the renewables portfolio standard in texas an early assessment texas has rapidly emerged as one of the leading wind power markets in the united states this development can be largely traced to a well designed and carefully implemented renewables portfolio standard rps the rps is a new policy mechanism that has received increasing attention as an attractive approach to support renewable power generation though replacing existing renewable energy policies with an as of yet untested approach in the rps is risky early experience from texas suggests that an rps can effectively spur renewables development and encourage competition among renewable energy producers initial rps targets in texas were well exceeded by the end of 2001 with 915 mw of wind installed in that year alone rps compliance costs appear negligible with new wind projects reportedly contracted for well under 3 us cent k wh in part as a result of a 1 7 us cent kwh production tax credit an outstanding wind resource and an rps that is sizable enough to drive project economies of scale obliged retail suppliers have been willing to enter into long term contracts with renewable generators reducing important risks for both the developer and the retail supplier finally the country s first comprehensive renewable energy certificate program has been put into place to monitor and track rps compliance c 2002 published by elsevier science ltd less

monopolistic competition in the spirit of chamberlin a general model this paper develops a model of large group chamberlinian monopolistic competition in which 1 there are many firms producing differentiated commodities 2 each firm is negligible in that it can ignore its impact on and hence reactions from other firms 3 free entry leads to zero profit of operating firms but 4 each firm faces a downward sloping demand curve the existence of a monopolistically competitive equilibrium is established in a companion paper more particular questions such as whether the market provides too many or too few products are addressed for a special case of the model

renewable energy finance and project ownership the impact of alternative development structures on the cost of wind power abstract this paper uses traditional financial cash flow techniques to examine the impact of different ownership and financing structures on the cost of renewable energy specifically wind power most large non hydroelectric renewable energy projects are developed owned and financed by private non utility generators recently however us utilities have begun to consider owning and financing their own wind power facilities rather than purchasing power from independent renewable energy suppliers utilities in other countries have also expressed interest in direct renewable energy investments a primary justification for utility ownership of wind turbine power plants is that utility self financing and ownership is cheaper than purchasing wind energy from non utility renewable energy suppliers the results presented in this paper support that justification although some of the estimated cost savings associated with utility ownership are a result of suboptimal utility analysis procedures and implicit risk shifting financing terms and variables are shown to significantly impact wind power costs

beyond the transaction banks and mortgage default of low income homebuyers we evaluate the effects of the lending institution and soft information on mortgage loan performance for low income homebuyers we find that even after controlling for the propensity of a borrower to get a loan from a local bank based on observable characteristics those who receive a loan from a local bank branch are significantly less likely to become delinquent or default than other bank or nonbank borrowers consistent with an unobserved information effect these effects are most pronounced for loans originated to borrowers with marginal credit where soft information may have a stronger effect these findings support previous research on information driven lending and provide additional explanation for observed differences in mortgage loan performance between bank and nonbank lenders

prospects for global market expansion of china s wind turbine manufacturing industry abstract emerging economies are increasingly contributing to global innovation including clean tech innovation the development of china s wind power sector has often been used to illustrate this point china s domestic wind power market is the largest in the world and is largely supplied by domestic manufacturers competition for market share in the domestic market may pressure firms to innovate which consecutively improves prospects for global expansion this paper reviews developments in china s domestic wind turbine market using the technological innovation system framework we analyze the pressure to innovate arising from market competition and assess the prospects for global expansion of chinese wind turbine manufacturers we conclude that domestic customers are not pressured or incentivized to perform with respect to power output such that turbine manufacturers are not pressured to perform with respect to turbine efficiency or maintenance needs pressure to innovate is further reduced by formalizing connections between wind farm developers and turbine manufacturers chinese turbine manufacturers cannot yet compete with leading global brands in technological leadership the prospects for exports are improved however by the preferential supply of project financing from institutional investors such as the china development bank from chinese utilities that seek global expansion and from the manufacturers themselves

