asset transformation and the challenges to servitize a utility business model abstract the traditional energy utility business model is under pressure and energy services are expected to play an important role for the energy transition experts and scholars argue that utilities need to innovate their business models and transform from commodity suppliers to service providers the transition from a product oriented capital intensive business model based on tangible assets towards a service oriented expense intensive business model based on intangible assets may present great managerial and organizational challenges little research exists about such transitions for capital intensive commodity providers and particularly energy utilities where the challenges to servitize are expected to be greatest this qualitative paper explores the barriers to servitization within selected swiss and german utility companies through a series of interviews with utility managers one of them is asset transformation the shift from tangible to intangible assets as major input factor for the value proposition which is proposed as a driver for the complexity of business model transitions managers need to carefully manage those challenges and find ways to operate both new service and established utility business models aside policy makers can support the transition of utilities through more favorable regulatory frameworks for energy services and by supporting the exchange of knowledge in the industry

historical review of demand side management in china management content operation mode results assessment and relative incentives abstract traditional power load management in china is featured by power rationing without considering user demand however since the 1990s demand side management dsm has been introduced by local governments and enterprises in china to improve terminal power efficiency and optimize resources allocation and certain breakthrough have already been achieved demand response aims at improving the energy efficiency of end users and achieving emission reduction targets based on the development status of power industry and electricity market in china this paper firstly reviews the three key development stages of traditional dsm including management content operation mode and results assessment secondly this paper analyzes the demand side management aimed at energy conservation and emissions reduction selecting the core elements and key processes influencing terminal power efficiency of dsm development in addition dsm safeguard system and incentive mechanism including political economic technical and managerial measures are further discussed to achieve the aim of energy conservation and emission reduction finally this paper systematically analyzes related policies and regulations proposed by the government and put forward relative policy recommendations for dsm development in china

impacts of wind and solar spatial diversification on its market value a case study of the chilean electricity market abstract renewable energy is expected to become the main electricity source in the world in the coming decades with solar and wind power taking a big share of the energy supply although there has been a remarkable advance on renewable energy technologies their integration is still difficult for regulators market designers and system operators due to the high variability and limited predictability of solar and wind resources measures can be adopted to ease their integration among them geographical diversification there is plenty of literature about the diversification of solar and wind resources and there is a common conclusion greater dispersion smooths out power production however literature on the effects of spatial diversification on the power system electricity prices and renewable energy market value is much scarcer this paper studies the effects of spatial diversification and questions whether integration policies are incentivizing the placement of renewable generators where they provide the highest value to the electricity system in chile using real data and a simplified dispatch model the analysis presented shows evidence of the effects of diversification on wind and solar market value in chile results suggest that spatial diversification has a strong positive effect on the market value of renewable energy especially in scenarios with active transmission and hydro storage constraints wind market value may vary up to us 10 mw h depending on the level of diversification and the spatial and temporal constraints of the system and given current storage capacity of hydro reservoirs the solar market value may increase us 5 mw h due to diversification if transmission capacity is enough even though these results must be observed with caution because they depend on the assumptions made there is an important effect of renewable spatial diversification that should be observed by regulators

macroeconomic forecasting in the euro area country specific versus area wide information abstract this paper compares several time series methods for short run forecasting of euro wide inflation and real activity using data from 1982 to 1997 forecasts are constructed from univariate autoregressions vector autoregressions single equation models that include euro wide and us aggregates and large model methods in which forecasts are based on estimates of common dynamic factors aggregate euro wide forecasts are constructed from models that utilize only aggregate euro wide variables and by aggregating country specific models the results suggest that forecasts constructed by aggregating the country specific models are more accurate than forecasts constructed using the aggregate data

timing based business models for flexibility creation in the electric power sector energy policies in many countries push for an increase in the generation of wind and solar power along these developments the balance between supply and demand becomes more challenging as the generation of wind and solar power is volatile and flexibility of supply and demand becomes valuable as a consequence companies in the electric power sector develop new business models that create flexibility through activities of timing supply and demand based on an extensive qualitative analysis of interviews and industry research in the energy industry the paper at hand explores the role of timing based business models in the power sector and sheds light on the mechanisms of flexibility creation through timing in particular we distill four ideal type business models of flexibility creation with timing and reveal how they can be classified along two dimensions namely costs of multiplicity and intervention costs we put forward that these business models offer coupled services combining resource centered and service centered perspectives this complementary character has important implications for energy policy

demand side management potentials for mitigating energy poverty in south africa abstract south africa is severally posited to be africa s most industrialized nation with an economy heavily reliant on energy with depleted electricity reserve margin which led to massive load shedding and rationing of electricity in 2008 eskom has stepped up the construction of additional power plants to cover for growing supply deficits emerging trends however favour demand side management dsm initiatives as alternatives to building additional supply capacity due to environmental and economic constraints this research evaluates the electricity per capita for 2007 2011 and 2016 on provincial basis assuming 100 and 36 8 residential sector consumption of generated electricity to show declining electricity per capita values a scenario simulation for 100 50 and 30 household participation of cloth washers and cloth dryers optimal dispatch is then modelled to show the enormous dsm potentials in terms of electricity cost reduction and supply flexibility a modified genetic algorithm mga is used in the dispatch of participating loads on the medupi power plant which has been modelled to operate with carbon capture and sequestration ccs technology dsm potentials of 6938 34 mw 3469 18 mw and 2081 51 mw are computed for 100 50 and 30 household participation for cloth washers and cloth dryers

