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Cross-border Effects of Capacity Remuneration Mechanisms: The Swiss Case Energy J. (IF 2.394) Pub Date : 2021-03-01 Florian Zimmermann, Andreas Bublitz, Dogan Keles, and Wolf Fichtner
Abstract: In this article, cross-border effects of different market design options are analyzed using Switzerland, which is strongly interconnected to larger neighboring markets, as a case study. An investigation is conducted with an agent-based model where in one scenario, all market designs are represented according to the current legislation, and in another, energy-only markets (EOM) are assumed
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The Natural Gas Announcement Day Puzzle Energy J. (IF 2.394) Pub Date : 2021-03-01 Marcel Prokopczuk, Chardin Wese Simen, and Robert Wichmann
Abstract: This paper studies natural gas futures returns on EIA storage announcement days. More than 50% of the annual return is earned on these days. We find a significant difference between announcement and non-announcement day returns, which cannot be explained by the announcement surprise or other control variables. At the intraday level, the return splits half into a pre- and post-announcement
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Energy Cost Information and Consumer Decisions: Results from a Choice Experiment on Refrigerator Purchases in India Energy J. (IF 2.394) Pub Date : 2021-03-01 Manisha Jain, Anand B. Rao, and Anand Patwardhan
Abstract: Appliance labels allow consumers to choose products based on their energy use. In most countries, the widely adopted comparative categorical labels give information on energy use in physical units such as kilowatt-hour. Studies on the impact of monetary cost information on labels have reported different results across appliances within studies, and for the same appliances across studies.
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Institutions and Geography: A "Two Sides of the Same Coin" Story of Primary Energy Use in Sub-Saharan Africa Energy J. (IF 2.394) Pub Date : 2021-03-01 Laté Ayao Lawson and Phu Nguyen-Van
Abstract: Do institutional and geographical characteristics matter for energy consumption similar to the case of economic development? Why do coastal Sub-Saharan African (SSA) countries appear to be more energy-consuming than inland ones? To answer these questions, surprisingly rarely addressed in the existing literature, we empirically assess the determinants of primary energy use across SSA, exploiting
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Does Global Value Chain Participation Decouple Chinese Development from CO2 Emissions? A Structural Decomposition Analysis Energy J. (IF 2.394) Pub Date : 2021-03-01 Hui Wang, Chen Pan, B.W. Ang, and Peng Zhou
Abstract: Decoupling economic activities and CO2 emissions is central to achieving the climate goals of China. The country�s participation in global value chains has profound impacts on its economy as well as CO2 emissions. Assessing the impacts is fundamental to identifying strategies to decouple China�s development from emissions. To this end, we adopt the multi-region structural decomposition analysis
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Why Has China Overinvested in Coal Power? Energy J. (IF 2.394) Pub Date : 2021-03-01 Mengjia Ren, Lee G. Branstetter, Brian K. Kovak, Daniel Erian Armanios, and Jiahai Yuan
Abstract: In spite of ambitious investments by the Chinese government in renewable energy sources, the country�s investment in coal power accelerated in recent years, raising concerns of massive overcapacity and undermining the central policy goal of promoting cleaner energy. In this paper, we ask why this happened, focusing on policies that incentivized excessive entry in the coal power sector and
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Closer to One Great Pool? Evidence from Structural Breaks in Oil Price Differentials Energy J. (IF 2.394) Pub Date : 2021-03-01 Michael Plante and Grant Strickler
Abstract: We show that the oil market has become closer to �one great pool,� in the sense that price differentials between crude oils of different qualities have generally become smaller over time. We document, in particular, that many of these price differentials experienced a major structural break in or around 2008, after which there was a marked reduction in their means and volatilities. Differentials
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Internal Carbon Financing with Transferable Offsets from Renewable Portfolio Standard Energy J. (IF 2.394) Pub Date : 2021-03-01 Jongmin Yu and Hyo-Sun Kim