should renewable energy policy be renewable political flexibility brings about trade offs for policy makers aiming to support the deployment of renewable energy sources res on the one hand it allows incorporating new information on ex ante uncertain benefits and costs of res policy on the other hand it may deter res investments this paper scrutinizes how these trade offs play out economically and politically when res policy makers choose the degree of flexibility as well as the instruments to implement flexibility the analysis builds on a theoretical framework distinguishing between flexibility by design and by adjustment it is complemented by a discussion of three case studies res support schemes in germany and the united kingdom and the eu emissions trading scheme theoretical as well as empirical results suggest that the politically chosen degree of flexibility by policy design may be sub optimally low in contrast flexibility by policy adjustment is often excessively high

monopolistic competition with experience goods this paper constructs a model of monopolistic competition where consumers cannot directly verify product quality prior to an initial purchase instead consumers base initial purchases on observed prices which perfectly signal firms qualities both in and out of equilibrium equilibrium quality is less than efficient but generally bounded away from the minimum quality with free entry observable product variety exceeds what would prevail with perfect information as repeat purchases become large relative to initial purchases or as firms become small relative to the size of the market equilibrium product quality rises and the market converges to the full information equilibrium

the production tax credit for wind turbine powerplants is an ineffective incentive abstract the us energy policy act epact of 1992 created a production tax credit of 1 5 kwh available for 10 years to promote certain renewable energy technologies including wind turbines this paper argues that the impact of the wind turbine production tax credit will be minimal the argument depends entirely on the nature of the project finance structure used by the private power industry for wind turbine development we show that tax credits can only be absorbed by equity investors if there is a large fraction of equity in the project capital structure this raises the financing cost of wind turbine projects compared to conventional power technology which relies on a large fraction of low cost debt if the tax credit were paid as a cash subsidy the capital structure could be shifted to low cost debt and financing costs could be significantly reduced

a generalized valuation model for fixed rate residential mortgages this paper uses option pricing techniques to rationally price mortgage instruments subject to both default and prepayment risk attention is given to terminations due to purely financial consideration of the mortgage contract itself as well as to personally induced terminations explicit inclusion of default in the mortgage valuation procedure also permits the valuation of insurance against such default qualitatively it is found that default differs significantly in the behavior from either prepayment or nonfinancial termination quantitatively however there is significant substitution between prepayment and default so that the addition of a default feature to the contract has only a modest impact on mortgage values unless there is substantial price volatility in the housing market or a high loan to value ratio copyright 1992 by ohio state university press

equilibrium with product differentiation tive consumer formulations is used to examine the properties of single and multiple price equilibria conditions under which decreases in the intensity of consumer preferences reduce price are given it is shown that with certain types of demand curves entry can eliminate price cost markups even given product differentiation if competition is localized it is demonstrated that entry does not affect the markup finally the effect of spurious product differentiation on price is examined

liar s loan effects of origination channel and information falsification on mortgage delinquency 1 this paper presents an analysis of mortgage delinquency between 2004 and 2008 using a loan level data set from a major national mortgage bank our analysis highlights two problems underlying the mortgage crisis a reliance on mortgage brokers who tend to originate lower quality loans and a prevalence of low documentation loans known in the industry as liar s loans that result in borrower information falsification while over three quarters of the difference in delinquency rates between bank and broker channels can be attributed to observable loan and borrower characteristics the delinquency difference between full and low documentation mortgages is due to unobservable heterogeneity about half of it potentially due to income falsification

