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on Regulation |
| By: | Andor, Mark; Voss, Achim |
| Abstract: | We derive optimal subsidization of renewable energies in electricity markets. The analysis takes into account that capacity investment must be chosen under uncertainty about demand conditions and capacity availability, and that capacity as well as electricity generation may be sources of externalities. The main result is that generation subsidies should correspond to externalities of electricity generation (e.g., greenhouse gas reductions), and investment subsidies should correspond to externalities of capacity (e.g., learning spillovers). If only capacity externalities exist, then electricity generation should not be subsidized at all. Our results suggest that some of the most popular promotion instruments are likely to cause welfare losses. |
| Abstract: | In diesem Artikel leiten wir optimale Subventionen für erneuerbare Energien im Elektrizitätsmarkt her. Die Analyse berücksichtigt sowohl, dass Entscheidungen über Kapazitätsinvestitionen unter Unsicherheit über die Nachfrage und die Verfügbarkeit der Kapazität getroffen werden müssen, als auch, dass sowohl die Kapazität selbst als auch die Erzeugung von Strom externe Effekte haben können. Das wichtigste Ergebnis ist, dass Subventionen, die die Produktion subventionieren, den Externalitäten der Stromerzeugung (wie z.B. der Reduzierung von Treibhausgasen) und Investitionssubventionen den Externalitäten der Kapazität (bspw. öffentlichen Lernkurveneffekten) entsprechen sollten. Falls nur Externalitäten der Kapazität vorliegen, sollte die Stromerzeugung überhaupt nicht subventioniert werden. Unsere Ergebnisse legen daher nahe, dass einige der populärsten Förderinstrumente vermutlich Wohlfahrtsverluste verursachen. |
| Keywords: | peak-load pricing,capacity investment,demand and supply uncertainty,renewable energy sources,energy policy,optimal subsidies,feed-in tariffs |
| JEL: | Q41 Q48 H23 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:rwirep:473&r=reg |
| By: | Nils May |
| Abstract: | Germany changed renewable remuneration for wind power from a fixed Feed-In Tariff (FIT) to a floating Market Premium Scheme (MPS) in 2012. One aim of this adjustment was to better align the supply of generated wind electricity with the demand for it, e.g. through more system-friendly wind turbine technology choices. In energy systems with a high share of variable renewable energies, such turbines produce a higher share of their production at lower wind speeds and thus can reduce the need for alternative flexibility options like back-up capacity, storage, grid extensions and demand side measures. However, based on a wind power investment model, I show that the MPS fails to convey strong enough incentives to project developers to significantly alter their investment decisions as long as these base their investments on current electricity market price profiles and are limited by their access to risk-averse project finance. One reform proposal to support the installation of system-friendly turbines is a change in the production volume-based benchmark approach which plays an integral part in both the fixed FIT and the MPS. The investment model indicates that such a revised policy can incentivize the deployment of moderately more system-friendly wind power technologies at some locations. An alternative option is to shift to a production value-based benchmark approach. It directly reflects the future additional market value of system-friendly turbines in today's remuneration structure. Thus, this approach sets incentives also for investors without perfect foresight - or with financing constraints - to deploy more systemfriendly turbines that meet the requirements of power systems with increasing shares of wind power. |
| Keywords: | Renewable Energies, Wind Power Technology, Feed-in Tariff, Project Finance, Market Premium |
| JEL: | Q42 Q55 O38 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwwpp:dp1485&r=reg |
| By: | Frondel, Manuel; Sommer, Stephan; Vance, Colin |
