managing without growth abstract there are three main arguments why developed countries should consider managing without growth 1 continued economic growth worldwide is not an option owing to environmental and resource constraints and so developed countries should leave room for growth in developing countries where the benefits of growth are evident 2 in developed countries growth has become uneconomic in the sense that it detracts more from well being than it adds and 3 economic growth in developed countries is neither necessary nor sufficient for meeting specific policy objectives such as full employment no poverty and protection of the environment this paper explores various growth scenarios for canada over the medium range to 2020 using lowgrow a dynamic simulation model after describing lowgrow a scenario is presented that shows conditions under which the rate of unemployment in canada could be reduced to historically low levels poverty eliminated and greenhouse gas emissions reduced to comply with canada s commitment under the kyoto protocol without relying on economic growth this is not to say that zero growth should itself become a policy objective rather that the dependence on and defence of economic growth should not be an obstacle to fulfilling more specific welfare enhancing objectives of full employment eliminating poverty and protecting the environment the paper concludes with some policy implications for managing without growth followed by an annex which provides a technical description of lowgrow

global energy use decoupling or convergence we examine the key factors driving change in energy use globally over the past four decades we test for both strong decoupling where economic growth has less effect on energy use as income increases and weak decoupling where energy use declines overtime in richer countries ceteris paribus our econometric approach is robust to the presence of unit roots unobserved time effects and spatial effects our key findings are that the growth of per capita energy use has been primarily driven by economic growth convergence in energy intensity and weak decoupling there is no sign of strong decoupling

wind power in the danish liberalised power market policy measures price impact and investor incentives wind power has a strong position at the danish electricity market mainly caused by high feed in tariffs in the 1990s investments in new wind power installations on land however have declined dramatically after the danish electricity market was liberalised in 1999 first the paper describes how policy measures directed towards wind power have been redesigned to match the liberalised market then we estimate the impact of the redesigned tariffs on the electricity prices finally we assess whether the new tariffs make an incentive to invest in wind power the paper concludes that the new tariffs not by itself make evidence for the actual danish recession in new wind power installations after the electricity reform the main causes could include a combination of problems in spatial planning high risk aversion of new wind turbine investors and perhaps more favourable support schemes in other countries

the merit order effect of wind and photovoltaic electricity generation in germany 2008 2016 estimation and distributional implications abstract generation from renewable energy sources in germany has experienced a considerable uptake in recent years mainly responsible for this development is the german renewable energy sources act erneuerbare energien gesetz eeg this paper considers redistributive implications of the eeg for different electricity consumers using time series regression analysis we show that electricity generation by wind and pv has reduced spot market prices considerably by 6 mwh in 2010 rising to 10 mwh in 2012 we use these results to build a near term forecasting tool for merit order effects projected to reach 14 16 mwh in 2016 on the other hand the costs of the eeg are passed forward to consumers in the form of a surcharge our findings highlight significant redistributive transfers under the current design of the eeg in particular some energy intensive industries are benefiting from lower wholesale electricity prices whilst being largely exempted from contributing to the costs of the scheme we also highlight implications of our results for other areas for reform of the eeg such as adequate remuneration mechanisms that ensure efficient operation and investment decisions are made under the scheme more generally these findings suggest that policy makers need to integrate distributional assessments into policy design and implementation

an integrated approach to climate change income distribution employment and economic growth a demand driven growth model involving capital accumulation and the dynamics of greenhouse gas ghg concentration is set up to examine macroeconomic issues raised by global warming e g effects on output and employment of rising levels of ghg offsets by mitigation relationships among energy use and labor productivity income distribution and growth the economic significance of the jevons and other paradoxes sustainable consumption and possible reductions in employment and sources of instability and cyclicality implicit in the two dimensional dynamical system the emphasis is on the combination of biophysical limits and post keynesian growth theory and the qualitative patterns of system adjustment and the dynamics that emerge

slovak electricity market and the price merit order effect of photovoltaics abstract this paper analyses slovak electricity market with a focus on photovoltaic energy it evaluates the impact of the solar electricity penetration into electricity mix on spot prices seeks evidence of the merit order effect in the slovak electricity market and quantifies it based on hourly data the multivariate regression analysis covers the period 2011 2016 the rather small merit order effect estimated by an ols time series model leads to the small decrease of slovak electricity wholesale prices this spot price reduction attributable to the photovoltaics does not outweigh the costs of the support scheme borne by end users what implies a consumer loss

