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on Regulation |
| By: | Cloete, Schalk; Ruhnau, Oliver; Hirth, Lion |
| Abstract: | The hydrogen economy is currently experiencing a surge in attention, partly due to the possibility of absorbing wind and solar energy production peaks through electrolysis. A fundamental challenge with this approach is low utilization rates of various parts of the integrated electricity-hydrogen system. To assess the importance of capacity utilization, this paper introduces a novel stylized numerical energy system model incorporating the major elements of electricity and hydrogen generation, transmission and storage, including both "green" hydrogen from electrolysis and "blue" hydrogen from natural gas reforming with CO2 capture and storage (CCS). Balancing renewables with electrolysis results in low utilization of electrolyzers, hydrogen pipelines and storage infrastructure, or electricity transmission networks, depending on whether electrolyzers are co-located with wind farms or demand centers. Blue hydrogen scenarios face similar constraints. High renewable shares impose low utilization rates of CO2 capture, transport and storage infrastructure for conventional CCS, and of hydrogen transmission and storage infrastructure for a novel process (gas switching reforming) that enables flexible power and hydrogen production. In conclusion, both green and blue hydrogen can facilitate the integration of wind and solar energy, but the cost related to low capacity utilization erodes much of the expected economic benefit. |
| Keywords: | Hydrogen economy,Energy system model,Decarbonization,CO2 capture and storage,Variable renewable energy |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:esprep:222474&r=all |
| By: | Raju, Arun; Vu, Alexander |
| Abstract: | Significant electrification of the transportation sector is necessary for the State to achieve several important greenhouse gas (GHG) reduction and renewable energy targets. The State’s electricity generation and transmission capabilities must increase in order to meet the demand generated by increasing levels of fleet electrification. The increased demand, combined with the Renewables Portfolio Standard (RPS) targets will require significantly increased energy storage capabilities that can accommodate demand while integrating renewable power sources into the grid. This project evaluated the mid to long-term energy storage needs of the electric grid for select fleet electrification scenarios. The analysis was conducted using Resolve, a power systems planning model, for RPS targets of 60% and 80% by 2030 and 2042 respectively. The results show that Electrical Energy Storage (EES) capacity requirements depend on a number of parameters, including Demand Response (DR), Electric Vehicle (EV) charging flexibility, and total EV population. The EES requirements for the 60% RPS scenarios range from 3.9 to 4.3 GW while for the 80% RPS scenarios, the range is from 18.5 to 20.4 GW. View the NCST Project Webpage |
| Keywords: | Engineering, Energy Storage Capacity, Electrification, Energy Storage |
| Date: | 2020–07–01 |
| URL: | http://d.repec.org/n?u=RePEc:cdl:itsdav:qt4t918623&r=all |
| By: | Ramadorai, Tarun; Zeni, Federica |
| Abstract: | We use data from the Carbon Disclosure project (CDP) to measure firms' beliefs about climate regulation, their plans for future abatement, and their current actions on mitigating carbon emissions. These measures vary both across firms and time in a manner that is especially pronounced around the Paris climate change agreement announcement. A simple dynamic model of carbon abatement with a firm exposed to a certain future carbon levy, facing a trade-off between emissions reduction and capital growth, and convex emissions abatement adjustment costs cannot explain the data. A more complex two-firm dynamic model with both information asymmetry across firms and reputational concerns fits the data far better. Our findings imply that firms' abatement actions depend greatly on their beliefs about climate regulation, and that both informational frictions and reputational concerns can amplify responses to climate regulation, increasing its effectiveness. |
| Keywords: | abatement; Carbon Emissions; climate change; climate regulation; Dynamic Models; information asymmetry; reputation |
| JEL: | G31 G38 Q52 Q54 |
| Date: | 2019–11 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:14155&r=all |
| By: | Jens-Uwe Franck; Dimitrios Linardatos |
| Abstract: | As of January 2020, Section 58a of the German Payment Services Supervisory Act (PSSA) provides a right for payment service providers and e-money issuers to access technical infrastructure that contributes to mobile and internet-based payment services. This right of access is intended to promote technological innovation and competition in the consumers’ interests in having a wide choice among payment services, including competing solutions for mobile and internet-based payments. The provision has been dubbed ‘Lex Apple Pay’ as it seems to have been saliently motivated by the objective to give payment service providers the right of direct access to the NFC interfaces of Apple’s mobile devices. In enacting Section 58a PSSA, the German legislature has rushed forwards, overtaking the EU Commission’s ongoing competition investigation into Apple Pay as well as the pending reform of the German Competition Act, which is aimed precisely at operators of technological platforms, which enjoy a gatekeeper position. This article explores the scope of application and the statutory requirements of this right of access as well as available defences and possible legal barriers. We point out that, to restore a level playing field in the internal market, the natural option would be to further harmonize EU payment services regulation, including the availability of a right of access to technical infrastructure for mobile and internet-based payment services and e-money issuers. |
