the optimal biopower capacity in co firing plants an empirical analysis abstract biomass fuels carry appealing features in replacing traditional fossil fuels especially coal in power generation due to the bulk sparse and low energy density drawbacks of biomass many studies implicitly indicate small and limited scale in biopower generation this study contributes to the bioenergy literature by explicitly studying the optimal biopower capacity of biopower co firing technology in coal fired power plants which has practical implications for potential biopower practitioners investors and policymakers this study indicates that the optimal biopower capacity of biomass co firing in coal powered plants is intermediate i e 12 mw on average in order to take advantage of economies of scale without incurring high transportation cost regional variations are also found in the aspects of production cost and optimal capacity due to local characteristics local biomass availability plays a critical role in shaping biopower s generation cost optimal capacity and cost changing patterns

the measurement and trend of inequality comment in a recent article in this review morton paglin proposes a measure of concentration which he claims will correct the gini ratio for overstatement in populations where each individual may be expected to vary his income or wealth over his life cycle the paglin measure suggests that the gini ratio overstates income concentration in the united states by a third and does not reveal a 23 percent decline in concentration which has occurred between 1947 and 1972 these results are based on an improper decomposition of the gini ratio in this note i decompose the gini ratio to derive the paglin measure it is shown to correct for neither demographic nor life cycle income effects and to understate intracohort income or wealth inequality if properly normalized the paglin measure shows that the gini overstates u s income concentration by 7 percent or less and indicates a decline in u s interfamily income concentration of less than 12 percent four percentage points of this decline are the result of demographic change while less than 7 points comparable to the 5 percent decline of the gini are the result of decreased income concentration within cohorts of family heads decomposition further reveals major changes in the division of income among cohorts and in concentration of income within cohorts these changes compensate each other in the paglin measure the use of which as a measure of income or wealth concentration is not recommended the gini concentration ratio

supply of biomass bioenergy and carbon mitigation method and application this study develops an analytical framework for deriving the supply of biomass feedstock and subsequently electricity and co2 displacement generated from the biomass this systematic approach minimizes the total cost of both feedstock and electricity production and involves the determination of the optimal power plant size and the derivation of the supply curves the analytical framework is applied to the case of logging residues in the us both the theoretical and empirical results point to the importance of simultaneously considering feedstock production energy conversion and environmental benefits costs in bioenergy project development leading to useful policy implications for bioenergy development and deployment

project finance and international energy development this paper explores the preference for and the features unique to project finance one of the favoured vehicles for funding energy development our main focus is on the interests of project sponsors commercial banks and host governments inclusion of the latter reflects the fact host governments are often leading participants in primary energy and energy related projects more recently they have come to use limited recourse structures to finance local infrastructure development traditional analyses whilst providing useful insights into the interests of leading project participants are incapable of isolating a single motive or set of motives that can comprehensively account for all of the features common to this form of debt within an options theoretic framework most of these ambiguities are resolved risk management long recognised as one of the primary reasons for choosing project finance over rival debt structures is affirmed as a key explanatory factor on the other hand options pricing theory provides a radically different perspective on how project finance contributes to the realisation of these objectives

outline of the economic and technical problems associated with the co combustion of biomass in poland abstract the paper presents the economic and technical problems associated with the use of biomass in co combustion processes in the energy sector in poland the particular attention was paid to the extent of the use of biomass in the energy sector the technologies and techniques applied as well as the economic determinants as it results from the analyses the co combustion of biomass in poland is a predominant direction in the green energy production co combustion processes are carried out mainly with the use of direct combustion technologies in the largest entities operating in the energy market the widespread use of biomass in the polish energy sector results in specific problems such as those associated with the prices of green certificates and the import of biomass currently the polish renewable energy sector is developing as intended however the validity of the funds spending which aimed at supporting renewable energy sources res may raise some doubts this results from insufficient monitoring of the amount of energy produced on the basis of renewable sources which in 2012 led to over production of the res based energy and consequently to a significant decrease in prices of green certificates

