the electricity generation adequacy problem assessing dynamic effects of capacity remuneration mechanisms abstract following liberalization reforms the ability of power markets to provide satisfactory incentives for capacity investments has become a major concern in particular current energy markets can exhibit a phenomenon of investment cycles which generate phases of under and over capacity and hence additional costs and risks for generation adequacy to cope with these issues new mechanisms called capacity remuneration mechanisms crm have been or will be implemented this paper assesses the dynamic effects of two crms the capacity market and the strategic reserve mechanism and studies to what extent they can reduce the investment cycles generation costs and shortage costs of both mechanisms are also compared to conclude on their effectivity and economic efficiency a simulation model based on system dynamics is developed to study the functioning of both crms and the related investment decisions the results highlight the benefits of deploying crms to solve the adequacy issue shortages are strongly reduced compared to an energy only market besides the capacity market appears to be more beneficial since it experiences fewer shortages and generation costs are lower these comparisons can be used by policy makers in particular in europe where these two crms are mainly debated to determine which crm to adopt

the environmental kuznets curve ekc and the environmental problem of the day this study evaluates the relevancy of the environment kuznets curve ekc hypothesis to the environment problem of the world to achieve this objective different aspects of the ekc have been critically reviewed the study concludes that ekc growth strategy grow now clean later is too much resource intensive and has huge environmental cost that this planet may not be able to absorb in future the key recommendations of the study are that developing countries should follow different growth path than that of the ekc the growth path that must be sustainable and less destructive since energy is the most important determinant of the pollution therefore the governments should frame a special policy for renewable energy by taxing the fossil and subsidizing the renewables

optimal pricing in electrical networks over space and time an electrical system is modelled with a transmission network customers central generators and independent generators the system is subject to stochastic failures and stochastic demand parameters optimal spot prices are derived for the system they vary stochastically with space and time and depend on electrical load flow patterns the price difference between two locations or two voltage levels and the wheeling charge between them will change magnitude and sometimes sign over time as a function of events throughout the network current spatial pricing methods are significantly different from the spot price based methods derived here

when do households invest in solar photovoltaics an application of prospect theory abstract while investments in renewable energy sources res are incentivized around the world the policy tools that do so are still poorly understood leading to costly misadjustments in many cases as a case study the deployment dynamics of residential solar photovoltaics pv invoked by the german feed in tariff legislation are investigated here we report a model showing that the question of when people invest in residential pv systems is found to be not only determined by profitability but also by profitability s change compared to the status quo this finding is interpreted in the light of loss aversion a concept developed in kahneman and tversky s prospect theory the model is able to reproduce most of the dynamics of the uptake with only a few financial and behavioral assumptions

security of electricity supply at the generation level problem analysis abstract since the very beginning of the restructuring process back in 1982 in chile the ability of an electricity market to provide the system with the required level of security of supply has been put into question the mistrust on the ability of the market left to its own devices to provide sufficient generation availability when needed is more and more leading to the implementation of additional regulatory mechanisms this matter is undoubtedly gaining importance and it has taken a key role in the energy regulators agendas in this paper we revisit this discussion under the light of thirty years of electricity market experience we analyze the different reasons why although ideally the market is supposed to provide itself an adequate security of supply at the generation level this result is still far from being achieved in practice

regulatory design for res e support mechanisms learning curves market structure and burden sharing drawing from relevant experiences in power systems around the world this paper offers a review of existing policy support mechanisms for res e with a detailed analysis of their regulatory implications while recent studies provide an account of current res e support systems in this paper we focus on some of the impacts these mechanisms have on the overall energy market structure and its performance given the rising importance of res e in systems everywhere these impacts should no longer be overlooked