a coevolutionary framework for analysing a transition to a sustainable low carbon economy this paper proposes a coevolutionary framework for analysing a transition to a sustainable low carbon economy based on the coevolution of ecosystems technologies institutions business strategies and user practices within a multi level micro meso macro perspective this builds on and develops previous coevolutionary analyses of long term technological and industrial change and recent renewed interest within ecological economics on coevolutionary approaches previous work has analysed how the coevolution of technologies and institutions has led to the lock in of current high carbon energy systems and how the coevolution of physical and social technologies and business strategies has brought significant material and welfare benefits to the minority of the world s population living in industrialised countries the coevolutionary framework proposed here may be used to undertake 1 detailed empirical analyses at a micro meso level of the challenges relating to the innovation and adoption of particularly low carbon technologies 2 as a framework for analysing the multi level interaction of social and technological elements within potential transition pathways to a low carbon energy system 3 to assess the implications for economic growth and prosperity of a transition to a low carbon economy and 4 to assist in the development of more formal multi level evolutionary economic models

dynamic hierarchical factor models this paper uses multilevel factor models to characterize within and between block variations as well as idiosyncratic noise in large dynamic panels block level shocks are distinguished from genuinely common shocks and the estimated block level factors are easy to interpret the framework achieves dimension reduction and yet explicitly allows for heterogeneity between blocks the model is estimated using an mcmc algorithm that takes into account the hierarchical structure of the factors the importance of block level variations is illustrated in a four level model estimated on a panel of 445 series related to different categories of real activity in the united states

the impact of adaptation on the stability of international environmental agreements we examine the stability of international environmental agreements that include clauses pertaining to both adaptation and mitigation measures we assume that adaptation requires a prior irreversible investment and presents the characteristics of a private good by reducing a country s vulnerability to the impact of pollution while mitigation policies produce a public good by reducing the total amount of pollution using a stylized model we show that adaptive measures can be used strategically and that their inclusion in environmental agreements enhances agreement stability and can even lead to full cooperation we examine the robustness of agreements including both adaptation and mitigation measures against renegotiation finally we evaluate how including adaptive measures for climate change in international environmental agreements affects welfare and overall pollution

regulating technological change the strategic reactions of utility companies towards subsidy policies in the german spanish and uk electricity markets abstract this paper focuses on how incumbent electric utilities strategically react to subsidy schemes supporting renewable energy technologies in the uk germany and spain firms coordinate the development of their technological capabilities and their political activities to shape their regulatory environment analysing the diffusion of wind power in these countries we show that the different ways in which firms coordinate their technological and political strategies lead to very different market outcomes both for the firms market share and the size of the overall market although incumbents are usually seen as being resistant to change in energy systems we show that spanish utilities proactively drive the diffusion of wind power we speculate about the relation between the ownership structure of the energy system and its inertia with respect to the integration of new technologies we derive novel policy implications that explicitly take into account the strategic actions of incumbent firms shaping the technological and regulatory system

the macro economic rebound effect and the uk economy abstract this paper examines the macroeconomic rebound effect for the uk economy arising from energy efficiency policies 2000 2010 using the macroeconomic model mdm e3 the literature distinguishes between three types of rebound effect direct indirect and economy wide the macroeconomic rebound effect considered here is the combination of the indirect and economy wide effects policies for the domestic business commercial and public and transport sectors of the economy are analysed for 2000 2010 overall the policies lead to a saving of about 8 of the energy which would otherwise have been used and a reduction in co2 emissions of 10 or 14 mtc by 2010 there are also favourable macroeconomic effects lower inflation and higher growth we find that the macroeconomic rebound effect arising from uk energy efficiency policies for the period 2000 2010 is around 11 by 2010 averaged across sectors of the economy when this is added to the assumed direct rebound effect of around 15 this gives a total rebound effect of around 26 arising from these policies thus the findings of the study support the argument that energy efficiency improvements for both consumers and producers stimulated by policy incentives will lead to significant reductions in energy demand and hence in greenhouse gas emissions

the economics of energy service contracts energy service contracting can provide a cost effective route to overcoming barriers to energy efficiency energy service contracts allow the client to reduce operating costs transfer risk and concentrate attention on core activities however the energy services model may only be appropriate for a subset of energy services and energy using organisations a challenge for both business strategy and public policy is to identify those situations in which energy service contracting is most likely to be appropriate and the conditions under which it is most likely to succeed energy service contracting is a form of outsourcing it will only be chosen where the expected reduction in the production cost of supplying energy services can more than offset the transaction cost of negotiating and managing the relationship with the energy service provider production costs will be determined by a combination of the physical characteristics of the energy system and the technical efficiency of the relevant organisational arrangements including economies of scale and specialisation transaction costs in turn will be determined by the complexity of the energy service the specificity of the investments made by the contractor the competitiveness of the energy services market and the relevant legal financial and regulatory rules this paper develops these ideas into a general framework that may be used to assess the feasibility of energy service contracting in different circumstances the framework leads to a number of hypotheses that are suitable for empirical test