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

optimal involvement in futures markets of a power producer this paper addresses the optimal involvement in a futures electricity market of a power producer to hedge against the risk of pool price volatility the considered trading horizon spans one whole year recognizing the highly uncertain nature of future pool prices a stochastic programming framework with recourse is used to model this decision making problem the resulting problem is a large scale mixed integer linear programming problem scenario reduction techniques are used to make this problem tractable risk is properly modeled using the cvar methodology results from a realistic case study are provided and analyzed some conclusions are finally drawn

modeling long term dynamics of electricity markets in the last decade many countries have restructured their electricity industries by introducing competition in their power generation sectors although some restructuring has been regarded as successful the short experience accumulated with liberalized power markets does not allow making any founded assertion about their long term behavior long term prices and long term supply reliability are now center of interest this concerns firms considering investments in generation capacity and regulatory authorities interested in assuring the long term supply adequacy and the stability of power markets in order to gain significant insight into the long term behavior of liberalized power markets in this paper a simulation model based on system dynamics is proposed and the underlying mathematical formulations extensively discussed unlike classical market models based on the assumption that market outcomes replicate the results of a centrally made optimization the approach presented here focuses on replicating the system structure of power markets and the logic of relationships among system components in order to derive its dynamical response the simulations suggest that there might be serious problems to adjust early enough the generation capacity necessary to maintain stable reserve margins and consequently stable long term price levels because of feedback loops embedded in the structure of power markets and the existence of some time lags the long term market development might exhibit a quite volatile behavior by varying some exogenous inputs a sensitivity analysis is carried out to assess the influence of these factors on the long run market dynamics

subsidy modes waste cooking oil and biofuel policy effectiveness and sustainable supply chains in china abstract many countries are concerned with the waste to energy for economic development and societal welfare this paper constructs a dynamic game model that for the first time compares the incentive effects of four common subsidy modes on waste cooking oil supply for biofuel refining and sales of waste cooking oil refined products the model considers the impact of preferential tax treatment a raw material subsidy a sales subsidy and an investment subsidy on the profits of biofuel enterprises and waste cooking oil recyclers results indicate that common approaches adopted in developed economies such as raw material price subsidies and finished products sales subsidies increase the profits of both biofuel enterprises and recyclers on the contrary investment subsidies which are relatively common in some regions of china increase the profits of recyclers while reducing revenues achieved by biofuel enterprises to promote the supply chain policy should give priority to raw material price subsidies and finished products sales subsidies and for investment subsidies however the government should be cautious

a measure of horizontal inequity politicians academicians and the general public alike have perceived that the status quo tax and transfer legislation creates inequities among living units tax laws create numerous situations in which living units with seemingly equal abilities to pay are taxed quite different amounts state by state differences in welfare eligibility rules benefit schedules and administrative procedures the general unavailability of cash welfare to childless nonaged healthy couples and single individuals and other features of transfer programs similarly provide vastly different levels of income support to units with equal needs advocates of major tax and welfare reform have marshalled such evidence into a central argument in favor of their proposals while there is wide agreement that the process of redistributing incomes abounds with inequities there have been few attempts to quantify their extent 2 this paper develops a measure of horizontal inequity and illustrates its use section ii discusses the concept of horizontal equity then builds upon familiar lorenz curve gini coefficient analysis to derive the inequity index the third part considers some problems of implementing the measure and illustrates it section iv provides a short conclusion

are renewable energy subsidies effective evidence from europe abstract we test if policy support for renewable electricity have been effective in promoting renewables in the five largest european countries in the period 2000 2010 we collect data on the exact amount of monetary incentives and the average tariffs granted the econometric analysis reveals a positive correlation between subsidies and the production of incentivized energy as well as the installed capacity we find that a 1 1c increase in the incentive tariff leads to an increase in renewable generation of 0 4 1 18 26 feed in tariffs appear to outperform tradable green certificates overall the analysis shows that these policies have been effective in promoting renewable energy both in the short and in the long run

