risk assessment of virtual power plants offering in energy and reserve markets distributed energy resources ders can be integrated into a single entity namely virtual power plant vpp the integration enables them to participate in competitive wholesale electricity markets according to the different types of uncertainty faced by different ders this integration can also act as a risk hedging mechanism providing a surplus profit in this paper using a two stage stochastic programming approach risk averse optimal offering model for a vpp trading in a joint market of energy and spinning reserve service is presented the conditional value at risk cvar is used to control the risk of profit variability uncertainties involved in generation of renewables consumption of loads calls for reserve service as well as prices in the day ahead market the spinning reserve market rm and the balancing real time market bm are taken into consideration this paper assesses how total and surplus profits of vpp are affected by risk aversion participation in the rm and the pricing system in the bm for this purpose the role of the integration and the trends of energy and reserve transactions under both single and dual pricing systems in the bm are addressed in detail through a numerical study

oil price shocks and their short and long term effects on the chinese economy a considerable body of economic literature shows the adverse economic impacts of oil price shocks for the developed economies however there has been a lack of empirical study of this kind on china and other developing countries this paper attempts to fill this gap by answering how and to what extent oil price shocks impact china s economy emphasizing on the price transmission mechanisms to that end we develop a structural vector auto regressive model our results show that an oil price increase negatively affects output and investment but positively affects inflation rate and interest rate however with the differentiated price control policies for materials and intermediates on the one hand and final products on the other hand in china the impact on real economy represented by real output and real investment lasts much longer than that to price monetary variables our decomposition results also show that the short term impact namely output decrease induced by the cut of capacity utilization rate is greater in the first one to two years but the portion of the long term impact defined as the impact realized through an investment change increases steadily and exceeds that of short term impact at the end of the second year afterwards the long term impact dominates and maintains for quite some time

the sword and the shield the economics of targeted sanctions abstract how effective are smart sanctions in imposing costs on an adversary we consider this question in a model where a targeted regime may choose to shield strategically important firms from harm using detailed firm and individual data we estimate the impact on firm performance from smart sanctions deployed by the u s and eu against russia beginning in 2014 we find significant losses in operating revenue asset values and employees for sanctioned firms relative to their non sanctioned peers which are greater in sectors dependent upon western service inputs strategic firms systemically outperform non strategic firms under sanctions implying a cost of shielding to the regime that adds substantially to the total cost of sanctions jel f5

oil price shocks and real gdp growth empirical evidence for some oecd countries this study assesses empirically the effects of oil price shocks on the real economic activity of the main industrialized countries multivariate var analysis is carried out using both linear and non linear models the latter category includes three approaches employed in the literature namely the asymmetric scaled and net specifications evidence of a non linear impact of oil prices on real gdp is found in particular oil price increases are found to have an impact on gdp growth of a larger magnitude than that of oil price declines with the latter being statistically insignificant in most cases among oil importing countries oil price increases are found to have a negative impact on economic activity in all cases but japan moreover the effect of oil shocks on gdp growth differs between the two oil exporting countries in the sample with the uk being negatively affected by an oil price increase and norway benefiting from it

the effects of oil price shocks on the iranian economy abstract the iranian economy is highly vulnerable to oil price fluctuations this paper analyzes the dynamic relationship between oil price shocks and major macroeconomic variables in iran by applying a var approach the study points out the asymmetric effects of oil price shocks for instance positive as well as negative oil price shocks significantly increase inflation we find a strong positive relationship between positive oil price changes and industrial output growth unexpectedly we can only identify a marginal impact of oil price fluctuations on real government expenditures furthermore we observe the dutch disease syndrome through significant real effective exchange rate appreciation

comparison of china s oil import risk results based on portfolio theory and a diversification index approach in recent years the international oil price has fluctuated violently bringing about huge risk for the international oil trade in fact the risk of crude oil and petroleum product imports is different because of the different import origins and prices which import risk is lower for china from the perspective of oil supply security how should china portfolio crude oil and petroleum product imports to minimize its oil import risk using portfolio theory and a diversification index approach this paper compares and analyzes the supply price and transport risks of crude oil and petroleum product imports our results show that the following 1 specific risk diversification risk and marine transport risk of china s petroleum product imports are lower than that of crude oil imports 2 the average rate of return of china s petroleum product imports is higher than that of crude oil imports moreover the average import price variance of petroleum product imports is lower than that of crude oil imports thus the systematic risk price risk of petroleum products is lower too therefore from the perspective of oil supply security china should increase petroleum product imports to decrease its oil import risk

