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on Regulation |
| By: | Meera Mahadevan |
| Abstract: | Electricity sectors in many developing countries are stuck in a vicious cycle of low prices, financial insolvency, and unreliable service. India’s state-owned utilities are emblematic of this problem, costing the government billions in bailouts while delivering poor electricity reliability. This paper leverages a large-scale reform in India’s power sector to show that raising electricity prices—while seemingly counterintuitive—can help propel the sector out of this cycle. Using state-level variation in the implementation of the reforms, I find that manufacturing firms in states where electricity reliability improved increased their consumption of grid electricity by 19%, despite a 3% rise in average prices. Firms also increased worker hours and output, highlighting that previously, unreliable electricity was a binding constraint on production. These results suggest that raising prices, when coupled with improved service quality, is a viable strategy for breaking the cycle of low investment and poor utility performance in the developing world. |
| Keywords: | electricity, energy sector reform, manufacturing firms, public utilities, India |
| JEL: | O13 O14 O38 L94 Q48 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12168 |
| By: | Karsten Neuhoff; Seabron Adamson; Luis Olmos; Anthony Papavasiliou; Silvia Vitello; Konstantin Staschus; Leon Stolle |
| Abstract: | Motivation: As the share of renewables in power generation increases, the system needs greater flexibility to ensure that wind and solar energy, which might otherwise be curtailed due to mismatches in time and location of supply and demand, can be stored or transmitted to where and when they are needed or most valuable. Local market prices are essential to make use of demand side flexibility and storage. At times and locations of high renewable production, the prices tend to be low, and heat, hydro, battery and intermediary product storage can be filled. Vice versa, in periods of low renewable production, the stored energy can be released. As local market prices encourage market participants to behave consistently with system needs, they increase predictability of flow patterns and thus require lower security margins to reach the same level of system security. The increased network utilization allows for increased pooling and sharing of flexibility across regions. (...) |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:esrepo:327655 |
| By: | Ehrhart, Karl-Martin; Eicke, Anselm; Hirth, Lion; Ocker, Fabian; Ott, Marion; Schlecht, Ingmar; Wang, Runxi |
| Abstract: | This paper proposes a game-theoretic model to analyze the strategic behavior of inc-dec gaming in market-based congestion management (redispatch). We extend existing models by considering incomplete information about competitors' costs and a finite set of providers. We find that inc-dec gaming is also a rational behavior in markets with high competition and with uncertainty about network constraints. Such behavior already occurs in our setup of two regions. Comparing market-based redispatch with three theoretical benchmarks highlights a lower efficiency level of market-based redispatch and inflated redispatch payments. Finally, we study seven variations of our basic model to assess whether different market fundamentals or market design changes mitigate incdec gaming. None of these variations eliminate inc-dec gaming entirely. |
| Keywords: | Energy market, Game theory, Auctions/bidding, Congestion management, Inc-dec gaming |
| JEL: | D43 D44 L13 Q41 Q48 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:zewdip:327112 |
| By: | Frédéric Marty (Université Côte d'Azur, GREDEG, CNRS, France); Thierry Warin (HEC Montréal; CIRANO, OBVIA, GPAI/CEIMIA) |
| Abstract: | Digital markets are increasingly dominated by entities that leverage technical specificities such as network effects, economies of scale, and scope, as well as significant advantages in data access and critical infrastructure, including computing power and cloud capacities. The advent of generative artificial intelligence (AI) marks a potential inflection point in this landscape. In this context, the primary barriers to entry are no longer merely data and open source foundation models but the availability of large, high-quality datasets and substantial computing power. This paper examines whether these barriers will entrench the dominant positions of Big Tech companies or if they will catalyze a reshuffling of competitive dynamics. By focusing on the dual challenges of data and computing power, this study identifies the key factors that will shape the future competitive landscape of the generative AI industry. This article contributes to the ongoing debate in industrial economics and strategic management regarding the potentially disruptive effects of generative AI on the market power of Big Tech firms. Can this technological shift recalibrate competitive dynamics, or will it ultimately serve to entrench existing power structures? At its core, the article seeks to interrogate a prevailing narrative - namely, the notion that innovation inherently sustains competitive processes, even in the face of short-term lock-in effects. |
| Keywords: | Generative AI, data-based advantage, digital ecosystems, Big Techs |
| JEL: | K21 L12 L13 L41 |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:gre:wpaper:2025-38 |
