energy market liberalization and renewable energy policies in oecd countries abstract this paper investigates the effect of energy liberalization compared to other drivers on policies that support renewable energy in a long panel of oecd countries we estimate this effect by accounting for the endogeneity of liberalization related to joint decisions within a country s energy strategy using regulation in other industries as instruments we find that energy liberalization increases public support for renewable energy the effect of liberalization is the second largest after the effect of per capita income and is mostly driven by reductions in entry barriers while the effect of privatization is unclear this finding suggests that a reduction in the monopolistic power of state owned utilities has a positive effect on renewable energy policies when various types of actors are ensured access to the grid instead of it being provided to only a few large private firms

optimal diversity of renewable energy alternatives under multiple criteria an application to the uk we propose a multi criteria analysis of alternative combinations of renewable energy technologies to meet a sustainable energy supply it takes into account a range of criteria to reflect relevant environmental social and economic considerations capture the value of diversity and reflect innovative potential and learning capacity the combination of these factors allows for solutions in which there is more balance between economic environmental and social dimensions unlike in previous studies scenarios that might have been preferred on the basis of for example minimal costs or low co2 emissions will have to be reconsidered because of negative effects in terms of land use or unemployment the decision making philosophy in this case changes from that of optimization to multi criteria satisficing this article argues for consideration of the following dimensions of the energy system costs emissions water use land use and employment consideration of such dimensions will shift energy system into the direction of overall sustainability while making it more resilient in the long term the approach is applied to the case of the united kingdom by making use of a markal model complementing its goal of cost minimization with additional social and environmental criteria this gives rise to a number of suggestions for uk energy mix and policy

support systems for the diffusion of renewable energy technologies an investor perspective concern over climate change impacts and the projected depletion of fossil fuels has urged more governments to adopt policies that stimulate the diffusion of renewable energy technologies ret with an increasingly diverse suite of support instruments the question emerges as to which instruments or combinations are able to achieve faster more substantial diffusion results although various support instruments were extensively addressed in policy studies there is still no consensus this is partly because many policy studies take a policy maker approach in comparing support instruments leaving relationships between policy design and policy results as a black box this paper proposes an investor oriented perspective to analyze the diffusion potential of support systems for ret the main argument is that it is not the type of support instrument but rather its risk profitability characteristics that influence investor behavior and the rate of diffusion the two instruments most frequently discussed and compared are the feed in tariff and the quota model the analysis in this paper concludes that policy design is crucial while often feed in tariffs are applauded and quota system feared feed in tariffs may also bring about disappointing diffusion results when poorly designed while quota systems may be also conceived as attractive instruments for independent power producers

an analysis of feed in tariff remuneration models implications for renewable energy investment recent experience from around the world suggests that feed in tariffs fits are the most effective policy to encourage the rapid and sustained deployment of renewable energy there are several different ways to structure a fit policy each with its own strengths and weaknesses this paper presents an overview of seven different ways to structure the remuneration of a fit policy divided into two broad categories those in which remuneration is dependent on the electricity price and those that remain independent from it this paper examines the advantages and disadvantages of these different fit models and concludes with an analysis of these design options with a focus on their implications both for investors and for society

european schemes for promoting renewables in liberalised markets abstract the paper describes possibilities and problems for penetration of supply systems based on renewable energy sources in liberalised markets the analysis is based on recent development in eu with different models for support of installations based on renewable energy these include feed in models with guaranteed minimum tariffs tender models for different bands of technologies and green certificates trading models with obligatory consumer quota the paper describes the market situation in selected european countries including germany the uk holland and denmark an eu directive from september 2001 has postponed the decision on a possible harmonisation of promotional models until at least 2005 in order to obtain more practical experience with the different support schemes a critical evaluation is given in this paper of the different models with proposals for a balanced development between environmental and trading concerns it is argued that too much emphasis is presently given to the side of free trade at the expense of long range planning for a sustainable energy development

exchange rate pass through in developing and emerging markets a survey of conceptual methodological and policy issues and selected empirical findings abstractglobal integration has increased the international linkages of financial markets for emerging market countries a key channel for the international transmission of inflation and economic cycles is from exchange rate movements to domestic prices known as exchange rate pass through erpt this article reviews the conceptual methodological and policy issues connected with erpt in emerging market and developing countries and critically surveys selected empirical studies a key contribution is to categorise and compare the heterogeneous methodologies used to extract erpt measures in the empirical literature single equation models and systems methods are contrasted frequent misspecifications that produce unreliable erpt estimates are highlighted the discerning policy maker needs to ascertain by which methods erpt measures were calculated the controls and restrictions applied and the time frame and stability of the estimates

feed in tariffs with minimum price guarantees and regulatory uncertainty abstract the feed in tariff fit program is a popular policy for incentivizing new renewable energy projects because it establishes a long term contract with renewable energy investors this paper presents a novel model to analyze a fit contract with a minimum price guarantee i e a price floor regime from an investor s perspective the results show that a perpetual guarantee only induces investment for prices below the price floor when offering a risk free investment opportunity in contrast the finite guarantee may induce investment even when the revenue from the guarantee is lower than the investment cost when an investor faces a scenario with regulatory uncertainty a higher and more likely reduction in the price floor induces earlier investment for all cases investors postpone an investment decision when market conditions present a higher price volatility

pass through exchange rates and monetary policy this conference is devoted to examining the forces that lead to incomplete pass through of exchange rates into domestic prices my comments are divided into two separate parts first i will examine whether and to what extent monetary policy should be concerned with pass through second i will ask whether monetary policy should pay attention to exchange rates beyond concern about their effect on local nominal prices