| Abstract: | Germany's energy transition has been accompanied by a near doubling of power prices for private households since the outset of the new millennium. Millions of poor households and those that are close to the poverty threshold are likely to suffer from these increases in electricity cost. Focusing on low-income households, this paper illustrates the distributional implications of Germany's energy transition by investigating their electricity cost burden between 2006 and 2012, using data from the German Residential Energy Consumption Survey (GRECS). Our estimates suggest that in 2012, on average, households at poverty risk allocated 5.5% of their income to power and, hence, paid nearly as much for covering their electricity consumption as for heating purposes. Given Germany's ambitious targets to expand the share of costly renewable technologies in electricity consumption, which has broad support among the electorate, it is to be expected that households' expenditure for power will increase in the upcoming years. This raises the urgent question of how to mitigate the regressive impact of further increasing electricity prices on poor households. Direct cash transfers are suggested here as a non-distortionary instrument for easing the burden of high prices, one that is directly targeted at those endangered by energy poverty. |
| Abstract: | Der Ausbau der erneuerbaren Energien in Deutschland ging mit einer Verdopplung der Haushaltsstrompreise seit dem Jahr 2000 einher. Insbesondere leiden Millionen von armutsgefährdeten Haushalten unter dem Anstieg ihrer Stromkosten. Mit dem Fokus auf einkommensschwachen Haushalten stellt der vorliegende Beitrag die Verteilungswirkungen der Energiewende durch die Analyse der Stromkostenentwicklung privater Haushalte zwischen 2006 und 2012 dar. Basierend auf Primärdaten zum Energieverbrauch legen unsere Ergebnisse nahe, dass armutsgefährdete Haushalte im Jahr 2012 durchschnittlich 5,5% ihres Einkommens für Elektrizität ausgaben. Damit zahlten sie einen ähnlich hohen Betrag für Strom wie für den Bedarf an Heizenergie. Angesichts der ambitionierten Ziele Deutschlands, den Anteil teurer erneuerbarer Energien an der Stromerzeugung zu steigern, ist zu erwarten, dass sich die Stromausgaben in den kommenden Jahren weiter erhöhen werden. Dies zieht die Frage nach sich, wie die regressive Wirkung zukünftig steigender Strompreise abgefedert werden kann. Transferleistungen an armutsgefährdete Haushalte werden als ein unverzerrendes Instrument vorgeschlagen, ihre Belastung durch hohe Preise zu begrenzen. |
| Keywords: | energy transition,feed-in tariff,German Residential Energy Consumption Survey |
| JEL: | Q21 Q28 Q47 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:rwirep:542&r=reg |
| By: | Byrnes, Liam; Brown, Colin |
| Abstract: | As Australia grapples with increasing renewable energy penetration and the appropriate climate change strategy, renewable energy policy plays an increasingly important role. In recent years the renewable energy policy environment has become increasingly politicised and uncertain. The implications for the industry are significant. In light of this policy environment, this paper sets out the economic theory behind public sector market intervention and contextualises it within the Australian renewable energy context. It highlights the barriers facing renewable energy deployment and explores the current status of Australian renewable energy policy. This analysis reveals market failures and other barriers to deployment as well as entrenched enabling policy, regulatory and institutional frameworks for fossil fuel industries. This context was found to justify government intervention to support the renewables sector and improve overall economic efficiency. Building on this analysis, five observations relevant to the development of future renewable energy policy are outlined. |
| Keywords: | Energy Policy; Energy; Renewable Energy Policy; Renewable; Policy Development; Australia |
| JEL: | E61 E65 H0 H3 O2 O3 |
| Date: | 2015–05 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:64977&r=reg |
| By: | Kihm, Alex; Ritter, Nolan; Vance, Colin |
| Abstract: | We explore whether non-competitive pricing prevails in Germany's retail gasoline market by examining the influence of the crude oil price on the retail gasoline price, focusing specifically on how this influence varies according to the brand and to the degree of competition in the vicinity of the station. Our analysis identifies several factors other than cost - including the absence of nearby competitors and regional market concentration - that play a significant role in mediating the influence of the oil price on the retail gas price, suggesting price setting power among stations. |
| Keywords: | panel data,quantile regression,spatial competition,gasoline market |
| JEL: | C33 Q41 R41 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:rwirep:522&r=reg |
| By: | Frohwein, Torsten |
