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on Regulation |
| By: | Cédric Clastres (GAEL - Laboratoire d'Economie Appliquée de Grenoble - Grenoble INP - Institut polytechnique de Grenoble - Grenoble Institute of Technology - INRA - Institut National de la Recherche Agronomique - CNRS - Centre National de la Recherche Scientifique - UGA - Université Grenoble Alpes); Jacques Percebois (CREDEN - Centre de Recherche en Economie et Droit de l'ENergie - UM1 - Université Montpellier 1); Olivier Rebenaque (GAEL - Laboratoire d'Economie Appliquée de Grenoble - Grenoble INP - Institut polytechnique de Grenoble - Grenoble Institute of Technology - INRA - Institut National de la Recherche Agronomique - CNRS - Centre National de la Recherche Scientifique - UGA - Université Grenoble Alpes, Chaire économie du climat - Chaire économie du climat); Boris Solier (Chaire économie du climat - Chaire économie du climat) |
| Abstract: | The deployment of renewable energies relies upon incentive policies to make their use profitable for owner. However, their development needs adjustments of network to manage intermittency and additional energy fed into the grid. Moreover, the Public Service Obligation Tariffs (PSOT) are increasing to fund policies that support renewable energy deployment. Therefore, some decisions are taken to promote self-consumption by owners of renewable energy power plants, as photovoltaic prosumers. This behavior is encouraged by payment exemptions of PSOT, special tariffs dedicated to remunerate each self-consumed energy unit or savings on the variable part of the network tariff. Thus, some cross-subsidies appear between self-consumers and other users of the network to compensate all these previous self-consumers' gains. We show that these cross-subsidies occur but they strongly rely on self-consumption rate and on renewable energy share in the total produced or consumed energy. So, currently, the levels of cross-subsidies are not significant for consumers. We also show that regulator could fund these cross-subsidies increasing the fixed part of the network tariff for prosumers. |
| Keywords: | Self-consumption, Cross-subsidies, Network tariff, Policy instruments |
| Date: | 2018–04 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-01781594&r=reg |
| By: | Alexandrov, Alexei; Pittman, Russell; Ukhaneva, Olga |
| Abstract: | Monopolists selling complementary products charge a higher price in a static equilibrium than a single multiproduct monopolist would, reducing both the industry profits and consumer surplus. However, firms could instead reach a Pareto improvement by lowering prices to the single monopolist level. We analyze administrative nationally-representative pricing data of railroad coal shipping in the U.S. We compare a coal producer that needs to ship from A to C, with the route passing through B, in two cases: (1) the same railroad owning AB and BC and (2) different railroads owning AB and BC. We do not find that price in case (2) is higher than price in case (1), suggesting that the complementary monopolist pricing inefficiency is absent in this market. For our main analysis, we use a specification consistent with the previous literature; however, our findings are robust to propensity score blocking and machine learning algorithms. Finally, we perform a difference-in-differences analysis to gauge the impact of a merger that made two routes wholly-owned (switched from case 2 to case 1), and these results are also consistent with our main findings. Our results have implications for vertical mergers, tragedy of the anticommons, mergers of firms selling complements, and royalty stacking and patent thickets. |
| Keywords: | pricing of complements, vertical mergers, Cournot, Coase, railroads |
| JEL: | D21 D22 D43 D86 L13 L14 L4 L40 L92 |
| Date: | 2018–04–18 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:86279&r=reg |
| By: | Jan Malek (DIW Berlin, Mohrenstraße 58, 10117 Berlin, Germany); Lukas Recka (Department of Banking and Insurance, Faculty of Finance and Accounting, University of Economics, Namesti Winstona Churchilla 4, 13067 Prague, Czech Republic); Karel Janda (Institute of Economic Studies, Faculty of Social Sciences, Charles University in Prague, Smetanovo nabrezi 6, 111 01 Prague 1, Czech Republic; Department of Banking and Insurance, Faculty of Finance and Accounting, University of Economics, Namesti Winstona Churchilla 4, 13067 Prague, Czech Republic) |
| Abstract: | The impacts of renewable energy production and German nuclear phase-out on the electricity transmission systems in Central Europe is investigated with focus on the disparity between the growth of renewable production and the pace at which new electricity transmission lines have been built, especially in Germany. This imbalance endangers the system stability and reliability in the whole region. The assessment of these impacts on the transmission grid is analysed by the direct current load flow model ELMOD. Two scenarios for the year 2025 are evaluated from different perspectives. The distribution of loads in the grids is shown. Hourly patterns are analysed. Geographical decomposition is made, and problematic regions are identified. The high solar or wind power generation decrease the periods of very low transmission load and increase the mid- and high load on the transmission lines. High solar feed-in has less detrimental impacts on the transmission grid than high wind feed-in. High wind feed-in burdens the transmission lines in the north-south direction in Germany and water-pump-storage areas in Austria. |
