robust portfolio optimization for electricity planning an application based on the brazilian electricity mix one of the major challenges of today s policy makers and industry strategists is to achieve an electricity mix that presents a high level of energy security within a range of affordable costs and environmental constraints bearing in mind the planning of a more reliable electricity mix the main contribution of this paper is to consider parameter uncertainties on the electricity portfolio optimization problem we assume that the expected and the covariance matrix of the costs for the different energy technologies such as gas coal nuclear oil biomass wind large and small hydropower are not exactly known we consider that these parameters belong to some uncertainty sets box ellipsoidal lower and upper bounds and convex polytopic three problems are analyzed i finding a energy portfolio of minimum worst case volatility with guaranteed fixed maximum expected energy cost ii finding an energy portfolio of minimum worst case expected cost with guaranteed fixed maximum volatility of the energy cost iii finding a combination of the expected and variance of the cost weighted by a risk aversion parameter these problems are written as quadratic second order cone programming socp and semidefinite programming sdp so that robust optimization tools can be applied these results are illustrated by analyzing the efficient brazilian electricity energy mix considered in losekann et al 2013 assuming possible uncertainties in the vector of expected costs and covariance matrix the results suggest that the robust approach being by nature more conservative can be useful in providing a reasonable electricity energy mix conciliating co2 emission risk and costs under uncertainties on the parameters of the model

electorally unstable by supply or demand an examination of the causes of electoral volatility in advanced industrial democracies the stability of voters partisan choices from election to election is a key feature of democratic politics but why it varies across advanced industrial democracies and elections is not well understood this study makes several key contributions to explaining electoral volatility firstly it is argued and demonstrated that strategic voting plays an independent role in inducing vote switching secondly the analysis shows that demand side factors such as socio economic cleavages and organizations do not predict voter stability whereas supply side factors such as the party system government performance and strategic incentives do thirdly earlier contradictory findings with respect to the role of the electoral system are clarified as its effects are shown to be indirect rather than direct and finally the importance of the temporal dimension to stability is demonstrated as the time since the previous election is found to have a positive effect on volatility the results are based on a comprehensive statistical analysis of 336 elections in 21 countries between 1950 2005 where the significance as well as the robustness of individual variables across different model specifications inform the conclusions

incumbency advantages in the canadian parliament we apply a regression discontinuity approach to determine incumbency advantages in the canadian parliament finding that incumbents enjoy a 9 4 11 2 increased probability of winning over non incumbents owing to the presence of multiple parties an incumbency advantage in terms of vote share does not always translate to an increased probability of winning because incumbents do not necessarily obtain votes from their closest opponent also under the assumption that strategic exit is not an issue we are able to split the incumbency advantage into party incumbency and individual candidate incumbency components finding that the advantage is almost entirely due to the individual on utilise une approche par la methode de regression avec discontinuite pour determiner les avantages qu il y a aetre l elu en place dans les elections au parlement du canada on decouvre que les elus en place ont une probabilite de gagner de 9 4 a 11 2 de plus que leurs adversaires a cause de la presence de multiples partis politiques l avantage de l elu en place en termes de proportion du vote ne se traduit pas toujours par une probabilite accrue de gagner parce que les elus en place ne capturent pas necessairement les votes de leur plus proche adversaire de plus en presumant qu il ne s agit pas de sortie strategique on peut departager l avantage de l elu en place en composantes correspondant a l effet de parti et l effet de l individu on decouvre que l avantage est presque completement attribuable a l individu

how do budget deficits and economic growth affect reelection prospects evidence from a large panel of countries conventional wisdom is that good economic conditions and expansionary fiscal policy help incumbents get reelected but this has not been tested in a large cross section of countries we test these arguments in a sample of 74 countries over the period 1960 2003 we find no evidence that deficits help reelection in any group of countries developed and less developed new and old democracies countries with different government or electoral systems and countries with different levels of democracy in developed countries and in old democracies election year deficits actually reduce the probability that a leader is reelected with similar although smaller negative electoral effects of deficits in the earlier years of an incumbent s term in office higher growth rates of real gdp per capita raise the probability of reelection only in the less developed countries and in new democracies but voters are affected by growth over the leader s term in office rather than in the election year itself and apparently only by growth not attributed to global growth low inflation is rewarded by voters only in the developed countries the effects we find are not only statistically significant but also quite substantial quantitatively we also suggest how the absence of a positive electoral effect of deficits can be consistent with the political deficit cycle found in new democracies

the role of market forces in assuring contractual performance the conditions under which transactors can use the market repeat purchase mechanism of contract enforcement are examined increased price is shown to be a means of assuring contractual performance a necessary and sufficient condition for performance is the existence of price sufficiently above salvageable production costs so that the nonperforming firm loses a discounted steam of rents on future sales which is greater than the wealth increase from nonperformance this will generally imply a market price greater than the perfectly competitive price and rationalize investments in firm specific assets advertising investments thereby become a positive indicator of likely performance