minimization of imbalance cost trading wind power on the short term power market present power markets are designed for trading conventional generation for wind generation to participate in a short term energy market lengthy wind power production forecasts are required although wind speed forecasting techniques are constantly improving wind speed forecasts are never perfect and resulting wind power forecast errors imply imbalance costs for wind farm owners in this paper a new method for minimization of imbalance costs is developed stochastic programming is used to generate optimal wind power production bids for a short term power market a wind power forecast error is represented as a stochastic process the imbalance costs resulting from this strategy are then compared to the case when wind power production bids on a short term power market are based directly on a wind speed forecast

oil and the macroeconomy since world war ii all but one of the u s recessions since world war ii have been preceded typically with a lag of around three fourths of a year by a dramatic increase in the price of crude petroleum this does not mean that oil shocks caused these recessions evidence is presented however that even over the period 1948 72 this correlation is statistically significant and nonspurious supporting the proposition that oil shocks were a contributing factor in at least some of the u s recessions prior to 1972 by extension energy price increases may account for much of post opec macroeconomic performance

imperfect competition and the effects of energy price increases on economic activity the authors show that modifying the standard neoclassical growth model by assuming that competition is imperfect makes it easier to explain the size of the declines in output and real wages that follow increases in the price of oil plausibly parameterized models of this type are able to mimic the response of output and real wages in the united states the responses are particularly consistent with a model of implicit collusion where markups depend positively on the ratio of the expected present value of future profits to the current level of output copyright 1996 by ohio state university press

the impact of intraday markets on the market value of flexibility decomposing effects on profile and the imbalance costs abstract an increasing share of variable renewable energy sources vres basically affects the electricity price formation in two ways 1 the so called merit order effect tends to lower the base price level and challenges conventional plants to remain profitable 2 due to the variable nature of renewable energy infeed the short term demand for flexibility increases and changes the volatility of electricity prices the more variable prices offer opportunities for controllable electricity producers ceps who provide up and down ramping flexibility to increase their revenues in contrast the vres with high degrees of simultaneity tend to pay for this flexibility in the electricity spot market to reduce their imbalance exposure the intraday market idm for electricity has gained importance for the market value of different technologies lately and continues to expand due to the increasing efforts to balance within day deviation from day ahead schedules this article presents a combination and extension of two existing models to capture the peculiarities of the intraday price formation and to analyze the impact of the idm on the market value of vres and ceps doing so the paper suggests an adjustment of the classical market value factor metric and to go beyond classical day ahead market dam information the article shows that market value factors mvfs can be stabilized if the idm delivers market based price signals for the costs of flexibility that are sufficient to activate flexibilities prior to the usually more expensive imbalance mechanism ibm yet the mvfs from single vre technologies will worsen if their market share is high enough to outweigh forecast errors from other technologies and if they become a permanent price maker in the idm and the ibm

global oil glut and sanctions the impact on putin s russia abstract the russian economy is highly responsive to oil price fluctuations at the start of 2014 the country was already suffering from the weak economic growth partly due to the ongoing crisis in ukraine and western sanctions the recent plunge in global oil prices put even further strain on the russian economy this paper analyzes the dynamic relationship between oil price shocks economic sanctions and leading macroeconomic indicators in russia we apply a vector autoregression var to quantify the effects of oil price shocks as well as western economic sanctions on real gdp real effective exchange rate inflation real fiscal expenditures real consumption expenditures and external trade using quarterly data from 1999 1 until 2015 1 our results show a significant impact of oil prices on the russian economy we predict that russia s economic outlook is not very optimistic if sanctions remain until the end of 2017 the quarter to quarter real gdp will contract on average by 19 percent over the next two years

low carbon scenarios for russia s energy system a participative backcasting approach abstract despite the high profile of climate change in scientific and policy discourse the russian government has thus far failed to commit to an emission reduction target based on the latest science given russia is a key supplier of fossil fuels a major greenhouse gas emitter and climate impacts on its vast territory likely to have far reaching consequences this contextual research shows that the country s current policies fall woefully short of what is required to implement the paris agreement to support russia in developing informed internally consistent and scientifically literate energy policies this paper presents low carbon emission trajectories commensurate with the 2 c goal using stakeholder informed backcasting the results illustrate that even if russia s co2 emissions peak in 2017 a reduction rate of at least 9 per year between 2020 and 2030 is required to meet a 2 c budget constraint these sustained rates are in excess of anything achieved globally or indeed deemed possible within most studies such emission reductions would involve unprecedented material changes to russia s energy system including both rapidly cutting energy demand and building extensive low carbon infrastructures nevertheless failure to transform russia s existing policies will likely have global repercussions for achieving the paris agreement s goals

this is what happened to the oil price macroeconomy relationship abstract many of the quarterly oil price increases observed since 1985 are corrections to even bigger oil price decreases the previous quarter when one looks at the net increase in oil prices over the year recent data are consistent with the historical correlation between oil shocks and recessions

