the demand for energy cross country evidence using the florida model abstract income and own price elasticities of demand for energy for 51 countries in 1980 are presented based on pooled estimates from an 11 good demand system estimated with the florida model results indicate income elasticities of demand for energy are significantly larger than unitary for all countries and own price elasticities of demand for energy range between 0 8 and 1 0

energy consumption and economic development in sub sahara africa sub saharan african countries economic development is dependent on energy consumption this paper assesses total energy demand which is composed of traditional energy wood fuel and commercial energy electricity and petroleum in the central east south and west regions of sub saharan africa cross sectional time series data for 20 countries in 25 years are analyzed and the results of the study show that wood fuel accounts for 70 of energy consumption followed by petroleum with most industrial activities utilizing some form of wood fuel regression results suggest that energy demand is inversely related to the price of petroleum and industrial development but positively related to gdp population growth rate and agricultural expansion and that price elasticity is less than one the model results also show that there are regional differences in energy demand in addition the interaction of population growth rates by regions generates mixed results and there are regional differences in the use of commercial energy consumption and gdp growth the findings of this study suggest that countries must diversify their energy sources and introduce energy efficient devices and equipment at all levels of the economy to improve gdp growth rate and gdp per capita

structural change in factor substitution in finnish manufacturing the possibility of structural change in finnish factor substitution relations between energy and nonenergy factors is analyzed the standard generalized leontief klemf cost function is modified so that the substitution parameters related to electricity and fuel factors may shift to new levels over time the initial point of transition is 1974 during which the first energy crises took place likelihood ratio tests confirm that there has indeed been a statistically significant change in energy versus nonenergy substitution our estimates imply stronger substitutability for most input pairs after the energy crisis

determinants of import demand for non renewable energy petroleum products empirical evidence from nigeria abstract this study estimated determinants of import demand for refined petroleum products in nigeria for the period 1984 2013 it employed the autoregressive distributed lag ardl bounds test cointegration method and analysed both long run and short run determinants of import demand for total and specific petroleum products in the long run aggregate and sectoral incomes are significant determinants of import of refined kerosene further real effective exchange rate reer aggregate income gdp manufacturing sector s income domestic energy production dep and population growth rate pgr are drivers of import of refined motor spirit moreover reer dep and manufacturing sector s income are propellers of import of refined distillate fuel also reer and total output of petroleum products are major drivers of total import of refined petroleum products short run results show that previous period gdp pgr and manufacturing and service sectors incomes are determinants of import demand for refined kerosene moreover reer gdp previous pgr and manufacturing sector s income exert significant effects on the import of refined motor spirit further significant effects of reer dep previous pgr domestic output of the product and manufacturing and service sectors incomes on the import demand for distillate fuel were found policy implications of the foregoing are articulated in the paper

impacts of renewables obligation with recycling of the buy out fund tradable green certificate tgc or renewables obligation ro programs typically include a buy out option but only in the uk the buy out fund is redistributed back to the suppliers who have submitted the certificates we show that when the buy out fund is redistributed the supply of renewable energy responds positively to the market conditions and renewables target without it the buy out rate is equivalent to a maximum price however redistribution of the buy out fund may induce strategic behavior from producers who have market power we analyze the impacts of market power and integration on the supply of conventional and renewable energy under the ro program with the buy out fund recycled and devise some empirical tests to predict these impacts policy implications of this study are discussed with special reference to the new fit cfd system

engel s law diet diversity and the quality of food consumption increasing income brings about a decline in the relative importance of food consumption a wider spread of spending patterns and a demand for higher quality goods using an index number approach this article analyzes these three closely related tendencies stripping out the impact of prices from the dispersion of food expenditures gives a volume based measure of diet diversity that is relevant for nutrition using unpublished data from the world bank s international comparison program for 31 items of food in more than 150 countries we find that diets of rich countries are substantially more diverse than those of the poor and that volumes are the more appropriate way to measure the inequality of diversity the quality of the food basket based on the luxury necessity distinction of consumption increases with income but the elasticity is small there is a modest tendency for the structure of prices to be regressive since prices of luxuries relative to necessities are lower in richer countries additionally our diversity and quality measures are shown to have implications for demand analysis and well being

energy security and renewable electricity trade will desertec make europe vulnerable to the energy weapon abstract solar power imports to europe from the deserts of north africa as foreseen in the desertec concept is one possible way to help decarbonising the european power sector by 2050 however this approach raises questions of threats to european energy security in such an import scenario particularly in the light of increasing import dependency and russia s use of the energy weapon in recent years in this paper we investigate the threat of north african countries using the desertec electricity exports as an energy weapon we develop and use a new model to assess the interdependence the bargaining power symmetry operationalised as costs of a disruption in a future renewable electricity trade between north africa and europe if europe maintains current capacity buffers some demand response capability and does not import much more than what is described in the desertec scenario it is susceptible to extortion and political pressure only if all five exporter countries unite in using the energy weapon europe is not vulnerable to extortion by an export cut from only one country as the european capacity buffers are sufficient to restore the power supply no single exporter country would have sustained bargaining power over europe

industrial energy substitution during the 1980s in the greek economy abstract factor substitution in greek manufacturing during the 1980s is examined using pooled data in static and dynamic translog expenditure share models inputs are capital labor electricity and non electrical energy liquid solid gas own price elasticities for capital and labor are inelastic but for electricity more elastic 0 90 results indicate substitutability among factors in the short run in the long run electricity and capital are complements as are labor and non electrical energy greek manufacturing is predicted to continue decreased consumption of liquid fuels to the year 2000 continuing the electrification begun in the 1970s