effect of wind generation on ercot nodal prices abstract in this paper we utilize nodal price data at each thermal generation facility within the ercot footprint between 2014 and 2016 to revisit an empirical question of great interest to various parties how does wind integration affect the wholesale energy price we find that for every additional 1000 mw of wind generation in a real time 15 minute settlement interval nodal prices at non wind resources would be suppressed by 1 45 mwh to 4 45 mwh with considerable heterogeneity across time and space

ecological macroeconomic models assessing current developments our society faces a dilemma while continued economic growth is ecologically unsustainable low or negative rates of economic growth are accompanied by adverse social impacts hence there is a need for macroeconomic tools that can help identify socially sustainable post growth pathways the emerging field of ecological macroeconomics aims to address this need and features a number of new macroeconomic modelling approaches this article provides 1 a review of modelling developments in ecological macroeconomics based on the literature and interviews with researchers and 2 an analysis of how the different models incorporate policy themes from the post growth literature twenty two ecological macroeconomic models were analysed and compared to eight policy themes it was found that environmental interactions and the monetary system were treated most comprehensively themes of income inequality work patterns indicators of well being and disaggregated production were addressed with less detail while alternative business models and cross scale interactions were hardly addressed overall the combination of input output analysis with stock flow consistent modelling was identified as a promising avenue for developing macroeconomic models for a post growth economy however due to the wide interpretation of what the economy entails future research will benefit from employing a range of approaches

an adaptive wavelet neural network based energy price forecasting in electricity markets in a competitive electricity market an accurate forecasting of energy prices is an important activity for all the market participants either for developing bidding strategies or for making investment decisions an adaptive wavelet neural network awnn is proposed in this paper for short term price forecasting stpf in the electricity markets a commonly used mexican hat wavelet has been chosen as the activation function for hidden layer neurons of feed forward neural network ffnn to demonstrate the effectiveness of the proposed approach day ahead prediction of market clearing price mcp of spain market which is a duopoly market with a dominant player and locational marginal price lmp forecasting in pjm electricity market are considered the forecasted results clearly show that awnn has good prediction properties compared to other forecasting techniques such as wavelet arima multi layer perceptron mlp and radial basis function rbf neural networks as well as recently proposed fuzzy neural network fnn

greener more integrated and less volatile a quantile regression analysis of italian wholesale electricity prices abstract this paper provides estimates of quantile regression models of the relationship between italian day ahead electricity prices the supply of renewables and the inception of a new cable sapei linking sardinia with the italian peninsula in the 2006 2015 time window the results confirm the merit order effects detected in the existing literature both for photovoltaics and wind power more strongly in market conditions characterised by moderately low price levels and with some implied increase in volatility the new cable has apparently challenged the ability of power generating companies to extract value through price spikes has mitigated volatility and its effects have been complementary with those of renewables effects from photovoltaics are more sensitive to robustness checks differences across zonal markets are nonetheless detected

energy transition towards economic and environmental sustainability feasible paths and policy implications this paper focuses on growth feasibility in an era of increasing scarcity of fossil fuels a stylised dynamic model illustrates the implications of investing in smooth technological progress in the field of renewable energy positive rates of gdp growth sustained by fossil fuels entail on the one hand more income available for r d in renewable energy sources and on the other an acceleration of the exhaustible resource depletion time our model explores such a trade off and highlights the danger of high growth rates policies should target low growth rates stimulate investment in alternative energy sources and discourage consumption growth

electricity prices large scale renewable integration and policy implications abstract this paper investigates the effects of intermittent solar and wind power generation on electricity price formation in germany we use daily data from 2010 to 2015 a period with profound modifications in the german electricity market the most notable being the rapid integration of photovoltaic and wind power sources as well as the phasing out of nuclear energy in the context of a garch in mean model we show that both solar and wind power granger cause electricity prices that solar power generation reduces the volatility of electricity prices by scaling down the use of peak load power plants and that wind power generation increases the volatility of electricity prices by challenging electricity market flexibility

an ecological macroeconomics model the energy transition in the eu abstract the energy roadmap 2050 er2050 is committed to achieve the european union s emissions mitigation goals by reducing energy use and a transition to renewables the macroeconomic impacts of the ref16 and euco scenarios of this strategy have been reported to entail an absolute decoupling between gdp growth and energy use the aim of this paper is assessing the er2050 targets with a novel modelling methodology based on post keynesian economics i e demand led economic growth and ecological economics i e taking into account absolute biophysical energy availability constrains to economic growth thus this article presents the economy module of the integrated assessment model medeas europe combining system dynamics and input output analysis and evaluates the er2050 targets under different scenarios regarding primary income distribution foreign trade labour productivity industrial policy and working time reduction our results show that gdp growth and employment creation may be halted due to energy scarcity if the er2050 targets are met even considering great energy efficiency gains in addition the renewables share would increase enough to reduce the energy imports dependency but not sufficiently to meet the emissions targets only a post growth scenario would be able to meet the climate goals and maintain the level of employment