Abstract: Power generation under the Renewable Portfolio Standard (RPS) can reduce greenhouse gas emissions below the baseline level, so entities may argue to use this attribute to meet the goal of Emission Trading Scheme (ETS). Although these two quantity-based regulation systems have different policy objectives, both mechanisms are implicitly linked by credit conversions depending on credit prices
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The Variation in Capacity Remunerations Requirements in European Electricity Markets Energy J. (IF 2.394) Pub Date : 2021-03-01 Conor Hickey, Derek Bunn, Paul Deane, Celine McInerney, and Brian Ó Gallachóir
Abstract: This paper provides the first EU wide analysis of the variation in Capacity Remuneration Requirements throughout Europe which aim to resolve the �missing money� problems in various member states. The findings of this analysis point to an asymmetric investment case for gas-fired peaking power plants throughout the EU. Under the assumptions of the European Commission Reference Scenario, pan-European
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An Experimental Study of Monthly Electricity Demand (In)elasticity Energy J. (IF 2.394) Pub Date : 2021-03-01 David P. Byrne, Andrea La Nauze, and Leslie A. Martin
Abstract: We document substantial rigidity in household electricity demand in response to large price shocks. We partnered with an electricity retailer to run a field experiment in which randomly-selected households received discounts of up to 50% on their total electricity bill or up to 95% off their per unit cost of electricity for a full month. We show that the quantity of electricity consumed was
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In Light of Democracy and Corruption: Institutional Determinants of Electricity Provision Energy J. (IF 2.394) Pub Date : 2021-03-01 Frida Boräng, Sverker C. Jagers, Marina Povitkina
Abstract: Long-lasting democratic institutions have been found to matter for the universal provision of reliable electricity. In this article we revisit this finding, suggesting that the effect of democracy on electricity provision is moderated by the quality of institutions shaping the implementation of public policies. We test the hypothesis positing the interaction effect between democracy and corruption
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Optimal Allocation of Variable Renewable Energy Considering Contributions to Security of Supply Energy J. (IF 2.394) Pub Date : 2021-01-01 Jakob Peter and Johannes Wagner
Abstract: Electricity markets are increasingly influenced by variable renewable energy such as wind and solar power, characterized by a pronounced weather-induced variability and imperfect predictability. As a result, the evaluation of the capacity value of variable renewable energy, i.e., its contribution to security of supply, gains importance. This paper develops a new methodology to endogenously
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Selling Wind Energy J. (IF 2.394) Pub Date : 2021-01-01 Ali Kakhbod, Asuman Ozdaglar, and Ian Schneider
Abstract: We investigate the strategic behavior of wind producers in the presence of uncertain wind resource availability, where wind availability is correlated across firms. We study how the level of correlation between different firms’ wind resources impacts strategy and market outcomes. The main insight of our analysis is that increasing heterogeneity in resource availability improves social welfare
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A Risk-Hedging View to Refinery Capacity Investment in OPEC Countries Energy J. (IF 2.394) Pub Date : 2021-01-01 Hamed Ghoddusi and Franz Wirl
Abstract: Should oil-rich members of OPEC invest in the oil refinery industry? This is a crucial energy policy question for such economies. We extend theoretical models for a vertical integration strategy within an oil-producing economy, based on a risk-hedging view. The first model highlights the trade-off between return and risk-reduction features of upstream/downstream sectors. The dynamic model
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Peak Load Habits for Sale? Soft Load Control and Consumer Preferences on the Electricity Market Energy J. (IF 2.394) Pub Date : 2021-01-01 Thomas Broberg, Runar Brännlund, and Lars Persson
Abstract: The main purpose of this paper is to estimate lost consumer values due to various restrictions on household electricity use involving behavior adaptation. To do this, we conduct a choice experiment where households choose between hypothetical electricity contracts including various restrictions on the use of high-power household appliances. In addition, we use a contingent valuation question
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Locational (In)Efficiency of Renewable Energy Feed-In Into the Electricity Grid: A Spatial Regression Analysis Energy J. (IF 2.394) Pub Date : 2021-01-01 Tim Höfer and Reinhard Madlener