consequences of a carbon tax on household electricity use and cost carbon emissions and economics of household solar and wind abstract the study was conducted to determine the consequences of a carbon tax equal to an estimated social cost of carbon of 37 2 mg on household electricity cost and to determine if a carbon tax would be sufficient to incentivize households to install either a grid tied solar or wind system u s department of energy hourly residential profiles for five locations 20 years of hourly weather data prevailing electricity pricing rate schedules and purchase prices and solar panel and wind turbine power output response functions were used to address the objectives two commercially available household solar panels 4 kw 12 kw two wind turbines 6 kw 12 kw and two price rate structures traditional meter smart meter were considered averaged across the five households the carbon tax is expected to reduce annual consumption by 4 4 552 kwh year for traditional meter households and by 4 9 611 kwh year for households charged smart meter rates the carbon tax increases electricity cost by 19 202 year for a household cost of 202 year the carbon tax is expected to reduce social costs by 11 annual carbon tax collections of 234 household are expected adding the carbon tax was found to be insufficient to incentivize households to install either a solar panel or wind turbine system installation of a 4 kw solar system would increase the annual cost by 1546 247 and decrease co 2 emissions by 38 2526 kg valued at 94 household the consequence of a carbon tax would depend largely on how the proceeds of the tax are used

electricity demand by time of use an application of the household aids model in this study we estimated the price and expenditure elasticities of peak and off peak electricity consumption using a micro data set on 220 households living in 19 swiss cities the household version of the almost ideal demand system model aids was used as a framework to incorporate household characteristics the aids model was expanded by specifying the intercept as a linear function of household characteristics variables results indicate that demand for peak and off peak electricity is elastic and that cross price effects are positive as well as the elasticity of substitution therefore peak and off peak electricity are substitutes in the hicks allen sense

an analytical approach to activating demand elasticity with a demand response mechanism abstract the aim of this work is to demonstrate analytically the conditions under which activating the elasticity of consumer demand could benefit social welfare we have developed an analytical equilibrium model to quantify the effect of deploying demand response on social welfare and energy trade the novelty of this research is that it demonstrates the existence of an optimal area for the price signal in which demand response enhances social welfare this optimal area is negatively correlated to the degree of competitiveness of generation technologies and the market size of the system in particular it should be noted that the value of unserved energy or energy reduction which the producers could lose from such a demand response scheme would limit its effectiveness this constraint is even greater if energy trade between countries is limited finally we have demonstrated scope for more aggressive demand response when only considering the impact in terms of consumer surplus

the changing demand for energy in rich and poor countries over 25 years abstract country specific income and own price elasticities of demand for private consumption of energy are compared across time and affluence for 43 countries that participated in the 1980 1996 and 2005 international comparison program based on estimates from a ten good demand system results indicate that income elasticities of demand for energy are significantly larger than unitary in 1980 are approximately unitary in 1996 but become inelastic for all 43 countries in 2005 own price elasticities decrease absolutely going from 1980 to 1996 to 2005 ranging from 0 8 to 1 0 in 1980 0 7 to 0 8 in 1996 and 0 6 to 0 7 in 2005 elasticity estimates are also calculated for the set of countries in 1996 and 2005 that do not participate in the icp in 1980

a dynamic analysis of interfuel substitution in u s industrial energy demand using data for 1960 92 to analyze interfuel substitution in the u s industrial sector a dynamic linear logit model is shown to provide superior global properties than a comparable dynamic translog model confirming earlier static results by t j considine 1989 the linear logit model provides a direct unbiased estimate of the rate of dynamic adjustment indicating a median response lag of less than two years excluding fuels used for nonenergy purposes yields larger estimates of the price elasticities for coal and oil and indicates generally greater potential for interfuel substitution than when using aggregate data

optimal generation mix with short term demand response and wind penetration demand response defined as the ability of load to respond to short term variations in electricity prices plays an increasingly important role in balancing short term supply and demand especially during peak periods and in dealing with fluctuations in renewable energy supplies however demand response has not been included in standard models for defining the optimal generation technology mix three different methodologies are proposed to integrate short term responsiveness into a generation technology mix optimization model considering operational constraints elasticities are included to adjust the demand profile in response to price changes including cross price elasticities that account for load shifts among hours as energy efficiency programs also influence the load profile interactions of efficiency investments and demand response are also modeled comparison of model results for a single year optimization with and without demand response shows peak reduction and valley filling effects impacting the optimal amounts and mix of generation capacity increasing demand elasticity also increases the installed amount of wind capacity suggesting that demand response yields environmental benefits by facilitating integration of renewable energy

perceived price complexity of dynamic energy tariffs an investigation of antecedents and consequences dynamic tariffs have the potential to contribute to a successful shift from conventional to renewable energies but tapping this potential in europe ultimately depends on residential consumers selecting them this study proposes and finds that consumer reactions to dynamic tariffs depend on the level of perceived price complexity that represents the cognitive effort consumers must engage in to compute the overall bill amount an online experiment conducted with a representative sample of 664 german residential energy consumers examines how salient characteristics of dynamic tariffs contribute to perceived price complexity subsequently a structural equation model sem reveals that the depth of information processing is central to understand how price complexity relates to consumers behavioral intentions the results suggest that it will be challenging to convince european consumers to select complex dynamic tariffs under the current legal framework policymakers will need to find ways to make these tariffs more attractive

a model for energy pricing with stochastic emission costs we use a supply demand approach to value energy products exposed to emission cost uncertainty we find closed form solutions for a number of popularly traded energy derivatives such as forwards european call options written on spot prices and european call options written on forward contracts our modeling approach is to first construct noisy supply and demand processes and then equate them to find an equilibrium price this approach is very general while still allowing for sensitivity analysis within a valuation setting our assumption is that in the presence of emission costs traditional supply growth will slow down causing output prices of energy products to become more costly over time however emission costs do not immediately cause output price appreciation but instead expose individual projects particularly those with high emission outputs to much more extreme risks through the cost side of their profit stream our results have implications for hedging and pricing for producers operating in areas facing a stochastic emission cost environment

the demand for electricity in the gcc countries abstract cointegration techniques are used to study the effects of economic variables on electricity demand in the gcc countries a dynamic model is estimated using aggregate data for the six states spanning the period 1970 97 statistical investigations confirm the existence of unit root in all time series employed in the study which called for the use of cointegration and error correction methodologies empirical results indicate that both income and price have an impact on electricity consumption and income and price policies could be effectively facilitated in electricity demand management

