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on Regulation |
| By: | Peter, Jakob (Energiewirtschaftliches Institut an der Universitaet zu Koeln (EWI)) |
| Abstract: | Ongoing climate change affects complex and long-lived infrastructures like electricity systems. Particularly for decarbonized electricity systems based on variable renewable energies, there is a variety of impact mechanisms working differently in size and direction. Main impacts for Europe include changes in wind and solar resources, hydro power, cooling water availability for thermoelectric generation and electricity demand. Hence, it is not only important to understand the total effects, i.e., how much welfare may be gained when accounting for climate change impacts in all dimensions, but also to disentangle various effects in terms of their marginal contribution to the potential welfare loss. This paper applies a two-stage modeling framework to assess RCP8.5 climate change impacts on the European electricity system. Thereby, the performance of two electricity system design strategies – one based on no anticipation of climate change and one anticipating impacts of climate change – is studied under a variety of climate change impacts. Impacts on wind and solar resources are found to cause the largest system effects in 2100. Combined climate change impacts increase system costs of a system designed without climate change anticipation due to increased fuel and carbon permit costs. Applying a system design strategy with climate change anticipation increases the cost-optimal share of variable renewable energy based on additional wind offshore capacity in 2100, at a reduction in nuclear, wind onshore and solar PV capacity. Compared to a no anticipation strategy, total system costs are reduced. |
| Keywords: | Climate Change; Variable renewable energy; Power system modeling |
| JEL: | C61 Q41 Q42 Q48 Q54 |
| Date: | 2019–02–06 |
| URL: | http://d.repec.org/n?u=RePEc:ris:ewikln:2019_003&r=all |
| By: | Growitsch, Christian (Frauhofer CEM, Hamburg University); Höffler, Felix (Energiewirtschaftliches Institut an der Universitaet zu Koeln (EWI)) |
| Abstract: | The Fukushima Daiichi nuclear accident in 2011 led to some drastic reactions in Germany, in particular an immediate shut-downof older nuclear power plants. This event is therefore often seen as a turning point, or a major accelerator for the German Energiewende. We investigate the short term effects, but also put the event into a longer, 10-year perspective. This shows that hardly any trend in the energy policy was strongly affected by policy decisions of 2011. Major trends are the increase of renewable electricity sources, the phase out of nuclear, a slight increase in energy efficiency, while total energy consumption and also greenhouse gas emissions remained stable in the decade 2005-2015/16. We also provide some tentative explanations for these developments. |
| Keywords: | Germany; Japan; Fukushima; Nuclear power; Energiewende; Energy policy |
| JEL: | Q40 Q48 Q53 Q58 |
| Date: | 2019–02–06 |
| URL: | http://d.repec.org/n?u=RePEc:ris:ewikln:2019_002&r=all |
| By: | Morteza Taiebat; Samuel Stolper; Ming Xu |
| Abstract: | Connected and automated vehicles (CAVs) are expected to yield significant improvements in safety, energy efficiency, and time utilization. However, their net effect on energy and environmental outcomes is unclear. Higher fuel economy reduces the energy required per mile of travel, but it also reduces the fuel cost of travel, incentivizing more travel and causing an energy "rebound effect." Moreover, CAVs are predicted to vastly reduce the time cost of travel, inducing further increases in travel and energy use. In this paper, we forecast the induced travel and rebound from CAVs using data on existing travel behavior. We develop a microeconomic model of vehicle miles traveled (VMT) choice under income and time constraints; then we use it to estimate elasticities of VMT demand with respect to fuel and time costs, with fuel cost data from the 2017 United States National Household Travel Survey (NHTS) and wage-derived predictions of travel time cost. Our central estimate of the combined price elasticity of VMT demand is -0.4, which differs substantially from previous estimates. We also find evidence that wealthier households have more elastic demand, and that households at all income levels are more sensitive to time costs than to fuel costs. We use our estimated elasticities to simulate VMT and energy use impacts of full, private CAV adoption under a range of possible changes to the fuel and time costs of travel. We forecast a 2-47% increase in travel demand for an average household. Our results indicate that backfire - i.e., a net rise in energy use - is a possibility, especially in higher income groups. This presents a stiff challenge to policy goals for reductions in not only energy use but also traffic congestion and local and global air pollution, as CAV use increases. |
