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on Regulation |
| By: | Meier, Jan-Niklas; Lehmann, Paul |
| Abstract: | In federal countries the allocation of renewable energy (RE) deployment is simultaneously regulated by national and subnational governments. We analyze the efficiency of federal coregulation when different types of policy instruments - price and quantity - are assigned to government levels. Using an analytical model with two regulatory levels, we specify conditions that ensure first-best allocation of RE deployment in equilibrium. These efficiency conditions refer to how the financial burden of the national RE support scheme should be shared among subnational jurisdictions. Under realistic assumptions national price-based regulation is efficient if burden shares are proportional to population shares, regardless of the subnational policy instrument. Contrary, under national quantity-based regulation efficiency conditions depend on the subnational policy instrument. While with subnational price-based regulation burden shares should be oriented towards first-best RE deployment shares, with subnational quantity-based regulation burden shares should be oriented towards population shares. |
| Keywords: | multi-level governance,environmental regulation,renewable energies,tender scheme,feed-in tariff,spatial planning |
| JEL: | H77 H23 Q48 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ufzdps:82020&r=all |
| By: | Raju, Arun S.K.; Vu, Alexander |
| Abstract: | California has set aggressive vehicle electrification goals to achieve its greenhouse gas (GHG) reduction targets. The state is also integrating renewable energy into the electric grid under the Renewables Portfolio Standard (RPS). Increasing electricity demand from electric vehicles, combined with increasing power generation from variable renewable energy sources like solar and wind, will require significantly increased electrical energy storage capabilities, such as batteries and pumped hydroelectric storage. Assessing long-term energy storage needs and deploying the necessary infrastructure will be critical for maintaining future grid reliability. Researchers at the University of California, Riverside analyzed several scenarios using the California Public Utilities Commission’s Resolve power system planning model to understand how vehicle electrification, renewable energy standards, and GHG reduction goals affect California’s mid- to long-term energy storage needs. This policy brief summarizes findings from that research. View the NCST Project Webpage |
| Keywords: | Engineering, Computer models, Demand, Electric vehicles, Energy storage systems, Fleet management, Greenhouse gases, Grids (Transmission lines), Range (Vehicles), Vehicle fleets |
| Date: | 2020–11–01 |
| URL: | http://d.repec.org/n?u=RePEc:cdl:itsdav:qt9p3320fc&r=all |
| By: | Xu, Q.; Hobbs, B. |
| Abstract: | A local jurisdiction that regulates power plant emissions, but participates in a larger regional power market faces the issue of emissions leakage, in which local emissions decrease, but emissions associated with the imported power increase. Border carbon adjustment (BCA) schemes can be imposed on imports in an attempt to lessen leakage. This paper explores the potential cost and emission impacts of alternative BCA policies that could be implemented in the California AB32 carbon pricing system. We focus on cost and emission impacts on the power sector in California and the rest of the Western Electricity Coordinating Council (WECC) region, the latter of which provides approximately 23.5% of California’s electricity requirements. With both a simple schematic model and a detailed WECC generation-transmission expansion planning model for the year 2034 called JHSMINE, we examine the following deemed emission rate schemes for estimating and charging for emissions associated with electricity imports: no BCA, facility (import source)-specific deemed rate, a facility-neutral and constant deemed rate, and a facility-neutral and dynamic deemed rate. Our results suggest that, compared with cases with either no BCA or a BCA using facility-based deemed emission rates, facility-neutral schemes can provide efficiency gains by simultaneously lowering WECC-wide emissions and costs without raising payments by California consumers. Emissions leakage declines greatly. The precise value of the deemed rate affects these gains. One particular facility-neutral dynamic scheme in which rates are set by marginal emission rates external to California provides the greatest gain in economic efficiency. Our results also show the impact of carbon pricing and BCAs on transmission investment economics: California’s unilateral AB32 carbon pricing encourages more interstate transmission expansion because power imports are more profitable; however, BCAs that are cost-effective in lowering total regional emissions will dampen those incentives. |
| Keywords: | Carbon policy, Border carbon adjustment, Electricity markets, Expansion planning, Market efficiency |
| JEL: | H23 L94 Q48 |
| Date: | 2020–11–24 |
| URL: | http://d.repec.org/n?u=RePEc:cam:camdae:20109&r=all |
| By: | Perino, G.; Ritz, R.; van Benthem, A. |