explaining the choice of organic produce cosmetic defects prices and consumer preferences the choice between organic and conventional produce was estimated empirically using a two equation probit model data were collected in store on cosmetic defects produce prices and consumers demographic and economic traits store choice displayed a significant impact on the probability of purchasing organic produce shoppers at the specialty grocer were sensitive to price differences between organic and conventional items households with children under eighteen were more likely to purchase organic produce while shoppers with graduate or professional degrees were less likely to do so differences in cosmetic defects had statistically significant albeit small effects on the probability of purchasing organics

investment risks in power generation a comparison of fossil fuel and renewable energy dominated markets abstract due to their high capital intensity weather dependent renewable energies res such as solar and wind face considerable investment risks in power markets in addition their uncertain production volumes also affect the investment risks of other plant types through the impact on power prices and residual demand increasing res shares thus potentially increase overall investment risks in power markets which many analysts consider to be a potential problem against this background this paper compares investment risks of different technologies in markets with increasing shares of variable res it further analyses how generation mixes are affected by these investment risks if the risks are evaluated on a stand alone basis or in a plant portfolio context of a private firm for this purpose a stylized investment and dispatch model is used to conduct monte carlo simulations from which risk measures are derived the results show that capital intensive res face the highest stand alone risks since their profits are most affected by the power price risk however the results further indicate that the stand alone risks of variable res decrease with their share in the market because of a negative correlation of output and price risk in addition res have a risk benefit in firm plant portfolios in terms of constituting a hedge against losses of fossil fuel plants this positive portfolio effect however rapidly decreases and becomes negative with increasing res shares in the market

corporate socially responsible initiatives and their effects on consumption of green products corporate social responsibility csr research has focused often on the business returns of corporate social initiatives but less on their possible social returns we study an actual company consumer partnership csr initiative promoting ecologically correct and conscious consumption of bottled mineral water we conduct a survey on adult consumers to test the hypotheses that consumer skepticism toward the company consumer partnership csr initiative and the moral emotion of elevation mediate the relationship between company csr motives perceived by consumers and consumer behavioral responses following this csr initiative favorable consumer behavioral responses in turn relate positively to consumer support of other green products the results provide scholars and managers with means of improving their understanding and handling of company consumer partnership csr initiatives

public information as a deterrent to environmental infractions past studies of the impact of publicly announced violations of environmental laws on the market value of the offending firms have yielded equivocal results a particularly troubling aspect of this research is whether the market imposes a reputation penalty for such violations this article uses the event study methodology to estimate the effect of announced environmental infractions on the market returns of the violators stockholders experienced significant negative abnormal returns in the event window cross sectional analysis showed these cumulative losses to be a function of firm size type of legal action and specific toxin the reputation component of abnormal returns was influenced by these factors as well

industry self regulation without sanctions the chemical industry s responsible care program industry self regulation the voluntary association of firms to control their collective action has been proposed as a complement to government regulation proponents argue that the establishment of

asset stock accumulation and sustainability of competitive advantage given incomplete factor markets appropriate time paths of flow variables must be chosen to build required stocks of assets that is critical resources are accumulated rather than acquired in strategic factor markets barney barney j 1986 strategic factor markets expectations luck and business strategy management sci october 1231 1241 sustainability of a firm s asset position hinges on how easily assets can be substituted or imitated imitability is linked to the characteristics of the asset accumulation process time compression diseconomies asset mass efficiencies inter connectedness asset erosion and causal ambiguity

policy variability productive spending and growth in this paper i present two models with policy variability arising from randomness in the provision of productive public spending in the first model public spending enters as an input in output production in this case i find that the relationship between policy variability and growth depends critically on the technological parameters of the production function in the second model public spending enters as an input in the education sector of the economy in this case i find that policy variability retards growth as individuals respond to increased uncertainty by actually reducing rather than increasing their investment in human capital

redistribution effects of energy and climate policy the electricity market abstract energy and climate policies are usually seen as measures to internalize externalities however as a side effect the introduction of these policies redistributes wealth between consumers and producers and within these groups while redistribution is seldom the focus of the academic literature in energy economics it plays a central role in public debates and policy decisions this paper compares the distributional effects of two major electricity policies support schemes for renewable energy sources and co2 pricing we find that the redistribution effects of both policies are large and they work in opposed directions while renewables support transfers wealth from producers to consumers carbon pricing does the opposite more specifically we show that moderate amounts of wind subsidies can increase consumer surplus even if consumers bear the subsidy costs co2 pricing in contrast increases aggregated producer surplus even without free allocation of emission allowances however not all types of producers benefit these findings are derived from an analytical model of electricity markets and a calibrated numerical model of northwestern europe our findings imply that if policy makers want to avoid large redistribution they might prefer a mix of policies even if co2 pricing alone is the first best climate policy in terms of allocative efficiency

reputation and imperfect information abstract a common observation in the informal literature of economics and elsewhere is that is multistage games players may seek early in the game to acquire a reputation for being tough or benevolent or something else but this phenomenon is not observed in some formal game theoretic analyses of finite games such as selten s finitely repeated chain store game or in the finitely repeated prisoners dilemma we reexamine selten s model adding to it a small amount of imperfect or incomplete information about players payoffs and we find that this addition is sufficient to give rise to the reputation effect that one intuitively expects