| Keywords: | ‘Lex Apple Pay’; Technology platforms; Antitrust; Payment Services Regulation; Mobile Payment; Access to NFC interfaces; Wallet Apps; Internal Market Regulation |
| JEL: | K21 K22 |
| Date: | 2020–06 |
| URL: | http://d.repec.org/n?u=RePEc:bon:boncrc:crctr224_2020_173v2&r=all |
| By: | Paul Belleflamme; Martin Peitz |
| Abstract: | A monopolist sells a network good to a set of heterogeneous users who all care about total participation. We show that the provider of the network good effectively becomes a two-sided platform if it can condition prices on some user characteristics. This still holds true if the network operator cannot observe consumer characteristics but induces user self-selection when it offers screening contracts. In our setting, all incentive constraints are slack. The use of freemium strategies emerges as a special case of versioning. Here, a base version is offered at zero price and a premium version at a positive price. Overall, the paper illustrates the close link between price discrimination in the presence of a network good and pricing by a two-sided platform. |
| Keywords: | Network goods, Two-sided markets, Platform pricing, Group pricing, Menu pricing |
| JEL: | D62 L12 L82 L86 |
| Date: | 2020–06 |
| URL: | http://d.repec.org/n?u=RePEc:bon:boncrc:crctr224_2020_188&r=all |
| By: | Marco Magnani (Department of Economics and Management, University of Padova, Italy and Italian Regulatory Authority for Energy, Network and the Environment (ARERA)); Fabio M. Manenti (Department of Economics and Management, University of Padova, Italy); Paola Valbonesi (Department of Economics and Management, University of Padova, Italy and Higher School of Economics, National Research University, (HSE-NRU), Moscow) |
| Abstract: | Following Shy (2002), we develop a simple model to determine consumers’ switching costs in the liberalized residential electricity market. By exploiting an original dataset on electricity prices and consumers in Italy, we use the theoretical predictions to measure consumers’ switching costs across the three main firms acting in the liberalized market. Our empirical results confirm the theoretical prediction that firms in the liberalized market are posting lower prices than the regulated one. Consumer decisions are found to be heavily affected by switching costs; our results show that the number of consumers in the regulated market negatively influences them. Switching costs appear to be particularly relevant for the incumbent firm while they are of lower magnitude for competitors – a result consistent with reputation playing a significant role in influencing customer switching. |
| Keywords: | Electricity Retail Markets, Liberalization in Electricity Markets, Switching Costs, Consumer Behaviour |
| JEL: | D12 L94 L98 |
| Date: | 2020–07 |
| URL: | http://d.repec.org/n?u=RePEc:pad:wpaper:0258&r=all |
| By: | Yannis Kerkemezos (CPB Netherlands Bureau of Economic Policy Analysis); Bas Karreman (Erasmus University Rotterdam) |
| Abstract: | We empirically test the hypothesis that the discounts offered by firms to consumers who purchase tickets in advance increase with the intensity of competition. We develop a new measure of competition for which we use the proximity (in departure time) of a given flight to its competitors to infer the intensity of competition and estimate the impact of competition on advance purchase discounts (APDs) and the dynamic pricing of airlines by exploiting plausibly exogenous changes in the flight schedules of airlines that occur during the booking period. We find strong support for the theoretical prediction that APDs are larger when the intensity of competition is higher using a sample of airline fare quotes. Our results also suggest that airline price dispersion increases with the intensity of competition. |
| Keywords: | Dynamic pricing, advance purchase discounts, price discrimination, oligopoly, airlines |
| JEL: | D43 D22 L1 L9 |
| Date: | 2020–07–18 |
| URL: | http://d.repec.org/n?u=RePEc:tin:wpaper:20200042&r=all |
| By: | Fitiwi, Desta; Lynch, Muireann Á.; Bertsch, Valentin |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:esr:wpaper:wp647&r=all |
| By: | Nathan DeMaagd (University of Hawaii at Manoa, Department of Economics); Michael J. Roberts (University of Hawaii at Manoa, Department of Economics) |
