transmission network cost allocation based on circuit theory and the aumann shapley method this paper presents a new method to allocate the costs of the transmission system among generators and loads the allocation is calculated for each branch of the transmission system to identify and quantify the individual responsibility of generators and loads a two step method based on the perfect coupling of the circuit theory with the aumann shapley method is proposed here first to determine the participation of the generators in the costs of the transmission network the generators are modeled as current injections and the loads as impedances second to determine the participation of the loads in the cost of the transmission network the loads are modeled as current sources and the generators as impedances the aumann shapley method and the circuit theory are used to calculate the participation of each real and imaginary current component in the allocation of the costs of the transmission system game by considering them as independent agents the properties of the aumann shapley method ensure equitable allocation and recovery of the total costs numerical results are presented and discussed to demonstrate the applicability of the proposed method

dynamics of energy related co2 emissions in china during 1980 to 2002 the relative importance of energy supply side and demand side effects abstract based on a newly developed model that integrates energy production transformation and consumption processes this paper compares the relative importance of some traditionally recognized factors operating on the energy demand side with a body of newly defined factors on the supply side in terms of their contribution to trends in china s co2 emissions related to the total primary energy supply c tpes before 1996 changes in china s c tpes were mainly driven by changes on the energy demand side factors operating on the energy supply side played trivial roles during the period 1996 2000 however increasing demand side effects declined dramatically and at the same time decreasing effects from supply side expanded significantly such changes resulted directly in a decline in the c tpes the decreasing effects from international trade as well as statistical imbalances between supply and demand reinforced the declining trend the shrinkage of demand side effects mainly arose from the slowdown of economic growth and speed of decrease in energy intensity the expansion of supply side effects was principally attributed to the speed of decrease in gross unit consumption in transformation sectors especially in electricity sector therefore the acceleration of efficiency improvements in end use and transformation sectors accounted for the decline in the c tpes over the period 1996 2000

cost competitive incentives for wind energy development in china institutional dynamics and policy changes abstract this paper presents an overview of the development of wind power in china the factors that affect the directions of wind power development are analyzed it examines the economics of windfarm development and compares it with conventional energy sources the major constraints in wind technology development and defects of the current policies are discussed it points out that wind power development should be subject to rational policy change and institutional adjustment it discusses the incentive mechanisms and institutional frameworks for future development particular importance is attributed to market incentives for wind power to reach the objectives of industrialization and commercialization a number of cost competitive incentive measures and policies are recommended i introducing market based mechanisms through standard power purchase agreement ii establishing effective investment policies and regulations to attract private investment iii promoting localization of wind turbine production iv adjusting tax and subsidy policies and v reforming governmental institutions to make clear rules and responsibilities for policymaking and enhancing communication coordination between relevant government agencies in order to formulate uniform and effective policies

the substitutability of non fossil energy potential carbon emission reduction and energy shadow prices in china abstract the rapidly increasing consumption of energy and fossil fuel dominated energy structure have caused great pressure on energy security and carbon reduction policies in china and the chinese government has attempted to substitute fossil with non fossil energy to investigate the feasibility of replacing fossil energy with non fossil energy in china we apply an input distance function to estimate the substitutability of non fossil energy for fossil energy and compare shadow prices the result confirms the feasibility of substituting non fossil energy for fossil energy we then divide the non fossil energy into nuclear energy and renewable energy and find that nuclear energy is more suitable than renewable energy to substitute for fossil energy the shadow price ratio of non fossil to fossil energy is 268 41 on average in the study period the ratio experiences several fluctuations and shows a declining trend at the end of the study period implying that improving energy structure in china is very promising

transmission cost allocation by cooperative games and coalition formation the allocation of costs of a transmission system to its users is still a pending problem in many electric sector market regulations this paper contributes with a new allocation method among the electric market participants both cooperation and competition are defined as the leading principles to fair solutions and efficient cost allocation the method is based mainly on the responsibility of the agents in the physical and economic use of the network their rational behavior the formation of coalitions and cooperative game theory resolution mechanisms the designed method is applicable to existing networks or to their expansion simulations are made with sample networks results conclude that adequate solutions are possible in a decentralized environment with open access to networks comparisons with traditional allocation systems are shown and cooperative game solutions compare better in economic and physical terms