financial appraisal of operational offshore wind energy projects abstract this paper investigates the commercial attractiveness of the nascent offshore wind energy industry from an asset owner s perspective two commercial scale operational projects are used as illustrative cases based upon historical empirical financial and performance data in conjunction with future spot market price scenarios a discounted cash flow methodology has been applied to underpin the financial value over each life cycle of plant the robustness of the results is strengthened by sensitizing key input parameters the results suggest that project annualized returns range between 8 and 11 above prescribed costs of capital a key finding is that the cost of capital can be more instrumental in achieving lower costs of energy than site selection itself

exchange rate pass through exchange rate volatility and exchange rate disconnect abstract this paper explores the hypothesis that high volatility of real and nominal exchange rates may be due to the fact that local currency pricing eliminates the pass through from changes in exchange rates to consumer prices exchange rates may be highly volatile because in a sense they have little effect on macroeconomic variables the paper shows the ingredients necessary to construct such an explanation for exchange rate volatility in addition to the presence of local currency pricing we need a incomplete international financial markets b a structure of international pricing and product distribution such that wealth effects of exchange rate changes are minimized and c stochastic deviations from uncovered interest rate parity together it is shown that these elements can produce exchange rate volatility that is much higher than shocks to economic fundamentals and disconnected from the rest of the economy in the sense that the volatility of all other macroeconomic aggregates are of the same order as that of fundamentals

assessment of instruments in facilitating investment in off grid renewable energy projects abstract renewable off grid solution plays a critical role in supporting rural electrification however off grid renewable energy ogre project financing faces significant challenges due to limited financing access low affordability of consumers high transactions costs and etc various supporting instruments have been implemented to facilitate ogre investment this study assesses the effectiveness of those instruments with a framework consists of three dimensions feasibility sustainability and replicability the weights of each dimension in the framework and the scores of each instrument are assessed by expert surveys based on the delphi method it is suggested that all the three dimensions should be taken into consideration while assessing the instruments among which feasibility and sustainability are considered as the most important dimensions in the assessment framework furthermore the top 5 most effective instruments in facilitating ogre investment are local engagement in operation and maintenance loan guarantee start up grant end user financing and concessional finance developing countries that need to increase electrification such as most of the asean member states could use these top scored instruments despite of their limited amount of public finance

initiating a sustained diffusion of wind power the role of public private partnerships in spain the literature on policy approaches for the market support of renewable electricity is dominated by narrow conceptualizations of policy referring mostly to direct instruments for economic feasibility such approaches often led to unsatisfactory explanations of diffusion results this is the case of wind power diffusion in spain the success of which is typically credited to the feed in tariff instrument this paper offers an alternative explanatory account for wind power diffusion in spain it is argued that diffusion can be explained by a less obvious policy of stimulating investments by means of public private partnerships ppps the three legal frameworks for economic feasibility applicable up to 2004 harbored high economic risks although projects could have high profitability because of generous investment subsidies up to mid 1990s most investments were based on ppps to address the risk perceptions of early investors fully private partnerships now dominate investments though ppps have not disappeared next to winning investors confidence the ppp policy led to an investment culture whereby partnership investments dominate by 2000 95 7 of the installed wind capacity was owned by partnerships and only 4 3 by individual companies partnerships invest in larger projects have ambitious investment plans and these lead to a high diffusion tempo

impacts of considering climate variability on investment decisions in ethiopia extreme interannual variability of precipitation within ethiopia is not uncommon inducing droughts or floods and often creating serious repercussions on agricultural and nonagricultural commodities a dynamic climate module is integrated into an economy wide model containing a detailed zonal level agricultural structure this coupled climate economic model is used to evaluate the effects of climate variability on prospective irrigation and infrastructure investment strategies and the ensuing country wide economy the linkages between the dynamic climate module and the economic model are created by the introduction of a climate yield factor cyf defined at the crop level and varied across ethiopian zones nine sets of variable climate vc data are processed by the coupled model generating stochastic wet and dry shocks producing an ensemble of potential economic prediction indicators analysis of gross domestic product and poverty rate reveal a significant overestimation of the country s future welfare under all investment strategies when climate variability is ignored the coupled model ensemble is further utilized for risk assessment to guide ethiopian policy and planning

renewable energy policy evaluation using real option model the case of taiwan abstract this study presents a policy benefit evaluation model that integrates cost efficiency curve information on renewable power generation technologies into real options analysis roa methods the proposed model evaluates quantitatively the policy value provided by developing renewable energy re in the face of uncertain fossil fuel prices and re policy related factors the economic intuition underlying the policy making process is elucidated while empirical analysis illustrates the option value embedded in the current development policy in taiwan for wind power in addition to revealing the benefits that re development provides when considering real options analytical results indicate that roa is a highly effective means of quantifying how policy planning uncertainty including managerial flexibility influences re development in addition to assessing the policy value of current re development policy this study also compares policy values in terms of internalized external costs and varying feed in tariff fit simulation results demonstrate that the re development policy with internalized co2 emission costs is appropriate policy planning from sustainability point of view furthermore relationship between varying fit and policy values can be shown quantitatively and appropriate fit level could be determined accordingly

exchange rate pass through into import prices revisited what drives it a large sample of developed and emerging economies is utilized to investigate import exchange rate pass through panel models reveal that various economic aspects of the destination country can explain about one third of the total variation in pass through elasticities and the remaining variation comes largely in the form of unobserved country specific effects inflation exchange rate volatility openness and relative wealth play a clear role as drivers of emerging markets pass through whereas the output gap and protectionism appear influential more generally nonlinearity regarding large versus small changes in the exchange rate is quite pervasive our evidence challenges the widely held view that pass through has been universally falling in developed markets and that it is higher for emerging markets the economic drivers are shown to play a role as out of sample predictors of pass through the findings confirm pricing to market theories and have implications for the optimal conduct of monetary policy