danish energy reform policy implications for renewables abstract for decades renewables have been promoted in denmark by the feed in model fixed price scheme with favourable tariffs for green electricity this has resulted in successful penetration of wind power covering more than 13 of danish electricity consumption 2001 changing the promotional scheme to a quota based system with tradable green certificates has been on the political agenda since 1999 this article discusses danish energy policy with focus on the implications for the penetration and deployment of renewables it has turned out to be more complicated than anticipated to create an efficient operational system for trade in green certificates and the starting date for trading has been postponed several times the national green certificates market was to be fully operational by the beginning of 2003 however political negotiations in the fall of 2001 seem to postpone the initiation of the certificate market until 2005 transitional rules for green electricity during the period from 2003 to 2005 are under negotiation after a national election in november 2001 this situation has created widespread uncertainty among potential investors in green electricity the article evaluates a number of problems related to the shift in danish energy policy

probabilistic decision model of wind power investment and influence of green power market this paper presents results from a model of a representative wind power investor s decision making process using a monte carlo simulation of a project financial analysis data in the form of probability distribution functions pdfs for key input variables were collected from interviews with investors and other professionals active in the u s wind power industry using a formal expert elicitation protocol this study presents the first quantitative estimates of the effect of the u s voluntary renewable energy certificate rec market on renewable energy generation the results indicate that the investment decisions of wind power project developers in the united states are unlikely to have been altered by the voluntary rec market the problem with the current voluntary rec market is that it does not offer developers a reliable risk adjusted revenue stream consequently the claims by u s green power retailers and promoters that voluntary market recs result in additional wind power projects lack credibility even dramatic increases in voluntary market rec prices in the absence of long term contracts were found to have only a small effect on investor behavior

benefits of relationship banking evidence from consumer credit markets abstract using a unique panel dataset that contains comprehensive information about the relationships between a large bank and its credit card customers we show that relationship accounts exhibit lower probabilities of default and attrition and have higher utilization rates than non relationship accounts dynamic information about changes in the behavior of a customer s other accounts at the same bank helps predict the behavior of the credit card account over time these results imply that relationship banking offers significant potential benefits to banks information the lender has at its disposal can be used to mitigate credit risk on the credit card account

ex post analysis of economic impacts from wind power development in u s counties wind power development has surged in recent years in the united states policymakers and economic development practitioners to date have typically relied upon project level case studies or modeled input output estimates to assess the economic development impacts from wind power often focusing on potential local state wide or national employment or earnings impacts building on this literature we conduct an ex post econometric analysis of the county level economic development impacts of wind power installations from 2000 through 2008 in a large wind rich region in the country taking into account factors influencing wind turbine location we find an aggregate increase in county level personal income and employment of approximately 11 000 and 0 5 jobs per megawatt of wind power capacity installed over the sample period of 2000 to 2008 these estimates appear broadly consistent with modeled input output results and translate to a median increase in total county personal income and employment of 0 2 and 0 4 for counties with installed wind power over the same period

bank branch presence and access to credit in low to moderate income neighborhoods banks specialize in lending to informationally opaque borrowers by collecting soft information about them some researchers claim that this process requires a physical presence in the market to lower information collection costs the author provides evidence in support of this argument in the mortgage market for low income borrowers mortgage originations increase and interest spreads decline when there is a bank branch located in a low to moderate income neighborhood

the impact of production tax credits on the profitable production of electricity from wind in the u s a spatial financial model using wind data derived from assimilated meteorological condition was developed to investigate the profitability and competitiveness of onshore wind power in the contiguous u s it considers not only the resulting estimated capacity factors for hypothetical wind farms but also the geographically differentiated costs of local grid connection the levelized cost of wind generated electricity for the contiguous u s is evaluated assuming subsidy levels from the production tax credit ptc varying from 0 to 4 kwh under three cost scenarios a reference case a high cost case and a low cost case the analysis indicates that in the reference scenario current ptc subsidies of 2 1 kwh are at a critical level in determining the competitiveness of wind generated electricity compared to conventional power generation in local power market results from this study suggest that the potential for profitable wind power with the current ptc subsidy amounts to more than seven times existing demand for electricity in the entire u s understanding the challenges involved in scaling up wind energy requires further study of the external costs associated with improvement of the backbone transmission network and integration into the power grid of the variable electricity generated from wind