adapting to climate change is cooperation good for the environment we consider the formation of an international environmental agreement focusing on adaptation to climate change members of the agreement fully share their knowledge and determine their investments in r d by maximizing their joint welfare while non members optimize their individual payoffs using a three stage game formalism we obtain that a large coalition is achievable and that total emissions increase with the size of the agreement the welfare implications are parameter dependent

the myths and facts of energy efficiency abstract the debate about how much energy efficiency is socially desirable and what is the best way to finance and implement energy conservation measures has reached a critical junction in many countries the arguments have passed the stage of whether more energy efficiency is possible or desirable and are centred around how much and how best to implement them this is a survey article which attempts to shed some light on several critical issues in this debate first it distinguishes between what is technically possible v what is economically desirable in energy efficiency improvements second it looks at some of the alleged causes of social under investment in energy efficiency and identifies ways to reduce or eliminate them third it addresses the question of who is best equipped to implement energy efficiency improvements and how one may go about promoting it finally the paper addresses critical financing and equity questions

measuring world business cycles using kalman filtering and dynamic factor analysis the authors decompose aggregate output consumption and investment for the g7 countries into factors that are 1 common across all countries and aggregates 2 common across aggregates within a country and 3 specific to each individual aggregate in quarterly data for the period 1970 through 1993 fluctuations in all aggregates contain world and country specific common components that are both statistically significant and quantitatively important the authors find that the world and country specific common components play different roles in different business cycle episodes for each of the seven countries and that either may be dominant during a particular episode copyright 1997 by economics department of the university of pennsylvania and the osaka university institute of social and economic research association

voluntary agreements with white certificates for energy efficiency improvement as a hybrid policy instrument in this paper we examine the implementation of a combined policy scheme that consists of a traditional instrument the voluntary agreements vas and an innovative one the white certificates whc the basic structure of this scheme is that energy suppliers who undertake an energy efficiency obligation under a white certificate scheme can make use of voluntary actions to enhance investments in innovative energy savings projects energy suppliers and other market parties can additionally or in parallel participate in voluntary agreements and set energy efficiency targets for fulfilling their voluntary agreement target these market parties can receive tax exemptions or receive white certificates that they can sell in the market transaction costs and baseline definition for demonstrating energy efficiency improvement deserve special attention this policy can assist a country to enhance energy efficiency improvement while it stimulates innovation cost effectiveness can be higher than the case of stand alone policy instruments since more financing options are available for more expensive projects nevertheless the added value of the scheme lies more in the implementation of innovative measures for enhanced energy efficiency furthermore market parties can discover more business opportunities in energy efficiency and establish a green image hence an integrated scheme should achieve higher political acceptability

profiting from negawatts reducing absolute consumption and emissions through a performance based energy economy abstract current energy and ghg emissions policies either focus directly on emissions or promote renewable production and the implementation of specific efficiency measures meanwhile the fundamental structure of the energy market based on profits through energy throughput remains largely unchallenged this policy oversight prevents the transition to an energy economy in which profits are based on energy services delivered at the lowest energy cost a performance based energy economy pbee the pbee applies the combined concepts of the performance economy and energy services to the energy sector energy service companies escos are discussed as an example of pbee practices the implications for energy suppliers and consumers as well as the conditions for pbee diffusion and consequences for technological change are also explored the expected environmental social and economic benefits are described however absolute consumption and emissions reductions may prove elusive due to the rebound effect in order to forestall rebound led increases complementary policy measures likely to lead to absolute reductions are required

how to fit demand side management dsm into current chinese electricity system reform abstract dsm is one of the best and most practical policy tools available to china for balancing environmental protection and economic growth the new round of electricity system reform provides a good opportunity to consolidate and integrate dsm policy and expedite its development and implementation dsm policy can be upgraded by incorporating it into the current electricity system reform comparing the potential acceleration of electricity price reform with the possibility of imposing a system benefit charge sbc the author argues that support for a sbc would be much easier to gather among policymakers and stakeholders in a short time and would have a much better policy effect in the current situation the author discusses three kinds of price discrimination related to the dsm development in china time based electricity pricing electricity price discrimination for industrial structure adjustment in china fujian province as a case and direct power purchases by large customers and preferential tariff policy these can be well designed to be combined with dsm and energy efficiency policy

jevons paradox revisited the evidence for backfire from improved energy efficiency beginning with william stanley jevons in 1865 a number of authors have claimed that economically justified energy efficiency improvements will increase rather than reduce energy consumption jevons paradox is extremely difficult to test empirically but could have profound implications for energy and climate policy this paper summarises and critiques the arguments and evidence that have been cited in support of jevons paradox focusing in particular on the work of len brookes and harry saunders it identifies some empirical and theoretical weaknesses in these arguments highlights the questions they raise for economic orthodoxy and points to some interesting parallels between these arguments and those used by the biophysical school of ecological economics while the evidence in favour of jevons paradox is far from conclusive it does suggest that economy wide rebound effects are larger than is conventionally assumed and that energy plays a more important role in driving productivity improvements and economic growth than is conventionally assumed