wind power policy in complex adaptive markets abstract this paper aims to advance research into the effectiveness of policies for encouraging technological transition in the energy sector in general and wind power in particular it contends that the ineffectiveness of wind power development policy in most nations stems from a linear approach to policy design that is unsuited to complex adaptive markets the paper argues that in complex adaptive markets policies are required that foster competition on a level playing field insights are extracted from complexity theory to advance four principles for effective wind power policy in such markets these principles include establishing policy initiatives to encourage technological diversity establish clear and progressive short to medium term targets enhance environmental monitoring systems and establish a malleable policy regime that directly resolves emergent challenges while simultaneously sustaining market momentum to ensure long term targets are met in order to demonstrate the applied relevance of these principles the paper applies these concepts to a historical analysis of denmark s wind power development policies

a review on global wind energy policy with the increasing negative effects of fossil fuel combustion on the environment in addition to limited stock of fossil fuel have forced many countries to inquire into and change to environmentally friendly alternatives that are renewable to sustain the increasing energy demand energy policy plays a vital role to mitigate the impacts of global warming and crisis of energy availability this paper explores the wind energy industry from the point of view of the wind energy policy it is noticed that energy policy could help increasing wind power generation as well as stimulating the energy industry it may be stated that without specific energy policy a country would not be able to solve the acute problems like reducing greenhouse gases ghgs emission scarcity of energy etc this paper discussed the existing successful energy policies for few selected countries based on literatures it has been found that fit rps incentives pricing law and quota system are the most useful energy policies practiced by many countries around the world then status of wind energy policy for malaysia was investigated and compared with few selected countries around the world

optimal wind power deployment in europe a portfolio approach geographic diversification of wind farms can smooth out the fluctuations in wind power generation and reduce the associated system balancing and reliability costs the paper uses historical wind production data from five european countries austria denmark france germany and spain and applies the mean variance portfolio theory to identify cross country portfolios that minimise the total variance of wind production for a given level of production theoretical unconstrained portfolios show that countries spain and denmark with the best wind resource or whose size contributes to smoothing out the country output variability dominate optimal portfolios the methodology is then elaborated to derive optimal constrained portfolios taking into account national wind resource potential and transmission constraints and compare them with the projected portfolios for 2020 such constraints limit the theoretical potential efficiency gains from geographical diversification but there is still considerable room to improve performance from actual or projected portfolios these results highlight the need for more cross border interconnection capacity for greater coordination of european renewable support policies and for renewable support mechanisms and electricity market designs providing locational incentives under these conditions a mechanism for renewables credits trading could help aligning wind power portfolios with the theoretically efficient geographic dispersion 2009 elsevier ltd

vector autoregressions and reduced form representations of dsge models abstract the performance of dynamic stochastic general equilibrium models is often tested against estimated vars this requires that the data generating process consistent with the dsge theoretical model has a finite order var representation this paper discusses the assumptions needed for a finite order var p representation of a dsge model to exist when a var p is only an approximation to the exact infinite order var the truncated var p may return largely incorrect estimates of the impulse response function the results do not hinge on small sample bias or on incorrect identification assumptions but the bias introduced by truncation can lead to bias in the identification of the structural shocks identification strategies that work in the exact var representation perform poorly in the truncated var

high exchange rate volatility and low pass through abstract two specifications of an open economy model are shown to generate high exchange rate volatility and low exchange rate pass through erpt in the model price discrimination causes erpt to be incomplete in both the short and the long run in the short run a small amount of nominal rigidities is enough to reduce erpt sharply still exchange rate depreciation worsens the terms of trade consistent with the evidence possible biases from omitted variables and measurement error in the erpt empirical literature due to data limitations are investigated using model generated time series estimates of erpt coefficients can be quite different from true parameters and are sensitive to the shocks driving the economies estimates can nonetheless detect key structural features of the models

community perspectives of wind energy in australia the application of a justice and community fairness framework to increase social acceptance decisions concerning the siting of infrastructure developments or the use of natural resources have the potential to damage a community s social well being if the outcomes are perceived to be unfair justice is accepted as central to the well functioning of society with fairness being an expectation in day to day interactions outcomes that are perceived to be unfair can result in protests damaged relationships and divided communities particularly when decisions are made which benefit some sections of the community at the perceived expense of others through empirical research using a wind farm pilot study community perceptions of a community consultation process are explored using procedural justice principles to evaluate fairness findings from the pilot study indicate that perceptions of fairness do influence how people perceive the legitimacy of the outcome and that a fairer process will increase acceptance of the outcome a key research finding was that different sections of a community are likely to be influenced by different aspects of justice namely by outcome fairness outcome favourability and process fairness based on this finding a community fairness framework was developed which has potential application in community consultation to increase social acceptance of the outcome

wind power implementation the nature of public attitudes equity and fairness instead of backyard motives abstract public attitudes anywhere in europe show moderate to strong support for the implementation of renewable energy nevertheless planning wind power developments appears to be a complicated matter in most countries the problems that have to be dealt with during decision making processes on the siting of wind turbines are usually referred to as mere communication problems however public attitudes towards wind power are fundamentally different from attitudes towards wind farms this gap causes misunderstandings about the nature of public support for renewables in particular where planners easily assume support for renewables can be generated by information campaigns emphasising the environmental benefits whereas opposition to renewable energy schemes can be explained by a selfish not in my backyard attitude both explanations used by planners authorities and unfortunately by many scholars are falsified furthermore policies that still take this common knowledge for granted can have negative consequences for the implementation rates of renewables visual evaluation of the impact of wind power on landscape values is by far the dominant factor in explaining why some are opposed to wind power and others are supporting it moreover feelings about equity and fairness appear the determinants of backyard motives instead of selfishness