| By: | Abuzayed, A.; Pollitt, M. G.; Liebensteiner, M.; Hochgreb, S. |
| Abstract: | Retrofitting gas-fired power plants to accommodate low-carbon fuel blends offers a promising pathway to achieving deep decarbonization while leveraging the existing infrastructure and maintaining electricity supply reliability. This study presents a comprehensive techno-economic assessment of low-carbon fuel options for decarbonizing combined cycle gas turbines (CCGTs), evaluating both fuel switching and blending strategies using green hydrogen, green ammonia, and biomethane. We estimate capital investment requirements for retrofitting existing fleets and building new CCGT capacity in Germany and the UK, featuring a case study case of retrofitting a relatively new CCGT power plant (Keadby2 in the UK). Our findings reveal that retrofitting increases the levelized cost of electricity (LCOE) by about 6–13 €/MWh, with storage infrastructure representing a key cost driver. Fuel blending enhances operational flexibility but raises retrofitting costs. Biomethane emerges as the most cost-effective option due to its compatibility with existing infrastructure and negligible retrofitting needs, potentially cutting capital investments by up to €16.5 and €12 billion in Germany and the UK, respectively. However, even under the most favorable conditions, the marginal cost of electricity using low-carbon fuels exceeds 120 €/MWh, leaving natural gas more competitive at current market conditions. Strategic retrofitting decisions must be pursued selectively, considering plant age, proximity to fuel supply, and storage infrastructure. Policy frameworks ensuring simultaneous supply and infrastructure development are critical to realizing the potential of fuel blending and retrofitting strategies. |
| Keywords: | Deep Decarbonization, Low-Carbon Fuels, Fuel-Blending, Combined-Cycle Gas Turbines (CCGT) |
| JEL: | Q42 Q48 |
| Date: | 2025–09–24 |
| URL: | https://d.repec.org/n?u=RePEc:cam:camdae:2557 |
| By: | Johnston, Sarah; Liu, Yifei; Yang, Chenyu |
| Abstract: | Meeting projected growth in electricity demand and climate goals will require building new electricity generators. The grid connection process is seen as a key constraint on this development. We collect new data on grid connection costs for PJM, the largest regional grid operator in the United States. We geographically match these costs to transmission spending to study their determinants. Using regression analysis, we find that these costs, and especially the network upgrade portion, are difficult to predict: generators with similar characteristics can have very different costs. We also find that planned generators with high network upgrade costs are much more likely to be canceled. Finally, prior transmission spending by the grid operator is associated with lower network upgrade costs for connecting generators. These findings emphasize the critical role of transmission capacity in expanding electricity generation capacity. |
| Date: | 2025–09–23 |
| URL: | https://d.repec.org/n?u=RePEc:rff:dpaper:dp-25-21 |
| By: | Normann, Hans-Theo; Martin, Simon; Püplichhuisen, Paul; Werner, Tobias |
| JEL: | C73 D43 L13 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:vfsc25:325405 |
| By: | Herold, Daniel; Lüke, Daniel |
| JEL: | L42 L13 K21 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:vfsc25:325429 |
| By: | Heiny, Friederike; Li, Tianchi; Tolksdorf, Michel |
| JEL: | C91 D11 D43 L13 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:vfsc25:325415 |
| By: | Schulte, Elisabeth; Friehe, Tim |
| JEL: | K13 L15 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:vfsc25:325372 |
| By: | Natasha Aggarwal (TrustBridge Rule of Law Foundation); Bhavin Patel (TrustBridge Rule of Law Foundation) |
| Abstract: | Appellate tribunals were established to ensure speedy and expert adjudication of appeals from regulators’ orders. However, tribunals in India frequently remand matters to regulators, resulting in prolonged delays and undermining regulatory certainty. This paper provides introductory overviews of the Securities Appellate Tribunal (sat) and the Appellate Tribunal for Electricity (aptel) and analyses orders issued by these tribunals in 2024. We find that 13/228 sat orders (5.7%) and 28/171 aptel orders (16.4%) direct remands. We also evaluate whether these remands are consistent with recognised legal principles regarding when a remand may be ordered. In the absence of specific rules governing when tribunals can remand matters, we rely on the Code of Civil Procedure, 1908 (cpc) and judicial decisions to determine the limits of tribunals’ powers of remand. We classify reasons in the cpc and judicial decisions as “Permissible Reasons†, and all others as “Other Reasons†and find that several remands by both tribunals are for Other Reasons. Such remands increase costs, create uncertainty, and defeat the purpose for which tribunals were established. We suggest that clear limits on tribunals’ power to remand, similar to those on courts’ remands powers, should be codified in parent statutes and made uniformly applicable across tribunals. |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:bjd:wpaper:14 |
| By: | Tomic, Slobodan; Dragicevic, Ognjen |