on the trade off between real time pricing and the social acceptability costs of demand response abstract dynamic tariff policies have become an essential feature of modern electric grid design the successful implementation of such policies usually depends on overcoming the resistance of end users to real time pricing and its political implications in this paper we review the literature on the social acceptability costs of implementing demand response programs and we discuss the key features of implementing a real time price to energy although the literature acknowledges the existence of a social acceptability cost it does not propose an explicit approach to dealing with this issue a model for investigating the implications of the social acceptability cost is thus introduced and through it we discuss thoroughly the joint impact of the elasticity and externality parameters on the tariff design of a demand response program we explore how the increases in elasticity and in externality effects influence price changes in such programs and how the social acceptability cost could be reduced as a function of pricing policies we conclude by discussing the policy design mechanisms in line with demand elasticity and their role in decreasing price variations to cope with the minimum volatility principle in the presence of policies that penalize high prices there is an even further decrease in price variations

the demand for capital labor and energy in european manufacturing industry before and after the oil price shocks the price and substitution elasticities for factor inputs capital labor fuels and electricity are estimated for total manufacturing industry on the basis of a pooled crosscountry time series analysis for nine west european countries the impact of the economic disturbances in the 1970s on the price sensitivity of demand is analyzed by estimating a translog cost function for two separate periods 1960 72 and 1973 80 hicks neutral technical change is rejected for both periods the results indicate some quite significant changes in the elasticities over the two periods

tangible and fungible energy hybrid energy market and currency system for total energy management a masdar city case study abstract we propose the introduction of an energy based parallel currency as a means to ease the transition to energy conscious living abundant fossil energy resources mask the internal and external energy costs for casual energy consumers this situation is challenging communities that draw a significant fraction of their primary energy consumption from renewable energy sources the masdar energy credit mec system is a way of translating the fundamental aspects behind energy generation and usage into a tangible reality for all users with built in fungibility to incentivize collectively sustainable behavior the energy credit currency ergo corresponds with a chosen unit of energy so that the total amount of ergos issued equals the energy supply of the community ergos are distributed to users residents commercial entities employees and visitors on a subscription basis and can be surrendered in exchange for the energy content of a service a spot market pricing mechanism is introduced to relate ergos to fiat currency using a continuously variable exchange rate to prevent depletion of the sustainable energy resource the mec system is intended to i meet the sustainable energy balance targets of a community ii support peak shaving or load shifting goals and iii raise energy awareness

a stochastic two settlement equilibrium model for electricity markets with wind generation incentives to encourage the uptake of renewable energy generation have fostered wind energy in many power systems these incentives usually take the form of market instruments e g feed in tariff or premium that are not directly amenable to optimization representations of the market in this paper we propose an equilibrium model of the short term market to address the impact of wind operation under different structural assumptions the model is formulated for several price taking risk averse firms in competition it accounts for wind generation uncertainty and embeds a representation of the day ahead and balancing mechanisms the consumer is modeled by a linear inverse demand function we focus on feed in premium as the incentive to wind as this is the instrument most favored today in european discussions the model is formulated as a stochastic equilibrium problem where the karush kuhn tucker kkt conditions from the optimization problem of each firm are simultaneously solved together with market clearing conditions on energy capacity for reserve and energy for reserve the problem for each firm consists of a two stage stochastic optimization problem with a recourse function based on the conditional value at risk cvar as a risk measure due to price taking assumptions the model is a single stage complementarity problem it is implemented and solved using the software gams an example based on a stylized simplification of the spanish power market and motivated by the impact of wind penetration on the revenue of conventional plants is used to illustrate the proposed approach

price and income elasticities of residential and industrial electricity demand in the european union this study examines the short and long run price and income elasticities of residential and industrial electricity demand in the european union between 1996 and 2016 instrumental variable models using the between estimator as well as dynamic panel models are employed to present robust estimates and to assess the impact of different methodologies on the reported elasticities the long run price elasticity of residential electricity consumption is estimated between 0 53 and 0 56 these elasticities are more inelastic than that of industrial electricity use which is reported between 0 75 and 1 01 the choice of different econometric methodologies has only moderate impact on the estimates while long run residential income elasticity estimates are moderately inelastic and estimated around 0 61 industrial electricity use tends to be closely tied to income with elasticities between 0 76 and 1 08 electricity demand in all sectors is highly price and income inelastic in the short run additionally population density temperatures and policy measures also influence sectoral electricity use the above estimates can aid the design of european energy and environmental policy

where do all the windmills go influence of the institutional setting on the spatial distribution of renewable energy installation abstract promoting renewable energy sources is one policy response to climate change not only is there currently a debate over the best policy instrument it is also discussed whether the renewable energy production should be expanded centralized at locations with the highest production potential or decentralized close to load it is yet not fully understood what influences the spatial distribution of renewable energy installation i assess the effect of subsidy scheme and market design on the spatial distribution of wind energy installations by comparing a feed in tariffs versus market premiums and b uniform versus nodal pricing the analysis is based on theoretical considerations and using a six node test model that reflects the consumption and renewable resource distribution in several countries and regions the institutional setting has great influence on the spatial distribution and resulting system costs with uniform pricing a market premium only leads to a more decentralized expansion of renewable energy production than a tariff when sites share similar wind conditions spatially more distributed expansion of wind power performs better in terms of total costs and share of wind power in final demand when networks are restricted

impact of some parameters on investments in oligopolistic electricity markets abstract it is seldom the case that one has the opportunity to compare investments as projected by a long term multi period model to what is eventually realized in practice further although sensitivity analysis is of common use in any optimization setting the impact of some parameters on strategic investments is not yet fully assessed in the context of the deregulated electricity industry starting with a benchmark model of the finnish industry we precisely explore the impact on equilibrium investments of varying such parameters as direct and cross price elasticities length of the planning horizon and the depreciation rate of capacity we run the model with different parameter values and compare the predicted equilibrium with what companies have actually done the model is a stochastic dynamic game involving three players and played over a ten year period our results show the depreciation rate and the planning horizon have a notable effect on investment levels whereas price elasticities seem to play a lesser role although the model s results are rather well aligned to total industry investments it diverges from individual levels this may be due to the cost parameter used and or to the open loop information structure adopted in the computations in any event these results should be of methodological and practical interest to scholars and practitioners involved in strategic investment in the electricity industry