a dynamic simulation of low carbon policy influences on endogenous electricity demand in an isolated island system abstract this paper considers the dynamics of electricity demand in response to changes arising from low carbon policies and socio economic developments as part of an investigation into the evolution of such systems on small economically developed islands endogenous electricity demand and associated policies are studied for the azorean island of sao miguel a comprehensive system dynamics sd model covering the period 2005 2050 is presented which captures both historical behaviours and real world influences on the endogenous demand dynamics of an island based electricity system the impact of tourism energy efficiency and electric vehicles ev expansion allied with associated policy options are critically evaluated by the sd model using a series of scenarios the model shows that energy efficiency measures exhibit the most significant long term impact on electricity demand while in contrast policies to increase tourism have a much less direct impact and ev expansion has thought provoking impacts on the long term demand although this is not as influential as energy efficiency measures

review of dynamic pricing programs in the u s and europe status quo and policy recommendations with the development of demand response dr technologies and increasing electricity demand dynamic pricing has been a popular topic in many countries this paper evaluates various dynamic pricing programs in the u s and europe and provides insights into various aspects including risks and rewards enabling technologies lower income groups and customer types surrounding programs such as time of use tou critical peak pricing cpp peak time rebates ptr and real time pricing rtp we conclude this paper with three main findings 1 policy coordination in promoting dynamic pricing programs between federal and state regulatory agencies is very critical 2 customer engagement is very important and can be enhanced via more accessible educational programs and policy adjustments and 3 more investment in related r d is required to construct a commonly accepted methodology for measuring the effectiveness of dynamic pricing programs

adapting to climate change equilibrium welfare implications for large and small economies we show that the availability of adaptation can be welfare reducing in the non cooperative equilibrium in a setting with multiple countries adaptation is a private good while abatement is a public good this means that substitution out of abatement and into adaptation by any one country imposes a negative externality on all other countries the potentially deleterious impact of adaptation is asymmetric small economies are most likely to be hurt by the availability of adaptation because they control a small fraction of global emissions relative to the biggest emitters

can international environmental cooperation be bought comment abstract fuentes albero and rubio 2010 analytically examine the effects of the countries heterogeneity on the international environmental cooperation they consider two types of countries having different abatement costs in one case and different environmental damages in another case furthermore it is analyzed whether a self financed transfer system can diminish these heterogeneity effects the paper shows for both scenarios of asymmetry and no transfers that the maximum level of cooperation consists of three countries of the same type for the case of heterogeneity in environmental damages fuentes albero and rubio conclude that an agreement between one type 1 and one type 2 country is also self enforcing given that the differences in the damages are not very large in this comment the derivation of the last mentioned result is shown to be incorrect by proving that this coalition is not self enforcing

global business cycles convergence or decoupling we analyze the evolution of the degree of global cyclical interdependence over the period 1960 2008 using a dynamic factor model we decompose macroeconomic fluctuations in output consumption and investment into a global factor factors specific to country groups and country specific factors we find that during 1985 2008 there is some convergence of business cycle fluctuations among industrial economies and among emerging market economies surprisingly there is a concomitant decline in the relative importance of the global factor we conclude that there is evidence of business cycle convergence within each of these two groups of countries but divergence or decoupling between them

a note on modelling core inflation for the uk using a new dynamic factor estimation method and a large disaggregated price index dataset abstract the term core inflation is widely used by academics and central bankers though there is no widely accepted definition or agreed method of measuring it in this paper we propose a new measure of core inflation which is atheoretical but assumes factor structure for the disaggregated price indices which underlie most constructed measures of inflation we show that the measure of core inflation obtained has added predictive ability for inflation in the uk over a relatively long evaluation period

energy supplier obligations and white certificate schemes comparative analysis of experiences in the european union abstract a number of member states of the european union eu have introduced market based policy portfolios based on quantified energy savings obligations on energy distributors or suppliers possibly coupled with certification of project based energy savings via white certificates and the option to trade the certificates or obligations the paper provides an up to date review and analysis of results to date of white certificate schemes in the eu in the eu supplier obligations and white certificate schemes have delivered larger savings than originally expected with obliged companies exceeding targets and in some cases at cost below what policy makers have anticipated supplier obligations foster the uptake of standardised energy efficiency actions often targeting smaller energy users residential sector lowering the transaction costs and contributing to market transformation the role of certificate trading is more ambiguous trading can bring benefits where the target is set sufficiently high with respect to the energy saving potential in the sectors covered theoretically trading may be better suited for broader systems with comprehensive coverage but even in smaller schemes trading may reduce the transaction costs of compliance for obliged actors without sufficient expertise on end use energy efficiency yet trading increases the administrative cost ratio of energy saving obligations