renewable generation and electricity prices taking stock and new evidence for germany and austria abstract economic theory predicts that the increase of renewable electricity production should reduce the price of electricity in the short run which is also known as the merit order effect although the merit order effect is only one of several consequences of renewable production on the electricity system it is crucial to determine its size for the economic evaluation of renewable energies in this paper we present a comprehensive overview of relevant past research results on the price effect of renewables additionally we conduct a new empirical analysis of the price effect of renewable production for the austrian german region a market that clearly qualifies for a merit order effect analysis given its characteristics based on the review and our own analysis we show that the merit order effect varies depending on the region and the assessment method chosen we also find that the size of this effect is less dispersed throughout different markets than previously suggested by the literature

towards post keynesian ecological macroeconomics the paper starts with a brief criticism of macroeconomic analyses of different schools of thought for their focus on economic growth and maximisation of output this applies to the traditional keynesian approach which has focused on the achievement of sufficient aggregate demand to underpin full employment and full capacity utilisation down playing aggregate supply constraints this also applies to the neoclassical approach including the current new consensus macroeconomics approach which asserts the dominant role of aggregate supply in the long run and where growth is set by the so called natural rate of growth with no concerns over environmental and ecological issues the paper then proposes a different approach to macroeconomic analysis it explicitly acknowledges that economic growth is a double edged sword growth can help to alleviate persistent levels of high unemployment but it can also lead to potentially catastrophic environmental problems building on the monetary circuit theory and the demand led growth theory the paper offers an analysis of the interconnections and interdependence of the economic biophysical and social worlds and by doing it hopes to provide the building blocks for the establishment of post keynesian ecological macroeconomics

on the market impact of wind energy forecasts this paper presents an analysis of how day ahead electricity spot prices are affected by day ahead wind power forecasts demonstration of this relationship is given as a test case for the western danish price area of the nord pool s elspot market impact on the average price behaviour is investigated as well as that on the distributional properties of the price by using a non parametric regression model to assess the effects of wind power forecasts on the average behaviour the non linearities and time variations in the relationship are captured well and the effects are shown to be quite substantial furthermore by evaluating the distributional properties of the spot prices under different scenarios the impact of the wind power forecasts on the price distribution is proved to be considerable the conditional price distribution is moreover shown to be non gaussian this implies that forecasting models for electricity spot prices for which parameters are estimated by a least squares techniques will not have gaussian residuals hence the widespread assumption of gaussian residuals from electricity spot price models is shown to be inadequate for these model types the revealed effects are likely to be observable and qualitatively similar in other day ahead electricity markets significantly penetrated by wind power

what is ecological economics ecological economics addresses the relationships between ecosystems and economic systems in the broadest sense these relationships are the locus of many of our most pressing current problems i e sustainability acid rain global warming species extinction wealth distribution but they are not well covered by any existing discipline environmental and resource economics as it is currently practiced covers only the application of neoclassical economics to environmental and resource problems ecology as it is cur rently practiced sometimes deals with human impacts on ecosystems but the more common tendency is to stick to natural systems ecological economics aims to extend these modest areas of overlap it will include neoclassical environmental economics and ecological impact studies as sub sets but will also encourage new ways of thinking about the linkages between ecological and economic systems we have chosen the name ecological economics for this area of study because it implies a broad ecological interdisciplinary and holistic view of the problem of studying and managing our world the earth from space cover of the journal reflects this global holistic perspective we did not intend to imply with the ordering of the two words in the title that the journal is mainly an economics journal it is intended to be a new approach to both ecology and economics that recognizes the need to make economics more cognizant of ecological impacts and dependencies the need to make ecology more sensitive to economic forces incentives and constraints and the need to treat integrated economic ecologic systems with a common but diverse set of conceptual and analytical tools there was much discussion of other possible names such as economic ecology or ecology and economics or some conjoining of the two words that to me end up being confusing tongue twisters like ecolnomics or econology but ecological economics seemed to get closest to the mean ing we desired while still being evocative to the uninitiated