the effect of the expansion of the voting franchise on the size of government this paper examines the claim that expansion of the voting franchise has been an important factor in the growth of government state government spending and state and local spending are explained using a panel of 46 states for 1950 88 elimination of poll taxes and literacy tests led to higher turnout particularly among the poor and a poorer pivotal voter as predicted we find that these changes a fall in the income of voters relative to state income and the ouster of republicans from state government led to a sharp rise in welfare spending but no change in other spending

establishing the role that wind generation may have in future generation portfolios assessing the correct future mix in generation portfolios has become more difficult given the introduction of emission trading schemes the recent fuel price rises and the increasing competitiveness of wind energy this paper combines analysis of generation economics load and wind generation characteristics generation adequacy and plant utilization to gain insight into the role of wind generation in desirable generation portfolios the unique characteristics of wind generation are accounted for in the analysis and sensitivity analysis is carried out with respect to discount rates carbon taxes and various fuel price scenarios results show that for a large range of future scenarios wind generation has a significant role to play in future generation portfolios in ireland mean variance portfolio theory is applied to examine the benefits of portfolio diversification in terms of avoiding exposure to volatile fuel prices analysis shows that wind generation has a further role to play in generation portfolios in this respect

new problem formulation of emission constrained generation mix this paper proposes an enhanced optimization formulation to help determine the type of power generation mix that can meet a given carbon emission target at the minimum cost compared to the previous studies the model proposed in this paper takes account of the emission cost at operational level and explores its impacts on the long term emission target oriented generation planning innovatively meanwhile the model is able to take account of the integer variables and nonlinearity of the operational cost together with network constraints and renewable generation expansion in one long term generation planning model the problem is solved by an innovative discrete gradient search method and a new concept emission reduction cost erc is developed which helps determine which generation technology is the most cost efficient in emission reduction during different stages of generation expansion a case study on a modified ieee 30 bus system is presented to demonstrate the application of this model and the value of considering short term emission costs and the network constraints on the long term generation expansion the results and sensitivity analysis are provided to show that a higher short term financial pressure can help realize the emission target at a lower total cost investment and operational costs optimization without considering it may overestimate the total cost required for the generation mix restructuring additionally a comparative study shows that optimization without considering network constraints may underestimate the total cost required for realizing the specified emission reduction target

competition in the political arena and local government performance competition reduces rent extraction in private sector firms in this article we empirically assess whether it similarly disciplines politicians by evaluating local level governments performance in flanders the results indicate that electoral competition measured via the number of parties competing in elections significantly positively affects the productive efficiency of municipal policy intertemporal competition measured as the volatility of election outcomes over time has a similar but weaker positive effect these beneficial effects are mitigated by the fact that competition may lead to more fragmented governments which is shown to work against their productive efficiency overall though the beneficial effects outweigh the unfavourable ones in our sample

determining the impact of wind on system costs via the temporal patterns of load and wind generation ambitious targets have been set for expanding electricity generation from renewable sources including wind expanding wind power impacts needs for other electricity generating resources as states plan for increasing levels of wind generation in their portfolio of generation resources it is important to consider how this intermittent resource impacts the need for other generation resources a case study for indiana estimates the value of wind capacity and demonstrates how to optimize its level and the levels of other generation resources changes are driven by temporal patterns of wind power output and load system wide impacts are calculated for energy capacity and costs under multiple wind expansion scenarios which highlight the geographic characteristics of a systems portfolio of wind generation the impacts of carbon prices as proposed in the bingaman bill are considered finally calculations showing the effect increasing levels of wind generation will have on end use indiana retail rates are included

stochastic optimization model to study the operational impacts of high wind penetrations in ireland a stochastic mixed integer linear optimization scheduling model minimizing system operation costs and treating load and wind power production as stochastic inputs is presented the schedules are updated in a rolling manner as more up to date information becomes available this is a fundamental change relative to day ahead unit commitment approaches the need for reserves dependent on forecast horizon and share of wind power has been estimated with a statistical model combining load and wind power forecast errors with scenarios of forced outages the model is used to study operational impacts of future high wind penetrations for the island of ireland results show that at least 6000 mw of wind 34 of energy demand can be integrated into the island of ireland without significant curtailment and reliability problems

the vp function revisited a survey of the literature on vote and popularity functions after over 40 years nannestad and paldam public choice 79 213 245 1994 published herein an extremely influential review of the literature linking economics and elections what they called the vp functions in that work they offered a number of conclusions in proposition form about the state of the evidence in this field we present the key ones 16 in all and assess the extent to which they continue to hold in light of the new evidence about what has come to be known as economic voting as shall be shown nannestad and paldam were prescient in their early establishment of many of the principal results explaining how the economy moves the vote choice

overcompliance and voluntary agreements voluntary agreements with industry offer many examplesof overcompliance with respect to environmentalstandards such phenomena seem to be irrational butappear less surprising considering firms strategiesare aimed to internalise environmental quality wemodel the choice of the environmental quality ofproducts in a one shot game between a monopolist andconsumers to show the existence of inefficientequilibria where quality is low because of moralhazard the firm can however change its equilibriumstrategy in a repeated but finite game in order tobuild an environmental reputation if we suppose thatconsumers information is not only imperfect withregard to quality but also incomplete with respect toany environmental constraint that may affect thebehaviour of firms like the threat either of astricter regulation or of potential entry in atwo period model we show the existence of a perfectbayesian equilibrium in mixed strategies where thefirm can revert to the production of green products inorder to influence consumers beliefs and acquire anenvironmentally friendly reputation due to thepeculiarity of environmental information greenproducts are credence goods we claim that anexplicit agreement is also necessary in order toestablish monitoring and controlling procedures toverify the performance of firms these procedures canexplain per se the diffusion of voluntary agreementsthat are nevertheless self enforcing because of thereputation effect