on the quantification of the network capacity deferral value of distributed generation this paper presents an approach to the quantification of the distribution network capacity deferral value of distributed generation dg besides different technical benefits such as reliability and power quality improvement there are a number of economic benefits related to dg the most important of which being the end user electricity bill reduction capability however since the onset of the implementation of these technologies the potential of dg to defer investments on distribution wires and transformers was soon realized to the point that non wire solutions are now considered as an alternative to network upgrades in this work a first approximation to the capacity deferral benefits brought about by dg is obtained such approach can be the starting point towards the development of a framework of credits to the owners of dg that fully and fairly recognize the deferral benefits provided to the utility the financial performance of investments on these important technologies can be then improved thus broadening dg as a viable market alternative for customers and utilities

tenants landlords and soil conservation it has long been argued that tenants tend to overexploit land but this conventional wisdom has been derived largely without consideration of landlords actions we examine what happens when landlords can invest in durable conservation measures in addition to choosing rental contract terms when tenants are risk neutral landlords overinvest in conservation under cash rental contracts but can achieve first best levels of output and protection against land degradation when conservation investment is combined with share rental when tenants are risk averse the first best is unattainable in this case conservation investment combined with share rental results in output levels below the first best while equilibrium conservation investment may be greater or less than the first best these results suggest that contract form and conservation investments are likely made simultaneously so that econometric studies of conservation practice adoption that treat rental status as exogenous are likely subject to bias

small distributed generation versus centralised supply a social cost benefit analysis in the residential and service sectors abstract this paper aims at measuring the social benefits of small chp distributed generation dg in the residential and service sectors we do this by comparing the social costs of decentralised and centralised supplies simulating ideal situations in which any source of allocative inefficiencies is eliminated this comparison focuses on assessing internal and external costs the internal costs are calculated by simulating the optimal prices of the electricity and gas inputs the external costs are estimated by using and elaborating the results of the dissemination process of the externe project one of the most recent and accurate methodologies in this field the analysis takes into account the main sources of uncertainty about the parameter values including uncertainty about external cost estimations despite these sources of uncertainty the paper concludes that centralised supply is still preferable to small dg in fact the overall range of dg social competitiveness is restricted even considering further remarkable improvements in dg electrical efficiency and investment costs the results are particularly unfavourable for the residential sector whereas in the service sector the performance of dg technologies is slightly better

rationales for capacity remuneration mechanisms security of supply externalities and asymmetric investment incentives economics so far provides little conceptual guidance on capacity remuneration mechanisms crm in deregulated electricity markets ubiquitous in real world electricity markets crms are introduced country by country in an ad hoc manner lacking the theoretical legitimacy and the conceptual coherence enabling comparability and coordination they are eyed with suspicion by a profession wedded to a theoretical benchmark model that argues that competitive energy only markets with voll pricing provide adequate levels of capacity while the benchmark model is a consistent starting point for discussions about electricity market design it ignores the two market failures that make crms the practically appropriate and theoretically justified policy response to capacity issues first energy only markets fail to internalize security of supply externalities as involuntary curbs on demand under scarcity pricing generate social costs beyond the private non consumption of electricity second when demand is inelastic and the potential capacity additions are discretely sized investors face asymmetric incentives and will underinvest at the margin rather than overinvest after presenting the key features of the theoretical benchmark model this paper conceptualizes security of supply externalities and asymmetric investment incentives and concludes with some consideration regarding design of crms

integrating real options analysis with long term electricity market models abstract in liberalized electricity markets the investment postponement option is deemed decisive for understanding the addition of new generating capacity basically it refers to the possibility for investors to postpone projects for a period while waiting for the arrival of new and better information about the market evolution when such development involves major uncertainties the generation business becomes riskier and the investors wait and see behavior might limit the timely addition of new power plants in that sense the literature provides solid empirical evidence about the occurrence of construction cycles in the deregulated electricity industry however the strategic flexibility inherent to the option to defer new power plants has not yet been rigorously incorporated to investment signals in existing market models therefore this paper proposes a novel methodology to assess the long term development of liberalized power markets based on a more realistic approach for valuing generation investments the work is based on a stochastic dynamic market model built upon system dynamics simulation approach the decision making framework considers that the addition of new capacity is driven by the economic value of the strategic flexibility associated with deferring investments under uncertainties thus the value of the postponement option is quantified in monetary terms through real options analysis simulations confirm the cyclical behavior of the energy only market in the long run as suggested by the empirical evidence found in the literature in addition sensitivity analysis regarding some relevant exogenous variables depicts an even more fluctuating evolution of the capacity due to the combination of strong demand growth rates with large volatilities finally the model validity is assessed through a formal procedure according to the scope of system dynamics modeling approach