the price of pollution a dual approach to valuing so2 allowances under the 1990 clean air act amendments a market based scheme to reduce u s sulfur dioxide emissions takes effect in 1995 indications are that participation in the market will be light and allowance prices will be lower than was once expected using an output distance function approach for wisconsin coal burning utility plants we estimate the shadow price of so2abatement which should approximate the allowance price the estimated average shadow price is above the prices at which the few observed allowance trades have occurred wisconsin s stringent state so2legislation may explain a portion of this divergence

the low carbon technology characteristics of china s ferrous metal industry abstract the ferrous metal industry is the largest energy consuming industrial sector in china this paper examines the low carbon production characteristics of this industry during the period 1980 2013 we employ the duality theory of the weighted russell directional distance function to propose a general procedure for modeling production characteristics with carbon emissions being considered the undesirable output using the weighted russell directional distance function model we measure the carbon adjusted technical efficiency and environmental regulatory costs for this industry to investigate policy effects we test the porter hypothesis using the granger causality between regulatory cost and technical efficiency by using the dual model of weighted russell directional distance function we estimate the carbon shadow pricing and inter factor substitution possibilities results show that the carbon adjusted technical efficiency and environmental regulation costs of the chinese ferrous metal industry have significantly increased in recent decades however the latter does not significantly cause the improvement of former the indirect morishima elasticities of substitution reflect that the increase of fixed assets will effectively improve the carbon emissions performance of the chinese ferrous metal industry finally some policy implications are suggested

directional shadow price estimation of co2 so2 and nox in the united states coal power industry 1990 2010 abstract shadow prices also termed marginal abatement costs provide valuable guidelines to support environmental regulatory policies for co 2 so 2 and no x the key contributors to climate change this paper complements the existing models and describes a directional marginal productivity dmp approach to estimate directional shadow prices dsps which present substitutability among three emissions and are jointly estimated we apply the method to a case study of co 2 so 2 and no x produced by coal power plants operating between 1990 and 2010 in the united states we find that dsp shows 1 1 times the maximal shadow prices estimated in the current literature we conclude that estimating the shadow prices of each by product separately may lead to an overestimation of the marginal productivity and an underestimation of the shadow prices

path towards achieving of china s 2020 carbon emission reduction target a discussion of low carbon energy policies at province level abstract following the announcement of the china s 2020 national target for the reduction of the intensity of carbon dioxide emissions per unit of gdp by 40 45 compared with 2005 levels chinese provincial governments prepared to restructure provincial energy policy and plan their contribution to realizing the state reduction target focusing on fujian and anhui provinces as case studies this paper reviews two contrasting policies as a means for meeting the national reduction target that of the coastal province of fujian proposes to do so largely through the development of nuclear power whilst the coal rich province of anhui proposes to do so through its energy consumption rate rising at a lower rate than that of the rise in gdp in both cases renewable energy makes up a small proportion of their proposed 2020 energy structures the conclusion discusses in depth concerns about nuclear power policy energy efficiency energy consumption strategy and problems in developing renewable energy

parametric efficiency tests economies of scale and input demand in u s electric power generation duality theory has been applied increasingly in recent years to study the structure of production a major advantage of using duality theory is that systems of input demand equations can be derived by simple differentiation facilitating the use of flexible functional forms also use of duality theory makes it possible to choose a representation of the technology which has desirable properties for estimation such as exogeneity of the regressors however the use of a dual representation of production structure is appropriate only if the corresponding maintained hypothesis concerning economic behavior e g cost minimization or profit maximization is valid the perceived advantages of the dual approach to studying production structure have led to some applications in which the maintained hypothesis concerning economic behavior is unlikely to be appropriate for example neoclassical cost functions have been used to study the characteristics of production in regulated industries despite an extensive theoretical literature indicating that a profit maximizing regulated firm would not minimize costs subject to market prices 2 in this paper we propose a generalized cost function that retains the principal advantages of the neoclassical cost function but does not require that cost minimization subject to market prices be imposed as a maintained hypothesis in our model firms are assumed to base their production decisions on unobservable shadow prices which reflect the effects of regulation on the effective prices of inputs parametric tests for cost minimization are obtained by expressing shadow prices as functions of market prices the generalized cost function is estimated with data for regulated electric utilities the parametric restrictions corresponding to cost minimizing behavior subject to market prices are rejected implying that the use of a neoclassical cost function is not appropriate in this application 3