Abstract: This paper presents an econometric analysis of curtailment costs of renewable energy sources (RES) in Germany. The study aims at explaining and quantifying the regional variability of RES curtailment, which is a measure to relieve grid overstress by temporarily disconnecting RES from the electricity grid. We apply a Heckit sample selection model, which corrects bias from non-randomly selected
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Incentives for Vertically Integrated Firms in the Natural Gas and Electricity Markets to Manipulate Prices Energy J. (IF 2.394) Pub Date : 2021-01-01 Nathalie Hinchey
Abstract: This paper examines the potential for vertically integrated firms that own assets in both the natural gas and electricity markets to manipulate natural gas and electricity prices through the withholding of natural gas pipeline capacity. An integrated firm theoretically could increase the price it receives in the electricity market by withholding pipeline capacity to the wholesale natural
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Under Pressure! Nudging Electricity Consumption within Firms. Feedback from a Field Experiment Energy J. (IF 2.394) Pub Date : 2021-01-01 Christophe Charlier, Gilles Guerassimoff, Ankinée Kirakozian, and Sandrine Selosse
Abstract: Many economists and psychologists have studied the impact of nudges on households’ pro-environmental behaviors. Interestingly, “private nudges” can be imagined for companies. Yet, studies focusing on nudging employees’ energy use are rare. The objective of our paper is to explore this issue with the help of a field experiment conducted at 47 French companies’ sites. Using a difference-in-difference
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Vertical Separation of Transmission Control and Regional Production Efficiency in the Electricity Industry Energy J. (IF 2.394) Pub Date : 2021-01-01 Yin Chu
Abstract: This study investigates the divestiture of transmission control from vertically-integrated power producers, aimed to maintain non-discriminatory access of the transmission network. I ask whether the vertical separation is sufficient to enhance how efficiently production is allocated among generators (i.e., regional production efficiency). Using a difference-in-difference strategy, I compare
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Evaluating the Impact of Energy Poverty in a Multidimensional Setting Energy J. (IF 2.394) Pub Date : 2021-01-01 Erica Delugas and Rinaldo Brau
Abstract: We study the relationship between energy poverty and subjective well-being by combining objective and subjective indicators in a multidimensional energy poverty index (MEPI). Using the Italian release of the European Survey on Income and Living Conditions, we first assess the identification power of this index vis-à-vis standard ’affordability’ indicators. Subsequently, we use the MEPI in
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European Industries’ Energy Efficiency under Different Technological Regimes: The Role of CO2 Emissions, Climate, Path Dependence and Energy Mix Energy J. (IF 2.394) Pub Date : 2021-01-01 Eirini Stergiou and Kostas Kounetas
Abstract: The assessment of industrial-level energy efficiency’s (EE) development is a critical research topic that has entrenched in the global battle against climate change. Under the Energy Efficiency Directives 2012/27/EU and 2018/2002/EU, European Commission sets specific industrial energy efficiency targets, rules and obligations for the 2020–2030 period aiming, among others, at specific energy
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Growth Sources of Green Economy and Energy Consumption in China: New Evidence Accounting for Heterogeneous Regimes Energy J. (IF 2.394) Pub Date : 2020-11-01 Guanchun Liu, Yuanyuan Liu, and Chien-Chiang Lee
Abstract: This paper proposes an extended Solow decomposition framework with a finite mixture model, which is incorporated to account for heterogeneous regimes. The model decomposes green economy into two different components, namely, green total factor productivity and factor endowment. Then, we reestimate the growth sources of green economy and especially the importance of energy consumption in China�s
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Unveiling the Time-dependent Dynamics between Oil Prices and Exchange Rates: A Wavelet-based Panel Analysis Energy J. (IF 2.394) Pub Date : 2020-11-01 Hyunjoo Kim Karlsson, Kristofer Månsson, and Pär Sjölander