how income transfer programs affect work savings and the income distribution a critical review for helpful comments on earlier drafts we thank without implicating moses abramovitz yves balcer john bishop alan blinder richard burkhauser michael darby irwin garfinkel alan gustman daniel hamermesh martin holmer george jakubson robert lampman paul menchik robert moffitt michael murray joseph quinn timothy smeeding eugene smolensky barbara wolfe and two anonymous referees

impact of renewables on electricity markets do support schemes matter abstract rising renewable shares influence electricity markets in several ways among others average market prices are reduced and price volatility increases therefore the missing money problem in energy only electricity markets is more likely to occur in systems with high renewable shares nevertheless renewables are supported in many countries due to their expected benefits the kind of support instrument can however influence the degree to which renewables influence the market while fixed feed in tariffs lead to higher market impacts more market oriented support schemes such as market premiums quota systems and capacity based payments decrease the extent to which markets are affected this paper analyzes the market impacts of different support schemes for this purpose a new module is added to an existing bottom up simulation model of the electricity market in addition different degrees of flexibility in the electricity system are considered a case study for germany is used to derive policy recommendations regarding the choice of support scheme

renewable deployment in india financing costs and implications for policy india s ambitious goals for renewable energy raise many questions regarding the nature of investment required we conduct financial modeling of actual renewable projects in india and derive the following insights first the high cost of debt is the most pressing problem higher cost and inferior terms of debt in india may raise the cost of renewable energy by 24 32 compared to the u s second even if cost of debt goes down loan terms including short tenors and variable interest rates will become significant impediments given that they add 13 14 to the cost of renewable energy in india compared to the u s finally due to the high cost of debt policy lessons from the u s and europe which focus on finer instruments such as duration of revenue support revenue certainty investor risk perception and completion cost certainty are not likely to be as effective with potential impacts on the cost of renewable energy in the 3 11 range in fact we find that an interest rate subsidy which reduces the cost of debt reduces the overall subsidy burden by 13 16 this suggests that indian policymakers need to prioritize the provision of low cost long term debt and take a closer look at the successful efforts by china and brazil 2013 elsevier ltd

labor supply response to welfare programs a dynamic analysis previous static analyses of the work disincentive effects of welfare programs are extended to a dynamic context using a sample of continuous longitudinal labor market histories estimates are derived for welfare nonwelfare differences in labor market flows among the states of employment unemployment and nonparticipation the estimates are used to identify the main sources of the lower employment and labor force participation rates and higher unemployment rate of welfare recipients the findings indicate that welfare programs have substantial effects on virtually every labor market transition examined but that the primary source of the static work disincentive effect is slower entry into employment

strategic choices for renewable energy investment conceptual framework and opportunities for further research this paper introduces the special issue on strategic choices for renewable energy investment which is a collection of best papers presented at an international research conference held in st gallen switzerland in february 2010 substantial private investment is needed if public policy objectives to increase the share of renewable energy and prevent dangerous anthropogenic climate change are to be achieved the aim of this paper and the entire special issue is to draw scholarly attention to the processes underlying strategic choices for renewable energy investment and how they are influenced by energy policy we disentangle the role of risk return perceptions portfolio effects and path dependence in explaining energy investment decisions and suggest that the heterogeneous universe of investors requires a segmentation of policies the paper outlines some of the rich opportunities for further research in this emerging area