consistent conjectures in monopolistic competition abstract models of monopolistic competition such as dixit and stiglitz and spence typically assume firms take market variables as parametric this conjectural variation corresponds to chamberlin s large group approximation although these models need not have a large number of firms the present note following perry shows that consistent conjectures about the size and number of rivals can provide a more satisfactory basis for this assumption

excess entry vertical integration and welfare this article provides a systematic analysis of the welfare effects of vertical integration by a monopolist input supplier into a monopolistically competitive downstream industry we give sufficient conditions on consumer preferences that lead to pareto improving vertical integration and demonstrate a close relationship between assumptions on preference for variety excess entry in monopolistically competitive markets and the welfare effects of vertical integration excess entry in downstream markets tends to give rise to pareto improving vertical integration we extend the analysis to vertical oligopoly and access price regulation

distance and private information in lending we study the effects of physical distance on the acquisition and use of private information in informationally opaque credit markets using a unique data set of all loan applications by small firms to a large bank we show that borrower proximity facilitates the collection of soft information leading to a trade off in the availability and pricing of credit which is more readily accessible to nearby firms albeit at higher interest rates ceteris paribus analyzing loan rates and firms decision to switch lenders provides further evidence for banks strategic use of private information however distance erodes our lender s ability to collect proprietary intelligence and to carve out local captive markets suggesting that the requisite soft information is primarily local the author 2010 published by oxford university press on behalf of the society for financial studies all rights reserved for permissions please e mail journals permissions oxfordjournals org oxford university press

commercial lending and distance evidence from community reinvestment act data a number of large banking organizations have substantially broadened the distances at which they are willing to extend commercial loans but there is also evidence to suggest that this has occurred primarily at the high side of the distribution of lending distances in this paper we employ a new source of data to examine the relationship between lending decisions and distance between lender and borrower for that part of the distance distribution where arguably most of the competitive interactions among lenders still occur we report three basic findings 1 distance operates as a deterrent to lending even within areas traditionally defined as local markets 2 distance is more of a deterrent for small banks than for larger organizations even within these areas and 3 for those commercial loans made within areas currently treated by regulators as markets distance has not been declining in importance indeed a preponderance of the evidence suggests that it is becoming if anything more of a factor possible explanations and policy implications are discussed

value of an additional firm in monopolistic competition the paper develops a model of monopolistic competition in which the satisfaction levels consumers get from products are independently and identically distributed potential substitution among products then generates demand curves through the mechanism of order statistics the value of extra variety can be calculated directly pareto lognormal and beta distributions are investigated using numerical integration some but not all cases support the argument that the optimal number of firms exceeds the equilibrium number

small streams diverse sources who invests in renewable energy in finland during the financial downturn this article addresses the investment gap in renewable energy sources identified by several authors examining the case of a country finland which introduced policy measures to diversify its renewable energy portfolio we analyse the development of investments in renewable heat and power in response to new policy measures and contextual factors during the downturn period 2009 2013 we investigate investor heterogeneity i e the diversity of logics employed by different types of res investors in spite of a severe financial recession we find an emergence of new sources of investment among these new investor types we find diversity in investment drivers and available options these include investors mobilized by the feed in tariff to seek profitable targets and investors such as real estate owners investing in heat pumps for their own use and benefiting from low interest rates we find that the diversification of investors supports the diversification in res sources and brings in new investors undeterred by the financial downturn our findings imply that policy makers should recognize that the responses to distinct incentives and pressures vary by investor types this also means that a mix of policies is required to maximize the contribution of different sectors to filling the renewable energy investment gap