| Abstract: | Many homes in Hawaii use cesspools and other on-site disposal systems (OSDS) instead of the municipal sewer system. Because bills combine water and waste-water services, and homes with OSDS do not pay for sewer service, OSDS residences have lower monthly bills compared to those with sewer-connected systems. We use this price difference in conjunction with selection on observables and matching methods to estimate the price elasticity of residential water demand. Matching methods indicate that OSDS residences have systematically different characteristics than those with sewer-connected systems, suggesting an imperfect natural experiment. We show traditional methods lead to biased elasticity estimates, even though they are robust when selecting on observables using OLS with or without census tract fixed effects, census block fixed effects, and non- parametric controls trained using cross-validation and a lasso. We then estimate demand using a limited sample of OSDS homes that have sewer-connected neighbors, which gives estimates from -0.06 to -0.08. The neighbors have no systematic differences in other characteristics and estimates are robust to further selection on observables, but the sample differs slightly from population means in their physical characteristics. These more defensible demand elasticity estimates, however, are much more inelastic than estimates not based on comparison of neighbors and are generally more inelastic than previous studies. Taken collectively, the results highlight the susceptibility of demand estimates to omitted variable bias. Highly inelastic water demand suggests that considerably higher prices may be needed for sustainable water management, creating some practical challenges under current regulatory guidance. We also use our results to estimate willingness to accept a tax credit for upgrading an OSDS system, a targeted policy that aims to improve water quality. Regardless of whether consumers respond to average or marginal prices, our estimates imply that the tax credit is far too small to induce voluntary participation in the program. Additional consumer welfare topics are also considered. |
| Keywords: | water demand; elasticity; consumer welfare |
| JEL: | Q21 Q25 |
| Date: | 2020–07 |
| URL: | http://d.repec.org/n?u=RePEc:hai:wpaper:202019&r=all |
| By: | Kenneth Gillingham; Bryan Bollinger |
| Abstract: | A growing literature points to the effectiveness of leveraging social interactions and nudges to spur adoption of pro-social behaviors. This study investigates a large-scale behavioral intervention designed to actively leverage social learning and peer interactions to encourage adoption of residential solar photovoltaic systems. Municipalities choose a solar installer offering group pricing, and undertake an informational campaign driven by volunteer ambassadors. We find a causal treatment effect of 37 installations per municipality from the campaigns, and no evidence of harvesting or persistence. The intervention also lowers installation prices. Randomized controlled trials based on the intervention show that selection into the program is important while group pricing is not. Our results suggest that the program provided economies of scale and lowered consumer acquisition costs, leading to low-cost emissions reductions. |
| Keywords: | non-price interventions, social learning, renewable energy, solar photovoltaic panels, technology adoption, natural experiment |
| JEL: | D03 L22 Q42 Q48 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_8434&r=all |
| By: | Lisa Bagnoli; Salvador Bertomeu; Antonio Estache; Maria Vagliasindi |
| Abstract: | The paper surveys the evidence for developing countries of the relevance for the poor of the ownership choice (i.e. public vs. private vs. mixed) in electricity and water & sanitation utilities. It shows that most of the still widely quoted evidence is outdated (based on pre-2010 data) and fails to reflect the longer term evolution of the ownership choices of the 1990s. The most recent data suggests that it matters less to social outcomes than regulatory governance and market structure. It makes the case for an ownership choice more coherent with the context and capacity constraints of countries and sectors. It also identifies significant knowledge gaps on the ways in which social considerations can be addressed under any ownership type and this defines a new research agenda. |
| JEL: | F63 H54 H57 L51 L90 |
| Date: | 2020–07 |
| URL: | http://d.repec.org/n?u=RePEc:eca:wpaper:2013/309240&r=all |
| By: | Timmons, Shane; McElvaney, Terence; Lunn, Pete |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:esr:wpaper:wp641&r=all |
| By: | Craig Garthwaite; Christopher Ody; Amanda Starc |
| Abstract: | High and increasing hospital prices have led to calls for price regulation. If prices are high because of consolidation, regulating prices could enhance welfare. However, high prices could also reflect increased willingness to pay by privately insured consumers for clinical and non-clinical quality. If so, regulating prices could reduce quality. We present a model of strategic quality choice where hospitals make quality investments to increase private revenue. We confirm the model's predictions across numerous quality measures including patient satisfaction, hospital processes, risk adjusted mortality, the revealed preferences of current Medicare patients, technology adoption, physician quality, and ED wait times. |
| JEL: | I11 |
| Date: | 2020–06 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:27440&r=all |
| By: | Riccardo Camboni (University of Padova, Italy; OIPE); Alberto Corsini (Université Côte d'Azur, France; CNRS, GREDEG; OIPE); Raffaele Miniaci (University of Brescia; OIPE); Paola Valbonesi (University of Padova, Italy; OIPE) |