towards a comprehensive policy for electricity from renewable energy an approach for policy design abstract energy policy design in europe is a complex issue involving multiple levels of governance and heavily influenced by institutional contexts however policy design in europe and model based analysis even more so is arguably shaped by the neo classical school of thought there is a need to provide a structured approach that would facilitate the incorporating of institutional contexts into renewable energy sources for electricity res e policy design and analysis this paper presents a formal approach to res e policy design based on design theory the institutional analysis and development iad framework and agent based modelling and simulation given a certain frame of analysis we propose that it is theoretically possible to identify the complete policy design space a set of design elements crucially this aspect potentially opens up to the policy analyst new avenues for intervention and allows her systematically explore given a range of uncertainties which element s of intervention is are the most vital to achieve the goals of the community its empirical applicability is demonstrated by representing and differentiating between six res e schemes from western europe in terms of the design elements a model based illustration demonstrates the value of this approach to quantitatively analyse the impact of design elements

public policies to support the development of renewable energy in romania a review abstract the aim of this study is to review the public policies used to support the development of renewable energy in romania over the past ten years romania assumed a target of 24 share of renewable energy in consumption in 2020 higher than the average target of the european union and this target has already been reached in the beginning of 2014 as a result of the public policies implemented therefore this study examines firstly the support schemes for the development of renewable energy in the european union underlining the arguments to support the renewable energy as well as the main barriers for its development secondly this study analyses the renewable energy sector in romania in terms of theoretical and economic potential production and consumption of renewable energy and legislation related to the renewable energy thirdly this study discloses the main issues of the public renewable energy policy in romania starting with an overview of the tradable green certificates system and revealing the changes of the romanian support scheme and the possible effects of the policy changes the results of the present study may be useful for further research regarding public policies for the development of renewable energy projects

economic feasibility of utilizing forest biomass in district energy systems a review abstract recent global protocols and agreements have motivated countries to use biomass for energy generation however the barriers in biomass utilization including variations in biomass availability high moisture content low bulk density and dispersed distribution of biomass have made investors reluctant to invest in bioenergy projects in some parts of the world in this paper in addition to a brief summary of the conversion technologies used for energy generation a review of the world literature on techno economic assessment of district energy systems using forest biomass as the primary fuel with references extending over two decades is provided although energy generation from forest biomass is found to be expensive in many countries the review of literature revealed important factors that increased the share of biomass in energy production in other countries these important factors include using more efficient technologies providing governmental grants and subsidies setting new policies in favor of biomass utilization increasing emission reduction targets and introducing tradable carbon credits the feasibility of utilizing forest biomass in district heating systems has been examined in the literature mainly based on the costs while considering social and environmental profiles of these systems could improve their acceptance future research studies on assessing the performance of biomass district energy systems should consider environmental and social impacts of these systems in addition to their costs

optimal regulation of renewable energy a comparison of feed in tariffs and tradable green certificates in the spanish electricity system abstract incentives for renewable energy based on feed in tariffs have succeeded in achieving high levels of renewable installed capacity however these incentives have not been responsive to market conditions or price signals imposing in some cases a great financial burden on consumers when renewable energy sources reached significant levels a way out of this problem could be a market mechanism where incentives respond to the level of investment on renewables we explore this issue comparing a regulatory system based on tradable green certificates able to react to market changes to a feed in tariffs incentive scheme we model the strategic interaction between participants in the electricity pool and the tradable green certificates market and focus on the optimal regulation for the retailer segment which generates the desired demand for green certificates as a decreasing function of the certificate price we then calibrate our theoretical model with data from the spanish electricity system for the period 2008 2013 simulations show that a green certificate scheme could both achieve the 2020 targets for renewable electricity and reduce regulatory costs however the role of regulators is still important since setting the right target for renewable electricity affects the cost burden of the system