the effects of wind generation capacity on electricity prices and generation costs a monte carlo analysis abstractwe use monte carlo analysis to examine the potential of increased renewable generation to provide a hedge against variability in energy prices and costs fuel costs electricity demand and wind generation are allowed to vary and a unit commitment and economic dispatch algorithm is employed to produce cost minimizing generation schedules under different levels of installed wind capacity increased wind capacity reduces the mean and the variance of production costs but only the variance of electricity prices wind generators see their market revenues increase while consumer payments and fossil generator profits do not considerably vary as wind capacity increases risk aversion is captured by considering the conditional value at risk for both consumers and producers the optimal level of wind generation increases as risk aversion increases due to the potential of wind to act as a hedge against very high electricity prices in high fuel price scenarios

consumer preferences for fresh food items with multiple quality attributes evidence from an experimental auction of pork chops this study illustrates an application of experimental auction methods using both experimental economics and experimental design to evaluate consumer perceptions and willingness to pay wtp for fresh pork chops we test and reject hypotheses that a market prices and consumers wtp are unaffected by the level of attributes embodied in the pork chops b appearance based on photographs or actual product and actual taste are equally good sources of consumer information and c consumers are consistent in their preferences for fresh pork attributes a major conclusion is that predicting consumer demand for fresh pork or any fresh food based on appearance without tasting is unproductive

a resource based perspective on corporate environmental performance and profitability drawing on the resource based view of the firm we posited that environmental performance and economic performance are positively linked and that industry growth moderates the relationship with the returns to environmental performance higher in high growth industries we tested these hypotheses with an analysis of 243 finns over two years using independently developed environmental ratings results indicate that it pays to be green and that this relationship strengthens with industry growth we conclude by highlighting the study s academic and managerial implications making special reference to the social issues in management literature

reputation and the control of pollution this paper investigates the effectiveness of reputation in inducing a polluting firm to self regulate its emissions when consumers have imperfect information in particular we ask to what extent must consumers reward and punish the firm before it chooses self regulation as its dominant strategy we find that if payoffs in the stage game are such that both the consumer and the polluting firm have beliefs that are consistent with each others behaviors then the firm has a positive probability of playing clean in each period of a finite game further we find that a weak reward punishment scheme may have an adverse effect on the environment and that there are both environmental and welfare gains associated with strengthening the scheme

the importance of nongovernmental organizations ngos in global governance and value creation an international business research agenda the emergence of organized civil society and of nongovernmental organizations ngos as organizational manifestations of broader social movements has dramatically altered the global political economic landscape the increasing global reach of ngos challenges established international business ib research and highlights opportunities for broadening and adapting extant paradigms in the field in this article we introduce the concept of ngos and contrast them with their private sector firm and public sector government counterparts within the context of ib we discuss factors giving rise to ngos as important organizational entities that participate in global value creation and governance and identify limits to their efficacy and viability we identify important questions raised by incorporating ngos into our conceptualization of global context and we challenge three basic tenets of ib theory the definition and dynamics of an institutional field the relevance centrality of a firm government i e two sector bargaining model and the pre eminence of the firm as the global organization of interest within the field we conclude by offering suggested research directions that should serve as catalysts for this new and potentially rich area of future ib research

strategic corporate social responsibility and economic performance this article proposes a novel corporate social responsibility csr index based on a data envelopment analysis dea model acknowledging the argument that companies might favour those csr dimensions that provide strategic competitive advantages we argue that the index can capture companies strategic approach to csr furthermore our findings reveal a neutral relationship between this strategic csr index and economic performance as measured by return on assets roa and tobin s q when controlling for firm unobserved heterogeneity and past economic performance by contrast an equally weighted index of the same csr indicators is found to be negatively related with roa which reinforces our claim that this specific dea based index is a measure of strategic csr

cvar constrained planning of renewable generation with consideration of system inertial response reserve services and demand participation abstract integration of renewable generation can lead to both diversification of energy sources which can improve the overall economic performance of the power sector and cost increase due to the need for further resources to provide flexibility and thus secure operation from unpredictable variable and asynchronous generation in this context we propose a cost risk model that can properly plan generation and determine efficient technology portfolios through balancing the benefits of energy source diversification and cost of security of supply through the provision of various generation frequency control and demand side services including preservation of system inertia levels we do so through a scenario based cost minimization framework where the conditional value at risk cvar associated with costs under extreme scenarios of fossil fuel prices combined with hydrological inflows is constrained the model can tackle problems with large data sets e g 8760 hours and 1000 scenarios since we use linear programming and propose a benders based method adapted to deal with cvar constraints in the master problem through several analyses including the chilean main electricity system we demonstrate the effects of renewables on hedging both fossil fuel and hydrological risks effects of security of supply on costs risks and renewable investment and the importance of demand side services in limiting risk exposure of generation portfolios through encouraging risk mitigating renewable generation investment