fixed feed in tariff versus premium a review of the current spanish system a b s t r a c t since 1998 the spanish government established a feed in system where res e generators could choose between two alternatives fixed feed in tariff and premium nowadays all res e 1 can be sold in the electricity market getting an additional premium except for solar photovoltaic one important novelty established in 2007 is a cap and floor system for facilities under the premium option the aim of this paper is to analyze and compare these two alternative options fixed fit and premiums which coexist at the same time in spain describe the evolution of both systems and evaluate its performance the introduction of this support system in spain led to very good results in terms of res e deployment the main advantage of the premium option is that it is a scheme integrated in the electricity market one disadvantage is that it can occasionally lead to overcompensation one way to try to avoid it is to set a cap value in order to evaluate the performance of this dual support system not only res e deployment has been assessed but also the policy stability the adequacy of res e production to the electricity demand pattern and the changes in the investors behaviour

low inflation pass through and the pricing power of firms abstract recently there has been a significant decline in the degree to which firms pass through changes in costs to prices a decline that is frequently characterized as a reduction in the pricing power of firms the decline appears to be associated with the decline in inflation in many countries the decline has important implications for monetary policy because it affects both forecasts of inflation and the effects of changes in monetary policy on inflation some have argued that the decline in pricing power helped to keep inflation low in the face of apparently strong demand pressures in the united states in the late 1990s this paper puts forth the view that the decline in pass through or pricing power is due to the low inflation environment that has recently been achieved in many countries first a microeconomic model of price setting is used to show that lower pass through is caused by lower perceived persistence of cost changes evidence is then presented showing that inflation is positively correlated with persistence of inflation suggesting that the low inflation itself has caused the low pass through an economy wide model consistent with the micromodel is then presented to illustrate how such changes in pricing power affect output and inflation dynamics in favorable ways but can disappear quickly if monetary policy and expectations change

an assessment of exploiting renewable energy sources with concerns of policy and technology in recent years the taiwanese government has vigorously promoted the development of renewable energy to engage the challenges of gradual depletion of fossil fuels and oil as well as the intensification of the greenhouse effect since the sustainable energy policy principles were announced in 2008 taiwanese government has declared that the development of renewable energy should take into account goals that pertain to energy the environment and the economy 3e goals this study aims to assess the 3e goals and renewable energy sources regulated by the renewable energy development bill that passed in 2009 the fuzzy analytic hierarchy process fahp is used to resolve the multi goal problem for achieving our research purposes that is this research attempts to reveal the suitable renewable energy sources for the purposes of meeting the 3e policy goals the results first show that environmental goal is the most important to the development of various renewable energy technologies in taiwan followed by the economic and energy goals additionally hydropower solar energy and wind energy would be the renewable energy sources utilized in meeting the 3e policy goals

danish and norwegian wind industry the relationship between policy instruments innovation and diffusion this article compares the role of policy instruments in stimulating long term technological change in danish and norwegian wind industry it concludes that although predictability has periodically been low denmark s broad portfolio of policies and measures has been well adapted to the different stages in the development of its wind industry this has contributed to a high degree of innovation successful establishment in niche markets high degree of diffusion and establishment of domestic and international mass markets and in recent years an increasingly successful replacement of senescent technology with new the motivation of norway s wind energy policies and measures at least up until the late 1990s has been to increase power supply rather than to stimulate industrial development and technological change policies and measures have been weaker than in denmark have been less stable over time and stimulated the demand side much less they have not sufficiently covered the wind industry s perceived needs on different stages in the development of new technology and have not sufficiently stimulated continuous improvement learning and new product development dynamic efficiency in industry this has been part of the reason why there has been only a limited extent of innovation and diffusion of wind technology in norway

green electricity market development lessons from europe and the us this study compares the development and implementation of green electricity policies in germany the netherlands sweden and the united states a set of countries applying a range of policy instruments to encourage electricity from renewable energy sources a general tendency is identified that policies shift emphasis from r d stimulation towards dissemination and market application of renewable energy technologies we argue that in light of the long term nature of policy goals on energy security mitigation of climate change and environmental protection the applied range of policy instruments may be lacking in providing incentives for the long term development of new technologies clarifying policy objectives would allow careful selection of policy instruments including support for r d improved capacity building for policy implementation is also important

exchange rate pass through to domestic prices does the inflationary environment matter abstract the paper tests a hypothesis suggested by j taylor 2000 low inflation pass through and the pricing power of firms european economic review 44 7 1389 1408 that a low inflationary environment leads to a low exchange rate pass through to domestic prices to test this hypothesis the paper derives a pass through relation based on new open economy macroeconomic models a large database that includes 1979 2000 data for 71 countries is used to estimate this relation there is strong evidence of a positive and significant association between the pass through and the average inflation rate across countries and periods the inflation rate moreover dominates other macroeconomic variables in explaining cross regime differences in the pass through

the impact of global warming on agriculture a ricardian analysis reply we measure the economic impact of climate on land prices using cross sectional data on climate farmland prices and other economic and geophysical data for almost 3 000 counties in the united states we find that higher temperatures in all seasons except autumn reduce average farm values while more precipitation outside of autumn increases farm values applying the model to a global warming scenario shows a significantly lower estimated impact of global warming on u s agriculture than the traditional production function approach and in one case suggests that even without co sub 2 fertilization global warming may have economic benefits for agriculture 16 refs 5 figs 5 tabs