| Date: | 2019–01 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:1902.00382&r=all |
| By: | Cohen, François; Glachant, Matthieu; Söderberg, Magnus |
| Abstract: | The empirical literature on the energy efficiency gap concentrates on demand inefficiencies in the energy-using durables markets and finds evidence that consumers underestimate future energy costs when purchasing a new appliance. We take a broader view and also consider the impact of imperfect competition. Using data on the UK refrigerator market (2002-2007), we find that the average energy consumption of appliances sold during this period was only 7.2% higher than what would have been observed under a scenario with a perfectly competitive market and non-myopic consumers. One reason for this small gap is that market power actually reduces energy use. |
| Keywords: | Energy Efficiency; Electricity Prices; Consumer Myopia; Imperfect Competition |
| JEL: | D12 L68 Q41 |
| Date: | 2017–04–01 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:69188&r=all |
| By: | McCoy, Daire; Curtice, John |
| Abstract: | In order to better understand the potential for both policy and technological improvements to aid carbon abatement, long-term historical information on the time-path of transition from more traditional to cleaner fuels is useful. This is a relatively understudied element of the fuel switching literature in both developed and emerging economies. This research adds to this literature by examing the adoption time-path of network gas as a heating fuel. We merge a unique dataset on gas network roll-out over time, with other geo-coded data and employ an instrumental variables technique in order to simultaneously model supply and demand. Results indicate a non-linear relationship between the proportion of households using gas as their primary means of central heating and the length of time the network has been in place in each area. Proximity to the gas network, peat bogs, and areas which have banned the consumption of bituminous coal also affect gas connections. Variations in socioeconomic and dwelling characteristics at area level can also help explain connections to the gas network. A better understanding of this variation is crucial in designing targeted policies and can aid network expansion decisions |
| Keywords: | Residential fuel choice; Spatial economics; Instrumental variables estimation |
| JEL: | C31 Q40 |
| Date: | 2018–01–06 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:86625&r=all |
| By: | Thonipara, Anita; Runst, Petrik; Ochsner, Christian; Bizer, Kilian |
| Abstract: | Despite a common EU directive on energy efficiency in residential buildings, levels of energy efficiency differ vastly across European countries. This article analyses these differences and investigates the effectiveness of different energy efficiency policies in place in those countries. We firstly use panel data to explain average yearly energy consumption per dwelling and country by observable characteristics such as climatic conditions, energy prices, income, and floor area. We then use the unexplained variation by sorting between-country differences as well as plotting within-country changes over time to identify better performing countries. These countries are analysed qualitatively in a second step. We conduct expert interviews and examine the legal rules regarding building energy efficiency. Based on our exploratory analysis we generate a number of hypotheses. First, we suggest that regulatory standards, in conjunction with increased construction activity, can be effective in the long run. Second, the results suggest that carbon taxation represents an effective means for energy efficiency. |
| Keywords: | carbon-taxation,energy efficiency,energy conservation,climate policy,residential buildings |
| JEL: | H23 K32 Q58 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ifhwps:122018&r=all |
| By: | Iossa, Elisabetta; Rey, Patrick; Waterson, Michael |
| Abstract: | The paper studies competition for the market in a setting where incumbents (and, to a lesser extent, neighboring incumbents) benefi t from a cost advantage. The paper fi rst compares the outcome of staggered and synchronous tenders, before drawing the implications for market design. We find that the timing of tenders should depend on the likelihood of monopolization. When monopolization is expected, synchronous tendering is preferable, as it strengthens the pressure that entrants exercise on the monopolist. When instead other fi rms remain active, staggered tendering is preferable, as it maximizes the competitive pressure that comes from the other firms. |