embeddedness in the making of financial capital how social relations and networks benefit firms seeking financing i investigate how social embeddedness affects an organization s acquisition and cost of financial capital in middle market banking a lucrative but understudied financial sector using existing theory and original fieldwork i develop a framework to explain how embeddedness can influence which firms get capital and at what cost i then statistically examine my claims using national data on small business lending at the level of dyadic ties i find that firms that embed their commercial transactions with their lender in social attachments receive lower interest rates on loans at the network level firms are more likely to get loans and to receive lower interest rates on loans if their network of bank ties has a mix of embedded ties and arm s length ties these network effects arise because embedded ties motivate network partners to share private resources while arm s length ties facilitate access to public information on market prices and loan opportunities so that the benefits of different types of ties are optimized within one network i conclude with a discussion of how the value produced by a network is at a premium when it creates a bridge that links the public information of markets with the private resources of relationships

take or pay contracts for renewables deployment abstract renewables require support policies to deliver the european 20 target we discuss the requirements for least cost development and efficient operation and quantify how different schemes i allow for the development of a renewable energy technology portfolio ii reduce rent transfers to infra marginal technologies or better than marginal resource bases and iii minimise regulatory risk and thus capital costs for new projects long term take or pay contracts minimise regulatory uncertainty create appropriate incentives for location and operation allow for efficient system operation and seem compatible with european state aid we discuss how property rights legislation protects existing renewables investors and thus can ensure ongoing investment during a transition towards the new scheme

public policy influence on renewable energy investments a panel data study across oecd countries this paper examines the impact of public policy measures on renewable energy re investments in electricity generating capacity made by institutional investors using a novel combination of datasets and a longitudinal research design we investigate the influence of different policy measures in a sample of oecd countries to suggest an effective policy mix which could tackle failures in the market for clean energy the results call for technology specific policies which take into account actual market conditions and technology maturity to improve the conditions for institutional investments advisable policy instruments include economic and fiscal incentives such as feed in tariffs fit especially for less mature technologies additionally market based instruments such as greenhouse gas ghg emission trading systems for mature technologies should be included these policy measures directly impact the risk and return structure of re projects supplementing these with regulatory measures such as codes and standards e g rps and long term strategic planning could further strengthen the context for re investments

the effect of the production tax credit on wind energy production in deregulated electricity markets abstract this letter estimates the asymmetric influence of the production tax credit on wind energy production i find that states with deregulated electricity markets were more responsive to the tax incentive than their regulated counterparts excluding any external benefits from wind production this dissimilarity amounts to a monthly difference of up to 464 450 in federal benefits

geographic proximity to coal plants and u s public support for extending the production tax credit abstract the production tax credit ptc is an important policy instrument through which the federal government promotes renewable energy development in the united states however the efficacy of the ptc is hampered by repeated expirations and short term extensions and by the general uncertainty surrounding its future status we examine the factors driving variation in public support for the extension of the ptc using a nationally representative internet based survey americans living near a coal fired power plant are significantly more likely to support extending the ptc than are their peers who are more insulated from the externalities of burning coal the evidence for this dynamic was strongest and most statistically significant among subjects experimentally primed to think about the adverse health effects of burning coal raising awareness of the public health ramifications of generating electricity from fossil fuels holds the potential to increase support for renewable energy policies among those living in proximity to coal plants even in a highly politicized policy debate

use of economic instruments in the german renewable electricity policy this article surveys the economic instruments adopted in germany since the start of the previous decade and analyse the factors determining their effectiveness it is found out that their effect has always diminished in correspondence of increased uncertainty on the future of the system in particular while in two of these instances uncertainty was mainly due to national factors in the other the debate on the european renewable directive played a very important role recent changes in the production incentives have introduced a process simulating the effect of competition among renewable generators it is pointed out that the biennial revision of the rates can increase the uncertainty intrinsic in the policy on the other hand this process also provides a forum for the debate on the future of the renewable sector one can notice that currently germany the biggest renewable market in europe is granting one of the lowest production incentives this is rather curious as germany never relied on market competition in order to increase the renewable electricity production