wind hydro or mixed renewable energy source preference for electricity products when the share of renewable energy increases abstract while the share of renewable energy especially wind power increases in the energy mix the risk of temporary energy shortage increases as well thus it is important to understand consumers preference for the renewable energy towards the continuous growing renewable energy society we use a discrete choice experiment to infer consumers preferences when the share of renewable energy increases the study results indicate that consumers are generally willing to pay extra for an increasing share of renewable energy but the renewable energy should come from a mixture of renewable energy sources we also found that consumers prefer to trade with their current supplier rather than another well known supplier this study contributes to the energy portfolio theories and the theory of energy diversification in a consumer perspective the managerial implications of this study are also discussed

energy supply security and geopolitics a european perspective the security of energy supply to the eu is examined in the context of two storylines markets and institutions exemplifies an economically and politically integrated multilateral world with effective institutions and markets regions and empires involves a world broken up in rival political and economic blocks competing for resources and markets via political economic and military power it is shown that these storylines have a significant impact on the development of the energy market on the way in which energy supply may be secured and on the effect and applicability of the several types of instruments available the current eu is geared towards enlargement and a deepening of economic integration based on the tenets of the post 1945 multilateral world system the present world tends towards regions and empires and suggests that the eu may have to reorient its energy security policy energy policy must become an integral part of eu external trade and foreign relations and security policy the eu should develop its own strategy actively investing in dialogues with producer countries in the persian gulf and africa and with russia sustainable prosperity and governance in these regions will support eu energy security

enhancing renewable and sustainable energy development based on an options based policy evaluation framework case study of wind energy technology in taiwan global warming and climate change have shifted the focus of industrial development towards low carbon renewable energy re as evidence by global efforts to develop re based sustainable energy policies however the generally cost ineffective nature of re investments explains continued governmental subsidies and draft assistance measures to encourage related industrial development reduce research and development r d costs and increase innovativeness besides measures to accelerate supply and reduced demand for energy sustainable energy policies must enact thoroughly planned legal and regulatory mechanisms notable examples of establishing a legal basis for a low carbon society in taiwan include the energy management act renewable energy development bill greenhouse gas reduction act draft and energy tax act draft however such legislative efforts occasionally conflict or compete with each other warranting further integration additionally re technologies are characterized by high r d costs long term planning and high investment risks therefore based on global trends in wind power development and related policy planning this study analyzes the feasibility of implementing management strategies in the development process and the correlations between such strategies additionally the achievements polices functions mechanisms promotion measures and future plans for related renewable and sustainable energy laws in taiwan is thoroughly reviewed an options based policy evaluation framework is also constructed based on governmental administrative considerations moreover the characteristics of options that lead to unforeseen circumstances during the planning of re development policies are discussed allowing us to derive real time response measures with a decision making value results of this study provide a valuable reference for governmental efforts to evaluate the merits and limitations of related policies concisely ultimately facilitating the formulation of re development policies

social acceptance of renewable energy innovation an introduction to the concept this paper introduces the special issue on social acceptance of renewable energy innovation it is a collection of best papers presented at an international research conference held in tramelan switzerland in february 2006 while there are ambitious government targets to increase the share of renewable energy in many countries it is increasingly recognized that social acceptance may be a constraining factor in achieving this target this is particularly apparent in the case of wind energy which has become a subject of contested debates in several countries largely due to its visual impact on landscapes this paper introduces three dimensions of social acceptance namely socio political community and market acceptance factors influencing socio political and community acceptance are increasingly recognized as being important for understanding the apparent contradictions between general public support for renewable energy innovation and the difficult realization of specific projects the third dimension market acceptance has received less attention so far and provides opportunities for further research particularly from management scholars

renewable energy support mechanisms in the gulf cooperation council states analyzing the feasibility of feed in tariffs and auction mechanisms renewable energy will be a crucial ingredient in the transition to a more sustainable future the renewable energy sector requires a variety of financial support mechanisms in order to further consolidate and expand currently the most prominent renewable energy support mechanisms are feed in tariffs and renewable energy auctions although these mechanisms have been used and analyzed extensively in western countries and more recently economies in transition they have rarely been examined in the arab gulf region yet particularly the gulf cooperation council gcc states have undertaken important steps towards renewable energy adoption which could be greatly facilitated with the use of financial support mechanisms this paper analyzes the feasibility of feed in tariffs and renewable energy auctions adoption in gcc based on an extensive meta analysis of the literature on these two mechanisms in both developed and developing countries the paper identifies a set of conditions necessary for success and evaluates the presence of favorable these conditions in the gcc context our findings reveal that while conditions that would ensure political feasibility are largely absent for both types of mechanisms auctions could be a more successful strategy at the moment

internationalization as a strategy to overcome industry barriers an assessment of the marine energy industry abstract research on conditions to develop new innovations within emerging renewable energy industries is often done with a national focus however recent research on international entrepreneurship has revealed that firms operate on international levels very early in their life time thus based on former research on international entrepreneurship and case examples we build the propositions that firms in the marine energy industry use internationalization as a strategy to overcome industry barriers our primary source of data is a unique dataset from a global survey of all the companies in the marine energy industry who are aiming to commercialize a wave or tidal energy device this paper is organized in two steps first we identified the most challenging industry barriers perceived by companies second we use these to form propositions which we assess through empirical data the two most challenging barriers perceived by the companies are need for capital and need for supportive political schemes our findings reveal that internationalization certainly is a common strategy to access capital and attractive support schemes in foreign countries the early internationalization has implications for researchers managers and policy makers