less than 2 c an economic environmental evaluation of the paris agreement abstract the literature dedicated to the analysis of the different climate agreements has usually focused on the effectiveness of the aims for emissions in the light of the advance in climate change this article quantifies the variation in emissions that the intended nationally determined contributions indcs will entail and their financial allocation and policies country by country and regionally the objective is evaluating the paris agreement feasibility regarding the indcs and its economic and environmental constraints the criteria through which the 161 indcs are analysed are as follows i socio economic impact of the transition ii focus on energy management iii substitution of non renewable sources iv the role of technology v equality of the transition vi compliance with emission reductions the results obtained show that the paris agreement excessively relies on external financial support 41 4 moreover its unilateralist approach the socio economic and biophysical constraints could be the underlying cause of the ineffectiveness of the 2 c objective this way each country would emit an average of 37 8 more than in the years 2005 2015 when this is weighted the figure would be a 19 3 increase due mainly to the increases in china and india these figures would lead the temperatures up to 3 4 c

empirical analysis of the merit order effect and the missing money problem in power markets with high res shares an on going debate in the energy economics and power market community raises the question if energy only power markets are increasingly failing due to growing feed in shares from subsidized renewable energy sources res the argument being essentially that the merit order effect of res production depresses day ahead spot market prices which in turn creates a situation where power plant owners cannot recover investment costs missing money problem we argue in short that energy only power markets are not failing in principle but are rather facing several market distortions that hinder proper market functioning namely 1 the gap between the electricity volume actually traded at day ahead spot markets versus the overall electricity consumption and 2 the regulatory assumption that variable res generation i e wind and photovoltaic pv truly has zero marginal operation and grid integration costs in this paper we show that both effects over amplify the well known merit order effect of res power feed in and indirectly also the missing money problem beyond a level that is explainable by underlying physical realities we empirically analyze the impacts of wind and pv power feed in on the day ahead market for the epex german austrian market zone a region that is already today experiencing significant feed in tariff fit subsidized res power feed in ca 20 fit share our analysis shows that if necessary regulatory adaptations are taken i e increasing the spot market s share of overall load demand and using the true marginal costs of res units in the merit order energy based power markets remain functional despite high res power feed in

effects of large scale penetration of renewables the italian case in the years 2008 2015 abstract italy has experienced a revolution in the electricity production mix in the years 2008 2015 when a large scale deployment of intermittent renewables caused a high volatility of electricity prices stopped the investments in both fossil and renewable power plants and caused a high degree of uncertainty in matching electricity demand and supply the current legislation gives renewable energy the priority of dispatchment producing a significant decrease of the operational hours of all kinds of power plants which caused economic problems to utilities that had started investments in new high efficiency combined cycles before 2008 and reduced the overall efficiency of fossil fired power generation in order to restore the opportunities for further investments in renewable energy systems it is very important to develop long term policies and interventions to improve the capacity to balance the electricity demand and supply

functional income distribution and aggregate demand in the euro area an increase in the wage share has contradictory effects on the subaggregates of aggregate demand private consumption expenditures ought to increase because wage incomes typically are associated with higher consumption propensities than capital incomes investment expenditures ought to be negatively affected because investment will positively depend on profits net exports will be negatively affected because an increase in the wage share corresponds to an increase in unit labour costs and thus a loss in competitiveness therefore theoretically aggregate demand can be either wage led or profit led depending on how these effects add up the results will crucially depend on how open the economy is internationally the paper estimates a post kaleckian macro model incorporating these effects for the euro area and finds that the euro area is presently in a wage led demand regime implications for wage policies are discussed

macroeconomic modelling under energy constraints global low carbon transition scenarios abstract integrated assessment models provide a framework to study sustainability transitions and their economic impacts models seldom consider energy constraints taking supply availability for granted and thus suggesting a mere change in the energy mix from non renewables to renewables in order to address these limitations a macro economic module within a broader system dynamics model medeas has been developed the model has been run for the whole world from 1995 to 2050 under three different scenarios business as usual bau considering no further transition policies and keeping current trends green growth gg undertaking the low carbon transition according to the paris agreement set of policies and with high gdp growth standards and post growth pg testing the sustainability transition under a gdp non growth degrowth approach the results reveal the conflict between economic growth climate policy and the sustainability of resources whereas a bau approach would not even be an option to achieve climate goals a gg view would not only face the downsizing of economic output but neither would it be able to achieve the 2 c objective the success of the pg approach in meeting emissions objectives suggests a redirection from economic growth policies to an industrial policy that incorporates efficiency and redistribution

