|
on Regulation |
| By: | Onno Kuik (IVM, VU Amsterdam); FrŽdŽric Branger (CIRED); Philippe Quirion (CIRED, CNRS) |
| Abstract: | Pioneering domestic environmental regulation may foster the creation of new eco-industries. These industries could benefit from a competitive advantage in the global market place. This article examines empirical evidence of the impact of domestic renewable energy policies on the export performance of renewable energy products (wind and solar PV). We use a gravity model of international trade with a balanced dataset of 49 (for wind) and 40 (for PV) countries covering the period 1995-2013. The stringency of renewable energy policies are proxied by installed capacities. Our econometric model shows evidence of competitive advantage positively correlated with domestic renewable energy policies, sustained in the wind industry but brief in the solar PV industry. We suggest that the reason for the dynamic difference lies in the underlying technologies involved in the two industries. |
| Keywords: | Competitive Advantage, Gravity Model, Wind Industry, Solar PV Industry, Green Growth |
| JEL: | F14 K32 Q42 |
| Date: | 2018–10 |
| URL: | http://d.repec.org/n?u=RePEc:fae:ppaper:2018.07&r=reg |
| By: | Hancevic, P.; Lopez-Aguilar, J. |
| Abstract: | Increasing block pricing schemes represent difficulties for applied researchers who try to recover demand parameters, in particular, price and income elasticities. The Mexican residential electricity tariff structure is amongst the most intricate around the globe. In this paper, we estimate the residential electricity demand and use the corresponding structural parameter estimates to simulate an energy efficiency improvement scenario, as suggested by the Energy Transition Law of December 2015. The simulated program consists of a massive replacement of electric appliances (air conditioners, fans, refrigerators, washing machines, and light-bulbs) for more energy-efficient units. The main empirical findings are the following: overall residential electricity consumption decreases 8.9% and the associated expenditure falls 11.1%. Additionally, the electricity subsidy decreases 360 million of USD per year and there is an annual cut in CO2 emissions of 3.5 million of tons. Acknowledgement : We would like to thank seminar participants at CIDE for their helpful comments and suggestions. We are grateful for the much valuable help on data collection by the Subsecretar ?a de Electricidad at the Mexican Energy Ministry (SENER). |
| Keywords: | Resource/Energy Economics and Policy |
| Date: | 2018–07 |
| URL: | http://d.repec.org/n?u=RePEc:ags:iaae18:277442&r=reg |
| By: | Schnellmann, M.; Chyong, C-K.; Reiner, D.; Scott, S. |
| Abstract: | Combined cycle gas turbine (CCGT) power plants are an important part of many electricity systems. By fitting them with carbon capture their CO2 emissions could be virtually eliminated. We evaluate CCGT plants with different variations of post combustion capture using amine solvents, covering a range of options, including solvent storage, partial capture and shifting the energy penalty in time. The analysis is based on the UK electricity system in 2025. The behaviour of individual CCGT plants is governed by the plant’s place in the merit order and to a lesser extent by CO2 reduction targets for the electricity system. In the UK, CCGT plants built from 2016 onwards will emit ~90% of the CO2 emissions of the whole CCGT fleet in 2025. The typical ‘base case’ CCGT plant with capture is designed to capture 90% of the CO2 emissions and to operate dynamically with the power plant. Downsizing the capture facility could be attractive for low-merit plants, i.e. plants with high short-run marginal costs. Solvent storage enables electricity generation to be decoupled in time from the energy penalty associated with carbon capture. Beyond a few minutes of solvent storage, substantial tanks would be needed. If solvent storage is to play an important role, it will require definitions of ‘capture ready’ to be expanded to ensure sufficient land is available. |
| Keywords: | Carbon capture and storage; Flexibility; Combined cycle gas turbine (CCGT); Power plants; Electricity system; Amine solvents |
| JEL: | L94 Q4 |
| Date: | 2018–11–26 |
| URL: | http://d.repec.org/n?u=RePEc:cam:camdae:1868&r=reg |
| By: | Duan, J.; McKenna, A.; Van Kooten, G.C.; Liu, S. |