design of an economically efficient feed in tariff structure for renewable energy development abstract evidence suggests albeit tentatively that feed in tariffs fits are more effective than alternative support schemes in promoting renewable energy technologies rets fits provide long term financial stability for investors in rets which at the prevailing market price of electricity are not currently cost efficient enough to compete with traditional fossil fuel technologies on the other hand if not properly designed fits can be economically inefficient as is widely regarded to have been the case under the public utility regulatory policies act of 1978 purpa under purpa too high a guaranteed price led to the creation of so called purpa machines poorly performing generating units that could survive financially only because of heavy subsidies that came at the expense of retail customers similarly because of their adverse impacts on retail electricity rates german fits have been subject to increasing political pressure from utilities and customers in this paper we propose an innovative two part fit consisting of both a capacity payment and a market based energy payment which can be used to meet the renewables policy goals of regulators our two part tariff design draws on the strengths of traditional fits relies on market mechanisms is easy to implement and avoids the problems caused by distorting wholesale energy markets through above market energy payments the approach is modeled on forward capacity market designs that have been recently implemented by several regional transmission organizations in the usa to address needs for new generating capacity to ensure system reliability

dominant currency paradigm author s gopinath g boz e casas c diez fj gourinchas po plagborg moller m abstract 2020 american economic association all rights reserved we propose a dominant currency paradigm with three key features dominant currency pricing pricing complementarities and imported inputs in production we test this paradigm using a new dataset of bilateral price and volume indices for more than 2 500 country pairs that covers 91 percent of world trade as well as detailed firm product country data for colombian exports and imports in strong support of the paradigm we find that i noncommodities terms of trade are uncorrelated with exchange rates ii the dollar exchange rate quantitatively dominates the bilateral exchange rate in price pass through and trade elasticity regressions and this effect is increasing in the share of imports invoiced in dollars iii us import volumes are significantly less sensitive to bilateral exchange rates compared to other countries imports iv a 1 percent us dollar appreciation against all other currencies predicts a 0 6 percent decline within a year in the volume of total trade between countries in the rest of the world controlling for the global business cycle we characterize the transmission of and spillovers from monetary policy shocks in this environment

pros and cons of exposing renewables to electricity market risks a comparison of the market integration approaches in germany spain and the uk abstract the article examines how renewable electricity res e producers are integrated into the electricity market under the support legislations and regulatory frameworks of germany spain and the uk focus is on wind power which faces the highest market integration challenge of all res e the analysis shows that the three countries follow contrasting approaches of exposing res e producers to the market risks of forward electricity markets balancing markets and system planning requirements risk exposure is highest in the uk and lowest in germany from a policy maker s perspective there is a trade off between a high risk and a low risk approach when res e face high market risks a higher level of financial support is required to stimulate res e development than in a low risk environment but the exposure to market risks may also give an incentive to make efficient use of the respective market thus limiting the indirect costs to society the special characteristics of wind energy however put natural limits to the response of wind power plants to market prices and locational price signals and will increasingly influence electricity markets and grid infrastructure these interdependencies should be recognised in the design of res e policies and market regulations

technological learning in offshore wind energy different roles of the government offshore wind energy is a promising source of renewable electricity even though its current costs prevent large scale implementation technological learning has improved the technology and its economic performance already and could result in significant further improvements this study investigates how technological learning takes place in offshore wind energy and how technological learning is related to different policy regimes offshore wind energy developments in denmark and the united kingdom have been analysed with a technology specific innovation systems approach the results reveal that the dominant forms of learning are learning by doing and learning by using at the same time learning by interacting is crucial to achieve the necessary binding elements in the technology specific innovation system generally most learning processes were performed by self organizing entities however sometimes cultural and technical barriers occurred excluding component suppliers and knowledge institutes from the innovation system danish policies successfully anticipated these barriers and removed them therefore the danish policies can be characterized as pro active british policies shaped stable conditions for learning only therefore they can be characterized as active in the future barriers could hinder learning by interacting between the oil and gas industry the offshore wind industry and academia based on this study we suggest national and international policy makers to design long term policies to anticipate these barriers in order to contribute to technological learning

the doping effect of italian feed in tariffs on the pv market abstract in less than six years italy has become one of the leading markets for pv power plants and one of the countries in the world with the largest number of installations and installed peak power such a quick and large growth is due to a series of feed in tariff schemes that have been uncapped until 2012 as a matter of fact any size or any number of pv power plants could be installed during a period of three years since the feed in tariffs are not paid by national taxes but are charged on the electricity bills italian energy users are now due to pay each year a surcharge of 9 billion euros on their energy bills this paper aims at discussing this development by highlighting the benefits but also some significant drawbacks that the application of uncontrolled feed in tariffs has produced

the impact of r d on innovation for wind energy in denmark germany and the united kingdom this paper examines the impact of public research and development r d support on cost reducing innovation for wind turbine farms in denmark germany and the united kingdom uk first we survey the literature in this field the literature indicates that in denmark r d policy has been more successful than in germany or the uk in promoting innovation of wind turbines furthermore such studies point out that subsidy induced capacity expansions were more effective in the uk and denmark in promoting cost reducing innovation than in germany the second part of the paper describes the quantitative analysis of the impact of r d and capacity expansion on innovation this is calculated using the two factor learning curve 2flc model in which investment cost reductions are explained by cumulative capacity and the r d based knowledge stock time series data were collected for the three countries and organized as a panel data set the parameters of the 2flc model were estimated focusing on the homogeneity and heterogeneity of the parameters across countries we arrived at robust estimations of a learning by doing rate of 5 4 and a learning by searching rate of 12 6 the analysis underlines the homogeneity of the learning parameters enhancing the validity of the 2flc formulation