stochastic factor model for electricity spot price the case of the nordic market this paper presents a stochastic factor based approach to mid term modeling of spot prices in deregulated electricity markets the fundamentals affecting the spot price are modeled independently and a market equilibrium model combines them to form spot price main advantage of the model is the transparency of the generated prices because each underlying factor and the dynamics between factors can be modeled and studied in detail paper shows realistic numerical examples on the forerunner scandinavian electricity market the model is used to price an exotic electricity derivative

has renewable energy induced competitive behavior in the spanish electricity market abstract recent energy policy has favored a massive introduction of renewable energy sources on electricity markets which has greatly impacted their performance first the electricity price has decreased as a consequence of the so called merit order effect another relevant effect is associated to the intermittent nature of renewable energy which has increased the cost of ancillary services a third and important aspect less addressed in the literature is the induced change in the strategic behavior of the conventional electricity producers in principle the entry of new generators in a concentrated market would make it more competitive and change the strategic behavior of the incumbents we test this hypothesis for the spanish wholesale market while we find no significant change in behavior for nuclear hydropower and coal a change is observed in combined cycle bidding strategies after the entry of renewable generators our analysis shows that the massive entry of renewable energy sources made other generators behavior more competitive in the short run but the effect was not persistent

merit order effects of renewable energy and price divergence in california s day ahead and real time electricity markets abstract we answer two policy questions 1 what are the estimated merit order effects of renewable energy in the california independent system operator s caiso s day ahead market dam and real time market rtm and 2 what causes the hourly dam and rtm prices to systematically diverge the first question is timely and relevant because if the merit order effect estimates are small california s renewable energy development is of limited help in cutting electricity consumers bills but also has a lesser adverse impact on the state s investment incentive for natural gas fired generation the second question is related to the efficient market hypothesis under which the hourly rtm and dam prices tend to converge using a sample of about 21 000 hourly observations of caiso market prices and their fundamental drivers during 12 12 2012 04 30 2015 we document statistically significant estimates p value 0 01 for the dam and rtm merit order effects this finding lends support to california s adopted procurement process to provide sufficient investment incentives for natural gas fired generation we document that the rtm dam price divergence partly depends on the casio s day ahead forecast errors for system loads and renewable energy this finding suggests that improving the performance of the caiso s day ahead forecasts can enhance trading efficiency in california s dam and rtm electricity markets

the merit order effect a detailed analysis of the price effect of renewable electricity generation on spot market prices in germany the german feed in support of electricity generation from renewable energy sources has led to high growth rates of the supported technologies critics state that the costs for consumers are too high an important aspect to be considered in the discussion is the price effect created by renewable electricity generation this paper seeks to analyse the impact of privileged renewable electricity generation on the electricity market in germany the central aspect to be analysed is the impact of renewable electricity generation on spot market prices the results generated by an agent based simulation platform indicate that the financial volume of the price reduction is considerable in the short run this gives rise to a distributional effect which creates savings for the demand side by reducing generator profits in the case of the year 2006 the volume of the merit order effect exceeds the volume of the net support payments for renewable electricity generation which have to be paid by consumers

the energy emissions trap abstract the requirement to reduce emissions to avoid potentially dangerous climate change implies a dilemma for societies heavily dependent on fossil fuels reducing emissions will necessitate the transition from relatively high eroi dispatchable fossil fuels to a combination of relatively low eroi intermittent renewables and geographically limited non intermittent renewables as renewable capacity requires energy to construct there is an initial fossil fuel cost to creating new renewable capacity an insufficiently rapid transition to renewables will imply a scenario in which it is impossible to avoid either transgressing emissions ceilings or facing energy shortages we term this the energy emissions trap in this paper we construct a mathematical model termed eetrap that builds the eroi metric and the energy characteristics of renewable generation into a macroeconomic framework eetrap is used for simulation analysis to test how differing assumptions about the eroi of intermittent renewables will affect the time path of renewable investment necessary to escape the energy emissions trap for all runs of the model the renewable investment rate by 2050 is significantly larger than the current energy investment rate for declining intermittent renewable eroi the renewable investment rate crowds out other forms of investment leading to a declining economic growth rate

the impact of renewables on electricity prices in germany an update for the years 2014 2018 abstract increasing electricity prices for private consumers manifested the idea of price boosting renewable energy sources in germany s public opinion literature however widely concurs that wind and photovoltaics have a reducing effect on spot market electricity prices the underlying merit order effect led to historically low exchange prices in the past years to quantify this effect this study analyses historic demand and supply curves from the german day ahead market to reconstruct electricity prices without the feed in of wind and photovoltaics from 2014 to 2018 results show that renewable energy sources considerably reduced electricity prices by between 2 89 ct kwh in 2014 to 8 89 ct kwh in 2017 this allowed german end consumers to save a total of 40 billion from 2014 to 2018 additionally wind and pv contributed significantly to security of supply demand could not have been met by domestic conventional and nuclear generation capacities in up to 424 hours in 2018 the study highlights the necessity to further speed up the expansion of wind and photovoltaics