| Keywords: | Dynamic procurement; incumbency advantage; local monopoly; competition; asymmetric auctions; synchronous contracts; staggered contracts |
| JEL: | D44 H40 H57 L43 L51 R48 |
| Date: | 2019–01 |
| URL: | http://d.repec.org/n?u=RePEc:tse:wpaper:33261&r=all |
| By: | Louis-Gaëtan Giraudet (CIRED - Centre International de Recherche sur l'Environnement et le Développement - CIRAD - Centre de Coopération Internationale en Recherche Agronomique pour le Développement - EHESS - École des hautes études en sciences sociales - AgroParisTech - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique, ENPC - École des Ponts ParisTech); Cyril Bourgeois (CIRED - Centre International de Recherche sur l'Environnement et le Développement - CIRAD - Centre de Coopération Internationale en Recherche Agronomique pour le Développement - EHESS - École des hautes études en sciences sociales - AgroParisTech - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique, ENPC - École des Ponts ParisTech, CNRS - Centre National de la Recherche Scientifique); Philippe Quirion (CIRED - Centre International de Recherche sur l'Environnement et le Développement - CIRAD - Centre de Coopération Internationale en Recherche Agronomique pour le Développement - EHESS - École des hautes études en sciences sociales - AgroParisTech - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique, CNRS - Centre National de la Recherche Scientifique) |
| Abstract: | Using an energy-economy model that integrates behavioural and technological detail, we evaluate the impact of key policies-energy efficiency subsidies (tax credits, zero-interest loans, reduced VAT, white certificates), the carbon tax and building codes-on residential energy demand for space heating in France. We find that the carbon tax is the most effective, yet most regressive, instrument. Taking into account all possible interactions among instruments, we find that they imply on average a 10% variation in policy effectiveness. Subsidies save energy at a cost of 0.05-0.08 euro per lifetime discounted kilowatt-hour, with a leverage of 0.9 to 1.4 in 2015, decreasing over time as the potential for energy-saving opportunities is being exhausted. Targeting subsidies towards low-income households, who tend to live in energy inefficient dwellings, increases leverage, thus reconciling economic efficiency and equity. The public cost of subsidies-3 billion euros in 2013-is outweighed by carbon tax receipts from 2025 onwards. Meeting the long-term energy saving targets set by the French Government however requires increasing subsidy rates and maintaining them through 2050. In particular, an order-of-magnitude discrepancy between simulated and observed numbers of zero-interest loans points to cognitive or strategic barriers that need to be removed to increase policy effectiveness. |
| Keywords: | residential buildings,space heating,energy-economy modelling,energy efficiency subsidies,carbon tax,fuel poverty |
| Date: | 2018–10–08 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-01890642&r=all |
| By: | Louis-Gaëtan Giraudet (CIRED - Centre International de Recherche sur l'Environnement et le Développement - CIRAD - Centre de Coopération Internationale en Recherche Agronomique pour le Développement - EHESS - École des hautes études en sciences sociales - AgroParisTech - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique, ENPC - École des Ponts ParisTech); Anna Petronevich (Banque de France - Banque de France - Banque de France); Laurent Faucheux (CIRED - Centre International de Recherche sur l'Environnement et le Développement - CIRAD - Centre de Coopération Internationale en Recherche Agronomique pour le Développement - EHESS - École des hautes études en sciences sociales - AgroParisTech - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique) |