exchange rates and monetary policy in emerging market economies this paper investigates the effects of exchange rate regimes and alternative monetary policy rules for an emerging market economy that is subject to a volatile external environment in the form of shocks to world interest rates and the terms of trade in particular we highlight the impact of financial frictions and the degree of exchange rate pass through in determining the relative performance of alternative regimes in stabilizing the economy in the face of external shocks our results are quite sharp when exchange rate pass through is high a policy of non traded goods inflation targeting does best in stabilizing the economy and is better in welfare terms when exchange rate pass through is low however a policy of strict cpi inflation targeting is better in all cases a fixed exchange rate is undesirable in addition financial frictions have no implications for the ranking of alternative policy rules

inside the black box technology and economics economists have long treated technological phenomena as events transpiring inside a black box and on the whole have adhered rather strictly to a self imposed ordinance not to inquire too seriously into what transpires inside that box the purpose of professor rosenberg s work is to break open and examine the contents of the black box in so doing a number of important economic problems be powerfully illuminated the author clearly shows how specific features of individual technologies have shaped a number of variables of great concern to economists the rate of productivity improvement the nature of learning processes underlying technological change itself the speed of technology transfer and the effectiveness of government policies that are intended to influence technologies in particular ways the separate chapters of this book reflect a primary concern with some of the distinctive aspects of industrial technologies in the twentieth century such as the increasing reliance upon science but also the considerable subtlety and complexity of the dialectic between science and technology other concerns include the rapid growth in the development of costs associated with new technologies as well as the difficulty of predicting the eventual performance characteristics of newly emerging technologies

revisiting the exchange rate pass through a general equilibrium perspective abstract a large literature estimates the exchange rate pass through to prices erpt using reduced form approaches whose results are an important input for central banks we show two shortcomings of these empirical measures for monetary policy analysis which are quantitatively important and may lead to imprecise and biased inflation predictions first while the literature describes a single erpt which we will label unconditional there are different erpt conditional on each shock that hits the economy second these crucially depend on expected monetary policy so that empirical erpt measures should not be taken as given in evaluating policy actions we use a simple model of a small and open economy to understand the intuition behind these two critiques showing that these results seem to hold under many alternative specifications we then highlight the quantitative relevance of these distinctions using a large scale dsge model of a small open economy

evaluating capital and operating cost efficiency of offshore wind farms a dea approach an actual growth rate greater than 30 indicates that offshore wind is a reasonable alternative to other energy sources the industry today is faced with the challenge of becoming competitive and thus significantly reduce the cost of electricity from offshore wind this situation implies that the evaluation of costs incurred during development installation and operation is one of the most pressing issues in this industry at the moment unfortunately actual cost analyses suffer from less resilient input data and the application of simple methodologies therefore the objective of this study was to elevate the discussion providing stakeholders with a sophisticated methodology and representative benchmark figures the use of data envelopment analysis dea allowed for plants to be modelled as entities and costs to be related to the main specifics such as distance to shore and water depth ensuring the necessary comparability moreover a particularly reliable database was established using cost data from annual reports offshore wind capacity of 3 6 gw was benchmarked regarding capital and operating cost efficiency best practice cost frontiers were determined and the effects of learning by doing and economies of scale were investigated ensuring that this article is of significant interest for the offshore wind industry

the design of renewable support schemes and co2 emissions in china abstract the renewable energy targets put forward by the chinese government need comprehensive incentive schemes this paper uses a multi regional cge model to evaluate two types of renewable support schemes a subsidy scheme like a feed in tariff fit with a direct price impact for final consumers and a subsidy scheme without any price impact we assess the co 2 consequences of both approaches as well as their impact on economic activity in terms of gdp industrial structure electricity generation structure and regional final demand elasticities of electricity we find that a support scheme with price impact is much more effective in reducing co 2 emissions while the difference in gdp between the two policies is small we estimate that the price implications of the support scheme allow for an additional emissions reduction of 113 mt co 2 or 0 07 of total emissions in china during 2020 2035 the support scheme with a price impact does not lead to a negative impact on the chinese economy although there are significant differences among regions in addition while the whole country faces an approximately unitary electricity elasticity demand we find significant differences in electricity demand elasticities among chinese regions

growth options and poverty reduction in ethiopia an economy wide model analysis abstract this study focuses on which agricultural subsectors are important in ethiopia s economic growth and poverty reduction and what kind of agricultural and nonagricultural growth is needed to achieve the millennium development goal of halving the incidence of poverty by 2015 a spatially disaggregated economy wide model was developed enabling the analysis of growth and poverty reduction linkages at national and regional levels using national household surveys agricultural sample surveys geographic information systems and other national and regional data the study reveals that agriculture can play a central role in decreasing poverty and increasing growth in ethiopia within the agriculture growth in cereals and other staple crops should receive priority agricultural growth also requires concurrent investments in roads and other market conditions at the subnational level similar growth rates within agricultural subsectors have different effects on poverty necessitating regionally based strategies for growth and poverty reduction

policy measures to promote the widespread utilization of renewable energy technologies for electricity generation in the maldives abstract this study adopts a stakeholder based approach to understand the size and nature of the market and financial barriers to the widespread utilization of renewable energy technologies rets in the maldives in light of these barriers and the interests of relevant stakeholders this study evaluates different policy options in terms of their suitability to develop a domestic market for rets in the maldives evaluating the different policy instruments it was found that pricing laws that regulate market access are more suitable than quota systems provided that the current subsidies for conventional energy are removed or shifted towards rets as for the other financial incentives rebates on investments and low interest loans should be provided to ret project developers to overcome the high initial project costs in addition to these measures the limited institutional capacity suggests that policy support should also focus on enabling the steady development of regional institutions rather than on supporting individual ret projects these institutions should enable islands in each atoll to take advantage of efficient management and access to financial capital this will allow the development of sustained renewable energy projects that in turn will result in increased renewable capacity and decreased costs