retrospectives engel curves engel curves describe how household expenditure on particular goods or services depends on household income german statistician ernst engel 1821 1896 was the first to investigate this relationship systematically in an article published about 150 years ago the best known single result from the article is engel s law which states that the poorer a family is the larger the budget share it spends on nourishment we revisit engel s article including its context and the mechanics of the argument because the article was completed a few decades before linear regression techniques were established and income effects were incorporated into standard consumer theory engel was forced to develop his own approach to analyzing household expenditure patterns we find his work contains some interesting features in juxtaposition to both the modern and classical literature for example engel s way of estimating the expenditure income relationship resembles a data fitting technique called the regressogram that is nonparametric in that no functional form is specified before the estimation moreover engel introduced a way of categorizing household expenditures in which expenditures on commodities that served the same purpose by satisfying the same underlying want were grouped together this procedure enabled engel to discuss the welfare implications of his results in terms of the smithian notion that individual welfare is related to the satisfaction of wants at the same time he avoided making a priori assumptions about which specific goods were necessities assumptions which were made by many classical economists like adam smith finally we offer a few thoughts about some modern literature that builds on engel s research

the effect of current and prospective policies on photovoltaic system economics an application to the us midwest abstract this study models fundamental features of current and prospective policies encouraging adoption of residential photovoltaic pv systems a key finding is that time of day tod pricing can enhance or worsen the economics of pv systems moreover increased responsiveness of electricity demand to its price diminishes the effectiveness of tod pricing in the absence of net metering but does not affect it otherwise an application to plausible conditions in the state of indiana usa shows that current policies are unlikely to trigger adoption by a risk neutral forward looking residential customer however adoption of pv systems can be induced if the federal tax credit is increased to cover 48 of capital cost instead of the current 30 which could imply a cost to the federal government of about 0 95 kw of installed capacity depending on the panel s size we demonstrate that implementation of tod pricing can trigger adoption under a range of on and off peak price combinations but our analysis also shows that the cost effectiveness of tod pricing is enhanced at higher ratios of on peak to off peak prices

decarbonizing europe s power sector by 2050 analyzing the economic implications of alternative decarbonization pathways abstract the european union aims to reduce greenhouse gas emissions by 80 95 in 2050 compared to 1990 levels the transition towards a low carbon economy implies the almost complete decarbonization of europe s power sector which could be achieved along various pathways in this paper we evaluate the economic implications of alternative energy policies for europe s power sector by applying a linear dynamic electricity system optimization model in over 36 scenarios we find that the costs of decarbonizing europe s power sector by 2050 vary between 139 and 633 bn 2010 which corresponds to an increase of between 11 and 44 compared to the total system costs when no co2 reduction targets are implemented in line with economic theory the decarbonization of europe s power sector is achieved at minimal costs under a stand alone co2 reduction target which ensures competition between all low carbon technologies if however renewable energies are exempted from competition via supplementary renewable energy res e targets or if investments in new nuclear and ccs power plants are politically restricted the costs of decarbonization significantly rise moreover we find that the excess costs of supplementary res e targets depend on the acceptance of alternative low carbon technologies for example given a complete nuclear phase out in europe by 2050 and politically implemented restrictions on the application of ccs to conventional power plants supplementary res e targets are redundant while in such a scenario the overall costs of decarbonization are comparatively high the excess costs of supplementary res e targets are close to zero

value of price responsive load for wind integration in unit commitment the ability of load to respond to short term variations in electricity prices plays an increasingly important role in balancing short term supply and demand especially during peak periods and in dealing with fluctuations in renewable energy supplies however price responsive load has not been included in standard models for defining the optimal scheduling of generation units in short term here elasticities are included to adjust the demand profile in response to price changes including cross price elasticities that account for load shifts among hours the resulting peak reductions and valley fill alter the optimal unit commitment enhancing demand response also increases the amount of wind power that can be economically injected further wind power uncertainty can be managed at a lower cost by adjusting electricity consumption in case of wind forecast errors which is another way in which demand response facilitates the integration of intermittent renewables

assessing the economic value of renewable distributed generation in the northeastern american market abstract incentive programs and tax rebates are commonly offered to offset the high initial costs of small scale renewable energy systems res and foster their implementation however the economic costs of res grid integration must be fully known in order to determine whether such subsidies are justified the objective of this paper is to assess the economic value of res including their environmental benefits using hourly generation information in conjunction with hourly wholesale price data reaching the paper s objective will provide a better estimate of the bias that could result from neglecting 1 the time pattern of the hourly wholesale price 2 the impacts of carbon taxes on the hourly wholesale price and 3 the value of the marginal hourly ghg emissions selected res include two types of grid connected photovoltaic panels 3 kwp mono and poly crystalline and three types of micro wind turbines 1 10 and 30 kw modeled for different climatic conditions in the province of quebec canada the cost of electricity is based on the technical performance of these res using a life cycle costing methodology the economic value of res electricity is estimated using the hourly wholesale electricity price in northeastern american markets in 2006 2008 results show that distributed generation dg has no economic benefits using the selected res even with a us 100 tonne of co2 equivalent carbon tax this finding remains the same when the value of the avoided ghg emissions is fully internalized except for one scenario micro wind 30 kw our results are key to understanding the extent to which subsidies for distributed res can be economically sustainable when the latter are integrated into regional networks driven by centralized electricity production

hierarchic demand and the engel curve for variety ahstract the usual treatment of consumer demand theory assumes a solution to the demand equations with positive quantities of all commodities this paper characterises a class called hierarchic demand systems for which only a subset of commodities are in the purchased set the hierarchic linear expenditure svstem is used to illustrate interesting properties of such systems the empirical section shows how the number of commodities purchased expands with total expenditure both in aggregate and for commodity groups the data clearly establish the empirical importance of corner solutions and of the purchase decision in demand studies

price elasticity of demand in the epex spot market for electricity new empirical evidence this paper provides estimates for the price elasticity of demand in the european power exchange epex day ahead market for electricity an institutional change in the year 2010 allows us to use wind speed as an instrumental variable for hourly spot market prices in order to deal with potential endogeneity problems the average price elasticity of demand covering the years 2010 2014 is about 0 43 and our results point to a decline in its absolute value over time