| Abstract: | This article examines the transformation of Serbia’s regulatory state under the populist regime of Aleksandar Vučić (2012–2025), a period marked by democratic backsliding and heavy reliance on foreign direct investment (FDI). Focusing on competition policy and a subsidy programme for foreign investors, it shows how the regime has reshaped the regulatory state in ways distinct from other autocratic populist contexts. Core institutional carriers of the regulatory state have remained in place as non-majoritarian institutions and were even granted greater de jure insulation from government, yet in practice they have been undermined and their authority - along with that of other institutions in the wider regulatory ecosystem (law enforcement bodies, inspectorates, and others) - systematically suppressed. The result is an eroded, hybridised model of the regulatory state: the government has carved out a role for itself to decisively shape and direct sectoral policy, often in an arbitrary manner, with a distinct form of deregulation, namely through the outright non-enforcement of substantial regulatory standards. |
| Date: | 2025–09–23 |
| URL: | https://d.repec.org/n?u=RePEc:osf:socarx:3zt62_v1 |
| By: | Pérez Urdiales, María; López-Luzuriaga, Andrea; Castillo, Adriana; Couto Ribeiro, Beatriz |
| Abstract: | Achieving universal and equitable access to water and sanitation remains a critical challenge in Latin America and the Caribbean (LAC). This paper assesses the efficiency of public spending in providing water and sanitation services across Colombian municipalities. Efficiency levels are estimated using a stochastic frontier analysis that accounts for unobserved heterogeneity. The results show that the organizational and governance characteristics of service providers play a significant role in shaping spending efficiency. Municipalities with more service providers tend to be less efficient. In contrast, efficiency improves when providers operate across multiple jurisdictions. Additionally, municipalities where the head of the service provider is appointed--rather than elected--demonstrate greater efficiency. Overall, the findings indicate that public expenditures could be reduced by approximately 18\% without compromising service quality, highlighting the potential for substantial gains through improved provider organization and governance. |
| Keywords: | water;Sanitation;fiscal management;public spending;Public Expenditure Review |
| JEL: | Q25 O54 H42 H54 H72 L95 |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:idb:brikps:14276 |
| By: | Dnes, Stephen |
| Abstract: | Recent years have seen sharp growth in the number and scale of class actions filed before the UK Competition Appeal Tribunal ('Tribunal'). Pending claims are worth an estimated £134 billion. There are 655 million claimants, that is, ten claims per person. On average, there is roughly one new class action every week. The sudden increase in the scope of claims raises questions about their quality. The strong economic case against hardcore cartels applies equally to private litigation, but there are also some more adventuresome cases which stray from true cases of economic harm. Such cases increase costs and could harm innovation. Three specific concerns arise: (1) Cases are not getting much money, even against hardcore cartels; (2) Some low-quality cases have crept in, but they are mixed up with stronger ones which ought not to be undermined by reform; (3) Cases are very slow. This paper explores five related policy options to address these three issues. They can be used together or in isolation to focus cases onto the stronger ones and away from the weaker ones. The proposals span several major aspects of the cases and would significantly focus their remit. |
| Keywords: | Civil law, Legal reform, United Kingdom |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:ieadps:327121 |
| By: | Iyad Rahwan (Max Planck Institute for Human Development - Max-Planck-Gesellschaft); Azim Shariff (UBC - University of British Columbia [Canada]); Jean-François Bonnefon (TSE-R - Toulouse School of Economics - UT Capitole - Université Toulouse Capitole - Comue de Toulouse - Communauté d'universités et établissements de Toulouse - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement) |
| Abstract: | Predicting the social and behavioral impact of future technologies, before they are achieved, would allow us to guide their development and regulation before these im-pacts get entrenched. Traditionally, this prediction has relied on qualitative, narrative methods. Here we describe a method which uses experimental methods to simulate future technologies, and collect quantitative measures of the attitudes and behaviors of participants assigned to controlled variations of the future. We call this method ‘sci-ence fiction science'. We suggest that the reason why this method has not been fully embraced yet, despite its potential benefits, is that experimental scientists may be re-luctant to engage in work facing such serious validity threats as science fiction science. To address these threats, we consider possible constraints on the kind of technology that science fiction science may study, as well as the unconventional, immersive meth-ods that science fiction science may require. We seek to provide perspective on the reasons why this method has been marginalized for so long, what benefits it would bring if it could be built on strong yet unusual methods, and how we can normalize these methods to help the diverse community of science fiction scientists to engage in a virtuous cycle of validity improvement. |
| Date: | 2025–08–07 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-05273736 |