induced technological change in a multi regional multi sectoral integrated assessment model wiagem impact assessment of climate policy strategies abstract this paper illustrates the representation of induced technological change in the multi regional multi sectoral integrated assessment model wiagem the main aim of the paper is to investigate quantitatively the economic impacts of climate policy measures due to the induced technological changes that are considered improved technological innovations are triggered by increased r d expenditures that advance energy efficiency model results show that induced technological changes due to increased investment in r d reduce compliance costs although r d expenditures compete with other investment expenditures we find that increased r d expenditures improve energy efficiency which substantially lowers abatement costs without the inclusion of induced technological changes emission targets are primarily reached by declines in production resulting in overall welfare reductions with the inclusion of induced technological changes emission mitigations can be achieved with fewer production drawbacks technological spillover effects also lead to improved terms of trade effects

decarbonisation perspectives for the polish economy abstract in the coming decades the energy sector in poland will undergo a substantial transition towards low carbon usage which will have a predominant impact on the economy several modernization scenarios for energy policy are currently being discussed by the government and not yet concluded the main objective of this paper is to provide a tool that allows to simulate such scenarios and to show the impact of decarbonisation on the whole economy we propose an intertemporal hybrid general equilibrium modeling that incorporates energy technologies bottom up approach directly into a macroeconomic structure top down approach by accounting for wide adjustments in the economy while controlling for all major constraints the model gives a unique and detailed insight into the future shape of the energy sector and prospects of low carbon economy in poland our simulation results suggest that there are no free lunches no realistic energy mix allows to achieve sustainable positive economic growth when considerable emission reduction is to be achieved the price on co2 will exceed eur 100 for 30 emission reduction with respect to business as usual scenario gradual phase out of coal requires focusing on biomass technology the first best nuclear and wind power the second best

the effects of renewables in space and time a regime switching model of the italian power price abstract renewable energy production can exercise a downward pressure on electricity prices by partly crowding out conventional units characterized by higher marginal costs merit order effect yet congestion induced by renewables would partly offset the merit order effect in the congested zone unless renewables reduce the need for imports and allow the emergence of prosumers these congestion effects of renewables are hereby jointly tested with the merit order effect by means of an endogenous regime switching model wherein a regime corresponds to the observable status congested non congested of the grid the model is taken to data from the italian power exchange observed in 2012 and 2013 with a focus on the line connecting sicily with the south zone a frequent bottleneck in the italian transmission grid the results confirm the merit order effect previously detected in the literature and highlight a negative congestion effect i e renewables relieve congestion from sicily a systematic importer but not from the italian peninsula the exporting region this effect is mainly driven by the wind power in feed

how renewable production depresses electricity prices evidence from the german market abstract the urgency of climate change has led several countries to develop renewable energy in order to reduce co2 emissions through the means of various subsidies in the electricity sector one drawback of such policies is the negative impact on electricity prices known as the merit order effect this paper aims at assessing how intermittent renewable production depresses electricity prices in germany which has experienced a significant increase of its renewable capacity over the last two decades to do so we use a two regime markov switching model that enables to disentangle the impact of wind and solar generation depending on the price being high or low we find as expected that renewable production induces a negative marginal effect which is stronger in regimes of relatively high prices in addition we show that both wind and solar productions have a significant impact on the distribution of prices and in particular on the frequency and expected duration of each regime this has implications in terms of market design security of supply and support mechanisms for renewables

the effect of wind and solar power forecasts on day ahead and intraday electricity prices in germany abstract this study analyzes the effects of wind and solar power generation forecasts on electricity prices converse to the existing empirical literature in this area we apply a panel data analysis to control for endogeneity due to unobserved heterogeneity we use a dataset with 24 daily observations of day ahead and intraday prices from 2010 to 2016 and we apply a fixed effects regression under consideration of robust driscoll kraay standard errors a noteworthy element of the regression model is the simulation based design of a variable indicating the power generation technology that is price determining at a certain point in time in this context we differentiate between the fuel types coal gas and others to model the nonlinear price behavior for a varying demand for 2016 we find price dampening effects of both wind and solar power of approximately 0 6 mwh per additional gwh of feed in along with the rapidly increasing shares of wind and solar power of the total power generation during the last years their price dampening effect has declined since 2013 due to a drop in fuel prices another finding is that a reduction in forecasting errors on the power generation from wind and solar and smoothing of the cyclical demand would lead to a decreased price volatility