international business cycles world region and country specific factors the paper investigates the common dynamic properties of business cycle fluctuations across countries regions and the world we employ a bayesian dynamic latent factor model to estimate common components in macroeconomic aggregates output consumption and investment in a 60 country sample covering seven regions of the world the results indicate that a common world factor is an important source of volatility for aggregates in most countries providing evidence for a world business cycle we find that region specific factors play only a minor role in explaining fluctuations in economic activity we also document similarities and differences across regions countries and aggregates jel f41 e32 c11 c32

optimal risk constrained participation of industrial cogeneration systems in the day ahead energy markets abstract this paper presents an optimal bidding strategy for industrial consumers with cogeneration facilities power only and heat only units to participate in day ahead electricity market a information gap decision theory igdt technique is implemented for determining the optimal bidding strategies considering market price uncertainty igdt evaluates the robustness opportunity of optimal bidding strategy under market price uncertainty considering the consumer choice of taking risk averse or risk taking decisions it is confirmed that the risk averse or risk taking decisions might affect the expected profit and bidding curve of the consumers moreover demand response dr program has been implemented in order to serve the power and heat demands of the consumer with minimum cost in the proposed dr program the total power and heat demand of consumer will be supplied without any curtailed load the responsive load can vary in different time intervals in addition it is assumed that the consumer will pay receive for increased reduced consumption which is proportional to the day ahead market price in this paper the heat power dual dependency characteristic in different types of combined heat and power chp units is taken into account and all technical constraints of generation units are satisfied in addition a heat buffer tank with the ability of heat storage is incorporated in the proposed framework the verification of the proposed method is demonstrated using the simulation of a case study

the timing and strategic role of self protection self protection has private goods characteristics as it reduces own exposure to pollution given a certain level of pollution we study the effect of timing self protection before after or simultaneously with abatement we find that self protection when timed before abatements has strategic effects in this case self protection shifts the second stage subgame perfect nash equilibrium of abatements such that own contributions of abatement are decreased and those of the other country are increased thereby shifting future abatement costs to the other country when countries cooperate only on abatement the incentives to shift future abatement costs are greater contrary to intention cooperation on abatement may in fact worsen environmental quality if it does not include self protection

can international environmental cooperation be bought in this paper a two stage game of international environmental agreement formation with asymmetric countries is analytically solved the equilibrium of the game makes it possible to determine the size and composition of a stable agreement two cases are studied in the first case countries differ only in abatement costs while in the second case they differ in environmental damages in both cases two different institutional settings one without transfers and another with transfers are considered the results establish that the asymmetry assumption has no important effects on the scope of cooperation in comparison with the symmetric case if transfers are not used or abatement costs represent the only difference among countries however when the only difference is in environmental damages the level of cooperation that can be bought through a self financed transfer scheme increases with the degree of asymmetry

a review of the decomposition methodology for extracting and identifying the fluctuation characteristics in electricity demand forecasting abstract electricity consumption data is regarded as nonlinear non stationary series and is often made up by a superposition of several distinct frequencies thus most of the conventional approaches currently employed for the modeling and forecasting involve great complexity and uncertainty recently fluctuation characteristic analysis has increasingly become essential step in the application of electricity demand forecasting yet the implementation of this analysis is an inherently difficult task to obtain reasonable accuracy and stability in the modeling there has been the tendency to accommodate multidimensional attributes of the consumption demands with decomposition based approach in terms of more advanced and hybrid form and the decomposition can be achieved through utilization of two different procedures namely component model based and frequency domain analysis based decomposition consequently a comprehensive review and summarization of decomposition based approach for the prediction is conducted in this paper more specifically the issues of demand forecasting classification the dependency between the electricity demand and external indicators features of various decomposition approach as well as the unique fluctuation characteristic of electricity demand at different time scales are discussed in addition future research directions of the decomposition based prediction approach are outlined

a core inflation indicator for the euro area this paper proposes a new core inflation indicator for the euro area obtained by cleaning monthly price changes from short run volatility idiosyncratic and measurement errors we use a factor model to project monthly inflation on a large panel of time series exploiting multivariate information we obtain a satisfactory degree of smoothing without using backward looking moving averages which induce a time delay in the signal the indicator forecasts inflation and is a useful tool for policy makers it outperforms other commonly used predictors at 6 months and longer horizons it tracks past policy interventions of the ecb

impact of energy efficiency policy to productive efficiency of electricity distribution industry in the philippines abstract the study analyzes the productive efficiency and simulates the effect of the energy efficiency policy on the productive efficiency of the electricity distribution industry in the philippines using data envelopment analysis dea the study finds that the main source of technical inefficiency in the distribution utilities is scale inefficiency moreover the study finds that with dsm electricity savings targets the technical efficiency of the industry would slightly improve significant improvement of technical efficiency is furthermore found with system loss reduction targets the paper concludes that the energy efficiency policy which benefits the overall economy and whole electricity supply industry results also in productive efficiency improvement in the distribution sector of the industry

adaptation and international environmental agreements we study the impact of collective effort in r d in adaptation technologies and also spillover effects on formation and size of stable international environmental agreements ieas our results suggest that it is possible to have more than one size of stable iea we can achieve a superior equilibrium i e the grand coalition if countries manage to keep knowledge spillovers low and arrange a minimum ratification threshold this threshold is defined endogenously we also shed light on the effects of two sided spillover on global welfare and the size of stable ieas