Abstract: The objective of this paper is to re-examine the relationship between real oil prices and real effective exchange rates (REER) for major oil-exporting countries with floating exchange rates. We apply the wavelet-based principles of Gallegati et al. (2016) using monthly data for the period 1996 to 2015. In contrast to many previous studies, our results support the theoretically expected positive
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Impact of Permit Allocation on Cap-and-trade System Performance under Market Power Energy J. (IF 2.394) Pub Date : 2020-11-01 Mei Wang and Peng Zhou
Abstract: The presence of market power usually has negative impacts on the cost-effectiveness of the carbon market. As market power-induced efficiency loss depends on permit allocation, the choice of permit allocation methods is likely to affect the cost-effectiveness of the carbon market. This paper examines theoretically how the choice of emission permit allocation method affects the cost-effectiveness
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Why the Effects of Oil Price Shocks on China’s Economy are Changing Energy J. (IF 2.394) Pub Date : 2020-11-01 Shouyang Wang, Xun Zhang, and Lin Zhao
Abstract: Some studies on developed economies have revealed that the impacts of oil price shocks have decreased while conclusions about China remain occluded. We investigate the changing effects of oil price shocks on China�s macroeconomy and discuss the causes. A time-varying parameter vector autoregressive (VAR) model reveals that impacts of oil price shocks on China�s economy have shown a downward
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International Oil Market Risk Anticipations and the Cushing Bottleneck: Option-implied Evidence Energy J. (IF 2.394) Pub Date : 2020-11-01 Marie-Hélène Gagnon and Gabriel J. Power
Abstract: This paper studies crude oil market integration and spillovers between Brent and WTI oil indexes over the 2006�2019 period. In addition to prices, we estimate time series of model-free option-implied moments to capture forward-looking market views and anticipations of different risk categories. We describe the WTI-Brent equilibrium relationship in prices and in risk expectations measured
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Transient and Persistent Energy Efficiency in the Wastewater Sector based on Economic Foundations Energy J. (IF 2.394) Pub Date : 2020-11-01 Stefano Longo, Mona Chitnis, Miguel Mauricio-Iglesias, Almudena Hospido
Abstract: Given the increasing importance of the wastewater sector in terms of energy usage, the understanding of the level of energy efficiency of wastewater treatment plants (WWTPs) is useful to both the industry itself as well as policy makers. Here, based on economic foundations, we apply a Stochastic Frontier Analysis (SFA) approach for energy demand modelling to estimate energy efficiency in
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Are Energy Executives Rewarded for Luck? Energy J. (IF 2.394) Pub Date : 2020-11-01 Lucas W. Davis and Catherine Hausman
Abstract: In this paper, we examine executive compensation data from 78 major U.S. oil and gas companies over a 24-year period. Perhaps in no other industry are the fortunes of so many executives so dependent on a single global commodity price. We find that a 10% increase in oil prices is associated with a 2% increase in executive compensation. This oil price effect holds for both CEOs and non-CEOs
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Behavioral Anomalies and Energy-related Individual Choices: The Role of Status-quo Bias Energy J. (IF 2.394) Pub Date : 2020-11-01 Julia Blasch and Claudio Daminato
Abstract: The literature on the energy-efficiency gap discusses the status-quo bias as a behavioral anomaly that potentially increases a household�s energy consumption. We empirically investigate the extent to which the status-quo bias is linked to residential electricity consumption through two channels: non-replacement of old appliances and overuse of appliances. Using data from a large household
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Energy R&D Investments and Emissions Abatement Policy Energy J. (IF 2.394) Pub Date : 2020-11-01 Di Yin and Youngho Chang
Abstract: The study examines the interactions of the energy R&D investments and the CO2 abatement policy using an endogenous energy R&D climate-economy model. Energy R&D investments affect the carbon emissions directly through efficiency improvements and indirectly by changing the comparative advantages of resources. This study considers the R&D investments in energy efficiency and low-carbon technology
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Fuel Demand across UK Industrial Subsectors Energy J. (IF 2.394) Pub Date : 2020-11-01 Paolo Agnolucci and Vincenzo De Lipsis
