative externalities that are non-linear in the total amount of alcohol consumed. If tastes for products are heterogeneous and correlated with marginal externalities, then varying tax rates on different products can lead to welfare gains. We study this problem in an optimal tax framework and empirically for the UK alcohol market. Welfare gains from optimally varying rates are higher the more concentrated externalities are amongst heavy drinkers. A sufficient statistics approach is informative about the direction of reform, but not about optimal rates when externalities are highly concentrated. This is an updated version of previous working paper see here. |
| Keywords: | externality, corrective taxes, alcohol |
| JEL: | D12 D62 H21 H23 |
| Date: | 2017–12–11 |
| URL: | http://d.repec.org/n?u=RePEc:ifs:ifsewp:17/28&r=reg |
| By: | Massimiliano Caporin (University of Padova); Fulvio Fontini (University of Padova); Paolo Santucci De Magistris (Unviersity of Aarhus) |
| Abstract: | In the paper we study the convergence of prices in the electricity markets, both at the day-ahead level and for the dispatching services (such as balancing and reserves). We introduce two concepts of price convergence, the convergence of zonal prices within each market (within convergence), and the converge of prices in a given zone between the two markets (between convergence). We provide an extensive analysis based on Italian data of within and between convergence. The zonal time-series of the prices are evaluated, seasonally adjusted and tested to assess their long-run properties. This evaluation induces us to focus on the behavior of the three largest and most interconnected continental zones of Italy (North, Center-North and Center-South). The fractional cointegration methodology used in the analysis shows the existence of long-run relationships among the series used in our study. This signals the existence of price convergence within markets, even though for the dispatching services market the evidence is less robust. The analysis also shows the existence of price convergence between markets in each zone, even though the evidence is more clearly armed for the North (the largest Italian zone), less so for the other two zones. Results are interpreted on the basis of the characteristics of the markets and the zones. |
| Keywords: | zonal prices, convergence between zones, convergence within zones, fractional cointegration, long-run equilibrium. |
| JEL: | Q40 Q41 C32 C51 |
| Date: | 2017–12 |
| URL: | http://d.repec.org/n?u=RePEc:pad:wpaper:0215&r=reg |