a methodology for understanding the impacts of large scale penetration of micro combined heat and power co generation at small kw e scale has been stimulated in recent years by governments and energy regulators as one way to increasing energy efficiency and reducing co2emissions if a widespread adoption should be realized their effects from a system s point of view are crucial to understand the contributions of this technology based on a methodology that uses long term capacity planning expansion this paper explores some of the implications for an electric power system of having a large number of micro chps results show that fuel cells based micro chps have the best and most consistent performance for different residential demands from the customer and system s perspectives as the penetration increases at important levels gas based technologies particularly combined cycle units are displaced in capacity and production which impacts the operation of the electric system during summer peak hours other results suggest that the tariff design impacts the economic efficiency of the system and the operation of micro chps under a price based strategy finally policies aimed at micro chps should consider the suitability of the technology in size and heat to power ratio to meet individual demands the operational complexities of a large penetration and the adequacy of the economic signals to incentivize an efficient and sustainable operation more highlights capacity displacements and daily operation of an electric power system are explored benefits depend on energy mix prices and micro chp technology and control scheme benefits are observed mostly in winter when micro chp heat and power are fully used micro chps mostly displace installed capacity from natural gas combined cycle units and tariff design impacts economic efficiency of the system and operation of micro chps less

priorities in cost sharing for soil and water conservation a revealed preference study a number of studies have questioned how successfully paid land diversion has been adapted to address broad environmental policy concerns similar evaluations of cost sharing programs have not been performed this paper uses a revealed preference approach to estimate the implicit decision criteria used to allocate federal cost sharing funds in maryland during the fiscal years 1994 through 1996 funds appear to have been awarded preferentially to projects that enhanced agricultural productivity and farm profitability in contrast to findings regarding the crp however our results do not indicate that cost share awards in maryland were inconsistent with stated environmental quality priorities

enhanced operational reserve as a tool for development of optimal energy mix abstract the aim of this article is to present a novel capacity remuneration mechanism concept that differentiates the level of financial support according to the technology and parameters of the new power plants new power plants that are to be constructed should guarantee the highest level of security of electricity supply and be consistent with actual energy policy carried out by a country thus the proposed remuneration system is based on an operational reserve system which is currently implemented in poland the proposed system distinguishes new power generating assets according to a total assessment based on three factors type of technology including emission benchmark flexibility and location addressing issue of brown or green field investment and conditions of power system operation existing power plants are also subsidized by the proposed mechanism however their remuneration is not based on their characteristics the details of the proposed mechanism a cost analysis and a standardized evaluation procedure are described in the paper the concept itself is universal and can be intruded in every power system that must overcome capacity problem

a method for estimating security of electricity supply from intermittent sources scenarios for germany until 20301 abstract in this paper we develop a methodology for deriving a consistent measure for supply adequacy in the power generation sector we especially consider the secured generation capacity of intermittent renewable energy sources such as wind availability of conventional power plants is estimated through stochastic convolution of unscheduled non usabilities we employ our methodology to measure supply security in germany until 2030 a detailed market analysis of power plants that are currently being built or planned provides support to our analysis for the short term for the long term we rely on a large scale dispatch and investment model of the european power sector to account for the embedding of the german electricity sector in the european market we analyze two scenarios one with prolongation of nuclear power plants and one with a nuclear phase out our results show that even though intermittent renewables only provide very limited secured generation capacity security of electricity supply in germany can be assured until 2015 in the long term the need for backup capacity for renewable energy sources increases as well as the need for electricity imports