Abstract: Heterogeneity is a theme acquiring more and more prominence in the energy economic literature from both a modelling and policy-making perspective. We show that useful empirical evidence on this subject can be obtained by applying a parsimonious multivariate cointegration analysis that makes use of the increasingly available time series data on energy demand. We find that there is substantial
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The (time-varying) Importance of Oil Prices to U.S. Stock Returns: A Tale of Two Beauty-Contests Energy J. (IF 2.394) Pub Date : 2020-11-01 David C. Broadstock and George Filis
Abstract: We evaluate the probability that oil prices affect excess stock returns for U.S. listed firms. The probabilities are obtained from a time-varying multi-factor asset pricing framework estimated using dynamic model averaging techniques, including oil price information among several other possible risk factors. Two widely used oil price measures are considered, one based on raw oil price changes
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Locational Investment Signals: How to Steer the Siting of New Generation Capacity in Power Systems? Energy J. (IF 2.394) Pub Date : 2020-11-01 Anselm Eicke, Tarun Khanna, and Lion Hirth
Abstract: New generators located far from consumption centers require transmission infrastructure and increase network losses. The primary objective of this paper is to study signals that affect the location of generation investment. Such signals result from the electricity market itself and from additional regulatory instruments. We cluster them into five groups: locational electricity markets, deep
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Do Localities Benefit from Natural Resource Extraction? Energy J. (IF 2.394) Pub Date : 2020-09-01 Dakshina G. De Silva, Robert P. McComb, and Anita R. Schiller
Abstract: There is a strand of the economics literature that considers the regionalized economic effects of natural resource endowments. The so-called Natural Resource Curse suggests that natural resource endowments are associated with lower long-term growth rates in the areas in which the resources are located. Lower growth arises because these areas tend to specialize in the development and exploitation
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Consumer Preferences for Solar Energy: A Choice Experiment Study Energy J. (IF 2.394) Pub Date : 2020-09-01 Jamal Mamkhezri, Jennifer A. Thacher, and Janie M. Chermak
Abstract: Electricity generation in the United States is rapidly moving towards integrating more renewables into the system due to several factors, including cost competitiveness, consumer preferences, and state and federal policies, such as production and income tax incentives, renewable portfolio standards (RPSs), and state level subsidies for solar energy. While these policies have been researched
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Natural Gas Storage Forecasts: Is the Crowd Wiser? Energy J. (IF 2.394) Pub Date : 2020-09-01 Adrian Fernandez-Perez, Alexandre Garel, and Ivan Indriawan
Abstract: This paper examines the usefulness of crowdsourced relative to professional forecasts for natural gas storage changes. We find that crowdsourced forecasts are less accurate than professional forecasts on average. We investigate possible reasons for this inferior performance and find evidence of a greater divergence of opinions and a lower incorporation of publicly available information among
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Least-cost Distribution Network Tariff Design in Theory and Practice Energy J. (IF 2.394) Pub Date : 2020-09-01 Tim Schittekatte and Leonardo Meeus
Abstract: In this paper a game-theoretical model with self-interest pursuing consumers is introduced in order to assess how to design a least-cost distribution tariff under two constraints that regulators typically face. The first constraint is related to difficulties regarding the implementation of cost-reflective tariffs. In practice, so-called cost-reflective tariffs are only a proxy for the actual
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Direct and Indirect Energy Rebound Effects in German Households: A Linearized Almost Ideal Demand System Approach Energy J. (IF 2.394) Pub Date : 2020-09-01 Hendrik Schmitz and Reinhard Madlener
Abstract: We estimate direct and indirect energy rebound effects for a wide variety of goods and services in Germany. To this end, we employ a linearized approximation of the popular Almost Ideal Demand System (AIDS) approach suggested by Deaton and Muellbauer (1980). Excluding measures of energy efficiency when estimating rebound can lead to biased results. We compensate for this shortcoming of previous