design of an economically efficient feed in tariff structure for renewable energy development abstract evidence suggests albeit tentatively that feed in tariffs fits are more effective than alternative support schemes in promoting renewable energy technologies rets fits provide long term financial stability for investors in rets which at the prevailing market price of electricity are not currently cost efficient enough to compete with traditional fossil fuel technologies on the other hand if not properly designed fits can be economically inefficient as is widely regarded to have been the case under the public utility regulatory policies act of 1978 purpa under purpa too high a guaranteed price led to the creation of so called purpa machines poorly performing generating units that could survive financially only because of heavy subsidies that came at the expense of retail customers similarly because of their adverse impacts on retail electricity rates german fits have been subject to increasing political pressure from utilities and customers in this paper we propose an innovative two part fit consisting of both a capacity payment and a market based energy payment which can be used to meet the renewables policy goals of regulators our two part tariff design draws on the strengths of traditional fits relies on market mechanisms is easy to implement and avoids the problems caused by distorting wholesale energy markets through above market energy payments the approach is modeled on forward capacity market designs that have been recently implemented by several regional transmission organizations in the usa to address needs for new generating capacity to ensure system reliability

an overview of incentive policies for the expansion of renewable energy generation in electricity power systems and the brazilian experience abstract energy production from renewable sources is already a reality in many countries and with that different strategies for incentivizing investments in renewable energy generation have been proposed and used over the years in this study long term policies that have been applied in several countries such as feed in tariffs shares with commercialization of certificates auctions and net metering are overviewed and discussed the main advantages and disadvantages of these incentive strategies are emphasized focusing on applications some of these strategies that have already been applied in brazil are analyzed in greater depth emphasizing the potentialities and fragilities of these mechanisms observed within the country even though it is a country that stands out in relation to other latin american countries regarding electricity generation from non hydro renewable sources brazil still faces barriers that prevent a utilization compatible with its potential moreover the trend for renewable sources such as wind and solar power is to represent an energy capacity reserve to cover hydrological risks and also to contribute to a distributed generation spread through electricity distribution networks

female labor supply with a discontinuous nonconvex budget constraint incorporation of a part time full time wage differential this paper incorporates the well documented part time full time wage differential into an empirical labor supply model with both a heterogeneity and a random error term and estimates that model fo

low or no subsidy proposing a regional power grid based wind power feed in tariff benchmark price mechanism in china abstract the chinese government plans to adopt a low or no subsidy policy mechanism on renewable energy power development in the future to achieve a balance between reducing financial burden on the government and ensuring profitability of investors as well as to account for the regional differences in china a novel regional wind power grid feed in tariff benchmark price mechanism by net present value npv method and real option ro method is proposed in this paper the results voice support on the appropriateness of gradually decreasing the wind feed in tariff fit benchmark price to as low as the coal fired fit the proposed fit price level is presented as a price range on the basis of a guaranteed internal rate of return irr falls in between 8 to 15 for wind power investors the results indicate that the current fit price should be readjusted and redistributed although the fit price in central and south china grids is recommended to be relatively high the npv of wind farm project value in six regional grids are at the same level

public transfers family socioeconomic traits and the job search behavior of the unemployed evidence from puerto rico abstract this paper explores the theoretical and empirical associations between the job search efforts of the unemployed and the socioeconomic characteristics of the family it takes as a point of reference that certain supply side phenomena may contribute to puerto rico s high open unemployment rate the statistical analyses carried out indicate that there does exist what can be labeled luxury unemployment in other words government provided transfer payments generate disincentive effects with respect to the job market behavior of the unemployed moreover the dependency status of the individual within the family group also leads to lower job search effort

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

small streams diverse sources who invests in renewable energy in finland during the financial downturn this article addresses the investment gap in renewable energy sources identified by several authors examining the case of a country finland which introduced policy measures to diversify its renewable energy portfolio we analyse the development of investments in renewable heat and power in response to new policy measures and contextual factors during the downturn period 2009 2013 we investigate investor heterogeneity i e the diversity of logics employed by different types of res investors in spite of a severe financial recession we find an emergence of new sources of investment among these new investor types we find diversity in investment drivers and available options these include investors mobilized by the feed in tariff to seek profitable targets and investors such as real estate owners investing in heat pumps for their own use and benefiting from low interest rates we find that the diversification of investors supports the diversification in res sources and brings in new investors undeterred by the financial downturn our findings imply that policy makers should recognize that the responses to distinct incentives and pressures vary by investor types this also means that a mix of policies is required to maximize the contribution of different sectors to filling the renewable energy investment gap