| Abstract: | In this study, we simulate a hybrid renewable energy system with battery storage to power the Alberta grid, to meet the province s goal of phasing out coal-fired power plants by 2030. In doing so, we study the optimal generation mix based on wind, solar, and load data, and we consider the so-called missing money problem in determining how Alberta will be able to facilitate a shift away from fossil fuels sustainably. We find that high carbon tax rates allow for higher levels of wind integration and introduce battery storage into the model, while solar energy remains economically infeasible. This allows the grid to depart from using combined-cycle gas plants to meet base load, though we find that combustion gas turbines are still necessary to act as peakers. One of economic consequence of this situation is that missing money problem is exacerbated, and then a compensation mechanism like the capacity market is necessary for the sake of electricity source adequacy and reliability. Despite this, renewable capacity factors in Alberta are potentially high, and as costs decline in the future, renewable energy will play a key role in meeting energy demand. Acknowledgement : |
| Keywords: | Resource/Energy Economics and Policy |
| Date: | 2018–07 |
| URL: | http://d.repec.org/n?u=RePEc:ags:iaae18:277525&r=reg |
| By: | Harim Kim |
| Abstract: | Industry-wide shocks can have heterogeneous impacts on firms’ costs due to different firm characteristics. The heterogeneity in these impacts is crucial for understanding the passthrough of the shock, because of its implications on strategic competition. In the context of the gas price shock in the electricity market, I develop a method to identify heterogeneous impacts of the shock and show with a structural analysis that the heterogeneous feature of the shock induces markup adjustments of firms. Pass-through that is estimated without incorporating heterogeneous impacts fails to reflect the change in competition arising from the shock, and is, on average, underestimated. |
| Date: | 2018–11 |
| URL: | http://d.repec.org/n?u=RePEc:bon:boncrc:crctr224_053_2018&r=reg |
| By: | Hirose, Kosuke; Matsumura, Toshihiro |
| Abstract: | We revisit command-and-control regulations and compare their efficiencies, in particular, an emission cap regulation that restricts total emissions and an emission intensity regulation that restricts emissions per unit of output under emission equivalence. We find that in both the most stringent target case, when the target emission level is close to zero, and the weakest target case, when the target emission level is close to business as usual, emission intensity yields greater welfare, although the same may not be true in moderate target cases. |
| Keywords: | near-zero emission industry; emission cap; emission intensity; emission equivalence |
| JEL: | L13 L51 Q52 |
| Date: | 2018–11–20 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:90134&r=reg |
| By: | Christopher Kath; Florian Ziel |
| Abstract: | We propose a multivariate elastic net regression forecast model for German quarter-hourly electricity spot markets. While the literature is diverse on day-ahead prediction approaches, both the intraday continuous and intraday call-auction prices have not been studied intensively with a clear focus on predictive power. Besides electricity price forecasting, we check for the impact of early day-ahead (DA) EXAA prices on intraday forecasts. Another novelty of this paper is the complementary discussion of economic benefits. A precise estimation is worthless if it cannot be utilized. We elaborate possible trading decisions based upon our forecasting scheme and analyze their monetary effects. We find that even simple electricity trading strategies can lead to substantial economic impact if combined with a decent forecasting technique. |
| Date: | 2018–11 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:1811.08604&r=reg |
| By: | Laurent Denant-Boemont; Carl Gaigné; Romain Gaté |
| Abstract: | In this paper, we study the effects of urban design on pollution and welfare. We build a theoretical model of residential choices with pollution externalities arising from commuting, where the size of the central business district (CBD) and the demand for housing are endogenous. We show that a polycentric city is desirable from welfare and ecological perspective, provided that travel speed and/or the number of roads directly connected with the CBD are sufficiently high. The spatial extension of cities remains the critical variable to curb transport-related urban pollution. |
| Keywords: | Urban form; Housing; Travel speed; Carbon emissions; Welfare. |
| JEL: | Q53 R14 R21 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:lvl:creacr:2017-02&r=reg |