slippage in the conservation reserve program or spurious correlation a rejoinder the conservation reserve program crp pays farmers about 2 billion per year to retire cropland under ten to fifteen year contracts recent research by wu found that slippage an unintended stimulus of new plantings offsets some of crp s environmental benefits wu does not account for the endogeneity of crp enrollments furthermore the data used by wu cannot be used to estimate slippage arising from a price feedback effect we replicate wu s findings demonstrate the possible presence of spurious correlation and construct new estimates with corrections for endogeneity and other econometric problems we find no convincing evidence of slippage

the impact of investors risk aversion on the performances of capacity remuneration mechanisms abstract this paper analyses the impact of risk aversion on the performances of capacity remuneration mechanisms with investors facing an uncertain peak load three market designs are studied for this purpose a competitive energy only market a capacity market and a strategic reserve mechanism a simulation model based on system dynamics is developed in order to represent investment decisions and analyse the behaviour of each market design risk aversion is modelled through the computation of conditional value at risk the results are discussed in terms of impact on the reliability ability to limit shortages and cost total generation costs of the studied market designs when comparing the three market designs the capacity market seems to be the least affected by the introduction of risk aversion both in terms of cost and reliability this result suggests that implementing a capacity market is preferable in order to deal with the adverse effects of risk aversion given the simulations and parameters that were used

a market approach to long term security of supply the problem of ensuring that there is enough generation capacity to meet future demand has been an issue in market design since the beginning of the deregulation process although ideally the market itself should be enough to provide adequate investment incentives there are several factors that prevent this result from being achieved and some actual markets have already experienced problems related with a lack of generation capacity a regulatory framework to address this question is presented the procedure is based on an organized market where reliability contracts based on financial call options are auctioned so both their price and their allocation among the different plants are determined through competitive mechanisms this results in a stabilization of the income of the generators and provides a clear incentive for new generation investment with a minimum of regulatory intervention additionally the method represents a market compatible mechanism to hedge demand from the occurrence of high market prices

slippage effects of the conservation reserve program reply given that the conservation reserve program crp costs taxpayers 2 billion per year and remains the largest conservation program in u s history roberts and bucholtz are to be commended for revisiting the slippage issue however their central point that regional variation in crp acreage is endogenous is inconsistent with crp implementation rules and data thus it is not surprising that the null hypothesis of exogeneity cannot be rejected by statistical tests

modelling energy savings in the danish building sector combined with internalisation of health related externalities in a heat and power system optimisation model abstract a substantial untapped energy saving potential rests in the building sector and is expected to play an important role in achieving reduction of environmental impacts of energy in order to utilise this potential effective policy measures need to be adopted to remove the existing barriers and create incentives for that purpose the cost effective energy saving options together with an optimal level of savings and expected environmental benefits have to be identified the paper reports on a study that analyses these questions by including heat saving measures in buildings into an energy system optimisation model of the danish heat and power sector the achieved optimal level of heat savings reaches 11 of projected heat demand in 2025 under the model assumptions moreover the analysis reveals the importance of considering energy conservation options in a system wide perspective furthermore the results suggest that changes in the energy generation sector are the prime driver behind the reduction of environmental externalities of energy heat savings in buildings play only a small role under model assumptions

what s experience got to do with it sources of cost reduction in a large specialty chemicals producer conventional learning curves relating unit cost to measures of production experience are estimated for 221 specialty chemicals produced by a fortune 500 company detailed records on cost and r d coupled with insights from company personnel are used to explain the variation across products in the rate of cost reduction products that exhibited the strongest relationship between unit cost and measures of production experience were subject to specific initiatives particularly process r d the r d was not however generally motivated or informed by production experience however cumulative past output the most commonly used measure of production experience was related to expected future output which conditioned the expected future returns from r d and the choice of r d projects thus cumulative output was connected to unit costs through its role in conditioning incentives to undertake process r d rather than as a proxy for production experience this suggests that the strong relationship commonly found between unit cost and measures of production experience may reflect incentives to reduce cost as much as learning from production experience