should social security benefits be means tested social security retirement benefits distort the saving decisions of workers who are rational enough to save for their future since the implicit rate of return in an unfunded social security program is less than the marginal product of capital the resulting decline in saving causes a welfare loss the present paper examines the conditions under which the welfare loss could be reduced by replacing the current universal social security program with a means tested program that pays benefits only to those individuals with little or no other retirement income or assets every society must solve the problem of supporting those individuals who become too old to work but have not made adequate provision for their own old age by saving when they were young at the present time the major industrial countries of the world have responded to this problem by creating social security programs that tax the working population and use the proceeds to provide a universal benefit to all retirees regardless of their financial condition this universal provision of social security benefits distorts the saving decisions of those workers who are rational enough to plan for the future since the implicit rate of return that taxpayers get on their this research is part of the nber study of the government budget and the private economy a more complete version of this paper with some numerical calculations is available as nber working paper no 1775 feldstein 1985b i am grateful to gilbert metcalf for assistance with the calculations presented in this paper and for helpful discussions for a discussion of the effect of promised retirement benefits on the savings of employees see feldstein 1974 1982 barro 1974 1978 has discussed an interesting

capacity adequacy in power markets facing energy transition a comparison of scarcity pricing and capacity mechanism this article analyses how a capacity mechanism can address security of supply objectives in a power market undergoing an energy transition that combines energy efficiency efforts to stabilise demand and a rapid increase in the proportion of renewables to analyse this situation power markets are simulated over the long term with a system dynamics model integrating new investment and closure decisions this last trait is relevant to studying investment in power generation in mature markets undergoing policy shocks the energy only market design with a price cap with and without a capacity mechanism is compared to scarcity pricing in two investment behaviour scenarios with and without risk aversion the results show that the three market designs lead to different levels of risk for peaking unit investment and results thus differ according to which risk aversion hypothesis is adopted assuming a risk neutral investor the results indicate that compared to an energy only market with a price cap at 3 000 mwh an energy only market with scarcity pricing and the market design with a capacity mechanism are two efficient options to reach similar levels of load loss but under the hypothesis of risk aversion the results highlight the advantage of the capacity mechanism over scarcity pricing

when outcomes are the reflection of the analysis criteria a review of the tradable green certificate assessments abstract the tradable green certificates tgc framework is a prevalent policy support scheme enacted to stimulate investments in electricity from renewable energy sources res e in several countries including sweden and norway the tgc framework is currently under reevaluation in this process academic literature plays a crucial role in reflecting the outcomes of this policy framework the outcomes however are often limited by the analysis criteria which reflect what has been accounted for or disregarded when assessing the performance of the tgc framework the analysis criteria also stress what is considered as a successful outcome given the importance of such criteria this paper presents an extensive and systemic literature review of academic publications assessing the performance of the tgc framework the findings are to provide an overview of the publications analysis criteria and outline their outcomes we also provide descriptive statistics for the publications and examine the average citation record of the publications that use various analysis criteria in order to explore their relative impact on later studies these findings can help policymakers put the assessments into perspective when reevaluating a country s tgc system they also suggest several intriguing directions for future studies in this field

the effect of financial constraints technological progress and long term contracts on tradable green certificates tradable green certificates tgcs have recently become a diffuse instrument to support renewable electricity in oecd countries although it is perhaps too early to draw a conclusive judgement on the effectiveness of this instrument in increasing renewable capacity and decreasing the price of certificates one view in the literature maintains that long term contracts are of particular importance for tgcs to be effective this paper contributes to this debate by analysing how financial constraints and technological progress can induce investors to hold pessimistic expectations of their ability to sell green certificates and still make a profit clearly these expectations will prevent investors from building new capacity to fulfil the quota comprised in tgcs and will keep the price of certificates traded in the market high as this kind of expectation is not influenced by most design features of tgcs one can conclude that long term contracts are particularly important in determining the effectiveness and cost effectiveness of these instruments some attention should therefore be paid to the features of the tgcs which induce obliged parties to offer long term contracts to renewable generators