| Abstract: | Sustainable competitive advantage (SCA) is a central tenet in strategic management theory. The effect of regulation on sustaining competitive advantages is widely neglected in literature. The impact on competence development and SCA of the firm can be significant, if regulatory requirements and regulatory prohibitions as types of specific industry regulation are considered. In arguing that resource-based theory can be modeled analogous to complex system theory, the effect of regulation on competence development and SCA is illustrated. In explaining the effect of regulation on competence development and SCA, the paper contributes to close a gap in one of the central assumptions of attaining SCA resource-based theory. |
| Keywords: | strategic management,resource-based theory,sustainable competitive advantage,competence development,regulation,open system |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:stuist:12015&r=reg |
| By: | Matthew S. Clancy; GianCarlo Moschini (Center for Agricultural and Rural Development (CARD)) |
| Abstract: | Mandates are policy tools that are becoming increasingly popular to promote renewable energy use. In addition to mitigating the pollution externality of conventional energy, mandates have the potential to promote R&D investments in renewable energy technology. But how well do mandates perform as innovation incentives? To address this question, we develop a partial equilibrium model with endogenous innovation to examine the R&D incentives induced by a mandate, and compare this policy to two benchmark situations: laissez-faire and a carbon tax. Innovation is stochastic and the model permits an endogenous number of multiple innovators. We find that mandates can improve upon laissez faire, and that the prospect of innovation is essential for their desirability. However, mandates suffer from several limitations. A mandate creates relatively strong incentives for investment in R&D in low-quality innovations, but relatively weak incentives to invest in high-quality innovations, so that the dispersion of realized innovation quality is comparatively low. Moreover, a mandate achieves lower welfare than a carbon tax, and its optimal level is more sensitive to the structure of the innovation process. Key Words: Carbon tax, Incentive, Innovation, Mandates, Renewable energy, R&D, Welfare. JEL codes: H23, O31, Q42, Q55, Q58 |
| Date: | 2015–06 |
| URL: | http://d.repec.org/n?u=RePEc:ias:cpaper:15-wp557&r=reg |
| By: | Barton, J.; Davies, L; Foxon, T.J.; Galloway, S.; Hammond, Geoff; O'Grady, Áine; Robertson, E.; Thomson, M. |
| Date: | 2013–12 |
| URL: | http://d.repec.org/n?u=RePEc:bme:wpaper:44217&r=reg |
| By: | Christian Krekel; Alexander Zerrahn |
| Abstract: | We investigate the effect of the physical presence of wind turbines on residential wellbeing in Germany, using panel data from the German Socio-Economic Panel (SOEP) and a unique novel panel data set on more than 20,000 wind turbines for the time period between 2000 and 2012. Using a Geographical Information System (GIS), we calculate the proximity between households and the nearest wind turbine as the most important determinant of their disamenities, e.g. visual interference into landscape aesthetics. Our unique novel panel data set on wind turbines, which was collected at the regional level, includes their exact geographical coordinates and construction dates. This allows estimating the causal effect of the physical presence of wind turbines on residential wellbeing, using a difference-in-differences design. To ensure comparability of the treatment and control group, we apply propensity-score and novel spatial matching techniques based on exogenous weather data and geographical locations of residence, respectively. We show that the construction of a wind turbine within a treatment radius of 4,000 metres around households has a significantly negative effect on life satisfaction. For larger treatment radii, no negative externalities can be detected. Moreover, the effect is transitory, vanishing after five years at the latest. As wind turbines are addressed at avoiding negative externalities of local pollutant and global greenhouse gas emissions, they fulfil an important role in the de-carbonization of electricity systems world-wide. Comparing the imposed spatially and temporally limited externalities with the avoided externalitiesfrom emissions, the positive impact of wind turbines is by several magnitudes higher than the negative. |
| Keywords: | Life satisfaction, social acceptance, wind power, wind turbines, renewables, externalities, SOEP, GIS, spatial analysis |