price adjustment and exchange rate pass through abstract this paper develops a simple theoretical model that can be used to account for the determinants of exchange rate pass through to consumer prices while recent evidence has found low estimates of pass through in many countries there is little consensus on an explanation for this our paper argues that sticky prices represent a key determinant of exchange rate pass through we make this argument in two stages first holding the frequency of price change constant we show that our model calibrated to data from low inflation countries can reproduce the estimates of very low pass through for these countries the principal determinant of low pass through in this case is the slow adjustment of prices we then extend the model to allow the frequency of price change to be endogenous calibrating to a wider set of countries including both low inflation and high inflation countries we show that our model implies that exchange rate pass through is increasing in average inflation but at a declining rate performing the identical exercise on the data we find a striking correspondence between the predictions of the model and those of the data

has exchange rate pass through really declined evidence from canada several empirical studies suggest that exchange rate pass through has declined in recent years among industrialized countries results for canada also indicate that import and consumer prices have become less responsive to exchange rate movements in the 1990s these findings are based on reduced form regressions that are typically motivated by partial equilibrium models of pricing this paper uses instead a structural general equilibrium approach to test the premise that exchange rate pass through has decreased in canada our approach consists in estimating a dynamic stochastic generalequilibrium model for canada over two sub samples which cover the periods before and after the adoption of inflation targeting by the bank of canada we then use impulseresponse analysis to assess the stability of exchange rate pass through across the two sub samples our results indicate that pass through to canadian import prices has been rather stable while pass through to canadian consumer prices has declined in recent years counterfactual experiments reveal that the change in monetary policy regime is largely responsible for this decline

a new look at pass through abstract this paper examines the relationship between exchange rates and prices rather than assuming exchange rate changes are exogenous shocks that affect prices i use a long run restrictions var to identify shocks and explore the way domestic prices import prices and exchange rates react to a variety of shocks consumer price pass through is nearly complete in response to some shocks but low in response to others alternatively import prices and exchange rates typically respond in the same direction and pass through seems quick this supports the idea that import prices are set in the producer s currency and that lower cpi pass through is a result of changes in quantities or margins further down the supply chain

wind electricity in denmark a survey of policies their effectiveness and factors motivating their introduction this paper surveys the development of the policies supporting the introduction of wind electricity in denmark in the last 15 years with special attention to the new policy introduced after a 2 year long debate the aim of this paper is to explore the roles of financial support policy certainty and planning constraints in the diffusion of wind electricity in denmark and the reasons prompting the change of the system in the current decade it is discovered that political uncertainty has badly affected the effectiveness of the feed in law in the years immediately after its introduction with regard to the new system it is concluded that the change has been prompted by generous conditions under the feed in law and by the desire to facilitate the modernisation of old turbines it is also concluded that incentive based systems can be more effective than tradable quotas in promoting the modernisation of renewable plants this finding is relevant to the development of energy policy in countries such as germany and spain where the average age of wind turbines is much younger than those existing in denmark

is small beautiful a multicriteria assessment of small scale energy technology applications in local governments in its 2003 white paper the uk government set ambitious renewable energy targets local governments and households have an increasing role in the overall energy system as consumers suppliers of smaller scale applications and citizens discussing energy projects in this paper we consider if small scale or large scale approaches to renewable energy provision can achieve energy targets in the most socially economically and environmentally see effective way we take a local case study of renewable energy provision in the metropolitan borough of kirklees in yorkshire uk and apply a multi criteria decision analysis methodology to compare the small scale schemes implemented in kirklees with large scale alternatives the results indicate that small scale schemes are the most see effective despite large scale schemes being more financially viable the selection of the criteria on which the alternatives are assessed and the assigned weights for each criterion are of crucial importance it is thus very important to include the relevant stakeholders to elicit this information

electricity market participation of wind farms the success story of the spanish pragmatism abstract in the last 10 years more than 15 gw of wind power asociacion empresarial eolica spanish wind energy association nota de prensa press release 17 de enero de 2008 http www aeeolica org doc np 080117 espana supera los 15000 mw eolicos pdf have been installed in spain of which more than 3 5 gw in 2007 furthermore plans are to reach 20 gw by 2010 and there are expectations of an installed capacity exceeding 40 gw by 2020 this article will present the innovative solutions for technical and economical integration that allow to reach such high level wind penetration objectives the system peaks at around 44 gw and is almost isolated it will be described how the regulation has evolved from a pure feed in tariff to a market premium option where technical and economic integration has been a priority today approximately 97 of installed wind capacity accesses the spanish wholesale electricity market market integration has been crucial sending the correct signals to participants to look for the optimum technical solutions technical improvements have come from both wind power producers fault ride through capabilities visibility and controllability of wind power power production forecasting reactive power control and the system operator specific control centre dedicated to renewable energy sources res new security analysis tools gaining technical confidence of wind capabilities

renewable generation expansion under different support schemes a stochastic equilibrium approach abstract following the deregulation of electricity markets a current challenge of policy makers is to facilitate the transition to a sustainable power system at the highest welfare for society in this paper we investigate the efficiency of different support schemes such as a feed in tariff a feed in premium and tradable green certificates with respect to incentivizing the required investments in renewable generation we consider a number of generation expansion problems and formulate stochastic equilibrium models that account for uncertainty in demand and renewable supply the risk aversion of investors and the competitiveness of the market the problem of the policy maker is formulated as a mathematical program with equilibrium constraints mpec and as a non linear complementarity problem ncp for the feed in schemes and the certificate market respectively our models are solved for a small illustrative example and a larger case study based on the danish power system the results confirm that the main driver for the optimal choice of renewable support scheme is the aversion of power producers towards price and volume risk while the competitiveness of the market rarely affects such choice