trade linkages and macroeconomic effects of the price of oil in this paper we assess the impact of oil price shocks on oil producer and oil consuming economies var models for different countries are linked together via a trade matrix as in abeysinghe 2001 as expected we find that oil producers here russia and canada benefit from oil price shocks for example a large oil shock leading to a price increase of 50 boosts russian gdp by about 6 however oil producers are hurt by indirect effects of positive oil price shocks as economic activity in their exporter countries suffers for oil consumers the effects are more diverse in some countries output falls in response to an oil price shock while other countries seem to be relatively immune to oil price changes finally indirect effects are also detected for oil consumer countries those countries which trade more with oil producers gain indirect benefits via higher demand from oil producing countries in general the largest negative total effects from positive oil price shocks are found for japan china the usa finland and switzerland while other countries in our sample seem to have fared quite well during recent positive oil price shocks the indirect effects are negative for russia finland germany and netherlands

identifying barriers to large scale integration of variable renewable electricity into the electricity market a literature review of market design abstract for reaching the 2 c climate target the robust growth of electricity generation from variable renewable energy sources vre in the power sector is expected to continue accommodation of the power system to the variable uncertain and locational dependent outputs of vre causes integration costs integrating vre into a well functioning electricity market can minimize integration costs and drive investments in vre and complementary flexible resources however the electricity market in the european union eu as currently designed seems incapable to deliver this end this paper aims to provide a comprehensive literature review of barriers to the large scale market integration of vre in the eu electricity market design based on the set up of the eu electricity market a framework was developed to incorporate the most pertinent market integration barriers and resulting market inefficiencies this paper concludes that an overhaul is needed for the current eu electricity market to address all barriers identified firstly a discrete auction intraday market a marginal pricing balancing market a two price imbalance settlement and a nodal pricing locational marginal pricing mechanism seem more promising in limiting integration costs secondly to support business cases of vre and complementary flexible resources in the electricity market a level playing field should be established and the price cap should be lifted up to the value of lost load voll meanwhile to fit vre s market participation a higher time resolution of trading products and later gate closure time in different submarkets would be required lastly feed in support schemes currently widely used for vre investments might be inconsistent with market integration as they increase integration costs and lock vre investments in a subsidy dependent pathway to avoid such lock in further investigation of alternative capacity based support schemes is recommended

the impact of european balancing rules on wind power economics and on short term bidding strategies abstract wind power represents a significant percentage of the european generation mix and this will increase to fulfill the renewable energy targets different balancing rules are applied to wind power among the countries for instance to what extent wind power producers wpps are responsible for the energy imbalances and how those imbalances are penalized this paper discusses those different rules and evaluates their effects on wpp bidding strategies to do so a quantitative analysis is presented for an offshore wind farm considering the differences in the balancing rules and prices of belgium denmark germany and the netherlands the quantitative approach consists of a stochastic optimization model that maximizes the profits of a wpp by trading in different markets day ahead and intraday and computes the final energy delivered the model considers uncertainties of most important parameters such as wind energy forecasts and prices at different time frames the results show that the imbalance pricing design and the allocation of balance responsibility significantly affect wpp revenues additionally wpps deviate differently from the expected energy depending on the balancing rules which can impact the system furthermore these balancing rules should be considered with other market regulations such as the design of support schemes

development of biodiesel industry in china upon the terms of production and consumption abstract the prices of primary energy have been ineluctably raised up due to the enormous energy consumption in china and the economy suffers a lot from the severe energy shortage therefore the necessity of using renewable energy in china is particularly important biodiesel has become one of the major renewable fuels of biomass energy since china s biodiesel industry just starts at the primary stage improving the production capacity of biodiesel for meeting the soaring on energy demands is more necessary for the sustainable development in china the materials for biodiesel production are various and sufficient in china that indicates china could have a brilliant potentiality in the production capacity of biodiesel however whether such prediction could be true is still needed to be discussion in depth and further for well answering the query the development of biodiesel industry in china has been systematically reviewed upon the terms of production and consumption and three essential aspects how to sufficiently take advantage of such plentiful feedstock for obtaining a satisfied production capacity how to reasonably use such biodiesel in each region and how to scientifically encourage the development of chinese biodiesel industry have been discussed from the review and discussions it can be concluded that the rising china s biodiesel industry is still behind the actual demand asked by 12th five years plan and continuous introduction of capitals is the effective method to a further development meanwhile the development of china s biodiesel industry is highly depended on the raw materials whose sources and production capability are remarkably different in different regions and hence make standards on the quality of biodiesel is essential and crucial to the further development furthermore adjusting tax policies and forcing the application of biodiesel as addition to fossil diesel can effective establish and enlarge the market of biodiesel in china