determinants of renewable energy growth a global sample analysis abstract we investigate factors influencing country level renewable energy growth by applying fevd and pcse estimation methods in a unique sample analysis with a longer time series 1990 2010 and a broader sample size of countries including brazil russia india china and south africa than previous studies our results reveal new insights the results suggest that certain government backed energy policies impede renewable energy investments thus implying significant failures in policy design these policies may be failing mainly because of uncertainty and the likelihood of discontinuity weak voluntary approaches are introduced in order to satisfy public demand for more sustainable investments and programmes we find that these may have negative influences on the growth of renewables as well the insight gained is consistent over the estimation methods employed

the benefits of lending relationships evidence from small business data this paper empirically examines how ties between a firm and its creditors affect the availability and cost of funds to the firm we analyze data collected in a survey of small firms by the small business administration the primary benefit of building close ties with an institutional creditor is that the availability of financing increases we find smaller effects on the price of credit attempts to widen the circle of relationships by borrowing from multiple lenders increases the price and reduces the availability of credit in sum relationships are valuable and appear to operate more through quantities rather than prices

impact of public policy uncertainty on renewable energy investment wind power and the production tax credit abstract it is generally understood that the pattern of repeated expiration and short term renewal of the federal production tax credit ptc causes a boom bust cycle in wind power plant investment in the us this on off pattern is detrimental to the wind industry since ramp up and ramp down costs are high and players are deterred from making long term investments it is often assumed that the severe downturn in investment during off years implies that wind power is unviable without the ptc this assumption turns out to be unsubstantiated this paper demonstrates that it is not the absence of the ptc that causes the investment downturn during off years but rather the uncertainty over its return specifically it is the dynamic of power purchase agreement ppa negotiations in the face of ptc renewal uncertainty that drives investment volatility with contract negotiations prevalent in the renewable energy industry this finding suggests that reducing uncertainty is a crucial component of effective renewable energy policy the ptc as currently structured is not the only means existing or potential for encouraging wind power investment using data from a survey of energy professionals various policy instruments are compared in terms of their perceived stability for supporting long term investment

the disparate influence of state renewable portfolio standards on renewable electricity generation capacity several papers have used panel data analyses to examine the effectiveness of u s state level renewable portfolio standards rps in promoting renewable capacity development but the findings are inconclusive estimation of average treatment effects however can mask the fact that rps policies across states are disparate and the treatment states are heterogeneous we use the synthetic control method to conduct individual case studies of the early adopter states our findings indicate that the impact of rps policies varied across states we find texas to be unique among these early adopters in that the rps policy in texas has led to increased renewable capacity jel q42 q48

monopolistic competition in the spirit of chamberlin special results the idea of large group monopolistic competition was first introduced by chamberlin in i 933 although a large literature has developed on this topic since that time it can be argued that few of the models which have been formulated really capture monopolistic competition in chamberlin s sense in a companion paper to this one hart i 983 a model was presented which it was claimed did satisfy the desiderata of large group monopolistic competition specifically the model had the property that i there were many firms producing differentiated commodities 2 each firm was negligible in the sense that it could ignore its impact on and hence reactions from other firms 3 free entry led to zero profit of operating firms but 4 each firm faced a downward sloping demand curve and hence equilibrium price exceeded marginal cost the model of hart i983 was quite general and only such issues as the existence and limiting properties of equilibrium were considered the purpose of the present paper is to analyse a special case of this model in greater detail and to consider in this context the old question of whether too few or too many brands are produced under monopolistic competition before embarking on the analysis however let me briefly indicate why i believe that there is a need for a new model of monopolistic competition further discussion of this may be found in hart i983 in the last few years a sizeable literature has developed on imperfect competition and product differentiation see for example dixit and stiglitz i977 lancaster i979 salop i979 and spence i976 in much of this literature see for example spence i976 markets of fixed finite size are considered where the entry of firms is limited by the existence of set up costs under these conditions only a finite number of firms can operate and hence firms will not be negligible in the sense of 2 in addition due to the integer problem operating firms will generally make strictly positive profits i e 3 is violated models of