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The 2003 Indian Electricity Act incentivizes captive power production through open access in an attempt to harness all sources of generation. Yet, we observe that only some firms self-generate while others do not. In this paper we give a transaction cost explanation for such divergent behavior. Using a primary survey of 107 firms from India, we construct a distinct variable to measure the transaction-specificity of electricity use. The ‘make or buy’ decision is then econometrically tested using probit model. Results are highly responsive to transaction-specificity and the likelihood of captive power generation is positively related to it. At the industrial level, this explains why food and chemical firms are more likely to make their own electricity. Since the burden of poor grid supply is highest on smaller sized and high transaction-specific firms, the grid access policies need to account for firm-level characteristics if government wants to incentivize captive power generation.

Abstract As it has long been debated who is a front-runner and who is a laggard state in terms of environmental protection it is rather surprising that the topic has received rather scant attention as far as quantitative, large-n research endeavours are concerned. Of course, there is a broad literature on the topic. However, existing studies have shortcomings. The criteria on which the assessments rely are often neither equivalent cross-nationally nor are they communicated clearly enough (i.e., not transparent). Although ambitious efforts have been invested to rank countries in terms of their environmental performance, little systematic research exists that clearly determines leaders and laggards in terms of their policies (policy performance) and states’ ranking, accordingly. To the best of our knowledge no empirical study has so far conducted a comprehensive and quantitative leader-laggard assessment policy analysis. Against this backdrop, we aim to provide such a paper. We especially strive to test the validity of “common knowledge” classifications or rankings derived from assessments in the literature. We demonstrate that while some known frontrunner states are indeed leaders if assessed from a broader policy data perspective, other countries commonly assigned a leader role find themselves in a lower position instead. In addition, some nations commonly excluded from the frontrunners are located unexpectedly high in the rankings. Even leader-laggard reversals occur if our results would be compared to existing classifications. Most importantly, the analyses show a considerable temporal dynamic. While often claimed or assumed, this has not been proven as clearly until now.

This paper empirically investigates factors driving the adoption of energy-efficiency measures by small and medium-sized enterprises (SMEs). Our analyses are based on cross-sectional data from SMEs which participated in a German energy audit program between 2008 and 2010. In general, our findings appear robust to alternative model specifications and are consistent with the theoretical and still scarce empirical literature on barriers to energy-efficiency in SMEs. More specifically, high investment costs, which are captured by subjective and objective proxies, appear to impede the adoption of energy-efficiency measures, even if these measures are deemed profitable. Similarly, we find that lack of capital slows the adoption of energy-efficiency measures, primarily for larger investments. Hence, investment subsidies or soft loans (for larger investments) may help accelerating the diffusion of energy-efficiency measures in SMEs. Other barriers were not found to be statistically significant. Finally, our findings provide evidence that the quality of energy audits affects the adoption of energy-efficiency measures. Hence, effective regulation should involve quality standards for energy audits, templates for audit reports or mandatory monitoring of energy audits.

Abstract The increase of intermittent electricity generation from renewable energy sources (RES) requires more flexibility from the demand side. Different applications and processes exist, which can provide Demand Response (DR) potential by shifting or shedding their load. The availability of most applications depend on the ambient temperature and/or time of day. Furthermore, their commitment is limited by technical restrictions, e.g. shifting time. In this paper, the availability and the flexibility of DR is analysed to investigate its role for the system integration of RES in Germany. In a first step, DR potential on an hourly basis is calculated for today and for future years. In a second step, the use of DR in an electricity system with different RES shares is investigated with an electricity market model. Results show, DR reduces RES curtailment. However, due to its limited availability and flexibility, it cannot integrate high amount of RES surplus over a longer period. Instead, it balances short-term fluctuation of the residual load curve. The exploited potential varies between DR applications because of their different characteristics. Therefore, focused (on selected applications) rather than broad development of DR potential is needed to shape the future energy system in a cost efficient way.

Abstract Governments and energy operators are often confronted with local residents’ protest against the construction of new high-voltage overhead transmission lines, negative risk expectations, and a lack of public support. A frequently discussed strategy for dealing with these issues is to build underground cables instead of overhead lines. So far, however, there is not much empirical evidence of whether substituting overhead lines by underground cables actually reduces protest or affects public risk expectations and attitudes. This study contributes to filling this gap by comparing residents’ risk expectations, attitudes, and protest behavior observed at two grid expansion sites in Germany by means of a quasi-experiment. At the time when the data were collected, both grid expansion projects–an overhead line project in Lower Saxony and an underground cable project in Hesse–were at the same stage of the legally defined planning and approval procedure. After controlling for various potential confounders, we obtained results revealing that there are no differences in the risk expectations, attitudes, and protest behavior of residents interviewed at the two project sites, or only marginal ones. Hence, our findings do not support the assumption that building underground cables necessarily improves the situation with regard to risk expectations, attitudes, and protest behavior.

Abstract As analysis of the energy situation in rural areas in developing countries has shown that the major cause of the prevailing energy crisis is the shortage of organic fuel (biomass). To cope with this crisis, therefore, technologies must be sought either to enhance biomass resources or to substitute for them. As the majority of the population in rural areas are poor, the technologies applied should not only meet energy needs; they must also be geared to particular economic and sociocultural conditions. Technically efficient, decentralized systems for the utilization of renewable energy can help in this by raising the availability of organic fuel resources (biomass) and meeting the demand for higher quality energy. Despite their advantages, however, there has as yet been no widespread dissemination of these technologies. The main reasons for this are discussed, and some precepts are presented upon which, it is argued, a strategy for overcoming these obstacles should be based.

Abstract Emissions scenarios used by the Intergovernmental Panel on Climate Change (IPCC) are based on detailed energy system models in which demographics, technology and economics are used to generate projections of future world energy consumption, and therefore, of greenhouse gas emissions. We propose in this paper that it is useful to look at a qualitative model of the energy system, backed by data from short- and medium-term trends, to gain a sense of carbon emission bounds. Here we look at what may be considered a lower bound for 21st century emissions given two assumptions: first, that extractable fossil-fuel resources follow the trends assumed by “peak oil” adherents, and second, that no climate mitigation policies are put in place to limit emissions. If resources, and more importantly, extraction rates, of fossil fuels are more limited than posited in full energy-system models, a supply-driven emissions scenario results; however, we show that even in this “peak fossil-fuel” limit, carbon emissions are high enough to surpass 550 ppm or 2 °C climate protection guardrails. Some indicators are presented that the scenario presented here should not be disregarded, and comparisons are made to the outputs of emission scenarios used for the IPCC reports.