verifiable and non verifiable anonymous mechanisms for regulating a polluting monopolist abstract optimal regulation of a polluting natural monopolist must correct for both external damages and market power to achieve a social optimum existing non bayesian regulatory methods require knowledge of the demand function while bayesian schemes require knowledge of the underlying cost distribution we introduce mechanisms adapted to use less information our p rice based s ubsidy ps mechanisms give the firm a transfer that matches or approximates the incremental surplus generated each period the regulator need not observe the abatement activity or know the demand cost or damage functions of the firm all of the mechanisms induce the firm to price at marginal social cost either immediately or asymptotically

epa s voluntary 33 50 program impact on toxic releases and economic performance of firms abstract this paper examines the motivations for participation in the voluntary 33 50 program and the program s impact on the toxic releases and economic performance of firms in the u s chemical industry it demonstrates that the benefits due to public recognition and the potentially avoided costs of liabilities and compliance under mandatory environmental regulations provide strong incentives for participation after controlling for sample selection bias and the impact of other firm specific characteristics this paper shows that program participation led to a statistically significant decline in toxic releases over the period 1991 93 the program also had a statistically significant negative impact on the current return on investment of firms but its impact on the expected long run profitability of firms was positive and statistically significant

elections economic outcomes and policy choices in canada 1870 2015 in this paper we examine the relationship between economic and electoral outcomes in canada since confederation 1867 and the role that economic policy has played in influencing this relationship

assessing the value of wind generation in future carbon constrained electricity industries this paper employs a novel monte carlo based generation portfolio assessment tool to explore the implications of increasing wind penetration and carbon prices within future electricity generation portfolios under considerable uncertainty this tool combines optimal generation mix techniques with monte carlo simulation and portfolio analysis methods to determine expected overall generation costs associated cost uncertainty and expected co2 emissions for different possible generation portfolios a case study of an electricity industry with coal combined cycle gas turbines ccgt open cycle gas turbines ocgt and wind generation options that faces uncertain future fossil fuel prices carbon pricing electricity demand and plant construction costs is presented to illustrate some of the key issues associated with growing wind penetrations the case study uses half hourly demand and wind generation data from south eastern australia and regional estimates of new build plant costs and characteristics results suggest that although wind generation generally increases overall industry costs it reduces associated cost uncertainties and co2 emissions however there are some cases in which wind generation can reduce the overall costs of generation portfolios the extent to which wind penetration affects industry expected costs and uncertainties depends on the level of carbon price and the conventional technology mix in the portfolios

experimental auction procedure impact on valuation of quality differentiated goods despite increased use of experimental auctions a myriad of different procedures are being employed without formal consideration of how the procedures might affect results this study investigates the effect of several procedural issues on valuation estimates from experimental auctions results indicate the second price auction generates higher valuations than english becker degroot marschak bdm and random nth price auctions especially in latter bidding rounds and that random nth price auction yields lower valuations than english and bdm auctions we find that endowing subjects with a good prior to eliciting bids can have an impact on valuations but the effect varies across auction mechanism

do native and invasive labels affect consumer willingness to pay for plants evidence from experimental auctions ornamental plant sales have been identified as an important vector for the introduction of invasive plants increased concerns about the economic and ecological costs of invasive plants have spawned interest in identifying strategies to curtail introductions one possible strategy is labeling plants based on whether they are invasive or native the primary purpose of this paper was to explore how labeling plants based on invasive and native attributes might affect consumer demand to accomplish this objective a second price auction was used to elicit the willingness to pay wtp for plants with and without labels on average we found a 0 35 premium for plants labeled as noninvasive and native and a 1 01 to 1 66 discount for plants labeled as invasive the size of these premiums and discounts differed in relation to various demographic attitudinal and preference related factors overall our results suggest that labeling plants as invasive or native could be a viable strategy for reducing the introduction of invasive plants

effect of announcements of withdrawal from south africa on stockholder wealth in this study we analyzed investor reaction to corporate announcements of withdrawal from south africa to determine whether such announcements increased or reduced firms market value we also exa

risk return incentives in liberalised electricity markets we employ monte carlo analysis to determine the distribution of returns for various electricity generation technologies costs and revenues for each technology are calculated by means of a unit commitment and economic dispatch algorithm at hourly resolution this represents a considerable contribution to the literature as costs and revenues are determined endogenously which in turn allows the returns of midmerit and peaking plant to be examined market entry is determined on the basis of a heuristic while market exit is according to a predetermined retirement schedule the results show that ccgt is the investment technology of choice for baseload only portfolios while ocgt proves optimal when all technologies are considered the high capital costs of baseload generation reduce incentives to invest the methodology can be expanded to consider random outages revenues from scarcity prices capacity markets and ancillary service payments