the demand for food quality in rural china many studies of food demand do not use actual prices but unit values obtained by dividing expenditures by the quantity consumed this can bias empirical analyses because unit values are not exogenous market prices they reflect household food quality choices within each food category this article develops a framework for assessing the resulting bias in income and price elasticities of demand and applies the framework to data for rural china empirical results indicate that households in rural china tend to consume higher quality food as income increases with a greater sensitivity to income for basic foods than for luxury foods copyright 2009 oxford university press

smart meter devices and the effect of feedback on residential electricity consumption evidence from a natural experiment in northern ireland abstract using a unique set of data and exploiting a large scale natural experiment we estimate the effect of real time usage information on residential electricity consumption in northern ireland starting in april 2002 the utility replaced prepayment meters with advanced meters that allow the consumer to track usage in real time we rely on this event account for the endogeneity of price and payment plan with consumption through a plan selection correction term and find that the provision of information is associated with a decline in electricity consumption of 11 17 we find that the reduction is robust to different specifications selection bias correction methods and subsamples of the original data the advanced metering program delivers reasonably cost effective reductions in carbon dioxide emissions even under the most conservative usage reduction scenarios

substitution and price elasticity estimates using inter country pooled data in a translog cost model pooled data across several developing countries and the u s were used to estimate long run substitution and price elasticities ina translog framework for the paper iron and steel and aggregatemanufacturing industries while the quality of the estimates variesacross the several industry specific models the results suggest highervalues for these elasticities than appear commonly used in integratedassessment models estimates of own price elasticities of energy rangefrom 0 80 to 1 76 and are comparable to estimates from previouseconometric studies in the context of developed countries 0 77 to 0 87 substitution elasticities show wider variation across countriesand industries for energy and capital they range from 1 96 to 9 80 forlabor and energy from 2 61 to 7 11 and for energy and material from 0 26 to 2 07

a disaggregated nonhomothetic modeling of responsiveness to residential time of use electricity rates in addition to quantifying the load impacts of time differentiated rates on aggregate peak off peak groupings a very finely disaggregated rotterdam demand system is described and estimated for explaining changes in detailed features of customers electricity load patterns this linear first difference formulation allows for nonhomotheticity permits an examination of load impacts on critical hours of the week and makes use of both control and time of use data moreover the proposed specification is parameter parsimonious an illustrative use of this model is portrayed through recent empirical evidence from a residential experiment of a northern winter peaking utility in ontario canada copyright 1992 by economics department of the university of pennsylvania and the osaka university institute of social and economic research association

the real time price elasticity of electricity the real time price elasticity of electricity contains important information on the demand response of consumers to the volatility of peak prices despite the importance empirical estimates of the real time elasticity are hardly available this paper provides a quantification of the real time relationship between total peak demand and spot market prices we find a low value for the real time price elasticity which may partly be explained from the fact that not all users observe the spot market price if we correct for this phenomenon we find the elasticity to be fairly low for consumers currently active in the spot market if this conclusion applies to all users this would imply a limited scope for government intervention in supply security issues

consistent estimation of censored demand systems using panel data we derive a joint continuous censored commodity demand system for panel data applications unobserved heterogeneity is controlled for using a correlated random effects specification and a generalized method of moments framework used to estimate the model while relatively small differences in elasticity estimates are found between a flexible random effects specification and one that restricts the random effect coefficient to be time invariant larger differences are observed when comparing the flexible model to a pooled cross sectional estimator the results suggest the limited ability of such estimators to control for preference heterogeneity and unit value endogeneity leads to parameter bias

energy efficiency economics and policy energy efficiency and conservation are major factors in the reduction of the environmental impact of the energy sector particularly with regard to climate change energy efficiency also contributes to reducing external dependence and vulnerabilities in the energy domain in this paper we discuss the factors that influence energy efficiency and conservation decisions and the most appropriate policies for their promotion although not all public policies seem justified we argue that specific policies for promoting energy conservation may be required preferably based on economic instruments or on the provision of information to consumers

estimating deficit probabilities with price responsive demand in contract based electricity markets studies that estimate deficit probabilities in hydrothermal systems have generally ignored the response of demand to changing prices in the belief that such response is largely irrelevant we show that ignoring the response of demand to prices can lead to substantial over or under estimation of the probability of an energy deficit to make our point we present an estimation of deficit probabilities in chile s central interconnected system between 2006 and 2010 this period is characterized by tight supply fast consumption growth and rising electricity prices when the response of demand to rising prices is acknowledged forecasted deficit probabilities and marginal costs are shown to be substantially lower

the effect of counter trading on competition in electricity markets in a competitive electricity market nodal pricing is the most efficient way to manage congestion counter trading is inefficient as it gives the wrong long term signals for entry and exit of power plants however in a non competitive market additional entry will improve the competitiveness of the market and will increase social benefit by reducing price cost margins this paper studies whether the potential pro competitive entry effects could make counter trading more efficient than nodal pricing we find that this is unlikely to be the case and expect counter trading to have a negative effect on overall welfare the potential benefits of additional competition more competitive prices and lower production cost do not outweigh the distortions additional investment cost for the entrant and socialization of the congestion cost to final consumers

fulfilling the kyoto protocol in spain a matter of economic crisis or environmental policies abstract in 2008 spain exceeded by 20 9 the co2 emissions allowed by the kyoto protocol for 2012 the financial and economic crisis has transformed these figures as production fell so did energy demand and with it co2 emissions will the spanish economic crisis allow spain to fulfill its commitments with this in mind we have developed an extended input output model able to forecast energy demand and compute co2 emissions linked to the consumption of energy goods petroleum products gas and coal the results show that the crisis and in particularly the stagnation of the construction industry is only one of the pillars which help to contain these emissions at 6 81 the possibility of incorporating environmental policies new technologies and increases in the price of crude oil in these simulations means an even greater reduction of emissions than the impact of the crisis 9 76 the final result of our most pessimistic realistic scenario is that in 2012 spain will exceed its co2 emissions linked to the combustion of energy goods by only 0 9