can renewable energy power the future fossil fuels face resource depletion supply security and climate change problems renewable energy re may offer the best prospects for their long term replacement however re sources differ in many important ways from fossil fuels particularly in that they are energy flows rather than stocks the most important re sources wind and solar energy are also intermittent necessitating major energy storage as these sources increase their share of total energy supply we show that estimates for the technical potential of re vary by two orders of magnitude and argue that values at the lower end of the range must be seriously considered both because their energy return on energy invested falls and environmental costs rise with cumulative output finally most future re output will be electric necessitating radical reconfiguration of existing grids to function with intermittent re

the merit order effect of czech photovoltaic plants abstract we assess the impact of photovoltaic power plants on the electricity supply curve in the czech republic the merit order effect is estimated as the elasticity of electricity spot price with respect to change in supply of electricity from renewable sources data for the czech electricity spot market from 2010 to 2015 are analyzed as this is the period with the steepest increase in a renewable generation capacity the effect is estimated separately for solar and other renewable sources we find a significant difference between these two groups our results show that based on hourly daily and weekly data energy produced by czech solar power plants does not decrease electricity spot price creating double cost to the end consumer however the merit order effect based on averaged daily and weekly data is shown to exist for other renewable sources excluding solar mainly water and wind this contributes to the conclusion that the czech renewables policy that prefers solar to other renewable sources may be considered as suboptimal

the impact of renewables on electricity prices in germany an estimation based on historic spot prices in the years 2011 2013 abstract germany s public opinion and media usually attribute increasing electricity prices to the high share of renewables in the german power system but average electricity prices at the european energy exchange dropped during the last years due to an excess of renewable energy this study uses historic market data in order to quantify the effect of renewables on prices historic demand and supply curves from 2011 to 2013 have been used to reconstruct electricity prices under the assumption that no wind and pv would be available the analysis reveals an astonishingly high increase of market prices up to 5 29 ct kwh due to a lack of non renewable power capacities in 2013 the available conventional capacity would not have been able to cover the demand during 269 hours the estimated maximum deficit of 5 6 gw is in good agreement to data published by the german grid operators the discussion of the origin of this deficit leads to the conclusion that the current situation has not been caused by renewables the liberalization of the european energy market established investment risks that hindered required investment a long time before the renewables boomed

does renewable energy generation decrease the volatility of electricity prices an analysis of denmark and germany although variable renewable energy vre technologies with zero marginal costs decrease electricity prices the literature is inconclusive about how the resulting shift in the supply curves impacts price volatility because the flexibility to respond to high peak and low off peak prices is crucial for demand response applications and may compensate for the losses of conventional generators caused by lower average prices there is a need to understand how the penetration of vre affects volatility in this paper we build distributed lag models with danish and german data to estimate the impact of vre generation on electricity price volatility we find that in denmark wind power decreases the daily volatility of prices by flattening the hourly price profile but in germany it increases the volatility because it has a stronger impact on off peak prices our analysis suggests that access to flexible generation capacity and wind power generation patterns contribute to these differing impacts meanwhile solar power decreases price volatility in germany by contrast the weekly volatility of prices increases in both areas due to the intermittency of vre thus policy measures for facilitating the integration of vre should be tailored to such region specific patterns

modeling the merit order curve of the european energy exchange power market in germany an updating study concerning the analysis and modeling of the european energy exchange power market in germany is urgently called for due to the dramatic transformations of the market in recent years based on careful data research this paper provides a consolidated and detailed view concerning the development of the market and its mechanisms this paper proposes a new analytical model of the merit order curve of the market the model is designed to capture the occurrences of negative prices it considers fuel prices and co2 prices and by taking into account the structural changes of the market such as the increasing energy in feed from renewable sources and the moratorium of nuclear power plants in germany the model is robust to these changes of market fundamentals the proposed merit order curve model constitutes a critical component in realistic fundamental models for the european energy exchange power market