the assessment the new energy paradigm during the 1980s and 1990s energy policy concentrated on privatization liberalization and competition in response to the underlying conditions of excess supply and low fossil fuels these conditions changed around 2000 in response to the coincidence of a structural upward shift in oil prices the aging of the assets network failures and greater import dependency the focus moved from asset sweating towards investment and has been accompanied by a paradigm shift in the objectives of energy policy towards security of supply and climate change this article sets out the implications for the choice of instruments and institutions in the context of liberalized markets in respect of security of supply and climate change market based instruments are advanced in the former capacity markets and in the latter carbon taxes and permits finally consideration is given to the case for a single integrated energy agency both to enhance credibility and to ensure consistency copyright 2005 oxford university press

endogenous elections electoral budget cycles and canadian provincial governments the existence of manipulative electoral budget cycles and opportunistic election setting is examined in the framework of a parliamentary democracy empirical tests are conducted using a pooled time series cross section data set derived from canadian provincial governments over the 1962 1992 period evidence in support of the electoral budget cycle hypothesis but not the opportunistic election timing hypothesis is obtained

diversity and ignorance in electricity supply investment addressing the solution rather than the problem the need for diversity has been cited as a rationale for important recent investment decisions in the uk electricity supply sector it is invoked as the principal argument for continuing major government intervention yet there exists no formal analytical basis for the concept why is diversity good what is meant by diversification what is it that must be diversified what trade off should be struck between diversity and other measures of performance the resulting ambiguity causes confusion and is vulnerable to special pleading despite this this paper argues that diversification offers a superior alternative to probabilistic approaches towards uncertainty and ignorance in electricity supply investments and proposes a formal analytical approach a quantitative index of diversity is borrowed from information theory and used to derive a value for the government s implicit willingness to pay for diversity in the uk electricity supply mix this is then applied in a pilot exercise to the problem of optimizing the diversity and financial performance of the supply portfolio although provisional the results are relevant to the government s forthcoming nuclear review particularly in assessing the relative levels of support for nuclear power and renewable energy

who surfs who manipulates the determinants of opportunistic election timing and electorally motivated economic intervention in this paper i develop a career concerns model of government policy choice within a dynamic optimal stopping framework to predict the degree of surfing opportunistic timing and manipulation politically motivated economic intervention under alternate institutional structures and voter characteristics among other results i find that the likelihood of opportunistic elections rises with exogenous economic performance with longer maximum term lengths with future electoral uncertainty and with economic volatility but diminishes in the value of office holding manipulation increases with the maximum term length and with the value of office holding but decreases with exogenous economic performance and with economic volatility the model suggests that single party governments should be highly opportunistic in calling elections and that countries that allow opportunistic election timing should experience less economically distortionary political intervention than their fixed timing counterparts

diversification of fuel costs accounting for load variation a practical mathematical programming model for the strategic fuel diversification problem is presented the model is designed to consider the tradeoffs between the expected costs of investments in capacity operating and maintenance costs average fuel costs and the variability of fuel costs in addition the model is designed to take the load curve into account at a high degree of resolution while keeping the computational burden at a practical level the model is illustrated with a case study for indiana s power generation system the model reveals that an effective means of reducing the volatility of the system level fuel costs is through the reduction of dependence on coal fired generation with an attendant shift towards nuclear generation model results indicate that about a 25 reduction in the standard deviation of the generation costs can be achieved with about a 20 25 increase in average fuel costs scenarios that incorporate costs for carbon dioxide emissions or a moratorium on nuclear capacity additions are also presented

multicriteria methods for resource planning an experimental comparison multicriteria decision making mcdm methods are widely used for comparing alternatives when there are multiple objectives for instance utilities use them for resource bidding externality quantification facility siting and resource planning there are many alternative methods differing in their ease of use validity results and appropriateness to resource planning several mcdm methods are compared in an experiment involving the choice of resource portfolio for seattle city light planners and interest group representatives applied direct weight assessment tradeoff weight assessment additive value functions and goal programming most of the participants concluded that mcdm methods could promote insight and confidence in decision making however the authors also confirmed the existence of method biases previously identified by psychologists no single method emerged as best thus application of two or more methods as consistency checks is recommended to guard against bias and to stimulate insight

nuclear and intermittent renewables two compatible supply options the case of the french power mix abstract the complementary features of low carbon power sources are a central issue in designing energy transition policies the french current electricity mix is characterised by a high share of nuclear power which equalled 76 of the total electric production in 2015 with the increase in intermittent renewable sources nuclear flexibility is examined as part of the solution to balance electricity supply and demand our proposed methodology involves designing scenarios with nuclear and intermittent renewable penetration levels and developing residual load duration curves in each case the load modulation impact on the nuclear production cost is estimated this article shows to which extent the nuclear annual energy production will decrease with high shares of intermittent renewables down to load factors of 40 for proactive assumptions however the production cost increase could be compensated by progressively replacing the plants moreover incentives are necessary if nuclear is to compete with combined cycle gas turbines as its alternative back up option in order to reconcile the social planner with plant operator goals the solution could be to find new outlets rather than reducing nuclear load factors nuclear flexibility could then be considered in terms of using its power to produce heat or hydrogen