| Abstract: | Major carbon-pricing systems in Europe and North America involve multiple jurisdictions (countries or states). Individual jurisdictions often pursue additional Initiatives – such as unilateral carbon price oors, legislation to phase out coal, aviation taxes or support programs for renewable energy – that overlap with the wider carbon-pricing system. We develop a general framework to study how the climate benefit of such overlapping policies depends on their design, location and timing. Some policies leverage additional climate benefits elsewhere in the system while others backfire by raising aggregate emissions. Our model encompasses almost every type of carbon-pricing system used in practice. |
| Keywords: | Overlapping policy, internal carbon leakage, waterbed effect, cap-and-trade, carbon pricing, hybrid regulation |
| JEL: | H23 Q54 |
| Date: | 2020–11–24 |
| URL: | http://d.repec.org/n?u=RePEc:cam:camdae:20111&r=all |
| By: | Hintermayer, Martin (Energiewirtschaftliches Institut an der Universitaet zu Koeln (EWI)); Schmidt, Lukas (Energiewirtschaftliches Institut an der Universitaet zu Koeln (EWI)); Zinke, Jonas (Energiewirtschaftliches Institut an der Universitaet zu Koeln (EWI)) |
| Abstract: | Recently, several articles rely on marginal abatement cost (MAC) curves to analyze the EU ETS. While the assumptions on MAC curves drive the results, the prevailing literature on the EU ETS does not take the shape of MAC curves into account. This paper discusses the implications of MAC curve properties for the EU ETS. With a partial equilibrium model of the European power sector, we derive two essential properties of MAC curves: First, the shape of MAC curves is convex and depends on economic developments, e.g., fuel prices and interest rates. Second, MAC curves flatten over time, mainly due to enlarging investment opportunities. With convex MAC curves, marginal abatement costs in the EU ETS increase over time, which triggers higher banking of firms. On the contrary, flattening MAC curves over time lead to lower incentives for banking. In particular, short-term MAC curves are steep and thus, raise the price path. |
| Keywords: | EU ETS; Marginal Abatement Cost Curves; Emission Abatement; Power Sector Modeling |
| JEL: | C61 H23 Q41 Q58 |
| Date: | 2020–11–25 |
| URL: | http://d.repec.org/n?u=RePEc:ris:ewikln:2020_008&r=all |
| By: | Energy Sector Management Assistance Program |
| Keywords: | Energy - Electric Power Energy - Energy Policies & Economics Energy - Energy Sector Regulation Energy - Energy Technology & Transmission Energy - Renewable Energy |
| Date: | 2020–08 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wboper:34400&r=all |
| By: | Schleich, Joachim; Durand, Antoine; Brugger, Heike |
| Abstract: | In most countries, minimum energy performance standards (MEPS) and energy labels are the key policies to accelerate the diffusion of energy-efficient appliances and to help meet energy efficiency and climate policy targets. This paper estimates country-specific multivariate econometric models for eight EU countries over the period of 2007 to 2017 to evaluate the combined effects of changes in the MEPS and the energy labels entering into force in the EU in 2010 and 2011. The findings suggest that these policies increased the market share of cold appliances (refrigerators and fridge-freezer combinations) with an energy label of A+ and better between about 15 and 38 percentage points. For these appliances, autonomous developments (captured through a time trend) are estimated to range between 5 and 10 percentage points per year. Thus, failure to account for autonomous developments would have resulted in substantially overestimating the combined effects of MEPS and energy label policies in the EU. The findings further imply that policy evaluations should allow for policy effectiveness and autonomous developments to differ across countries. |
| Keywords: | energy efficiency,energy labelling,minimum energy performance standards,policy evaluation |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:fisisi:s182020&r=all |
| By: | Ensieh Shojaeddini (National Center for Environmental Economics, US EPA) |
| Abstract: | This paper quantifies heterogeneity in rebound effects from policy-induced energy efficiency improvements by income and home size. We do so in a relatively understudied context: residential lighting. This context allows us to separately estimate effects for energy services (lighting hours) and electricity consumption. We identify the effect of household-level subsidy uptake using instrumental variables for program awareness and coarsened exact matching. We find that rebound effects are larger for households with lower incomes and smaller homes. We also show that the rebound effect is not large enough to ``backfire'' and all income and size subsamples exhibit net energy savings. |
| Keywords: | rebound effect, heterogeneity, energy efficiency policy |
| JEL: | D12 H31 L68 Q14 |
| Date: | 2020–11 |
| URL: | http://d.repec.org/n?u=RePEc:mns:wpaper:wp202007&r=all |
| By: | KAPSARC, King Abdullah Petroleum Studies and Research Center (King Abdullah Petroleum Studies and Research Center) |
