• Energy Research

This editorial paper tackles the issue of the consumer attitudes toward energy reduction and changing energy consumption behaviors. This topic is of special relevance today as Europe faces an unprecedented energy crisis as a result of diverting from Russian supplies of oil and gas due to the war in Ukraine. For many years now, Europe has relied upon cheap and affordable Russian oil and gas (in fact, the European Green Deal and the strategy for the decarbonization of the economy by 2030 were indirectly based on it), but the transition to the renewable future now appears to be jeopardized. As energy prices are soaring globally, it is not yet clear whether this would have an effect on significantly changing consumer behavior and increasing energy efficiency and security as many consumers are reluctant to change their old habits and are used to having their energy on demand and for any possible occasion. However, changing energy consumption behaviors would be beneficial not only for handling the current energy crisis but also for setting the long-term trends with respect to energy saving, which is crucial for fighting global warming and climate change while sustaining economic growth.

Abstract Given the interest in the commercialization of affordable, clean energy technologies, we examine the prospects of solar photovoltaics (PV). We consider the question of how to transition to a meaningful percentage of solar energy in a sustainable manner and which policies are most effective in accelerating adoption. This paper develops a stochastic dynamic model of the adoption of solar PV in the residential and commercial sector under two sources of uncertainty – the price of electricity and cost of solar. The analytic results suggest that a high rate of innovation may delay adoption of a new technology if the consumer has rational price expectations. We simulate the model across alternative rates technological change, electricity prices, subsidies and carbon taxes. It is shown that there will be a displacement of incumbent technologies and a widespread shift towards solar PV in under 30 years – and that this can occur without consumer incentives and carbon pricing. We show that these policies have a modest impact in accelerating adoption, and that they may not be an effective part of climate policy. Instead, results demonstrate that further technological change is the crucial determinant and main driver of adoption. Further, results indicate that subsidies and taxes become increasingly ineffective with higher rates of technological change.

AbstractLegislation passed in 2007 by the U.S. Congress increased by about 1.3 billion bushels the net amount of corn required to be processed annually into ethanol for motor‐fuel use. We estimate that corn prices were about 30% higher from 2006 to 2014 than they would have been without this demand increase. We develop a partially identified structural vector autoregression model. Our identification strategy is unique in the literature because it enables us to estimate the effects of transitory shocks, such as weather, separately from the effects of persistent shocks, such as the increased ethanol mandate. Moreover, by only partially identifying our model, we show how to generate robust conclusions without strong identifying assumptions.

Currently, there is a growing number of studies related to assessing the cost-effectiveness of renewable energy projects around the world. This topic is also very relevant for the Russian energy market that is otherwise dominated by oil and gas. The Russian Ministry of Energy forecasts that local power plants running on the renewable energy sources (RES) may not become economically efficient until 2025 or later. However, a research question arises: Is it possible to effectively implement RES projects in Russia without any state support? In order to answer this question, the authors need to assess the economic feasibility of seven scenarios for the construction of a solar power plant in the Orenburg region of Russia. The methodological basis of this work is the widely used in the energy sector classic method of investment analysis based on the calculation of discounted indicators: net present value (NPV), payback period (DPP) and internal rate of return (IRR) of the project. All our calculations are based on industry-specific initial capital investment estimates, energy storage equipment costs, and related annual operating costs. This led to the development of the scenarios on the basis of an analysis of the features of electricity and capacity generation in the Orenburg region, the existing options for joining the trading system of the energy market, energy storage applications, as well as the availability of the Russian government support and funding for the solar energy projects. Our results demonstrate that the economic feasibility of the development of renewable energy in Russia can become a reality. Out of the seven scenarios, three yielded the positive economic outcome (among them there were the two project scenarios without government support). These two projects featured the sale of electricity in retail markets and the installation of an additional energy storage system, despite an almost twofold increase in capital investments. The projects in question achieved the best economic results according to the three calculated criteria. In particular, the scenario that provided for the work on the retail market directly to the energy consumer receives an NPV of more than 1.5 times higher than other projects, an IRR of 10% and pays off at least 3 years faster. Achieving a positive economic result in the wholesale market was possible only in case of state support for the project. In addition, this scenario of the project numerically reached almost identical indicators, as in the case of selling energy on the retail market in the region where the power facility operates: NPV is almost 127 million rubles, IRR is within 13.9%, and DPP is 15 years. Other scenarios that do not provide for the use of energy storage systems or do not have state support for working in the wholesale market are not self-sustaining even during the 25-year life of energy equipment. These results might have practical significance and will be used in developing an approach to creating a profile of regions in terms of the advancements of renewable energy, as well as in developing strategies for the incentives of this sector in Russia.

Our paper focuses on the electricity consumption in the EU countries and smart meters that are gaining growing popularity and widely used by households and businesses for measuring power consumption and helping to reduce the costs of energy. We use the data collected by the Commission for Energy Regulation in the Republic of Ireland in 2009–2011. The trial included two survey questionnaires (pre-trail and post-trial) administered over the telephone and containing both quantitative data (e.g. Likert scales, dummies, selections, etc.) and open-ended questions. In total, 4232 respondents (individual households) involved in pre-trial and 3423 households involved in post-trial. The second questionnaire was administered 12 months after the first one with the same households participating in the trial. Our methodology involves the implementation of various alternative statistical specifications that allow us to test our hypotheses first by using simple binary form of logistic regression and then by employing its extensions. Our results show that households keen on changing their electricity consumption with the help of smart meters (and perhaps the new, even smarter grids of the future) are also those who would change their consumption patterns in order to have the positive impact on environment. Moreover, it appeared that saving on energy might be more relevant for people who do not have their own place to live and are renting their accommodation. Our findings might be relevant for the stakeholders and policy-makers dealing with setting up the new energy policy framework aimed at tackling the increasing use of energy and energy efficiency and paving the way in the direction of the low-carbon future.