| By: | Amundsen, Eirik S. (University of Bergen, Department of Economics); Andersen, Peder (Department of Food and Resource Economics, University of Copenhagen); Mortensen, Jørgen Birk (Department of Economics, University of Copenhagen) |
| Abstract: | Instruments chosen to pursue climate related targets are not always efficient. In this paper we consider an economy with three climate related targets for its electricity generation: a given share of “green” electricity, a given expansion of “green” electricity, and a given reduction of “black” (fossil based) electricity. At its disposal the country has three instruments: an allowance system (tradable green certificates), a subsidy system (feed-in tariffs) and a Pigouvian fossil tax. Each of these instruments may be used to attain any of the given targets. Within the setting of the model it is verified that each kind of the target has only a single efficient instrument under certainty, and that there is a deadweight loss of using other instruments to achieve the target. Similarly, there is also an analysis of instrument choice when several targets are to be attained at the same time. The paper also discusses the case of simultaneous targets as well as the relevance of the various targets. |
| Keywords: | energy policy; green certificates; subsidies; Pigouvian taxes; climate change |
| JEL: | C70 Q28 Q42 Q48 |
| Date: | 2018–04–18 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:bergec:2018_003&r=reg |
| By: | Ek, Claes (Department of Economics, School of Business, Economics and Law, Göteborg University); Elofsson, Katarina; Lagerkvist, Carl-Johan |
| Abstract: | In the choice between alternative environmental policy instruments, economists tend to favor policies capable of attaining cost-efficiency, but other considerations may be important to stakeholders. We perform a choice experiment modeled on Swedish water and marine policy to estimate preferences for different types of environmental policy instruments among citizens and municipal experts. To approximate preferences for each instrument per se, choice sets include several attributes that respondents may otherwise view as correlated with instrument type, such as how costs are shared between taxpayers and farmers. In our mixed-logit regressions, both the modal citizen and the modal expert prefer direct regulation and subsidies to nutrient trading. Experts weight taxpayer costs less heavily, implying larger WTP estimates; in particular, nutrient trading is unlikely to deliver sufficiently large cost savings for experts to prefer it to other instrument types. This potentially explains the low takeup of water quality trading outside the US. |
| Keywords: | choice experiments; instrument choice; nutrient trading; water policy |
| JEL: | H23 Q53 Q58 |
| Date: | 2018–11 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:gunwpe:0746&r=reg |
| By: | Elisabetta Cornago; Luisa Dressler |
| Abstract: | Disclosure of energy performance certificates (EPCs) is often incomplete, which hampers their effectiveness in relieving information asymmetries between landlords and tenants in the housing market. Even when a certificate is available, landlords do not always disclose it. This contradicts the unraveling result, according to which all landlords should disclose quality information unless it is costly to do so. We leverage a cross-sectional dataset of residential rental advertisements from the Belgian region of Brussels to empirically evaluate incentives to disclose an EPC. We find that two fundamental assumptions for the unraveling result are not confirmed in our setting: tenants value energy performance of rental property only when dwellings are of very high quality and do not appear to rationally adjust their expectations when faced with dwellings that withhold their EPC. The paper formulates specific policy advice for reforming EPC mechanisms to increase disclosure rates. |
| Keywords: | Information Unraveling, Voluntary Information Disclosure, Asymmetric |
| Date: | 2018–11 |
| URL: | http://d.repec.org/n?u=RePEc:eca:wpaper:2013/278920&r=reg |
| By: | Justin Dijk (Vrije Universiteit Amsterdam, PBL); Erik Ansink (Vrije Universiteit Amsterdam) |
| Abstract: | We contribute to the literature on the optimal design of auction mechanisms for the procurement of nature conservation activities. We use an economic experiment to examine whether the market efficiency of conservation auctions increases or decreases with repetition. Theory predicts that repetition facilitates collusion among sellers in procurement auctions, while behavioral economics suggests that repetition may increase market efficiency because it attenuates the endowment effect - the phenomenon that ownership of a good tends to increase one's valuation of the good. We find that of these two countervailing effects, the latter has the upper hand; average bids decrease monotonically over the consecutive auctions. Since repetition increases market efficiency, conservation contracts can be of shorter duration and procured at a higher frequency than has been suggested before. |