cost effectiveness of alternative green payment policies for conservation technology adoption with heterogeneous land quality this paper quantitatively analyses the cost effectiveness of alternative green payment policies designed to achieve a targeted level of pollution control by heterogeneous microunits these green payment policies include cost share subsidies that share the fixed costs of adoption of a conservation technology and or input reduction subsidies to reduce the use of a polluting input the paper shows that unlike a pollution tax that achieves abatement through three mechanisms a negative extensive margin effect a negative intensive margin effect and a technology switching effect a cost share subsidy and an input reduction subsidy are much more restricted in the types of incentives they provide for conservation of polluting inputs and adoption of a conservation technology to control pollution moreover they may lead to varying levels of expansion of land under production costs of abatement with alternative policies and implications for production and government payments are compared using a simulation model for controlling drainage from irrigated cotton production in california with drip irrigation as a conservation technology

investment incentives in the korean electricity market abstract this paper develops a model based analysis of the effects of various capacity incentive systems on new investment in the korean electricity market the restructuring process in korea allocated power generation to six firms competing within a wholesale market albeit strictly on a cost basis because of this cost based pool capacity payments were also introduced to encourage new investment however it is an open question whether the current fixed capacity payment scheme is enough to secure resource adequacy and consideration is being given to alternative mechanisms such as the use of lolp using a detailed market simulation model based on system dynamics we compare these approaches in terms of how they may influence the investors decisions and thereby determine the system reserve margin the simulation results suggest that there may be serious problems in staying with the current fixed capacity payments in order to achieve resource adequacy in contrast an lolp based capacity mechanism may in the longer term increase the reserve margin compared with a fixed capacity payment more generally this paper indicates how crucial the effective modeling of the investment behavior of the independent power producers is for adequate policy support even if they only constitute a fringe in a substantially centrally influenced market

a critical assessment of the different approaches aimed to secure electricity generation supply abstract since the very beginning of the power systems reform process one of the key questions posed has been whether the market of its own accord is able to provide satisfactory security of supply at the power generation level or if some additional regulatory mechanism needs to be introduced and in the latter case which is the most suitable approach to tackle the problem this matter is undoubtedly gaining importance and it has taken a key role in the energy regulators agendas in this paper we critically review and categorize the different approaches regulators can opt for to deal with the problem of guaranteeing or at least enhancing security of supply in a market oriented environment we analyze the most relevant regulatory design elements throughout an updated assessment of the broad range of international experiences highlighting the lessons we have learned so far in a variety of contexts based on the analysis we conclude by providing a set of principles and criteria that should be considered by the regulator when designing a security of supply mechanism

external costs of energy do the answers match the questions looking back at 10 years of externe abstract while the claim for getting prices right is quite popular in conceptual policy papers the implementation of appropriate internalisation strategies is still hampered by a lack of reliable external cost data great expectations were set into the externe project a major research programme launched by the european commission at the beginning of the 1990s to provide a scientific basis for the quantification of energy related externalities and to give guidance supporting the design of internalisation measures after more than a decade of research the externe label became a well recognised standard source for external cost data looking back into the externe history the paper pursues how emerging new scientific insights and changing background assumptions affected external cost estimates and related recommendations to policy over time based on externe results the usefulness and inherent limitations of external cost estimates for impact categories like climate change or nuclear waste disposal is discussed the paper also gives examples on how external costs in spite of remaining uncertainties are successfully used to support environmental policy

the learning curve and pricing in the chemical processing industries data on 37 chemical products are used to test a number of hypotheses about the learning curve and industrial price behavior the results document a strong and consistent learning effect learning is found to be a function of cumulated industry output and cumulated investment rather than calendar time standard economies of scale appear significant but small in magnitude relative to the learning effect variations in the slope of the learning curve are linked to differences in r d expenditures and capital intensity market concentration is found to be a strong influence on price flexibility and the timing of learningrelated price changes