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Stretching the Duck: How Rising Temperatures will Change the Level and Shape of Future Electricity Consumption Energy J. (IF 2.394) Pub Date : 2020-09-01 Nicholas Rivers and Blake Shaffer
Abstract: This paper examines how rising temperatures due to climate change will affect electricity consumption patterns through mid- and end-century. We extend recent literature in two important ways. First, we directly incorporate adaptation in the form of increased air conditioner penetration, resulting in heightened responsiveness to hot temperatures. Second, we go beyond average effects to consider
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Intermittency and CO2 Reductions from Wind Energy Energy J. (IF 2.394) Pub Date : 2020-09-01 Daniel T. Kaffine, Brannin J. McBee, and Sean J. Ericson
Abstract: Using detailed 5-minute electricity generation data, we examine the impact of wind intermittency on carbon dioxide (CO2) emissions savings from wind energy in the Southwest Power Pool from 2012�2014. Parametric and semi-parametric analysis confirms concerns that intra-hour wind intermittency reduces CO2 emissions savings from wind�in the top decile of wind intermittency, emission savings
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Oil Price Declines Could Hurt U.S. Financial Markets: The Role of Oil Price Level Energy J. (IF 2.394) Pub Date : 2020-09-01 Ha Nguyen, Huong Nguyen, and Anh Pham
Abstract: This paper investigates the causal effects of oil price fluctuations on United States� financial markets using daily oil price and financial market data from 2011 to 2016. To address endogeneity, we follow the heteroscedasticity-based identification strategy by Rigobon (2003) and instrument for changes in oil prices with exogenous shocks on current and future oil supply. We find that a decline
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Utilities Included: Split Incentives in Commercial Electricity Contracts Energy J. (IF 2.394) Pub Date : 2020-09-01 Katrina Jessoe, Maya Papineau, and David Rapson
Abstract: This paper quantifies a tenant-side �split incentives� problem that exists when the largest commercial sector customers are on electricity-included property lease contracts, causing them to face a marginal electricity price of zero. We use exogenous variation in weather shocks to show that the largest firms on tenant-paid contracts use up to 14 percent less electricity in response to summer
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The Dynamic Time-frequency Relationship between International Oil Prices and Investor Sentiment in China: A Wavelet Coherence Analysis Energy J. (IF 2.394) Pub Date : 2020-09-01 Zhengke Ye, Chunyan Hu, Linjie He, Guangda Ouyang, and Fenghua Wen
Abstract: We take a fresh look at the interaction between crude oil prices and investor sentiment from the novel perspective of both the time and the frequency domains. By using principal component analysis, we first construct an investor sentiment indicator. Then, crude oil prices are decomposed into three oil price shocks through an SVAR model. Lastly, the dynamic relationship between investor sentiment
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Strategic Cost shifting in the Swedish District Heating and Electricity Markets Energy J. (IF 2.394) Pub Date : 2020-09-01 Magnus Söderberg
Abstract: Firms that operate combined heat and power (CHP) plants in Sweden face strong incentives to let their district heating (DH) customers subsidize the sales of electricity. This study investigates whether firms exploit the variation in competitive intensity across the two markets and 1) shift costs from electricity to DH, and 2) pass on any cost increase to consumers. A major empirical challenge
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Selling and Saving Energy: Energy Efficiency Obligations in Liberalized Energy Markets Energy J. (IF 2.394) Pub Date : 2020-06-01 Louis-Gaëtan Giraudet, Matthieu Glachant, and Jean-Philippe Nicolaï
Abstract: In Europe, energy efficiency obligations are imposed on energy retailers competing in liberalized energy markets. They comply by subsidizing energy efficiency investments made by energy end-users from within or outside their customer base. We develop a model describing how competition in the energy market affects compliance strategies. We find that, instead of selecting the most cost-effective
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Incumbent's Bane or Gain? Renewable Support and Strategic Behavior in Electricity Markets Energy J. (IF 2.394) Pub Date : 2020-06-01 Ali Darudi and Hannes Weigt