| Keywords: | Auctions; procurement; endowment effect; collusion; nature conservation |
| JEL: | C91 D44 H57 Q57 |
| Date: | 2018–11–20 |
| URL: | http://d.repec.org/n?u=RePEc:tin:wpaper:20180093&r=reg |
| By: | José María Martín-Moreno (University of Vigo); Jorge Blázquiez (KARSARC); Rafaela Pérez (University Complutense of Madrid and ICAE); Jesús Ruiz (University Complutense of Madrid and ICAE) |
| Abstract: | The environmental objectives of the Paris Agreement imply that all policy levers will be eventually used to curb carbon emissions, including a carbon tax and specific taxes on fossil fuels. In this context, we identify the optimal tax-mix for oil, natural gas and coal in order to achieve a specific carbon emissions target for Spain, a competitive and small open economy. In a second step, we compare the optimal tax-mix to a standard carbon tax. This analysis is conducted in a general equilibrium framework. The results of the model suggest that: first, a carbon tax is suboptimal from a second-best point of view. In particular, carbon taxes are an unsatisfactory policy tool for mild environmental targets. Second, governments must always tax coal heavily to reduce CO2 emissions. In addition, subsidizing oil and natural gas could be part of an optimal strategy. This is a counterintuitive and innovative result. Third, we also find that the tax on oil should always be lower than both the tax on natural gas as well as the tax on coal. Fourth, marginal abatement costs of CO2 in terms of social welfare increases as the environmental policy becomes more ambitious. Finally, revenues from a carbon tax are higher than those arising from an optimal tax-mix, which could create a dilemma for policymakers. |
| Keywords: | carbon tax, CO2 emissions, environmental policy, fossil fuels, optimal taxes. |
| JEL: | C61 F41 H23 |
| Date: | 2018–11 |
| URL: | http://d.repec.org/n?u=RePEc:sek:iacpro:7309817&r=reg |
| By: | Marwitz, Simon; Elsland, Rainer |
| Abstract: | The increasing deployment of decentralised rooftop photovoltaic systems (PV systems) and the expected future diffusion of plug-in electric vehicles (PEVs) can have a major influence on the need to expand low-voltage networks in the near future. The associated grid investments are refinanced via grid utilisation fees (GUF). Some of the GUF are passed on from higher to lower voltage lev-els. At the same time, decentralised electricity generation from PV systems is currently exempt from paying GUF in Germany. This study determines the grid investment required based on the example of a low-voltage network in a suburb and the underlying change in electricity demand used to refinance the grid in-vestment. A newly developed modelling concept is introduced to do so. The analysis focuses on the German household sector for the year 2030. Key find-ings from the analysis are that the future penetration of PV systems and the charging capacity of PEVs will have a considerable influence on maximum grid loads and the associated investment requirements. The required grid invest-ment mainly concerns additional lines or (adjustable) local grid transformers. Furthermore, the analysis shows a direct correlation between the self-consumption of decentrally generated power, the increased electricity demand due to PEVs and the required grid investment. This shows that additional grid investment is required from an average penetration rate of 0.5 kW PEV inverter power output per person and 1 kWp installed PV capacity per person in the lo-cal network area. At the same time, GUF can be reduced due to the increase in electricity demand by PEVs. Correspondingly, PV systems reduce the amount of power withdrawn from the grid, which means the specific GUF could increase by up to 2.1 eurocent per kWh by 2030 under the current surcharge mecha-nism. Households with an electric vehicle but without a photovoltaic system contribute roughly four times as much to refinancing the electric grids as com-parable households without an electric vehicle but with a photovoltaic system do. |
| Keywords: | electric vehicle (PEV),rooftop photovoltaic system |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:fisisi:s192018&r=reg |