electricity market design for generator revenue sufficiency with increased variable generation we present a computationally efficient mixed integer program mip that determines optimal generator expansion decisions and hourly unit commitment and dispatch in a power system the impact of increasing wind power capacity on the optimal generation mix and generator profitability is analyzed for a test case that approximates the electricity market in texas ercot we analyze three market policies that may support resource adequacy operating reserve demand curves ordc fixed reserve scarcity prices frsp and fixed capacity payments cp optimal expansion plans are comparable between the ordc and frsp implementations while capacity payments may result in additional new capacity the frsp policy leads to frequent reserves scarcity events and corresponding price spikes while the ordc implementation results in more continuous energy prices average energy prices decrease with increasing wind penetration under all policies as do revenues for baseload and wind generators intermediate and peak load plants benefit from higher reserve prices and are less exposed to reduced energy prices all else equal an ordc approach may be preferred to frsp as it results in similar expansion and revenues with less extreme energy prices a fixed cp leads to additional new flexible ngct units but lower profits for other technologies

how predictable is technological progress abstract recently it has become clear that many technologies follow a generalized version of moore s law i e costs tend to drop exponentially at different rates that depend on the technology here we formulate moore s law as a correlated geometric random walk with drift and apply it to historical data on 53 technologies we derive a closed form expression approximating the distribution of forecast errors as a function of time based on hind casting experiments we show that this works well making it possible to collapse the forecast errors for many different technologies at different time horizons onto the same universal distribution this is valuable because it allows us to make forecasts for any given technology with a clear understanding of the quality of the forecasts as a practical demonstration we make distributional forecasts at different time horizons for solar photovoltaic modules and show how our method can be used to estimate the probability that a given technology will outperform another technology at a given point in the future

additionality and the adoption of farm conservation practices we use propensity score matching to estimate additionality from enrollment in federal cost share programs for six practices we analyze farmer adoption decisions based on farmer survey data in ohio we develop a new methodological approach to decompose the average treatment effect on the treated according to relative contributions of voluntary adopters and new adopters our results indicate that cost share programs achieve positive levels of additionality for each practice but percent additionality varies dramatically between practices specifically percent additionality is highest for hayfield establishment 93 3 cover crops 90 6 and filter strips 88 9 while it is lowest for conservation tillage 19 3 jel q24 q28

slippage in conservation cost sharing we examine whether subsidies for conservation on working farmland induce farmers to expand cultivation on more vulnerable land potentially offsetting reductions in environmental spillovers using a switching regression model with endogenous switching and censored endogenous variables applied to maryland farm level data we find no indication that cost share awards are targeted toward water quality improvements receipt of cost sharing increases conservation practice adoption but not the shares of land allocated to conservation implying little adverse selection in awards cost sharing decreases the share of land allocated to vegetative cover so that environmental quality improvements from conservation are likely offset to some degree

enhancing power supply adequacy in spain migrating from capacity payments to reliability options there has been total unanimity about the vital importance of reliability of supply since the beginning of the electricity sector deregulation process this paper describes the procedure proposed by perez arriaga et al 2005 white paper for the reform of the regulatory scheme of the power generation in spain for the ministry of industry tourism and trade of spain in spanish to improve upon the current scheme to guarantee a reasonable reserve margin the capacity payment mechanism this alternative design introduces improvements aimed at guaranteeing at least a minimum capacity reserve margin as well as at providing a strong incentive for generating units to be available when needed namely in situations when supply is likely to be insufficient to meet the total demand