estimating the electricity prices generation costs and co2 emissions of large scale wind energy exports from ireland to great britain abstract the share of wind generation in the irish and british electricity markets is set to increase by 2020 due to renewable energy re targets the united kingdom uk and ireland have set ambitious targets which require 30 and 40 of electricity demand to come from re mainly wind by 2020 respectively ireland has sufficient indigenous onshore wind energy resources to exceed the re target while the uk faces uncertainty in achieving its target a possible solution for the uk is to import re directly from large scale onshore and offshore wind energy projects in ireland this possibility has recently been explored by both governments but is currently on hold thus the aim of this paper is to estimate the effects of large scale wind energy in the irish and british electricity markets in terms of wholesale system marginal prices total generation costs and co2 emissions the results indicate when the large scale irish based wind energy projects are connected directly to the uk there is a decrease of 0 6 and 2 in the irish and british wholesale system marginal prices under the uk national grid slow progression scenario respectively

the potential of environmental regulation to change managerial perception environmental management competitiveness and financial performance abstract this research presents an overview of where the gaps in the literature exist in relation to the link between environmental regulation and proactive environmental management and competitiveness and incorporates them in a whole model different papers have highlighted only partial aspects of these relationships specifically this research evaluates the relationship between managerial perception and the different styles of environmental regulations command and control versus voluntary norms the mediator role of environmental management in the link between environmental regulations and competitiveness the effect of competitiveness on financial performance and the two way relationship between proactive environmental management and financial performance finally this paper uses statistical evidence to test and estimate causal relationships through a structural equation modelling of 208 firms affected by ippc law in spain there is a lack of systematic statistical evidence on this topic in the literature which mainly focuses on case studies the results show that when environmental regulation stems from command and control legislation its influence on managerial perception and proactive environmental management is not significant however when environmental regulation stems from voluntary norms its effects are positive moreover investment in proactive environmental management contributes to increasing the competitiveness of the firm cost and differentiation competitive advantage have a positive impact on financial performance finally the link between proactive environmental management and financial performance may follow different paths 1 neither direct nor single because it can depend on competitive advantage and 2 direct because there is a significant two way relationship between these variables proactive environmental management influences financial performance and financial performance influences proactive environmental management

competitive investment in clean technology and uninformed green consumers abstract in a market where consumers and the regulatory authorities are not fully informed about the actual production technology or environmental performance of firms that engage in strategic competition i study the effect of environmental consciousness of consumers on firms incentive to invest in cleaner technology firms compete in prices and may signal their environmental performance to uninformed consumers through prices i also analyze the effect of an expected liability on firms in this setting compared to full information incomplete information generates higher strategic incentive to invest in cleaner technology particularly when consciousness and or expected liability are not too high requiring mandatory disclosure of technology or environmental performance may discourage such investment even though consumers and the regulator are uninformed competition has a positive effect relative to monopoly on the incentive to invest

unstable politics fiscal space and electoral volatility in the indian states what explains variations in electoral volatility the authors argue that fiscal space availability of financial resources to enact policy initiatives and provide public programs possessed by govern

using renewables to hedge against future electricity industry uncertainties an australian case study abstract a generation portfolio modelling was employed to assess the expected costs cost risk and emissions of different generation portfolios in the australian national electricity market nem under highly uncertain gas prices carbon pricing policy and electricity demand outcomes were modelled for 396 possible generation portfolios each with 10 000 simulations of possible fuel and carbon prices and electricity demands in 2030 the lowest expected cost generation portfolio includes 60 renewable energy increasing the renewable proportion to 75 slightly increased expected cost by 0 2 mwh but significantly decreased the standard deviation of cost representing the cost risk increasing the renewable proportion from the present 15 to 75 by 2030 is found to decrease expected wholesale electricity costs by 17 mwh fossil fuel intensive portfolios have substantial cost risk associated with high uncertainty in future gas and carbon prices renewables can effectively mitigate cost risk associated with gas and carbon price uncertainty this is found to be robust to a wide range of carbon pricing assumptions this modelling suggests that policy mechanisms to promote an increase in renewable generation towards a level of 75 by 2030 would minimise costs to consumers and mitigate the risk of extreme electricity prices due to uncertain gas and carbon prices

a monte carlo based decision support tool for assessing generation portfolios in future carbon constrained electricity industries abstract this paper presents a novel decision support tool for assessing future generation portfolios in an increasingly uncertain electricity industry the tool combines optimal generation mix concepts with monte carlo simulation and portfolio analysis techniques to determine expected overall industry costs associated cost uncertainty and expected co 2 emissions for different generation portfolio mixes the tool can incorporate complex and correlated probability distributions for estimated future fossil fuel costs carbon prices plant investment costs and demand including price elasticity impacts the intent of this tool is to facilitate risk weighted generation investment and associated policy decision making given uncertainties facing the electricity industry applications of this tool are demonstrated through a case study of an electricity industry with coal ccgt and ocgt facing future uncertainties results highlight some significant generation investment challenges including the impacts of uncertain and correlated carbon and fossil fuel prices the role of future demand changes in response to electricity prices and the impact of construction cost uncertainties on capital intensive generation the tool can incorporate virtually any type of input probability distribution and support sophisticated risk assessments of different portfolios including downside economic risks it can also assess portfolios against multi criterion objectives such as greenhouse emissions as well as overall industry costs