| Abstract: | In the past couple of years, it became evident that hydrogen would need to play a pivotal role in a carbon-free energy system. It would help decarbonize hard-to-abate sectors and act as an energy carrier to manage large variability in renewable energy production and enhance energy security. In most cases, its transportation and storage over a certain distance and timeframe is cheaper than that of electricity. For hydrogen to make an impact, it needs to expand its utility beyond its existing applications. |
| Keywords: | Hydrogen, Renewable energy, Hydrogen exploration |
| Date: | 2020–11–26 |
| URL: | http://d.repec.org/n?u=RePEc:prc:wbrief:ks--2020-wb10&r=all |
| By: | Nguyen Quy Nghi; Martin H. Lenihan; Claude Saint-Pierre; Nguyen Thi Minh Phuong; Phan Huyen Dan |
| Keywords: | Communities and Human Settlements - Human Migrations & Resettlements Energy - Energy Policies & Economics Energy - Hydro Power Rural Development - Rural and Renewable Energy Water Resources - Dams and Reservoirs Social Development - Participations and Civic Engagement Social Development - Social Analysis |
| Date: | 2020–09 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wboper:34442&r=all |
| By: | Philipp Andreas Gunkel; Claire Bergaentzl\'e; Ida Gr{\ae}sted Jensen; Fabian Scheller |
| Abstract: | Community electricity storage systems for multiple applications promise benefits over household electricity storage systems. More economical flexibility options such as demand response and sector coupling might reduce the market size for storage facilities. This paper assesses the economic performance of community electricity storage systems by taking competitive flexibility options into account. For this purpose, an actor-related, scenario-based optimization framework is applied. The results are in line with the literature and show that community storage systems are economically more efficient than household storage systems. Relative storage capacity reductions of community storage systems over household storage systems are possible, as the demand and generation profiles are balanced out among end users. On average, storage capacity reductions of 9% per household are possible in the base case, resulting in lower specific investments. The simultaneous application of demand-side flexibility options such as sector coupling and demand response enable a further capacity reduction of the community storage size by up to 23%. At the same time, the competition between flexibility options leads to smaller benefits regarding the community storage flexibility potential, which reduces the market viability for these applications. In the worst case, the cannibalization effects reach up to 38% between the flexibility measures. The losses of the flexibility benefits outweigh the savings of the capacity reduction whereby sector coupling constitutes a far greater influencing factor than demand response. Overall, in consideration of the stated cost trends, the economies of scale, and the reduction possibilities, a profitable community storage model might be reached between 2025 and 2035. Future work should focus on the analysis of policy frameworks. |
| Date: | 2020–11 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2011.05830&r=all |
| By: | World Bank |
| Keywords: | Energy - Energy Demand Energy - Energy Technology & Transmission Energy - Hydro Power Energy - Power & Energy Conversion Energy - Renewable Energy |
| Date: | 2020–08 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wboper:34441&r=all |
| By: | Fabian Scheller; Robert Burkhardt; Robert Schwarzeit; Russell McKenna; Thomas Bruckner |
| Abstract: | Community electricity storage systems for multiple applications promise benefits over household electricity storage systems. More economical flexibility options such as demand response and sector coupling might reduce the market size for storage facilities. This paper assesses the economic performance of community electricity storage systems by taking competitive flexibility options into account. For this purpose, an actor-related, scenario-based optimization framework is applied. The results are in line with the literature and show that community storage systems are economically more efficient than household storage systems. Relative storage capacity reductions of community storage systems over household storage systems are possible, as the demand and generation profiles are balanced out among end users. On average, storage capacity reductions of 9% per household are possible in the base case, resulting in lower specific investments. The simultaneous application of demand-side flexibility options such as sector coupling and demand response enable a further capacity reduction of the community storage size by up to 23%. At the same time, the competition between flexibility options leads to smaller benefits regarding the community storage flexibility potential, which reduces the market viability for these applications. In the worst case, the cannibalization effects reach up to 38% between the flexibility measures. The losses of the flexibility benefits outweigh the savings of the capacity reduction whereby sector coupling constitutes a far greater influencing factor than demand response. Overall, in consideration of the stated cost trends, the economies of scale, and the reduction possibilities, a profitable community storage model might be reached between 2025 and 2035. Future work should focus on the analysis of policy frameworks. |
