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In the UK electricity market, generators are obliged to produce part of their electricity with renewable energy resources in accordance with the Renewable Obligation Order. Since 2009 technology banding has been added, meaning that different technologies are rewarded with a different number of certificates. We analyze these two different renewable obligation policies in a mathematical representation of an electricity market with random availabilities of renewable generation outputs and random electricity demand. We also present another, alternative, banding policy. We provide revenue adequate pricing schemes for the three obligation policies. We carry out a simulation study via sampling. A key finding is that the UK banding policy cannot guarantee that the original obligation target is met, hence potentially resulting in more pollution. Our alternative provides a way to make sure that the target is met while supporting less established technologies, but it comes with a significantly higher consumer price. Furthermore, as an undesirable side effect, we observe that a cost reduction in a technology with a high banding (namely offshore wind) leads to more CO2 emissions under the UK banding policy and to higher consumer prices under the alternative banding policy.

This paper aims at characterizing the conditions of wind power deployment in order to infer a carbon price level that would provide wind power with comparable advantage over fossil fuel technologies as effective wind support policies. The analysis is conducted on Danish data from 2000 to 2010, i.e. after market liberalization took place in 2000. Probit technique is used to analyze the connection of new turbines to the grid each month and tobit analysis is employed on the additional capacity installed monthly. I find that the level and type of the support policy are the dominant drivers of deployment. Electricity price impact is not visible. The investment cost impact is not significant either, but the effect of the interest rate, although not visible in the probit analysis, is significant in the tobit analysis. The number of turbines already installed, that is taken as a proxy for the sites availability, does not have any significant effect either. A feed-in tariff significantly brings more wind power in than a premium policy. The fact that the support policy is a feed-in tariff rather than a premium increases the additional capacity installed monthly by up to several tens MW. The additional capacity installed monthly increases by up to thousand kW for each additional e/MWh of support. If the policy is a premium, I find that 24 e/MWh of support in addition to electricity price is needed to observe the connection of new turbines to the grid with a 0.5 probability. I convert this support level into a carbon price of 28 e/ton if wind power competes with coal, and 50 e/t if it competes with gas.

This paper examines the interrelationships between energy consumption, foreign direct investment and economic growth using dynamic panel data models in simultaneous-equations for a global panel consisting of 65 countries. The time component of our dataset is 1990-2011 inclusive. To make the panel data analysis more homogenous, we also investigate this interrelationship for a number of sub-panels which are constructed based on the income level of countries. In this way, we end up with three income panels; namely, high income, middle income, and low income panels. In the empirical part, we draw on growth theory and augment the classical growth model, which consists of capital stock, labor force and inflation, with foreign direct investment and energy. Generally, we shows mixed results about the interrelationship between energy consumption, FDI and economic growth.

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 A recent article in this journal claimed to assess the socio-technical potential for onshore wind energy in Europe. We find the article to be severely flawed and raise concerns in five general areas. Firstly, the term socio-technical is not precisely defined, and is used by the authors to refer to a potential that others term as merely technical. Secondly, the study fails to account for over a decade of research in wind energy resource assessments. Thirdly, there are multiple issues with the use of input data and, because the study is opaque about many details, the effect of these errors cannot be reproduced. Fourthly, the method assumes a very high wind turbine capacity density of 10.73 MW/km2 across 40% of the land area in Europe with a generic 30% capacity factor. Fifthly, the authors find an implausibly high onshore wind potential, with 120% more capacity and 70% more generation than the highest results given elsewhere in the literature. Overall, we conclude that new research at higher spatial resolutions can make a valuable contribution to wind resource potential assessments. However, due to the missing literature review, the lack of transparency and the overly simplistic methodology, Enevoldsen et al. (2019) potentially mislead fellow scientists, policy makers and the general public.

In this paper, we identify key drivers and barriers for the adoption of building energy retrofits in Germany, which is promoted by public policy as an important measure to address the future challenges of climate change and energy security. We analyze data from a 2009 survey of more than 400 owner-occupiers of single-family detached, semidetached, and row houses in Germany, that was conducted as a computer-assisted personal interview (CAPI). In the survey, respondents were asked directly for reasons for and against retrofitting their homes, but also faced a choice experiment involving different energy retrofit measures. Overall, both the descriptive and econometric results show that house owners who are able to afford it financially, for whom it is profitable, and for whom there is a favorable opportunity, are more likely to undertake energy retrofit activities. Based on an estimated mixed logit error component model, we also simulate the incentive effects of different policy options, such as public subsidies and energy tax increases.

Abstract Data on European residential space cooling demands are scarce and often of poor quality. This can be concluded from a review of the Comprehensive Assessments on the energy efficiency potential in the heating and cooling sector performed by European Union Member States under Art. 14 of the Energy Efficiency Directive. This article estimates the potential space cooling demands in the residential sector of the EU and the resulting impact on electricity generation and supply systems using the United States as a proxy. A georeferenced approach was used to establish the potential residential space cooling demand in NUTS-3 regions of EU. The total potential space cooling demand of the EU was estimated to be 292 TW h for the residential sector in an average year. The additional electrical capacity needed was estimated to 79 GW. With proper energy system development strategies, e.g. matching capacity of solar PV with cooling demand, or introduction of district cooling, the stresses on electricity system from increasing cooling demand can be mitigated. The estimated potential of space cooling demand, identified in this paper for all EU Members States, could be used while preparing the next iteration of EU MS Comprehensive Assessments or other energy related studies.