sustainable energy systems role of optimization modeling techniques in power generation and supply a review electricity is conceivably the most multipurpose energy carrier in modern global economy and therefore primarily linked to human and economic development energy sector reform is critical to sustainable energy development and includes reviewing and reforming subsidies establishing credible regulatory frameworks developing policy environments through regulatory interventions and creating market based approaches energy security has recently become an important policy driver and privatization of the electricity sector has secured energy supply and provided cheaper energy services in some countries in the short term but has led to contrary effects elsewhere due to increasing competition resulting in deferred investments in plant and infrastructure due to longer term uncertainties on the other hand global dependence on fossil fuels has led to the release of over 1100 gtco2 into the atmosphere since the mid 19th century currently energy related ghg emissions mainly from fossil fuel combustion for heat supply electricity generation and transport account for around 70 of total emissions including carbon dioxide methane and some traces of nitrous oxide this multitude of aspects play a role in societal debate in comparing electricity generating and supply options such as cost ghg emissions radiological and toxicological exposure occupational health and safety employment domestic energy security and social impressions energy systems engineering provides a methodological scientific framework to arrive at realistic integrated solutions to complex energy problems by adopting a holistic systems based approach especially at decision making and planning stage modeling and optimization found widespread applications in the study of physical and chemical systems production planning and scheduling systems location and transportation problems resource allocation in financial systems and engineering design this article reviews the literature on power and supply sector developments and analyzes the role of modeling and optimization in this sector as well as the future prospective of optimization modeling as a tool for sustainable energy systems

reliability payments to generation capacity in electricity markets abstract electric power is a critical input to modern economies generation adequacy and security of supply in power systems running under competition are currently topics of high concern for consumers regulators and governments in a market setting generation investments and adequacy can only be achieved by an appropriate regulatory framework that sets efficient remuneration to power capacity theoretically energy only electricity markets are efficient and no additional mechanism is needed nonetheless the energy only market design suffers from serious drawbacks therefore jointly with the evolution of electricity markets many remunerating mechanisms for generation capacity have been proposed explicit capacity payment was the first remunerating approach implemented and perhaps still the most applied however this price based regulation has been applied no without severe difficulties and criticism in this paper a new reliability payment mechanism is envisioned capacity of each generating unit is paid according to its effective contribution to overall system reliability the proposed scheme has many attractive features and preserves the theoretical efficiency properties of energy only markets fairness incentive compatibility market power mitigation and settlement rules are investigated in this work the article also examines the requirements for system data and models in order to implement the proposed capacity mechanism a numerical example on a real hydrothermal system serves for illustrating the practicability of the proposed approach and the resulting reliability payments to the generation units

solar energy strategies in the u s utility market abstract given the exponential cost decline trend of solar energy generation technologies and the targeted tax incentives and loan guarantees for renewable energy in the american recovery and reinvestment act of 2009 and other policy measures solar energy generation has been enjoying rapid growth in the united states this paper examines the incorporation of solar renewable energy into generation portfolios and the effects of natural capital specifically the geospatially calculated potential solar energy generation as measured by potential average annual kilowatt hours per square meter per day and respective state mandated renewable portfolio standard targets on utility scale solar energy generation findings suggest that a state s natural solar energy potential is a predictor of solar energy generation development and further this relationship is significantly moderated by state specific renewable energy portfolio standard targets

modeling effort and lobbying in a heterogeneous common pool resource setting extraction from a common pool resource cpr such as a fishery can lead to socially inefficient and undesirable outcomes as a result of appropriation problems through regulation of the cpr users may achieve a more profitable and socially efficient outcome feeny et al land econ 72 2 187 205 1996 delve into some of the assumptions made by traditional cpr models and how use of those assumptions provides an incomplete framework to guide fishery policy in the theoretical models we develop we relax two of those assumptions cpr users are homogeneous and are unable to create or influence management of the resource we note a case where regulation of the individual user can induce others to harvest more and relate this to the slippage effect concept regarding resource sustainability we document situations where incentives exist for cpr users to lobby for tighter regulations and thus increase profits by limiting the tragedy of the commons influence

additionality and reverse crowding out for pollution offsets in water quality trading market based environmental policies frequently include offset provisions that allow polluters who are not subject to a binding cap to participate in trading programs when offsets are used for compliance it is important that they are additional in the sense that the payment from the trading program induces environmental benefits that would not occur without the program in this paper we analyze a water quality trading program in ohio u s to estimate the extent to which the offsets are additional using data from the program and a farmer survey we estimate the number of additional conservation practices that are adopted by farmers who participated in the trading program relative to the counterfactual outcome without the program using matching methods we find no statistically significant increase in the number of conservation practices due to the trading program we also examine whether the trading program may have crowded out government funding we also do not find significant evidence for such crowding out instead finding some evidence that the trading program may have led to greater participation in federal cost share programs