| Abstract: | Basic principles of loan pricing predict that the interest rate charged for energy efficiency investment is lower than for conventional investment. We test this hypothesis using a unique dataset of posted interest rates retrieved on a weekly basis from the websites of 15 lending institutions covering the near totality of the French market for unsecured credit. Crucially, our data are immune from sorting bias based on borrower characteristics. We find that the interest rate spread between conventional and energy efficiency investment was negative in 2015 and turned positive in 2016. A similar switch occurred to the spread between home renovation investment and vehicle investment. These results together imply that loans for home energy renovation were consistently charged relatively high interest rates. This can be interpreted as a new barrier to energy efficiency, with adverse consequences for scaling up home energy renovation. One possible explanation is that lenders use project characteristics as a screening device of unobservable borrower characteristics. |
| Keywords: | energy efficiency gap,unsecured loan,home energy retrofit |
| Date: | 2018–10–08 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-01890636&r=all |
| By: | Frondel, Manuel; Kussel, Gerhard; Sommer, Stephan |
| Abstract: | To provide the basis for evaluating the effectiveness of price policies, this paper contributes to the literature by estimating the heterogeneity in the response of residential electricity demand to price increases across household types. Drawing on household panel data from the German Residential Energy Consumption Survey (GRECS) that span over nine years (2006-2014), we gauge the response of residential electricity demand to price increases on the basis of the dynamic Blundell-Bond estimator to account for potential simultaneity and endogeneity problems, as well as Nickell bias. Estimating short- and long-run price elasticities of -0.44 and -0.66, respectively, our results indicate that price measures may be effective in dampening residential electricity consumption, particularly in the long run. Yet, we also find that responses to price changes are very heterogeneous across household groups, an outcome that has important implications for policy-making. Most notably, we do not find any significant price response for lowincome households. |
| Keywords: | dynamic panel methods,instrumental variable approach |
| JEL: | C23 C26 D12 Q41 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:rwirep:793&r=all |
| By: | Andrea Geraci (European Commission JRC); Mattia Nardotto (KU Leuven); Tommaso Reggiani (Masaryk University); Fabio Sabatini (Sapienza University of Rome) |
| Abstract: | We study how the diffusion of broadband Internet affects social capital using two data sets from the UK. Our empirical strategy exploits the fact that broadband access has long depended on customers’ position in the voice telecommunication infrastructure that was designed in the 1930s. The actual speed of an Internet connection, in fact, rapidly decays with the distance of the dwelling from the specific node of the network serving its area. Merging unique information about the topology of the voice network with geocoded longitudinal data about individual social capital, we show that access to broadband Internet caused a significant decline in forms of offline interaction and civic engagement. Overall, our results suggest that broadband penetration substantially crowded out several aspects of social capital. |
| Keywords: | ICT, broadband infrastructure, networks, Internet, social capital, civic capital |
| JEL: | C91 D9 D91 Z1 |
| Date: | 2018–12 |
| URL: | http://d.repec.org/n?u=RePEc:mub:wpaper:19&r=all |
| By: | Heather Klemick; Elizabeth Kopits; Ann Wolverton |
| Abstract: | Engineering-based studies of energy efficiency often find that firms and consumers fail to adopt technologies that appear to provide net private benefits absent regulation. We examine the recent empirical literature on the extent to which expected future fuel costs are reflected in vehicle prices and therefore valued by consumers when making purchase decisions. These studies improve upon the prior literature due to their use of highly disaggregated panel data that allows for defensible identification strategies. These studies found that vehicle purchase prices reflect about 50 to 100 percent of future fuel expenses, assuming static consumer expectations about future gasoline prices and a discount rate of five to six percent. Recent regulatory analyses have estimated the benefits of more stringent vehicle standards implicitly assuming that no improvements in fuel economy will occur in the baseline, absent regulation. This assumption is consistent with consumers placing no value on future fuel costs when making vehicle purchase decision. The recent empirical evidence supports using a range of consumer valuation assumptions and applying this range consistently in the baseline and regulatory scenarios when modeling consumer purchase and firm investment decisions. |
| Keywords: | Consumer valuation, fuel economy, vehicle purchase decisions, benefit-cost analysis |