price elasticities policy measures and actual developments in household energy consumption a bottom up analysis for the netherlands in the netherlands it seems likely that the large number of new policy measures in the past decade has influenced the response of households to changing prices to investigate this issue the energy trends in the period 1990 2000 have been simulated with a bottom up model applied earlier for scenario studies and extensive data from surveys for a number of alternative price cases the elasticity values found are explained using the bottom up changes in energy trends one finding is that the specific set of saving options defines for a great part the price response the price effect has been analysed too in combination with the policy measures standards subsidies and energy taxes the simulation results indicate that the elasticity value could be 30 40 higher without these measures

price volatility in commodity markets with restricted participation abstract in commodity markets price volatility may rise significantly if the product granularity increases to gain insights into the underlying drivers we analyze price volatility based on the example of german electricity markets we develop a theoretical model to reproduce the price formation in the day ahead and intraday auction which are sequential short term electricity markets with 60 minute and 15 minute products as cross border trade is allowed in the day ahead but not in the intraday auction the model accounts for the impact of restricted market participation the theoretical model is then transferred into an empirical analysis to first validate the modeling approach and second to comparatively assess the impact of increasing product granularity and restricted market participation the empirical results indicate that the disproportional rise in quarter hourly price volatility is mainly triggered by limited market participation and not only by the high volatility of renewable supply and demand since restricted market participation refers to a lack of market coupling we derive a proxy for efficiency losses ranging from eur 55 million to eur 108 million that may be reduced if markets are coupled

electricity prices and public ownership evidence from the eu15 over thirty years abstract this paper studies the impact of corporate ownership on residential net of tax electricity prices when the ownership effect is separated from the liberalisation effect and from other drivers of change after a discussion of a simple conceptual model and of earlier literature we use iea and oecd data for the eu15 over nearly three decades panel econometrics suggests that after controlling for other factors public ownership is associated with lower residential net of tax electricity prices in western europe the impact of liberalisation on prices is smaller and more uncertain

smart demand response in china challenges and drivers abstract smart demand response sdr induces change in electricity consumption by end users in response to price signals or incentives via smart infrastructures in china sdr programs are instrumental in peak shaving renewables integration emissions reduction and grid reliability improvement previous literature has not captured the effects of the latest development of electricity market reform on sdr our work is distinguished from prior work by a comprehensively identifying china specific sdr challenges by contrasting these with international experience b identifying effective drivers to overcome new market challenges and c recommending policies and providing insights into china s future sdr development our paper identifies three major challenges for sdr development and adoption in china namely financial and market consumer and infrastructural challenges in parallel we identify drivers to overcome these challenges including electricity market reform introduction of new market entrants and development of decentralized electricity systems finally we put forth china specific policy recommendations including continuous market reform performance based regulations for national utilities a level playing field for new market entrants and investments on consumer based technologies these measures aim to create equitable compensations to sdr align the interests of utilities with sdr initiatives provide incentives for consumer outreach and improve the responsiveness of consumers to sdr signals

oil shocks and the dynamics of substitution adjustments of industrial fuels in the us this paper investigates substitution among such alternate fuels as coal natural gas and electricity during the actual oil price increases of 1970s these substitution adjustments are assumed to be dynamic and modelled by a partial adjustment structure this dynamic structure is incorporated into a translog cost technology short and long run price elasticities are estimated by identifying inter and intra industry variations the models are estimated with a sample of 88 pooled observations including distillate and residual oils purchased by eleven 2 digit manufacturing groups 1974 81 models are estimates are strictly negative these own price elasticities range from long to short run 2 93 to 2 55 for distillate oil 0 698 to 1 53 for residual oil 0 533 to 0 011 for coal 0 235 to 0 213 for natural gas to 0 888 to 0 845 for electricity estimastes of both short run and long run cross price elasticities suggest that coal and electric energy are the prominent substitutes for fuel oils w

modeling market power by natural gas producers and its impact on the power system strategic behavior by natural gas producers may influence the operation as well as the development of an electricity system within this paper a computational game theoretic investment model is presented which allows assessing market power by natural gas producers and its effects on the electricity market under consideration of emission markets the model is formulated as a mixed complementarity problem it uses typical time segments to represent both seasonal load fluctuations on the natural gas market and load fluctuations within a day on the electricity market investment is possible in natural gas production and lng infrastructure as well as power plants a test case is presented covering three regions and simultaneously optimizing power plant dispatch and utilization of transmission lines on the power market as well as supply transport and storage on the natural gas market we compute prices production volumes and power plant utilization for two different market power specifications to show the impact of oligopolistic market behavior

the impact of heat waves on electricity spot markets abstract thermoelectric power plants depend on cooling water drawn from water bodies low river run off and or high water temperatures limit a plant s production capacity this problem may intensify with climate change our study quantifies the impact of forced capacity reductions on market prices production costs consumer and producer surplus as well as emissions by means of a bottom up power generation system model first we simulate the german electricity spot market during the heat wave of 2006 then we conduct a sensitivity study that accounts for future climatic and technological conditions we find an average price increase of 11 during the heat wave 2006 which is even more pronounced during times of peak demand production costs accumulate to an additional but moderate 16 m due to the price increase producers gain from the heat wave whereas consumers disproportionately bear the costs carbon emissions in the german electricity sector increase during the heat wave the price and cost effects are more pronounced and increase significantly if assumptions on heat sensitive demand hydropower capacity net exports and capacity reductions are tightened these are potential additional effects of climate change hence if mitigation fails or is postponed globally the impacts on the current energy system are very likely to rise increases in feed in from renewable resources and demand side management can counter the effects to a considerable degree countries with a shift toward a renewable energy supply can be expected to be much less susceptible to cooling water scarcity than those with a high share of nuclear and coal fired power plants

impacts of day ahead versus real time market prices on wholesale electricity demand in texas abstract the somewhat recent nodal market structure in texas impacts wholesale day ahead market dam and real time market rtm prices however comparative insights on consumer responses to both these prices have not received attention this paper attempts to fill this void by developing a system wide demand response model to better understand price elasticities under dam and rtm pricing these insights may also assist grid operators to develop improved short term forecasts of electricity demand using a large dataset from the electric reliability council of texas and a hierarchical bayesian population model we offer new insights on how dam and rtm pricing shapes demand for electricity and the related consequences for maintaining a reliable electricity market