the substitutability of nuclear capital for thermal capital and the shadow price in the korean electric power industry as part of ongoing efforts to reduce co2 emissions by increasing the proportion of the energy mix relying on nuclear power it may be useful to substitute nuclear power for thermal power wherever possible thereby substantially reducing the need to use fossil fuels in order to evaluate the contribution of nuclear power to potential co2 reduction this study examines the substitutability of thermal capital and nuclear capital in the korean electric power industry by utilizing the input distance function additionally the unit costs of thermal capital and nuclear capital are compared in terms of their shadow prices which are defined as the opportunity costs inherent to one additional unit of capital increase deriving from a reduction in labor the empirical results presented herein indicate that nuclear capital is readily substituted for thermal capital but the substitutability of thermal capital for nuclear capital is relatively low the shadow price ratio of nuclear capital to thermal capital is estimated to be 15 9 on average showing an upward trend over the years from 1982 to 2010

ecological total factor energy efficiency of regions in china most existing energy efficiency indices are computed without taking into account undesirable outputs such as co2 and so2 emissions this paper computes the ecological total factor energy efficiency etfee of 30 regions in china for the period 2005 2009 through the slack based model sbm with undesirable outputs we calculate the etfee index by comparing the target energy input obtained from sbm with undesirable outputs to the actual energy input findings show that china s regional etfee still remains a low level of around 0 600 and regional energy efficiency is overestimated by more than 0 100 when not looking at environmental impacts china s regional energy efficiency is extremely unbalanced the east area ranks first with the highest etfee of above 0 700 the northeast and central areas follow and the west area has the lowest etfee of less than 0 500 a monotone increasing relation exists between the area s etfee and china s per capita gdp the truncated regression model shows that the ratio of r d expenditure to gdp and the degree of foreign dependence have positive impacts whereas the ratio of the secondary industry to gdp and the ratio of government subsidies for industrial pollution treatment to gdp have negative effects on the etfee

technical efficiency shadow price of carbon dioxide emissions and substitutability for energy in the chinese manufacturing industries abstract china is the world s largest co 2 producer and energy consumer in this paper we calculate the maximum technically obtainable co 2 emissions reduction from the efficient use of inputs and estimate the shadow prices of co 2 emissions in order to assess the potential cost savings deriving from trading emissions among industries by measuring the input distance function for 30 chinese manufacturing industries our empirical results indicate that co 2 emissions could be reduced by as much as 680 million tons in the aggregate the shadow prices of co 2 vary from a high of 18 82 to a low of zero across industries with an average of 3 13 per ton additionally the estimated indirect morishima elasticities of substitution of capital for fossil fuels indicate that the substitutabilities of capital for oil gas and coal are higher than the substitutability for labor

fiscal stress and the production of public safety a distance function approach abstract faced with increasing crime rates but nonincreasing budgets local governments are seeking cost saving means of providing public safety this paper investigates a bureaucracy s response to fiscal stress as well as its ability to efficiently substitute civilian for uniformed personnel exploiting duality theory a distance function is used to model technology retrieve information concerning substitutability and shadow prices of personnel and test for cost minimization morishima elasticities are adopted to allow for asymmetry in substitution between types of personnel it is found that the more adverse the public safety environment and budgetary condition the more efficiently resources are allocated

an aumann shapley approach to allocate transmission service cost among network users in electricity markets this work presents a new methodology for the allocation of transmission service cost among network users in energy markets the proposed method is based on an optimization game theoretic framework aumann shapley that retains the desirable properties of other existing methodologies such as the average participations factors apf and long run marginal costs lrmc the approach is shown to be computationally feasible and presents desirable characteristics in terms of economic coherence and isonomy computational results are presented for the brazilian power system and compared with those obtained by three other methodologies lrmc apf and the current method adopted in brazil

the determinants of bank loan recovery rates in good times and bad new evidence abstract we find that factors explaining bank loan recovery rates differ depending on the state of an underlying credit cycle our modelling approach incorporates a two state markov switching mechanism to capture underlying economic conditions this latent credit cycle variable helps to explain differences in observed recovery rates over time using us bank default loan data from moody s ultimate recovery database and covering the pre and post global financial crisis gfc period the paper develops and implements a dynamic model for bank loan recovery rates we accommodate the distinctive empirical features of the recovery rate data while incorporating a large number of possible determinants we find that certain loan specific and other variables hold different explanatory power with respect to recovery rates in good versus bad times in the credit cycle i e depending on underlying credit market conditions our findings demonstrate the importance of accounting for counter cyclical expected recovery rates when determining capital retention levels