energy consumption in china past trends and future directions abstract in 2003 china s energy consumption amounted to 1678 million tonnes coal equivalent mtce making china the world s second largest consumer behind only the united states china is now also one of the largest oil importers in the world with an economy that is expected to maintain a rate of growth of 7 8 for decades china s role in the world energy market becomes increasingly influential this makes it important to predict china s future demand for energy the objective of this paper is to apply the bayesian vector autoregressive methodology to forecast china s energy consumption and to discuss potential implications the results of this paper suggest that total energy consumption should increase to 2173 mtce in 2010 an annual growth rate of 3 8 which is slightly slower than the average rate in the past decade the slower growth reflects expected slower economic growth and a decline in energy consumption due to structural changes in the chinese economy

economic impact of oil price shocks on the turkish economy in the coming decades a dynamic cge analysis as a small open economy turkey depends on both imported oil and natural gas importing almost two thirds of its primary energy demand this paper analyzes the economic effects of oil price shocks for turkey as a small open oil and gas importing country to analyze the potential long term effects of oil price shocks on macroeconomic variables of interest including gdp consumer price inflation indirect tax revenues trade balance and carbon emissions we developed turgem d a dynamic multisectoral general equilibrium model for the turkish economy using turgem d we analyzed the impact of oil price shocks under three distinct scenarios reference high and low oil prices the simulation results show that these oil prices have very significant effects on macro indicators and carbon emissions in the turkish economy

oil prices and current account a structural analysis for the turkish economy abstract although there has been an increasing number of studies about the effects of oil prices on the macroeconomic performances the literature on the interaction between oil prices and current account is limited especially for oil importing developing countries this paper analyzes the impact of oil prices on the current account balances for the turkish economy using a structural vector autoregression model our model allows us to identify the net effect of oil prices on current account balances after controlling for other factors such as output gap and exchange rate misalignment the results show that the response of current account ratio to oil price shock increases gradually up to the first three months and then starts to decrease which indicates a significant effect of oil price shocks in the short run moreover when the obtained structural shocks are employed in a simple regression analysis the parameter regarding the oil price shocks is found to be negative and statistically significant the final section discusses the policy implications of the results

estimation of direct and indirect impact of oil price on growth abstract using a new methodology this paper measures the direct and indirect effects of oil prices on gdp growth of 12 economies because of the indirect effect which is transmitted through a trade matrix even the net oil exporters like indonesia and malaysia cannot escape the negative influence of high oil prices

growth and oil price a study of causal relationships in small pacific island countries this paper investigates the nexus between economic growth and oil price in small pacific island countries pics except papua new guinea none of the 14 pics has fossil any fuel resources consequently the other 13 pics are totally dependent on oil imports for their economic activities since pics have limited foreign exchange earning capacities as they have a very narrow range of exports and are highly dependent on foreign aid high oil prices in recent months have seriously tested their economic resilience this paper applies the ardl bounds testing methodology to four selected pics samoa solomon islands tonga and vanuatu which have consistent and reliable time series of data with a view to assess the impact of oil price on economic growth the findings are that oil price gross domestic product and international reserve are cointegrated in all the four pics further both in the long and short runs we observe that there is a uni directional relationship as causality linkage runs only from oil price and international reserves to economic growth the paper makes some policy recommendations

exploring the oil price and real gdp nexus for a small island economy the fiji islands the goal of this paper is to examine the relationship between real gdp and oil prices using time series data for the period 1970 2005 our main finding is that an increase in oil has a positive albeit inelastic impact on real gdp inconsistent with the bulk of the literature we argue that this is not a surprising result for the fiji islands our central argument focuses on two aspects of the fijian economy 1 the fact that actual output in fiji has been around 50 per cent less than potential output thus fiji s actual output has not reached a threshold level at which oil prices can negatively impact output and 2 a rise in oil prices filters through to value added which in turn is reflected in a larger actual output

short term strategies for dutch wind power producers to reduce imbalance costs the paper assesses bidding strategies for a wind power producer in the netherlands to this end a three stage stochastic optimization framework is used maximizing wind power producer s profit using the day ahead and cross border intraday market taking into account available interconnection capacity results show that the wind power producer can increase its profits by trading on the intraday market and under certain imbalance prices by intentionally creating imbalances it has been considered uncertainties about prices power forecast and interconnection capacity at the day ahead and intraday timeframes

oil and the macroeconomy when prices go up and down an extension of hamilton s results in an important paper hamilton 1983 demonstrated a strong correlation between oil price changes and gross national product growth in u s data however his study pertained to a period in which all the large oil price movements were upward and thus it left unanswered the question whether the correlation persists in periods of price decline moreover the price variable he used was somewhat distorted by price controls in the 1970s this note investigates whether hamilton s results continue to hold when the sample is extended to include the recent oil market collapse and the oil price variable is corrected for the effects of price controls particular attention is given to the possibility of asymmetric responses to oil price increases and decreases as suggested in the structural employment literature loungani 1986 davis 1987 hamilton 1988 like hamilton i based my investigation on the gnp equation in sims s 1 980b six variable quarterly vector autoregressive model