public policy analysis of energy efficiency and load management in changing electricity businesses the focus of this paper is 1 the potential effectiveness of the reform of the electricity industry on promoting energy efficiency and load management and 2 the potential effectiveness of newmechanisms for promoting energy efficiency and load management many countries are initiating reforms of their power sectors to stimulate private investment increase operation and management efficiencies and lower the cost of power these countries are unbundling vertically integrated utilities into distinct generation transmission distribution and retail supply companies introducing commercial management principles to government owned monopolies and in many cases transferring operation or ownership to private companies electric industry restructuring may force regulators and policy makers to re examine existing mechanisms for promoting load management and energy efficiency in some cases electric industry restructuring replaces the long standing relationship between a single monopoly provider and protected customer franchise with a new set of relationships among retail electricity suppliers and customers who may now be free to choose suppliers in these types of situations markets not government regulators and utility monopolies are seen as determining future energy production and consumption decisions however it is uncertain whether this type of restructuring will overcome important market barriers to energy efficiency that limit markets for energy efficient products and services from functioning effectively as a result of these barriers a large untapped potential for cost effective energy efficiency investments exists supporters of public policies argue that energy efficiency programs are an appropriate government strategy to capture economic efficiencies that the market cannot secure unassisted r 2002 elsevier science ltd all rights reserved

investment and adaptation as commitment devices in climate politics the strategic roles of adaptation and technological investment in international climate politics have been analyzed within various approaches what makes this paper unique is that we investigate the combined impact of adaptation and investment on global mitigation and we compare the subgame perfect equilibria for different sequences of decisions considering a purely non cooperative game theoretic framework we find that by investment countries commit to lower national contributions to the global public good of mitigation moreover the order of adaptation before mitigation might reinforce this strategic effect of technological investments as a consequence the subgame perfect equilibrium for symmetric countries yields a globally lower level of mitigation and higher global costs of climate change when countries engage in advanced adaptation besides this theoretical contribution the paper proposes some strategies to combat the unfortunate rush to adaptation which can be currently observed in climate politics

policy redesign for solving the financial bottleneck in demand side management dsm in china abstract dsm is one of the best and most practical policy tools for china to balance environmental protection and economic growth however the bottleneck lies in the lack of long term stable sufficient and gradually increasing funds to flow into dsm projects the author redesigns the practical system benefit charge sbc policy which will provide long term and stable funding for dsm the policy to facilitate the financial support from banking sector and capital market and investigates the possibility of dsm funding from cdm projects sbc is the best way to boost long term stable and sufficient funding for dsm at present in china the current low inflation rate and natural resource price are favored to expedite the implementation of sbc and dsm developments with regard to the uneven development china needs to design relative policies to offset the impact in different areas such as tax reduction and fiscal subsides it is time for china to develop a definite and clear target and timetable to implement dsm which will give the public and enterprises a definite and clear expectation for the future the government should publicize a clear and integrated dsm development plan and relative policy outline in the near medium and long term

energy savings obligations in the uk a history of change this paper looks at energy savings obligations in the uk more specifically it discusses how the policy instrument changed over time and what the drivers of that change were the uk was the first country in europe that introduced obligations on suppliers to save energy at the customer end in 1994 since then this policy changed rapidly and is now the principal instrument to deliver energy savings in the housing stock the paper aims to answer three questions first how did the policy instrument change over time second what were the key drivers of that change third how did those pressures filter through the policy process and affect the energy savings obligations

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

business model innovation in electricity supply markets the role of complex value in the united kingdom this research investigates the new opportunities that business model innovations are creating in electricity supply markets at the sub national scale these local supply business models can offer significant benefits to the electricity system but also generate economic social and environmental values that are not well accounted for in current policy or regulation this paper uses the uk electricity supply market to investigate new business models which rely on more complex value propositions than the incumbent utility model nine archetypal local supply business models are identified and their value propositions value capture methods and barriers to market entry are analysed this analysis defines complex value as a key concept in understanding business model innovation in the energy sector the process of complex value identification poses a challenge to energy researchers commercial firms and policymakers in liberalised markets to investigate the opportunities for system efficiency and diverse outcomes that new supplier business models can offer to the electricity system

electrical demand side contribution to frequency control in power systems a review on technical aspects abstract demand side participation in frequency control in power systems which leads to reduced reliance on conventional thermal units in procuring essential control functions of future energy networks has gained increased developments in recent years in this context the aim of this paper is to provide a review on various design and control schemes of electrical load contribution to frequency control algorithms both centralized and decentralized control structures are discussed in details the problem of synchronization of certain types of electrical loads and different proposed methods of avoiding it are also presented and discussed synchronization which is a consequence of collective controllable demand response to system disturbances might put the power system in jeopardy and cause its failure therefore in order to fully comprehend the causes and effects of this phenomenon an investigation of this event in a power grid with high level of controllable electrical loads is necessary