the role of regulatory uncertainty in certificate markets a case study of the swedish norwegian market abstract price volatility in green certificate markets reflects uncertainty over future prices representing a major source of risk for renewable energy generators price risk is considered the principal deficiency of this market based policy since it causes investors to require higher returns moreover investors are exposed to regulatory risk namely the risk that a change in the regulation will materially impact the certificate price regulatory uncertainty is reflected in market volatility exacerbating certificate price risk using an econometric approach we investigate the role of regulatory changes on price volatility in the swedish certificate market the results of our analysis indicate that regulatory changes strongly affect certificate markets resulting in periods of higher volatility moreover we analyze whether certificate price volatility has changed after creating a joint swedish norwegian market results indicate that the ambivalence surrounding the creation of this bigger market led to a period of increased price volatility between 2010 and 2011 overall this article brings a better understanding of the role of regulatory uncertainty on certificate markets and gives evidence for its negative impact in terms of increased price volatility

wind power generation an impact analysis of incentive strategies for cleaner energy provision in brazil brazil has adopted various strategies to encourage alternative renewable energy sources in pursuit of cleaner and sustainable energy production to this end strategies should support the reduction of the financial risk for potential investors in the renewable energy market therefore this study aims to analyze the impact of incentive strategies on the financial risk of wind power generation projects in brazil in different marketing environments from a quantitative approach using monte carlo simulation in three scenarios we evaluate the impact of funding from the national development bank and participation in the clean development mechanism in the financial returns of the investor in a regulated contracting environment and free contracting environment measured by the net present value we conduct a statistical analysis to find out if there were statistically significant differences in investor risk in each scenario the main results of the study are as follows the wind speed the selling price of energy and disbursement for the investment have the most significant impact on the financial return the project viability probability is greater than 85 in all scenarios regardless of the marketing environment the regulated market is less risky for the producer than the free market since there is a statistically significant difference in net present value variances for all scenarios in the regulated contracting environment funding is critical to reducing risk and carbon credit trading is not a suitable policy for providing financial security to renewable energy producers thus we conclude that in brazil the contracting of projects from auctions in the regulated contracting environment with the support of the national development bank has been important for neutralizing the producer s financial risks

uncertain lifetime consumption and dissaving in retirement this paper asks whether the continued accumulation or mild dissaving observed among the retired can be explained by uncertain lifetime in the absence of annuities after an initial period influenced by borrowing constraints under constant relative risk aversion uncertain lifetime depresses consumption by a proportion increasing with age if the elasticity of intertemporal substitution in consumption is small illustrative computations based on actual income and survival data show that plausible elasticities are sufficiently small to give this effect the reduction in consumption is large enough to explain much of the lack of decumulation by the elderly

optimal feed in tariff for solar photovoltaic power generation in china a real options analysis abstract the feed in tariff policy is widely used to promote the development of renewable energy china also adopts feed in tariff policy to attract greater investment in solar photovoltaic power generation this study employs real options method to assess the optimal levels of feed in tariffs in 30 provinces of china the uncertainties in co 2 price and investment cost are considered a method that integrates the backward dynamic programming algorithm and least squares monte carlo method is used to solve the model the results demonstrate that the feed in tariffs of 30 provinces range from 0 68 rmb kwh to 1 71 rmb kwh and the average level is 1 01 rmb kwh on this basis we find that the levels of sub regional feed in tariff announced in 2013 are no longer appropriate and should be adjusted as soon as possible we have also identified the implications of technological progress and carbon emission trading schemes as well as the importance of strengthening electricity transmission it has been suggested that the chinese government takes diverse measures including increasing research and development investment establishing and improving a nationwide carbon emission trading scheme and accelerating the construction of electricity transmission infrastructure to reduce the required feed in tariff and promote the development of solar photovoltaic power generation