complex losses allocation to generators and loads based on circuit theory and aumann shapley method this paper presents a new method to allocate active and reactive losses simultaneously to generators and loads the allocation is calculated for each transmission branch identifying and quantifying the buses responsibilities in losses this is a two step process in the first step generators are modeled as current injections and loads as constant admittances in order to determine generator participations in losses in the second step loads are modeled as current sources and generators as constant admittances in order to determine load participations in losses the aumann shapley and circuit theories are used to calculate the participation of each real and imaginary current component considering them as independent players in the complex losses allocation game the properties of the aumann shapley method ensure equitable allocation and recovery of the total active and reactive losses counter flow cross subsidy and negative allocation issues are discussed numerical results are presented and discussed to demonstrate the applicability of the proposed method

price distortions and resource use efficiency in indian agriculture a restricted profit function approach this paper develops a generalized profit function that incorporates price distortions resulting from imperfect market conditions sociopolitical and institutional constraints as well as technical and allocative inefficiency the model is applied to test 1 the appropriateness of the neoclassical profit function and 2 the effect of education and farm size on allocative performance using farm level data from indian agriculture empirical results reject the neoclassical profit maximization hypothesis based on market prices in favor of the general model with price distortions and therefore help to improve allocation of inputs and output farm size is found to reduce price distortions only for small farmers copyright 1992 by mit press

transmission loss unbundling and allocation under pool electricity markets this paper presents a methodology based on the circuit theories for unbundling and allocation of transmission losses among the participants of a pool based electricity market starting from a known operation point and using the basic network equations without additional assumptions an expression of the branch losses based on nodal current injections is derived since the power flow equations and circuit theories are satisfied the methodology turns explicit in a natural way separating the losses at each system branch and assigning the responsibility to the respective market participants it means that the loss allocation of each branch which is produced by each generator and consumer is obtained extensions and strategies considering unsubsidized and predefined proportion based loss allocation as well as issues related with the allocation fairness and transparency are also included comparisons with previous methods and validation tests of the proposed method are reported by using the ieee reliability test system

a weakly conditioned imputation of an impedance branch dissipation power in a sinusoidal steady state circuit how much of an impedance branch dissipation power should be assigned to each source the answer is the basis of electricity transmission pricing such as the pricing of line loss and line security due to thermal limit however it is difficult to obtain a unique and common consent answer because of the nonlinearity of power expression this paper presents two weakly conditioned imputation formulas respectively for dissipation active and reactive power to answer the question first a detailed form of shapley value formula and three weak conditions are proposed on this basis the two imputation formulas are then derived and proved mathematically the imputation formulas are explicitly in terms of source currents voltages thus analytic and easy to compute they possess eight mathematical and economic features that lay a good foundation for electricity transmission pricing the two imputation formulas are also extended to actual power systems where trades are conducted in mwh mvarh instead of amperes volts numerical examples illustrate their computing process and features

on the partition of transmission losses among generators due to the introduction of competition in the electrical power industry determining the percentage of transmission grid losses that should be attributed to each generator has become important usually this is accomplished by determining the percentage of each transmission branch losses that should be attributed to each generator using the aumann shapley theory this letter identifies the fairest way to share the nonseparable portion of losses amongst the generators the obtained result validates some approximations assumed in recent papers and contributes to strengthening circuit theory based methods

environmentally sensitive productivity analysis of the canadian pulp and paper industry 1959 1994 an input distance function approach abstract this study employs a parametric input distance function that incorporates both desirable and undesirable outputs to provide a more complete representation of the production technology from which environmentally sensitive productivity and efficiency measures can be generated this framework also generates pollution abatement cost estimates that are useful for policy making an input based malmquist index of productivity growth that appropriately credits the producer not only for increases in marketable or desirable outputs but also for the production of improved environmental quality through pollution abatement activities is derived from the input distance function the method was applied to time series data from the canadian pulp and paper industry our shadow price estimates indicate that the marginal cost to producers of pollution control has been rising the main conclusion of this study is that productivity improvement from the social viewpoint has been stronger than conventional measures would suggest