| JEL: | C23 Q42 Q51 R20 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwsop:diw_sp760&r=reg |
| By: | Rezaee, Amir; Kirat, Thierry |
| Abstract: | The paper offers an empirical analysis of the effects of sanctions decided by the Financial Markets Authority (AMF) on the reputation of firms in France. Using an event study, we intend to show the impact of three events on the stock prices : opening of an investigation by the AMF ; issuance of a monetary sanction ; publication of the information about sanction a newspaper. The reputational impact issue raises the broader issue of understanding of financial regulation enforcement operates in concreto. We find a strong negative impact of the announcement of sanction in press on the firms’ stock prices. We observe a reputational loss of the deferred firm following the disclosure of sanction in press. We observe also a weak decrease in stock prices when the firm has been notified of the opening of investigation on its misconducts, however we find no evidence on the impact of announcement of sanction directly to the firm on the stock prices. We carry out an OLS cross-section regression to assess the impact of the amount of sanction on the reputational loss of firm. The amount of monetary sanctions are too low, compared the market size of deferred companies, to influence stock prices and contribute in reputational loss. |
| Keywords: | Sanctions; Finances internationales; Autorité des marchés financiers; Finance regulation; |
| JEL: | K00 |
| Date: | 2015–07 |
| URL: | http://d.repec.org/n?u=RePEc:dau:papers:123456789/15152&r=reg |
| By: | Glushetskiy, Andrey (Russian Presidential Academy of National Economy and Public Administration (RANEPA)) |
| Abstract: | In order to establish differentiated regimes for intra-corporate relations societies differ in the number of participants and the nature of the trafficking of human participation in the division of business entities entered into public and non-public. In this regard, a discussion about the nature of society and the public criteria for their application has emerged. This debate is of great practical importance for the fate of many joint-stock companies: whether their shareholders to take advantage of the disposition of regulation (freedom of intra-self), or they will be involved in the regime of strict mandatory regulation of their behavior. |
| Keywords: | intra-corporate relations, public economic companies, non-public economic companies, regulation |
| Date: | 2015–05 |
| URL: | http://d.repec.org/n?u=RePEc:rnp:ppaper:mn27&r=reg |
| By: | Silvester Van Koten |
| Abstract: | Two important caveats are made for applications and empirical tests of Bessembinder and Lemmon's (2002) theoretical risk premium model for forward premia. Firstly, (relative) forward premia (eventually) decrease in mean power demand. Secondly, empirical tests should use a definition of mean power demand in line with Bessembinder and Lemmon's (2002) theory to avoid confounds. |
| Keywords: | forward premia; electricity markets; energy economics; mean power demand; financial markets; |
| JEL: | G13 G17 L94 Q41 |
| Date: | 2015–06 |
| URL: | http://d.repec.org/n?u=RePEc:cer:papers:wp543&r=reg |
| By: | Kurt R. Brekke (Department of Economics, Norwegian School of Economics); Chiara Canta (Department of Economics, Norwegian School of Economics); Odd Rune Straume (Universidade do Minho - NIPE) |
| Abstract: | In this paper we study the impact of reference pricing (RP) on entry of generic firms in the pharmaceutical market. For given prices, RP increases generic firms' expected profit, but since RP also stimulates price competition, the impact on generic entry is theoretically ambiguous. In order to empirically test the effects of RP, we exploit a policy reform in Norway in 2005 that exposed a subset of drugs to RP. Having detailed product-level data for a wide set of substances from 2003 to 2013, we find that RP increased the number of generic drugs. We also find that RP increased market shares of generic drugs, reduced the prices of both branded and generic drugs, and led to a (weakly significant) decrease in total drug expenditures. The reduction in total expenditures was relatively smaller than the reduction in average prices, reflecting the fact that lower prices stimulated total demand. |
| Keywords: | Pharmaceuticals; Reference pricing; Generic entry |
| JEL: | I11 I18 L13 L65 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:nip:nipewp:06/2015&r=reg |