Abstract: Incumbent firms play a decisive role in the success of renewable support policies. Their investments in renewables as well as their operational strategies for their conventional CO2 emitting technologies affect the transition to a sustainable energy system. We use a game theoretical framework to analyze incumbents’ reactions to different renewable support policies, namely feed-in tariff (FIT)
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The Impact of Renewable Energy Generation on the Spot Market Price in Germany: Ex-Post Analysis using Boosting Method Energy J. (IF 2.394) Pub Date : 2020-06-01 Alexander Ryota Keeley, Ken’ichi Matsumoto, Kenta Tanaka, Yogi Sugiawan, and Shunsuke Managi
Abstract: This study combines regression analysis with machine learning analysis to study the merit order effect of renewable energy focusing on German market, the largest market in Europe with high renewable energy penetration. The results show that electricity from wind and solar sources reduced the spot market price by 9.64 €/MWh on average during the period from 2010 to 2017. Wind had a relatively
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Offer Price Information and the Exercise of Market Power: The Effect of the Publication of the Historical Trading Report on Competition in the Alberta Electricity Market Energy J. (IF 2.394) Pub Date : 2020-06-01 Derek E. H. Olmstead, Matthew J. Ayres, and Peter B. R. Lomas
Abstract: This paper considers the effect of the publication of offer price information on unilateral market power in Alberta’s electricity market. This market is an hourly auction characterized by repeated interaction among a small number of producers, common knowledge of costs and production capabilities, and price inelastic demand. For the period July 13, 2000 to May 18, 2017, offer prices for each
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Optimal Capacity Mechanisms for Competitive Electricity Markets Energy J. (IF 2.394) Pub Date : 2020-06-01 Pär Holmberg and Robert A. Ritz
Abstract: Capacity mechanisms are increasingly used in electricity market design around the world yet their role remains hotly debated. This paper introduces a new benchmark model of a capacity mechanism in a competitive electricity market with many different conventional generation technologies. We consider two policy instruments, a wholesale price cap and a capacity payment, and show which combinations
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Pricing and Competition with 100% Variable Renewable Energy and Storage Energy J. (IF 2.394) Pub Date : 2020-06-01 Tommi Ekholm and Vilma Virasjoki
Abstract: Electricity production is a key sector in global decarbonization efforts, and variable renewable energy (VRE) technologies are a primary way to produce carbon-free electricity. We study an electricity market where generation is 100 % VRE, while storage and elastic demand resolve temporal supply-demand imbalances. We model hourly market equilibrium to analyze price formation and imperfect
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Unbundling, Regulation, and Pricing: Evidence from Electricity Distribution Energy J. (IF 2.394) Pub Date : 2020-06-01 Sven Heim, Bastian Krieger, and Mario Liebensteiner
Abstract: Unbundling of vertically integrated utilities has become an integral element in the regulation of network industries and has been implemented in many jurisdictions. The idea of separating the network, as the natural monopoly, from downstream retailing, which may be exposed to competition, is still subject to contentious debate, as there is much empirical evidence that unbundling eliminates
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Conditional Yardstick Competition in Energy Regulation Energy J. (IF 2.394) Pub Date : 2020-06-01 Timo Kuosmanen and Andrew L. Johnson
Abstract: Yardstick competition is a regulation regime that forces local monopolies to compete against a variable cost or total cost benchmark. The variable cost benchmark ignores the fixed capital, creating a strong incentive to over-invest, whereas the total cost benchmark assumes all costs to be variable, ignoring the investment risk. We propose theoretical, methodological, and operational advances
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Competition in Markets for Ancillary Services? The Implications of Rising Distributed Generation Energy J. (IF 2.394) Pub Date : 2020-06-01 Michael G. Pollitt and Karim L. Anaya
Abstract: Ancillary services are electricity products which include balancing energy, frequency regulation, voltage support, constraint management and reserves. Traditionally they have been procured by system operators from large conventional power plants, as by-products of the production of energy. This paper discusses the use of markets to procure ancillary services in the face of potentially higher
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