limits to substitution and irreversibility in production and consumption a neoclassical interpretation of ecological economics abstract there are many methodological approaches within ecological economics one of the principal modes of analysis is a modified version of the standard neoclassical model this paper examines the parallels which emerge between the ideas of some ecological economists concerning production and the ideas of others concerning consumption when these ideas are interpreted in the neoclassical paradigm it is well known that ecological economics is characterized by arguments concerning limits to substitution between inputs energy natural capital etc vs manufactured capital labor etc in production and the implications these have for sustainability however various authors have also expressed concerns regarding limits to substitution in consumption either between environmental assets and other goods or between basic needs commodities and other goods though the specific reasons for non substitution are different in the production and consumption cases the underlying theme is that individual commodities and other inputs have unique physical or other properties which make them poor substitutes ideas about irreversibility in production and economic development are also prominent in ecological economics likewise many authors have argued for similar irreversibilities in consumption behavior in analogy to the term technological change i coin the term preferential change to describe these phenomena the linking themes in this case are that the economy environment system is evolutionary in character and that external effects intended and unintended consequences of actions or processes imposed on other parties or resources are all pervasive

economic growth and the transition from traditional to modern energy in sweden we examine the role of substitution from traditional to modern energy carriers and of differential rates of innovation in the use of each of these in economic growth in sweden from 1850 to 1950 we use a simple growth model with a nested ces production function and exogenous factor augmenting technological change and carry out a counterfactual simulation based on the econometric results even though the rate of technical change was higher for modern energy innovation in the use of traditional energy carriers contributed more to growth between 1850 and 1890 since the cost share of traditional energy was so much larger than that of modern energy in that period however after 1890 we find that modern energy contributed much more to economic growth than traditional energy but increasingly labor augmenting technological change became the most important single driver of growth

economic de growth vs steady state economy in recent years the concept of economic de growth decroissance based on the literature of nicolas georgescu roegen e g 1 3 has found a revival in france italy spain and other countries in the popular as well as in the academic literature therein authors took on board georgescu roegens categorical rejection of a steady state economy sse as proposed by herman daly 4 they argue that economic degrowth is the only viable alternative goal to the growing economy this position is challenged in this article and it is concluded that the two concepts are in fact complements economic de growth is not a goal in itself but the rich north s path towards a globally equitable sse moreover the de growth literature can benefit from the strong economic historic roots of the sse and from daly s macroeconomic concepts while in return being able to give lessons about bottom up approaches this would be particularly important for the population issue where daly proposes limited birth licences unfortunately statements on demography are inconsistent and underdeveloped in the de growth literature further it is concluded that most criticisms of the sse are due to a too narrow and technocratic interpretation of the concept instead the sse should be defined as a quasi steady state resting in a dynamic equilibrium and as an unattainable goal which can and probably should be approximated

dynamic analysis of the german day ahead electricity spot market abstract this paper analyzes the dynamic behavior of day ahead spot prices in the german electricity spot market due to positive structural shocks in wind and solar power it uses a dynamic structural vector autoregressive model to estimate the related structural impulse response functions the estimates suggest that wind power shocks have a more prolonged negative effect on spot prices than solar power shocks significant autocorrelations of wind power for larger lags indicate these results the total negative merit order effect of a solar power shock is larger when using a reasonable model specification one reason might be that solar power shocks coincide with demand peaks however results regarding the relation of the effects of wind and solar should be dealt with carefully because these results do not hold for all specifications past static estimates show differences in the total average negative merit order effects these estimates might be overstated if wind and solar power dynamics are transferred to the merit order effects

large scale wind power integration and wholesale electricity trading benefits estimation via an ex post approach abstract the integration of large scale wind power has brought about a series of challenges to the power industry but at the same time a number of benefits are being realized among those the ability of wind power to cause a decline in the electricity market prices has been recognized in quantifying this effect some models used in recent years are based on simulations of the market supply side and the price clearing process the accuracy of the estimates depend on the quality of the input data the veracity of the adopted scenarios and the rigorousness of the solution technique in this work a series of econometric techniques based on actual ex post wind power and electricity price data are implemented for the estimation of the impact of region wide wind power integration on the local electricity market clearing prices and the trading savings that stem from this effect the model is applied to the case of spain where the estimated savings are compared against actual credit and bonus expenses to ratepayers the implications and extent of these results for current and future renewable energy policy making are discussed

confidence sets for cointegrating coefficients based on stationarity tests standard methods for inference in cointegrating systems require all the variables to have exact unit roots and are not at all robust even to slight violations of this condition in this article i consider an alternative approach to inference in a cointegrating system this involves testing the hypothesis that a cointegrating vector takes on a specified value by testing for the stationarity of the associated residual confidence sets for the cointegrating vector can be constructed by exploiting the equivalence between tests and confidence sets this method has the advantage that it remains valid even if the regressors have roots that are not exactly equal to unity