| JEL: | D12 D22 R41 Q58 |
| Date: | 2019–01 |
| URL: | http://d.repec.org/n?u=RePEc:nev:wpaper:wp201902&r=all |
| By: | Audrey Berry (CIRED - Centre International de Recherche sur l'Environnement et le Développement - CIRAD - Centre de Coopération Internationale en Recherche Agronomique pour le Développement - EHESS - École des hautes études en sciences sociales - AgroParisTech - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique) |
| Date: | 2018–10–16 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-01896838&r=all |
| By: | Rui Evangelista; Esmeralda A. Ramalho; João Andrade e Silva |
| Abstract: | Using a unique dataset containing information of around 256 thousand residential property sales, this paper discloses a clear sales premium for most energy efficient dwellings, which is more pronounced for apartments (13%) than for houses (5 to 6%). Cross-country comparisons support the finding that energy efficiency price premiums are higher in the Portuguese residential market than in central and northern European markets. Results emphasize the relevance of data issues in hedonic regression models. They illustrate how the use of appraisal prices, explanatory variables with measurement errors, and the omission of variables associated with the quality of the properties, may seriously bias energy efficiency partial effect estimates. These findings provide valuable information not only to policy-makers, but also to researchers interested in this area. |
| Keywords: | Portugal, energy efficiency, residential property market, hedonic price models, cross-country comparisons |
| JEL: | C51 C81 Q41 R21 R30 |
| Date: | 2019–01 |
| URL: | http://d.repec.org/n?u=RePEc:ise:remwps:wp0642019&r=all |
| By: | Eoin Broin (CIRED - Centre International de Recherche sur l'Environnement et le Développement - CIRAD - Centre de Coopération Internationale en Recherche Agronomique pour le Développement - EHESS - École des hautes études en sciences sociales - AgroParisTech - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique); Jens Ewald (GU - University of Gothenburg); Franck Nadaud (CIRED - Centre International de Recherche sur l'Environnement et le Développement - CIRAD - Centre de Coopération Internationale en Recherche Agronomique pour le Développement - EHESS - École des hautes études en sciences sociales - AgroParisTech - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique, CNRS - Centre National de la Recherche Scientifique); Érika Mata (IVL Swedish Environmental Research Institute); Magnus Hennlock (IVL Swedish Environmental Research Institute); Louis-Gaëtan Giraudet (ENPC - École des Ponts ParisTech, CIRED - Centre International de Recherche sur l'Environnement et le Développement - CIRAD - Centre de Coopération Internationale en Recherche Agronomique pour le Développement - EHESS - École des hautes études en sciences sociales - AgroParisTech - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique); Thomas Sterner (GU - University of Gothenburg) |
| Abstract: | We evaluate the impact of a variety of energy efficiency policies on residential energy demand in six major EU economies (France, Germany, Italy, Spain, UK and Sweden) from 1990 to 2015. We find that both financing policies, such as loan facilities and subsidies, and building codes, as approximated by U-Values, have been effective at reducing energy demand for space heating. We additionally find the short term price and income effects to be inelastic, with elasticity coefficients of-0.2 and 0.2 respectively. |
| Date: | 2019–01–17 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-01985269&r=all |
| By: | Frondel, Manuel; Kussel, Gerhard; Sommer, Stephan; Vance, Colin |
| Abstract: | Given the rapid expansion of wind power capacities in Germany, this paper estimates the effects of wind turbines on house prices using real estate price data from Germany's leading online broker. Employing a hedonic price model whose specification is informed by machine learning techniques, our methodological approach provides insights into the sources of heterogeneity in treatment effects. We estimate an average treatment effect (ATE) of up to -7.1% for houses within a one-kilometer radius of a wind turbine, an effect that fades to zero at a distance of 8 to 9 km. Old houses and those in rural areas are affected the most, while home prices in urban areas are hardly affected. These results highlight that substantial local externalities are associated with wind power plants. |
| Keywords: | wind power,hedonic price model |
| JEL: | Q21 D12 R31 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:rwirep:791&r=all |