transferability of demand side policies between countries abstract the development of methods to determine the transferability of policies between countries has received limited attention in the energy policy field previous research has focussed on theoretical or less formal determinants of energy policy transferability rather than providing practical analytical tools the paper presents a practical framework for analysing the transferability of demand side management dsm policies and to identify where policies are transferable at different levels of policy transfer the paper tests the framework to determine the transferability of different types of dsm policy across 30 countries and 36 sub national states the method is a contextual based analysis that matches up countries states that have a comparable context at the proposed three levels of policy transfer direct copying adaptation and inspiration the paper utilises multi criteria decision making analysis with 17 dsm experts to validate the breakdown of contextual factors at different levels of policy transfer four groups of countries are identified where policy transfer is possible at the adaptation level and seven groups of countries states are identified at the inspiration level overall the paper argues that context is key and the level of contextual detail included in methods to analyse energy policy transferability will affect the level of policy transfer that is appropriate

a review on implementation strategies for demand side management dsm in kuwait through incentive based demand response programs abstract since the export of fossil fuel is the backbone of kuwait s economy the enormous upsurge in the internal fuel consumption creates anguish and bane at present 46 of the internal fossil fuel consumption is used for electricity generation the increase in fuel consumption hurled kuwait as one of the highest per capita electricity consuming as well as co 2 emitting countries in the world consumers pay only 6 of the production cost of electricity the government subsidizes the balance which is one of the major reasons behind the high electricity consumption in the country any reduction in electricity consumption can positively reflect on both per capita electricity consumption and co 2 emission additionally the saved fossil fuel can be exported to generate revenue to support the country s economy worldwide demand side management dsm is considered as an effective tool to curtail electricity demand the objective of this review paper is to explore the available literature to find out the most suitable dsm measures to control the growth of per capita electricity consumption in kuwait after conducting a detailed strengths weaknesses opportunities and threats swot analysis it is concluded that incentive based demand response programs can be considered as one of the most suitable solutions to address this problem

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

a multilevel factor model identification asymptotic theory and applications this paper studies a multilevel factor model with global and country factors the global factors affect all individuals while the country factors affect only those within each specific country a sequential procedure to identify the global and country factors separately is proposed in the initial step the global factors are estimated by canonical correlation analysis using this initial estimator the principal component estimators pces of the global and country factors are constructed it is shown that the pces estimate the spaces of the global and country factors consistently and are normally distributed in the limit several information criteria that can estimate the numbers of the country factors are proposed the number of the global factors is assumed to be known extensive simulation results demonstrate that the sequential procedure and the information criteria work well in finite samples the method of this paper is applied to 25 oecd countries to identify international business cycle it is reported that the method extracts a global factor reasonably well

principal components at work the empirical analysis of monetary policy with large data sets the empirical analysis of monetary policy requires the construction of instruments for future expected inflation dynamic factor models have been applied rather successfully to inflation forecasting in fact two competing methods have recently been developed to estimate large scale dynamic factor models based respectively on static and dynamic principal components this paper combines the econometric literature on dynamic principal components and the empirical analysis of monetary policy we assess the two competing methods for extracting factors on the basis of their success in instrumenting future expected inflation in the empirical analysis of monetary policy we use two large data sets of macroeconomic variables for the usa and for the euro area our results show that estimated factors do provide a useful parsimonious summary of the information used in designing monetary policy copyright 2005 john wiley sons ltd

do financial variables help forecasting inflation and real activity in the euro area abstract this paper uses a large data set consisting of 447 monthly macroeconomic time series concerning the main countries of the euro area to simulate out of sample predictions of the euro area industrial production and the harmonized inflation index and to evaluate the role of financial variables in forecasting we considered two models which allow forecasting based on large panels of time series forni et al rev econom statist 82 2000 540 mimeo 2001b and stock and watson mimeo 1999 performance of both models were compared to that of a simple univariate ar model results show that multivariate methods outperform univariate methods for forecasting inflation at one three six and twelve months and industrial production at one and three months we find that financial variables do help forecasting inflation but do not help forecasting industrial production

a review of demand side management policy in the uk abstract demand side management dsm refers to actions undertaken on the demand side of energy metres a broad definition of dsm is proposed to include current policy objectives for emissions reduction energy security and affordability and encompasses energy efficiency demand response and on site back up generation and storage the paper reviews the concept of dsm outlines the historical impacts of dsm globally since the energy crises of the 1970s analyses uk dsm policy and examines the influence of eu directives on uk dsm policy as the country is currently deciding on how to include the demand side in its electricity market reform proposals and wider energy policy much of the focus of previous research has been on dsm technological trials and modelling studies rather than dsm policy and the paper contributes to filling this gap policy recommendations for the uk context are discussed and it is clear that the success of dsm policies is determined primarily by regulatory support and utility financial incentives it is important that policy clarity is provided and that current and new policies do not overlap