limits to the value of external costs based on recent insights from the field of risk analysis this paper examines some of the difficulties encountered in attempts to characterise the environmental effects of energy options as monetary externalities more than 20 different dimensions of environmental appraisal are identified and discussed in relation to the historic literature on risk assessment and a number of recent influential environmental valuation studies a survey is conducted of the results obtained over more than a decade for the external environmental costs of electricity supply options theoretical and methodological criticisms are lent support by the finding that environmental valuation results vary over a very wide range of values yielding a variety of rank orderings for the different generating options in addition the values derived for energy externalities are found to be vulnerable to the possible influence of a price imperative the paper concludes by pointing to approaches to the social appraisal of generating technologies which offer greater transparency rigour and accessibility in addressing plural and intrinsically subjective value judgements concerning the different forms and dimensions of environmental effects

limits to growth in the renewable energy sector abstract it has been well documented that population growth development of biological subsystems and the utilization of resources in ecology and economy frequently follow a logistic or sigmoid time development in the context of oil and gas extraction such development is known as hubbert s peak oil theory we observe that the logistic equation describes the historic development of nuclear and hydroelectric energy production as well previous studies have hypothesized that the present time fastest growing renewable technologies wind and solar energy will develop under similar constraints here we provide evidence that the installation of these technologies follow a logistic curve in contrast to what is commonly perceived the specific growth rate in energy extraction from wind turbines and photovoltaics have decreased in recent years in an optimistic scenario where we have included forecasted data from the solar and wind associations four years into the future the logistic model implies that the total installed capacity saturates at around 1 8 tw in 2030 this is in sharp contrast to the almost established belief that these energy technologies will experience an exponential growth far into this century

long term assessment of power capacity incentives by modeling generation investment dynamics under irreversibility and uncertainty abstract in actual energy only markets the high volatility of power prices affects the expected returns of generators when dealing with irreversibility under uncertainty deferring decisions to commit in new power plants waiting for better information is therefore a rational approach theoretical and empirical evidence suggests that such investment pattern determines the occurrence of construction cycles which strongly compromise supply security in order to supplement generators revenues several remuneration mechanisms have been devised over past years along this line this work addresses the long run dynamics of capacity adequacy and market efficiency with both a price based and a quantity based capacity remuneration policy for that purpose a recently developed stochastic simulation model is used as a benchmark hence the optimal postponement of generation investment decisions is integrated into a long run power market model by formulating the decision making problem in the framework of real options analysis results suggest that policymakers may exchange supply security effectiveness for energy prices to be paid by consumers efficiency when designing and implementing capacity remuneration mechanisms by doing so this article contributes to the ongoing debate regarding the design of incentive policies and efficient power markets by considering the microeconomics of investors decision making under irreversibility and uncertainty

symposium on global climate change since the industrial revolution increased use of fossil fuels has been strongly linked with economic growth in recent years many scientists have argued that carbon dioxide emissions from fossil fuel combustion are likely to make the earth s climate warmer and some have argued that the consequences could be disastrous global climate change and policies to slow it or adapt to it may be among the primary forces shaping the world s economy throughout the next century and beyond nonetheless popular treatments of this issue commonly ignore economics and assume that if society learns that any warming is likely as a result of human activity we should do whatever is necessary to stop it this seems to reflect the widespread view that environmental issues involve rights and wrongs not costs and benefits and that environmental policy should eliminate contamination not replace missing markets 1 on this view human activity that may alter the earth s climate risks fouling our nest on a massive scale it is simply wrong and must be stopped regardless of cost economics has also been neglected in the pronouncements of the intergovernmental panel on climate change ipcc which was established in 1988 primarily to inform international negotiations on climate change policy 2 the ipcc has produced useful assessments of relevant scientific information but