short and long run time of use price elasticities in swiss residential electricity demand abstract this paper presents an empirical analysis on the residential demand for electricity by time of day this analysis has been performed using aggregate data at the city level for 22 swiss cities for the period 2000 2006 for this purpose we estimated two log log demand equations for peak and off peak electricity consumption using static and dynamic partial adjustment approaches these demand functions were estimated using several econometric approaches for panel data for example lsdv and re for static models and lsdv and corrected lsdv estimators for dynamic models the attempt of this empirical analysis has been to highlight some of the characteristics of the swiss residential electricity demand the estimated short run own price elasticities are lower than 1 whereas in the long run these values are higher than 1 the estimated short run and long run cross price elasticities are positive this result shows that peak and off peak electricity are substitutes in this context time differentiated prices should provide an economic incentive to customers so that they can modify consumption patterns by reducing peak demand and shifting electricity consumption from peak to off peak periods

residential electricity demand in taiwan this paper examines the residential demand for electricity in taiwan as a function of household disposable income population growth the price of electricity and the degree of urbanization short and long term effects are separated through the use of an error correction model in the long run the income elasticity is unit elastic the own price effect is negative and inelastic in an error correction framework the short run income and price effects are small and less than the long run effects cooling degree day effects have a positive impact on short run consumption we have used a proxy variable urbanization to capture economic development characteristics and changes in electricity using capital stocks not explained by income the variable provides significant explanatory power to the model both in the short and long run we interpret it as controlling for economic development factors not captured by the pure income effect and we think it holds promise for explaining residential electricity consumption in other developing countries

bi level approach to distribution network and renewable energy expansion planning considering demand response this paper presents a bi level model for distribution network and renewable energy expansion planning under a demand response dr framework the role of dr has recently attracted an increasing interest in power systems however previous models have not been completely adapted in order to treat dr on an equal footing the target of the distribution network and generation planner modeled through the upper level problem is to minimize generation and network investment cost while meeting the demand this upper level problem is constrained by the lower level problem stressing the importance of integrating dr to time varying prices into those investment models the objective function considered for the lower level is the minimization of overall payment faced by the consumers using the karush kuhn tucker complementarity constraints the proposed bi level model is recast as a mixed integer linear programming problem which is solvable using efficient off the shelf branch and cut solvers detailed results from an insular case study la graciosa canary islands spain are presented

assessing the life cycle environmental benefits of renewable distributed generation in a context of carbon taxes the case of the northeastern american market abstract distributed generation dg using renewable energy systems res can play an important role in reducing greenhouse gas ghg emissions given that dg could overlap with carbon tax implementation the objective of this work is to assess the implications of introducing different carbon tax levels from 0 to 100 us tonne of co 2 and to assess the ghg abatement performance when dg is applied to reach the paper objective different levels of carbon taxes were assessed by using the developed partial equilibrium model for the north eastern american electricity market the developed model is crucial to 1 estimate the increase of the hourly market price for different carbon taxes scenarios and 2 identify the hourly marginal electricity production technologies reducing its production as a consequence to dg results show that the increase of carbon taxes significantly decrease the environmental benefits as a consequence of dg when considering ghg emissions the 30 kw micro wind turbine efficiency gets from 6 3 to 3 8 kg co 2 eq kw h when carbon tax increases from 0 to 60 us tonne co 2 eq 60 reduction same trend is observed for other environmental impacts such as resource human health and ecosystem quality these results help in giving more insight on how two overlapping clean air policies interfere and how efficient they are in reducing ghg emissions at the same time

demand side management in china the context of china s power industry reform abstract the reform of china s power industry has lasted for decades while the implementation of demand side management dsm in china is still in its infancy in this paper we present a comprehensive study of the dsm and demand response dr programs in china under the context of china s power industry reform we first present a brief introduction of the background including the socio economic status and geographical location of china the energy policy of china china s power industry the smart grids and microgrid in china and the reform of china s power industry then based on the introduction of dsm and the analysis of dsm practices in some countries we discuss the development status of dsm and the reform of electricity pricing in china finally the main challenges in five aspects for the future development of dsm programs in china are proposed and discussed these challenges include customer understanding and participation advanced metering infrastructure ami and information and communication technology ict pricing mechanisms and optimal scheduling big data analytics based decision support as well as government regulations and market policies

investment in electricity capacity under fuel cost uncertainty dual fuel and a mix of single fuel technologies abstract we study the effect of the price and price volatility of natural gas on investment in electricity capacity in two technology scenarios 1 dual fuel units that use natural gas and diesel and 2 a mix of single fuel plants that use coal or natural gas we develop a two stage capacity and operation model and derive analytical solutions for both scenarios based on the observed log normal distribution of the natural gas price we show that optimal capacity investment increases moderately with natural gas price volatility countering a commonly held view that fuel cost uncertainty tends to discourage capacity investment thus higher volatility of the natural gas price tends to reduce the missing money problem we use texas data to show that higher gas price volatility implies higher profits and consumer surplus in the first scenario even when the per mwh diesel cost is much higher than the expected value of the per mwh gas cost in the second scenario firms invest only in gas capacity unless the per mwh coal cost is significantly below the expected per mwh gas cost thus explaining the popularity of gas generation

the consumer s demand for diversity abstract the consumer s demand for diversity is measured either by the entropy or by the hirschman herfindahl index of the budget shares this notion including the income elasticity of the demand for diversity is applied to per capita consumption data of 30 countries

an empirical analysis of electricity consumption in cyprus abstract the paper presents the first empirical analysis of electricity consumption in cyprus using annual data from 1960 to 2004 we have examined electricity use in the residential and the services sectors which are the fastest growing electricity consumers in the island and its interaction with income prices and the weather the analysis was performed with the aid of time series analysis techniques such as unit root tests with and without a structural break in levels cointegration tests vector error correction models granger causality tests and impulse response functions results show long term elasticities of electricity use above unity for income and of the order of 0 3 to 0 4 for prices in the short term electricity consumption is rather inelastic mostly affected by weather fluctuations granger causality tests confirm exogeneity of electricity prices and bidirectional causality between residential electricity consumption and private income the commercial sector is less elastic and reverts faster to equilibrium than the residential sector despite the relatively small sample size results reported here are quite robust and can be used for forecasts and policy analyses