residential electricity pricing in china the context of price based demand response abstract as a secondary energy electricity is an important channel between original energy and energy consumers electricity price is a critical factor for the interests of all involvers in the electric power market it also plays an important role for the sustainable development of energy and environment smart grid is a new conception proposed in recent years to improve the intelligent level and increase the efficiency of electric power system operation smart grid combines and integrates information technology communication technology and intelligent control technology with tradition power system to achieve the many objectives of smart grid demand response dr as an effective technique of demand side management dsm refers to the changes in electricity consumption behavior of users in response to the dynamic price or incentive rewards price based demand response pbdr is one of the two major dr programs in this paper we first introduce the pricing theories in economics the pricing of electricity and the development of electricity pricing in china then we present a detailed discussion on the pbdr strategies in the dsm of smart grid also the research status of pbdr is reviewed finally it gives a summary of the whole paper in the last section

do energy efficiency policies save energy a new approach based on energy policy indicators in the eu member states abstract over the last two decades the european union and its member states have introduced policies aimed at improving energy efficiency the energy service directives esd introduced the concept of measurement of energy savings attributed to policies two different and complementary methodologies for the evaluation of energy savings have been developed under the esd the bottom up bu approach based on a technical analysis of each measure and the top down td approach based on the analysis of how energy intensity changes over time bu methods can hardly take into account policy induced behavioural changes whereas td methods have difficulties in disentangling policy induced savings from other savings econometric models have been proposed as a viable alternative to deal with both drawbacks the purpose of this article is to present an econometric model aimed at estimating the energy savings induced by energy efficiency policies in the eu member states in the period 1990 2013 we introduce an explicit measure of energy policy intensity based on the mure database which is used as explanatory variable in a dynamic panel model for 29 european countries our results suggest that energy consumption in 2013 in europe would have been about 12 higher in the absence of energy efficiency policies

understanding the evolution of world business cycles abstract this paper studies the changes in world business cycles during the period 1960 2003 we employ a bayesian dynamic latent factor model to estimate common and country specific components in the main macroeconomic aggregates output consumption and investment of the g 7 countries we then quantify the relative importance of the common and country components in explaining comovement in each observable aggregate over three distinct time periods the bretton woods bw period 1960 1 1972 2 the period of common shocks 1972 3 1986 2 and the globalization period 1986 3 2003 4 the results indicate that the common g 7 factor explains on average a larger fraction of output consumption and investment volatility in the globalization period than it does in the bw period

from demand side management dsm to energy efficiency services a finnish case study abstract energy conservation is expected to contribute significantly to climate change mitigation and energy security traditionally energy companies have had strong role in providing demand side management dsm measures however after energy market liberalization in europe energy companies dsm activities declined in response the eu issued directive 2006 32 ec on energy end use efficiency and energy services esd to motivate energy companies to promote energy efficiency and conservation closely followed by directive 2012 27 eu on energy efficiency eed requiring the setting up energy efficiency obligation schemes despite strong political and economic motivation energy companies struggle to develop energy efficiency services in liberalised energy markets due to conflicting institutional demands which arise from contradicting policy requirements and customer relations the main challenges in developing new innovative energy efficiency services evidenced by an in depth case study were 1 the unbundling of energy company operations which makes it difficult to develop services when the contribution of several business units is required and 2 the distrust among energy end users which renders the business logic of energy saving contract models self contradictory on the basis of the research avenues out of these dilemmas are suggested

climate agreements in a mitigation adaptation game abstract we analyze the strategic interaction between mitigation public good and adaptation private good strategies in a climate agreement we show the fear that adaptation will reduce the incentives to mitigate carbon emissions may be unwarranted adaptation can lead to larger self enforcing agreements associated with higher global mitigation levels and welfare if it causes mitigation levels between different countries to be no longer strategic substitutes but complements we argue that our results extend to many public goods the well known problem of easy riding may turn into easy matching if the marginal utility of public good consumption is strongly influenced by private consumption

macroeconomic forecasting using diffusion indexes this article studies forecasting a macroeconomic time series variable using a large number of predictors the predictors are summarized using a small number of indexes constructed by principal component analysis an approximate dynamic factor model serves as the statistical framework for the estimation of the indexes and construction of the forecasts the method is used to construct 6 12 and 24 monthahead forecasts for eight monthly u s macroeconomic time series using 215 predictors in simulated real time from 1970 through 1998 during this sample period these new forecasts outperformed univariate autoregressions small vector autoregressions and leading indicator models

the co evolutionary relationship between energy service companies and the uk energy system implications for a low carbon transition abstract the energy service company esco business model is designed to reward businesses by satisfying consumers energy needs at less cost and with fewer carbon emissions via energy demand management and or sustainable supply measures in contrast the revenue of the incumbent energy utility company euco model is coupled with the sale of units of energy which are predominantly sourced from fossil fuels the latter is currently dominant in the uk this paper addresses two questions first why has the esco model traditionally been confined to niche applications second what role is the esco model likely to play in the transition to a low carbon uk energy system to answer these the paper examines the core characteristics of the esco model relative to the euco model the paper then examines how escos have co evolved with the various dimensions of the energy system i e ecosystems institutions user practices technologies and business models to provide insight into how escos might help to shape the future uk energy system we suggest that institutional and technological changes within the uk energy system could result in a more favourable selection environment for escos consequently enabling the esco model to proliferate at the expense of the euco model