energy planning and modern portfolio theory a review abstract modern portfolio theory mpt stands as a widely accepted methodology to meet the challenges associated with the definition of energy planning for a particular territory or region energy planning is thus framed as an investment selection problem mpt is characterized by having a wider capacity and conceptual richness than the other previously used methodologies such as the individual least cost alternative the portfolio approach is based on solving for an objective function that seeks to minimize either the cost or the risk of the portfolio subject to different constraints considering that real electricity generation assets can be defined in terms of cost or return and economic risk for each alternative technology the relevant portfolios are the result of solving the optimization model to determine the efficient cost risk frontier the work presented here consists of an exhaustive review of the literature in relation to the application of mpt methodology to the field of energy planning and electricity production a new classification is proposed from a financial perspective of the selection of investments from the preceding studies it delves deeper into the explanation of the limits to the methodology and into the concept of risk which is key from both a financial and an energy perspective the main methodological contributions found in the literature are examined that are aimed at improving the capacity of the model and adjusting it to the reality of the electricity market finally conclusions are provided from the works analyzed in terms of renewable technologies and the policy implications derived from them in most studies a preference has been shown for the inclusion of renewable technologies in the efficient portfolios however in order to implement the decision to increase the share of renewable technologies greater flexibility in the interconnection capacity between states and in storage capacity is needed

optimal pooling of renewable energy sources with a risk averse approach implications for us energy portfolio abstract tapping into a large amount of renewable generation considering the inherent variability of renewable energy sources res can greatly increase the risk of supply and demand imbalances in electric power delivery one of the major components of this risk is the intermittency of both wind and solar power generation in this paper we show that by strategically planning for geographical and technological diversification of renewable generation capacity it is possible to reduce such risk in a res only us energy portfolio we consider wind and solar as the sole sources of generation and use risk averse stochastic optimization with conditional value at risk cvar to optimize energy generation locations and capacities in an idealized case study the optimal res portfolios demonstrate a significant improvement in generation profile compared to non pooled or non optimized alternatives this confirms that with smart policy planning one can push the limits of the risk of imbalances in res only portfolios within continental united states and highlights the need for system wide thinking when designing a large scale energy portfolio

wind power reliability valuation in a hydro dominated power market the colombian case abstract the design of market mechanisms that remunerates the reliability provided by a generator in a power market is a task that aims to ensure the normal operation of the system for the case of a hydro dominated system when wind power is introduced and operated under the merit order effect it is possible to assess the effect of the displacement of hydro generation due to wind generation over the system s reliability in terms of firm energy taking this into account a model that valuates the firm energy provided by wind power in a hydro dominated system is proposed this model considers the effect of wind power over the system s reservoirs and the market price of electricity and valuates the firm energy as the net savings of the system related to the increase in the firm energy of the system when wind power is introduced the results show that wind power under merit order effect increases the firm energy of the system and decreases the market price of electricity being the net savings in comparison to the corresponding hydro only system the reliability income that should be perceived by the wind power generator

the european low carbon mix for 2030 the role of renewable energy sources in an environmentally and socially efficient approach abstract the european union s commitment to increase the presence of renewable energy sources in its portfolio has resulted in better levels of security of supply competitiveness and environmental sustainability this proposed work reviews european legislation regarding the promotion of renewable energy sources as well as the bibliography that applies portfolio theory methodology to energy policy this double revision gives rise to the question whether the share limits of renewable energy technologies anticipated for the european power mix in 2020 and 2030 are actually efficient the optimization model corrects for the attractiveness of renewable energy sources as opposed to conventional sources in terms of costs risks and pollutant gas emissions this model successfully and explicitly identifies the positive effect on the environment that is represented by the inclusion of renewable energy sources in the portfolio the goal is to minimize the cost and risk that society must bear to produce electricity in addition to compliance with european pollutant gas co2 so2 nox and pm objectives the results for 2020 indicate that the eu would not be able to reach its emissions reduction goals with the anticipated shares of renewable energy sources in 2030 achieving a lower emissions portfolio would not mean taking on greater costs although it would be necessary to assume a greater level of risk the anticipated shares of renewable energy sources 5 and fossil fuel technologies 15 would be overdimensioned in the forecasts analyzed in terms of technologies both nuclear and wind energy stand out both with shares above 20 on the contrary biomass and solar photovoltaic energies would be unnecessary in order to reach efficiency in any case one thing is clear the eu would be the master of its energy future if it prioritizes the importance of renewable energy sources in its efficient portfolio

voluntary environmental agreements good or bad news for environmental protection abstract there has been growing interest in the use of voluntary agreements vas as an environmental policy tool this article uses a simple model to determine whether vas are likely to lead to efficient environmental protection we consider cases where polluters are induced to participate either by a background threat of mandatory controls the stick approach or by cost sharing subsidies the carrot approach the results suggest that the overall impact on environmental quality could be positive or negative depending on a number of factors including the allocation of bargaining power the magnitude of the background threat and the social cost of funds

electoral and partisan cycle regularities in canada in this paper following recent politico institutional approaches to the theory of economic policy the authors present a methodology for identifying political cycle regularities and test for electoral and partisan cycles in canadian target variables and monetary and fiscal policy instruments using annual data from 1926 to 1994 the empirical evidence suggests the absence of political cycles in canada