| Date: | 2020–11 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2011.05809&r=all |
| By: | Jed J. Cohen (The Energy Institute at Johannes Kepler University); Levan Elbakidze (Division of Resource Economics and Management and the Center for Innovation in Gas Research and Utilization, West Virginia University); Randall Jackson (Geology and Geography Department and Regional Research Institute, West Virginia University) |
| Abstract: | Past solar adoption literature has focused primarily on households without significant attention to the potential of commercial properties as sites for solar generation. We examine firms’ decisions to install solar panels on their properties using state and firm level data from the U.S. We are interested in the effects of state level characteristics, including policies and regulations, on firm decisions regarding solar investments. We find that state characteristics that influence the return-on-investment from solar installations, most notably solar intensity, are important for commercial adoption decisions. Further, the results suggest that certain state level policies, including solar carve-outs in renewable portfolio standards, financing programs and tax breaks, can incentivize firms to install solar panels. Across different model specifications, we observe that firm installation decisions are correlated with personal electric vehicle ownership rates. This may indicate a ‘green’ business marketing strategy, whereby firms install solar to improve their social responsibility image. |
| Keywords: | Solar adoption; Corporate solar; State solar policies; Renewable portfolio standards; Solar renewable energy credits |
| JEL: | D22 M14 Q40 Q48 Q42 |
| Date: | 2020–01 |
| URL: | http://d.repec.org/n?u=RePEc:rri:wpaper:2020wp01&r=all |
| By: | Rolando Fuentes (King Abdullah Petroleum Studies and Research Center) |
| Abstract: | In this paper we discuss the unexplored two-way relationship between distribution network tariff design and the emergence of new business models in the power sector. Distribution network tariffs have traditionally used a cost accounting method. We suggest, instead, the use of a business model framework to analyze the extent to which emerging business models in the power sector change the way electricity distribution network services are priced and packaged. |
| Keywords: | Decentralization, Power sector, Network Tariffs, Electricity sector |
| Date: | 2020–11–25 |
| URL: | http://d.repec.org/n?u=RePEc:prc:dpaper:ks--2020-dp24&r=all |
| By: | Andor, Mark Andreas; Bernstein, David H.; Sommer, Stephan |
| Abstract: | Increasing energy efficiency is a key global policy goal for climate protection. An important step towards an optimal reduction of energy consumption is the identification of energy saving potentials in different sectors and the best strategies for increasing efficiency. This paper analyzes these potentials in the household sector by estimating the degree of inefficiency in the use of electricity and its determinants. Using stochastic frontier analysis and disaggregated household data, we estimate an input requirement function and inefficiency on a sample of 2,000 German households. Our results suggest that the mean inefficiency amounts to around 20%, indicating a notable potential for energy savings. Moreover, we find that the household size and income are among the main determinants of individual inefficiency. This information can be used to increase the cost-efficiency of programs aimed to enhance energy efficiency. |
| Keywords: | household electricity consumption,stochastic frontier analysis,technical efficiency |
| JEL: | D1 Q4 Q5 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:rwirep:870&r=all |
| By: | Belleflamme, Paul (Université catholique de Louvain, LIDAM/CORE, Belgium); Peitz, Martin; Toulemonde, Eric |
| Abstract: | We introduce asymmetries across platforms in the linear model of competing two-sided platforms with singlehoming on both sides and fully characterize the price equilibrium. We identify market environments in which one platform has a larger market share on both sides while obtaining a lower profit than the other platform. This platform enjoys a competitive advantage on one or both sides. Our finding raises further doubts on using market shares as a measure of market power in platform markets. |
| Keywords: | Two-sided platforms, market share, market power, oligopoly, network effects, antitrust |
| JEL: | D43 L13 L86 |
| Date: | 2020–08–01 |
| URL: | http://d.repec.org/n?u=RePEc:cor:louvco:2020027&r=all |
| By: | Yves Crozet (Sciences Po Lyon) |
| Abstract: | This paper examines the relationship between traditional public transport and innovative mobility solutions such as Mobility as a Service (MaaS). It looks at how MaaS could change the role of public transport authorities from providing transport services to facilitating mobility, and considers how their remit and capabilities should evolve to better promote seamless multimodal transport. |
| Date: | 2020–10–12 |
| URL: | http://d.repec.org/n?u=RePEc:oec:itfaab:2020/16-en&r=all |