| Abstract: | We use the nearest neighbour propensity score matching to link dwellings holding Energy Performance Certificates (EPCs) in the Italian province of Treviso with information on the socio-economic characteristics of households most likely to inhabit them. We construct a database of 17,405 dwellings for which information on standardized energy needs is matched to data on (potential) inhabitants and their imputed income, based respectively on census records and survey data. Our analysis shows that EPC registers can be exploited to investigate how income and housing conditions affect fuel poverty and to identify municipal areas with higher fuel poverty risk. Our findings highlight that when designing interventions to reduce fuel poverty, policymakers should target households based not only on their income but also on type of heating fuel, and on efficiency and the size of their accommodation. |
| Keywords: | Fuel Poverty, Energy Performance Certificates (EPCs), Building and dwelling Efficiency, Energy: Government Residential Policy |
| JEL: | C21 I32 Q48 |
| Date: | 2020–07 |
| URL: | http://d.repec.org/n?u=RePEc:gre:wpaper:2020-33&r=all |
| By: | Peitz, Martin |
| Abstract: | This report provides an overview on the economics of attention intermediaries. It addresses the following questions: What are the economics of attention intermediaries? For competition policy, how should markets be defined and market power of attention intermediaries be assessed? What theories of harm in merger control and abuse of dominance possibly apply to attention intermediaries? The report also touches on consumer protection policies and other regulatory issues. |
| Keywords: | attention intermediaries,platforms,market power,regulation,digital markets |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:20035&r=all |
| By: | Andreas Gerster; Mark A. Andor; Lorenz Götte |
| Abstract: | Novel information technologies hold the promise to improve decision making. In the context of smart metering, we investigate the impact of providing households with appliance-level electricity feedback. In a randomized controlled trial, we find that the provision of appliance-level feedback creates a conservation effect of an additional 5% relative to a group receiving standard (aggregate) feedback. These conservation effects are largely driven by reductions in electricity use of 10% to 15% during peak hours. Consumers with appliance-level feedback hold more accurate beliefs about the energy consumption of different appliances, consistent with the mechanism in our accompanying model. Our result suggests that conservation effects from a smart-meter rollout will be much larger if appliance-level feedback can be provided. Based on a sufficient statistics approach, we estimate that appliance-level feedback could raise consumer surplus by about 570 to 600 million Euro per annum for German households. |
| Keywords: | Randomized controlled trial, disaggregation, consumption feedback, energy conservation |
| JEL: | D12 D83 L94 Q41 |
| Date: | 2020–06 |
| URL: | http://d.repec.org/n?u=RePEc:bon:boncrc:crctr224_2020_182&r=all |
| By: | Alves, Pedro Jorge; Emanuel, Lucas; Pereira, Rafael Henrique Moreas |
| Abstract: | Reducing road fatalities is a key policy concern in several countries. Nonetheless, there is limited evidence on whether highway concessions and Public Private Partnerships (PPP) can bring road safety benefits, despite the growing number of countries adopting this policy to finance and manage road infrastructure. In this paper, we use a difference-in-differences approach to examine the causal effect of highway concessions on road safety outcomes using daily crash data from Brazilian Federal highways between 2007-2017. We find that concessions significantly improve road safety measures, including fatality rates and the number of people and vehicles involved in crashes. On average, procured roads had 15 fewer deaths then publicly managed highways for every 1000 crashes each year, and avoided 16 thousand deaths between 2007-2017. Moreover, these effects are marginally larger for every additional year of treatment but only become statistically significant a few years after the concession implementation. Finally, our results suggest that including safety-based incentives in concession contracts can substantially improve road safety performance |
| Date: | 2020–07–15 |
| URL: | http://d.repec.org/n?u=RePEc:osf:socarx:rqew3&r=all |
| By: | Eleftheria Triviza |
| Abstract: | This article analyses how consumers' habit formation affects firms' pricing policies. We consider both sophisticated consumers, who realize that their current consumption will affect future consumption, and naive consumers, who do not. The optimal contract for sophisticated consumers is a two-part tariff. The main result is that under naive habit formation, the optimal pricing pattern is a three-part tariff; namely a fixed fee, with some units priced below cost --- and after their end --- pricing above marginal cost. This holds both under symmetric and asymmetric information. |
| Keywords: | three-part tariff, nonlinear pricing, naivete, habit formation |
| JEL: | L11 D11 D42 D82 |
| Date: | 2019–06 |
| URL: | http://d.repec.org/n?u=RePEc:bon:boncrc:crctr224_2019_098v1&r=all |