dynamic translog and linear logit models a factor demand analysis of interfuel substitution in us industrial energy demand abstract we compare and contrast two popular dynamic flexible functional forms for cost functions the translog and the logit j bus econ stat 8 1990 347 353 using data on us industrial energy demand from 1960 to 1992 which has been analysed by previous studies energy econ 11 1989 89 94 appl econ 21 1989 931 945 j bus econ stat 13 1995 459 465 we show the crucial role played by different dynamic formulations of the translog in this analysis of factor demands with respect to rates of dynamic adjustment and substitution possibilities we conclude that the poor performance of the dynamic translog relative to the dynamic logit cannot be explained solely by dynamic model mis specification or the inclusion of price unresponsive non energy fuel use data our most robust empirical result is that coal and oil are substitutes

quality quantity spending and prices abstract one measure of the change in the quality of consumption is the degree to which the consumption basket as a whole moves towards more luxurious goods away from necessities we introduce two related measures based on the luxury necessity distinction one is an index of the extent to which the prices of luxuries change as compared to necessities while the second indexes the change in spending these two measures are interpreted as the price of and spending on quality the volume of quality is then spending deflated by its price using the recent international comparison program data for 100 countries we find that on average quality increases with income but at a slower rate luxuries are relatively more expensive in richer countries necessities cheaper and approximately 75 percent of additional spending on quality flows into a volume component with the remaining 25 percent accounted for by prices

environmentally damaging electricity trade electricity trade across regions is often considered welfare enhancing we show in this paper that this could be reconsidered if environmental externalities are taken into account we consider two cases where trade is beneficial before accounting for environmental damages first when two regions with the same technology display some demand heterogeneity second when one region endowed with hydropower arbitrages with its thermal neighbor our results show that under reasonable demand and supply elasticities trade comes with an additional environmental cost this calls for integrating environmental externalities into market reforms when redesigning the electricity sector two north american applications illustrate our results trade between pennsylvania and new york and trade between hydro rich quebec and new york

the response of small and medium size business customers to time of use tou electricity rates in israel this paper reports on the methodology data and results of the israeli time of use tou electricity pricing experiment in the industrial commercial sector we concentrate on the estimation of the demand functions for electricity under tou and the net welfare gains which result from applying tou rates to small and medium size business customers in israel this experiment which was preceded by a 15 month load research study to allow an optimal sample design was concluded in june 1992 the analysis yielded four major conclusions 1 the estimated gains of small and medium size customers in israel from tou rates are sufficient to justify investment in tou metering technology 2 there have been small but noticeable shifts of electricity from the peak to the mid peak if relevant and to the off peak periods during all seasons of the year and particularly during the winter 3 the structure and number of labour shifts during the day and weather are important factors in determining the response of business customers to the tou rates 4 price elasticities vary substantially over the seasons and across sic groups they do not vary with customer size

on variability of renewable energy and online power allocation as electric power system operators shift from conventional energy to renewable energy sources power distribution systems will experience increasing fluctuations in supply these fluctuations present the need to not only design online decentralized power allocation algorithms but also characterize how effective they are given fast changing consumer demand and generation in this paper we present an online decentralized dual descent od3 power allocation algorithm and determine in the worst case how much of observed social welfare can be explained by fluctuations in generation capacity and consumer demand convergence properties and performance guarantees of the od3 algorithm are analyzed by characterizing the difference between the online decision and the optimal decision we demonstrate validity and accuracy of the theoretical results in the paper through numerical experiments using real power generation data

one for all the impact of different types of energy feedback and goal setting on individuals motivation to conserve electricity abstract we investigate how different types of energy feedback combined with goal setting impact on consumers motivation to conserve electricity using an online survey we test the influence of energy feedback in physical units kwh monetary values eur and environmental values avoided co2 emissions we asked participants to set themselves either a high low or no energy conservation goal in addition we assess the respondents value types hedonic egoistic altruistic and biospheric to test predictions derived from goal framing theory in general individuals scoring high on biospheric values were more motivated to conserve electricity and their motivation did not increase in response to setting an energy conservation goal individuals with egoistic values seem less willing to reduce their electricity consumption unless in the monetary feedback or high goal conditions a high conservation goal was only found to be effective in combination with monetary feedback it increased the motivation to save electricity by 6 7 percentage points in comparison to the low goal condition and 6 6 percentage points in comparison to the control condition

the demand for electricity in israel quarterly data for israel are used to compare and contrast three dynamic econometric methodologies for estimating the demand for electricity by households and industrial companies these are the dynamic regression model and two approaches to cointegration ols and maximum likelihood since we find evidence of seasonal unit roots in the data we also test for seasonal cointegration we find that the scale elasticities are similar in all three approaches but the ols price elasticities are considerably lower moreover ols suggests non cointegration the paper concludes by stochastically simulating the drms to calculate upside risk in electricity demand

estimation of japanese price elasticities of residential electricity demand 1990 2007 abstract this paper estimates elasticities of japanese residential price electricity from 1990 to 2007 the first difference generalized method of moment estimator is employed to avoid dynamic panel bias which is not considered in most previous studies the results show that while short run elasticities are similar to those in previous studies long run elasticities are significantly lower in our study we also find that the price elasticity of japanese residential electricity consumption is notably affected by income inequality and severe weather based on these results we provide some insights to tailor environmental taxation so as to effectively attain the kyoto protocol

what do we know about global income inequality in this paper we review the recent literature on global interpersonal income inequality while all estimates agree that the level is very high with a gini of between 0 630 and 0 686 in the 1990s there is no consensus regarding the direction of change we discuss methodological issues including the use of national accounts versus survey based estimates of mean income or consumption and the choice of purchasing power parity exchange rates findings of a rise or fall in global income inequality are not robust across different estimation methods and datasets given the diversity of estimates and various sources of uncertainty including gaps and errors in the underlying data we conclude there is insufficient evidence to determine the direction of change in global interpersonal inequality in recent decades