the main support mechanisms to finance renewable energy development considering that the major part of greenhouse gases is carbon dioxide there is a global concern aimed at reducing carbon emissions additionally major consumer countries are looking for alternati

risk based assessment of the cost efficiency and the effectivity of renewable energy support schemes certificate markets versus feed in tariffs the introduction of renewable energy sources in the electricity generation mix has the potential to reduce power sector s emissions and countries dependence on imported oil climate change concerns and highly volatile oil prices have attracted governments interest and support to sustain investments in renewable energy capacity and different support policies have been implemented in many countries around the world this paper analyzes the effects of investors risk aversion on the performance of support schemes the analysis compares two policy options a feed in tariff mechanism with a certificate market system results show that while a tariff mechanism could obtain better results than a certificate market its performance is strictly dependent on regulator choices a certificate market instead permits to obtain the desired level of renewable energy market share with good cost efficiency as long as investors risk aversion is moderate moreover discounting future cash flows with higher social discount rates further benefits a certificate system making it preferable to feed in tariffs

renewable generation expansion under different support schemes a stochastic equilibrium approach abstract following the deregulation of electricity markets a current challenge of policy makers is to facilitate the transition to a sustainable power system at the highest welfare for society in this paper we investigate the efficiency of different support schemes such as a feed in tariff a feed in premium and tradable green certificates with respect to incentivizing the required investments in renewable generation we consider a number of generation expansion problems and formulate stochastic equilibrium models that account for uncertainty in demand and renewable supply the risk aversion of investors and the competitiveness of the market the problem of the policy maker is formulated as a mathematical program with equilibrium constraints mpec and as a non linear complementarity problem ncp for the feed in schemes and the certificate market respectively our models are solved for a small illustrative example and a larger case study based on the danish power system the results confirm that the main driver for the optimal choice of renewable support scheme is the aversion of power producers towards price and volume risk while the competitiveness of the market rarely affects such choice

are tradable green certificates a cost efficient policy driving technical change or a rent generating machine lessons from sweden 2003 2008 in the european policy debate tradable green certificates tgc have been suggested to be a superior regulatory framework for promoting the diffusion of renewable electricity technologies the purpose of this paper is to assess the performance of the swedish tgc system contributing to the european debate on the suitability of different types of frameworks the expectations of the tgc system were that it would a be effective in terms of increasing the supply of green electricity b do this in a cost effective manner from both a social and a consumer perspective c generate an equitable distribution of costs and benefits and d drive technical change so far it has performed adequately in terms of effectiveness and social cost effectiveness however consumer costs have been substantially higher than expected very large rents are generated and at best it contributes marginally to technical change thus a tgc framework should be selected if the overriding concern is to minimize short term social costs of reaching a certain goal with a high degree of predictability however it cannot be expected to also drive technical change keep consumer costs down and be equitable such trade offs need to be revealed and not obscured by analysts

overcoming barriers to wind project finance in australia the wind power industry in australia is expected to grow rapidly over the next decade primarily due to a forthcoming expanded national renewable energy target ret which will mandate that renewable sources provide approximately 20 of australia s electricity production by 2020 however development of new wind generation in australia has stalled as a result of several barriers to project finance the mechanism through which most wind farms have been developed historically this paper provides an overview of wind power financing in australia in light of recent political and financial trends drawing upon existing literature and a series of stakeholder interviews it identifies three primary barriers to project finance regulatory risk surrounding legislation of the ret semi privatization of electricity retailers in new south wales and limited capital availability resulting from the recent global credit crisis the paper concludes that the confluence of these barriers limits the availability of long term contracts that provide revenue certainty for pre construction wind projects while simultaneously making these contracts a necessity in order to obtain project finance in an attempt to mitigate these effects this paper identifies four alternative development strategies that can be pursued