| Keywords: | Energiewende, RES, transmission networks, congestion, loop flows, ELMOD, Central Europe |
| JEL: | L94 Q21 Q48 C61 |
| Date: | 2018–02 |
| URL: | http://d.repec.org/n?u=RePEc:fau:wpaper:wp2018_05&r=reg |
| By: | Benjamin Volland; Ivan Tilov |
| Abstract: | In this paper, we use data from a new household-level panel survey to estimate short- and long-run price elasticities of residential electricity demand in Switzerland. We exploit Switzerland's unique local variation in topography-related grid maintenance costs and electricity taxation, to address endogeneity of average prices in our models. Using first difference and gradual adjustment models, we find short-run elasticities of -0.3 and long-run elasticities in excess of negative unity. Results thus suggest that a tax on electricity, as initially foreseen as a part of Switzerland's Energy Strategy 2050, is likely to have a moderate effect in the short run, but an important one in the long run. |
| Keywords: | Residential electricity demand, price elasticity, panel data, Switzerland |
| JEL: | C23 D12 Q41 Q48 |
| Date: | 2018–05 |
| URL: | http://d.repec.org/n?u=RePEc:irn:wpaper:18-03&r=reg |
| By: | Coles, Anne-Marie; Peters, S. R. |
| Abstract: | Transitions management identifies broad national efforts that attempt to govern socio-technical change along more environmentally sustainable pathways. Although the complexity of such endeavours is generally acknowledged, it is not yet clear how governance practices work at an international level. This paper utilises the transitions management concept to compare three countries in their attempts to increase the adoption and use of renewable energy technologies. It notes that analysis at a micro-level needs to focus on the actions and requirements of particular user groups for a deeper elucidation of transition management processes. Furthermore, the complexity of socio-technical change processes implies that transitions management is a more useful concept when focused at the micro-level of change rather than at the macro-level of strategy formulation over the longer term. |
| Keywords: | Renewable energy; transitions management; energy users; inter-country comparison; |
| JEL: | O33 O57 Q42 |
| Date: | 2018–05–03 |
| URL: | http://d.repec.org/n?u=RePEc:gpe:wpaper:20230&r=reg |
| By: | Sébastien Brion (CRET-LOG - Centre de Recherche sur le Transport et la Logistique - AMU - Aix Marseille Université); Elodie Gardet (IREGE - Institut de Recherche en Gestion et en Economie - USMB [Université de Savoie] [Université de Chambéry] - Université Savoie Mont Blanc) |
| Abstract: | Previous researches on interorganizational relations show contradictory findings on the link between conflict and members satisfaction. While recent literature sketches some insight to refine the influence of different type of conflicts, resolution mechanisms that overcome these conflicts remains less studied. Our research proposes that conflict resolution mechanisms moderate hub firm satisfaction, depending on the type of conflict. Study of 173 innovation networks hub's firms demonstrate contingent relationships between type of conflict and resolution mechanisms on hub firm satisfaction. The expected negative effect of task conflict on hub firm satisfaction is positively moderate by soft resolution mechanisms (discussion and soft pressure), and the degradation caused by the relational conflicts on the hub firm satisfaction is compensate by the hard conflict resolution mechanism (mediation and court). These results shed new light on how to mitigate conflicts in the context of innovation, prone to discordances. Theoretically, this research paves the way for a joint consideration of literature on conflict types and literature on resolution mechanisms that are typically treated separately. |
| Keywords: | innovation networks,interorganizational conflicts,resolution mechanisms |
| Date: | 2018–06–06 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-01771604&r=reg |
| By: | Alexandre Ribeiro Scarcioffolo; Fernanda Finotti Perobelli, Ariaster Baumgratz Chimeli |
| Abstract: | We analyze potential efficiency gains in wind power projects by comparing counterfactual investment decisions in two different scenarios under a real options framework. The first scenario is a standard wind power investment, where the investor rents the land from local farms. In the second scenario, the wind power investor buys the land and commercializes both electricity and crop production, thus shortening the revenue risk through the diversification. Both scenarios have a waiting option, with the wholesale prices leading the installation decision. We model the electricity price as a mean reverting process with jumps and with different jumping probabilities for the different seasons of the year. Corn prices follow a mean reverting process. The waiting flexibility was modeled as a bundle of European options. The results indicate that the waiting option is exercised in 100% of our simulations in both scenarios, suggesting the still important role of government policies to stimulate wind power. More importantly, in more than 90% of the simulations, the second scenario brought value to the investment. Furthermore, net present values are more sensitive to reductions in capital costs than electricity prices. These results can form the basis for more effective policies for the wind power sector. |
| Keywords: | Wind Energy; Corn; Real Options Framework; Investment decision |
| JEL: | G23 Q42 Q48 |
| Date: | 2018–04–11 |
| URL: | http://d.repec.org/n?u=RePEc:spa:wpaper:2018wpecon04&r=reg |
| By: | Green, Fergus; Denniss, Richard |
| Abstract: | Proponents of climate change mitigation face difficult choices about which types of policy instrument(s) to pursue. The literature on the comparative evaluation of climate policy instruments has focused overwhelmingly on economic analyses of instruments aimed at restricting demand for greenhouse gas emissions (especially carbon taxes and cap-and-trade schemes) and, to some extent, on instruments that support the supply of or demand for substitutes for emissions-intensive goods, such as renewable energy. Evaluation of instruments aimed at restricting the upstream supply of commodities or products whose downstream consumption causes greenhouse gas emissions—such as fossil fuels—has largely been neglected in this literature. Moreover, analyses that compare policy instruments using both economic and political (e.g. political “feasibility” and “feedback”) criteria are rare. This article aims to help bridge both of these gaps. Specifically, the article demonstrates that restrictive supply-side policy instruments (targeting fossil fuels) have numerous characteristic economic and political advantages over otherwise similar restrictive demand-side instruments (targeting greenhouse gases). Economic advantages include low administrative and transaction costs, higher abatement certainty (due to the relative ease of monitoring, reporting and verification), comprehensive within-sector coverage, some advantageous price/efficiency effects, the mitigation of infrastructure “lock-in” risks, and mitigation of the “green paradox”. Political advantages include the superior potential to mobilise public support for supply-side policies, the conduciveness of supply-side policies to international policy cooperation, and the potential to bring different segments of the fossil fuel industry into a coalition supportive of such policies. In light of these attributes, restrictive supply-side policies squarely belong in the climate policy “toolkit”. |
| JEL: | N0 |
| Date: | 2018–03–12 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:87734&r=reg |
| By: | Garcia, Arturo; Leal, Mariel; Lee, Sang-Ho |
| Abstract: | This study considers the timing of environmental policies with a consumer-friendly firm having abatement technology, and compares two market-based regulations: tradable permits and emission tax regulations. When the government can credibly commit its policy, we show that the equilibrium outcomes under both policies are equivalent in terms of permits price and tax rate. Under the non-committed policy, however, the equivalence breaks down because firms have different incentives to induce time-consistent policy to be adjusted ex post. In particular, compared to pre-committed government, firms abate less emission to induce higher emission quotas under the permits policy while a consumer-friendly firm abates more emissions to reduce tax rate under the tax policy. Finally, we show that tax policy can induce higher welfare and lower environmental damage when the concern on consumer surplus is moderate. |
| Keywords: | abatement technology; consumer-friendly firm; environmental policy; tradable permits; emission tax |
| JEL: | L13 L31 Q58 |
| Date: | 2018–04–01 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:86407&r=reg |
| By: | Eyal Apatov (Ministry of Business, Innovation and Employment); Nathan Chappell (Motu Economic and Public Policy Research); Arthur Grimes (Motu Economic and Public Policy Research) |
| Abstract: | Using data on internet access for New Zealand’s 46,637 meshblocks, we examine issues of path dependence and the digital divide. We test whether areas that had the best railway access in the 1880s also have best access to new fibre internet infrastructure. Results suggest strong path dependence with respect to topography: people in areas that lacked 19th century rail due to remoteness or terrain are much less likely to have prioritised fibre access and slightly less likely to have current or (planned) future fibre access. Next, we examine path dependence with respect to ethnicity, given that 19th century railways deliberately avoided predominantly M?ori areas. The results suggest weak path dependence: countrywide, M?ori are slightly less likely to get fibre access than other New Zealanders, though are slightly more likely to have access within urban areas. Finally, we examine whether the rollout of fibre is increasing or decreasing the digital divide in access between rich and poor. Results show that those in more deprived areas are the most likely to benefit from fibre access, because these areas also tend to be denser and density was a factor in determining the path of the fibre rollout. |
| Keywords: | Digital divide, path dependence, economic history, inequality, broadband |
| JEL: | L92 L96 N97 |
| Date: | 2018–05 |
| URL: | http://d.repec.org/n?u=RePEc:mtu:wpaper:18_04&r=reg |