Gas and electricity demand in Spanish manufacturing industries: An analysis using homogeneous and heterogeneous estimators

A comparative analysis of electricity and gas demand in the industrial sector over a long period of time appears to be absent in the literature. In fact, unlike electricity demand, natural gas demand in the industrial sector has not been well researched. Our paper aims to cover this gap. It analyses electricity and gas consumption patterns by the Spanish manufacturing sector, between 1995 and 2010. A novel and innovative quantitative approach based on, both, homogenous and heterogeneous estimators was used for this purpose. The results of the no-spurious estimations (the Augmented Mean Group Estimator) show that the price elasticity of gas demand is significantly negative and within the −0.44 to −0.48 range. In contrast, the price elasticity of electricity demand is not statistically significant. The income elasticities show the opposite pattern: those of natural gas are not statistically significant, whereas the income elasticities for electricity are statistically significant and within the 0.22 to 0.29 range. Compared to previous findings, our preferred estimation shows some variation regarding price elasticities of natural gas demand.     

Service quality,technical efficiency and total factor productivity growth in Pakistan's post-reform electricity distribution companies

Pakistan's energy sector has undergone substantial reforms during the last three decades with the aim to improve its operational performance and to cater to the growing energy needs of the economy. In the wake of these reforms, the WAPDA Act was passed in 1998 to achieve operational and financial efficiencies. Pakistan's electricity market is still hampered by issues like extended blackouts, electricity thefts, high circular debt and poor service quality. The electricity distribution sector is thus an interesting case to investigate its efficiency in the post-reform period by examining the impact of service-quality parameters (SQPs), which have generally been neglected in the literature. Stochastic frontier analysis has been used to estimate technical efficiency, while the Malmquist Productivity Index is implemented to decompose total factor productivity (TFP) into scale change, technical change and efficiency change from 2006 to 2016. We conclude that the technical efficiency score declines from 98 percent to 36 percent with the inclusion of SQPs in the models. The results also indicate a negative trend in scale change, implying that distribution companies are not operating at the technically optimal scale. We propose that the regulatory body should change its governance regime and focus on incentive-based regulation instead of rate-of-return regulation.     

Optimal planning of distributed generation from the DisCo and the DGO viewpoints considering the uncertainties in future demand and electricity price

Since electricity demand is increasing continuously, it is necessary to invest in expansion of distribution network capacity. From the asset management point of view, it is necessary to encourage the private sector to invest in distribution network. To do this, distribution network managers must provide important opportunities for private sector to profit from their investments. One of the options for private sector is to invest on distributed generations (DGs). In this regard, distribution company (DisCo) must sign power purchase agreement (PPA) with DG owners (DGOs). So, optimal siting, sizing and PPA rates from economic point of view are important challenges which are considered as the main contribution of this paper. The proposed methodology of this paper applies load and price uncertainties into the planning problem. The proposed scheme involves using non-dominated sorting genetic algorithms II (NSGA II), since it attains non-dominated solutions in which DisCo and the DGO can put their personal preferences into practice. To evaluate the effectiveness of the suggested method, the computer simulations are done on a 33-bus distribution network and the results are discussed.     

Household electricity demand in Latin America and the Caribbean: A meta-analysis of price elasticity

Studying the price elasticity of demand is essential when considering rate policies in the electricity sector. This research aims to perform a meta-analysis and a meta-regression of the price elasticity of electricity demand for the residential sector in Latin American and Caribbean countries. Results show that the true value of the short-term price elasticity is between −0.197 and −0.468 and, for the long-term, is between −0.252 and −0.331. Findings differ substantially when studies are classified by their quality in econometric procedures. The long-term price elasticity seems to be lower than estimates found for other regions.     

Poverty and environmental impacts of electricity price reforms in Montenegro

The creation of the Energy Community of South Eastern Europe in 2005 committed countries in South Eastern Europe to liberalize their energy markets in accordance to EU regulations. The Government of Montenegro is thus in the process of reforming its energy sector, which includes an electricity tariff reform. This paper analyzes the environmental and social impacts of an increase in residential electricity tariffs contemplated – which is expected to range anywhere from 40 to over 100% increase. As this analysis shows, such a significant price rise will impose a heavy burden on the poor households and it may adversely affect the environment. In an ex ante investigation of the welfare impact of this price increase on households in Montenegro, we show that the anticipated price increase will result in a very significant increase in households' energy expenditures. A simulation of alternative policy measures analyzes the impact of different tariff levels and structures, focusing on the poor and vulnerable households. Higher electricity prices could also significantly increase the proportion of households using fuelwood for space heating. Thus the level of fuelwood consumption should be carefully monitored under the electricity tariff reforms and the Government of Montenegro should combine the tariff reforms with a carefully evaluated set of policy measures to mitigate the effect of the electricity price increase on the poor.     

Efficient resource utilization of the electricity distribution sector using nonparametric data envelopment analysis and influential factors

This study aims to investigate the efficient resource utilization of the electricity distribution sector in Pakistan and identifies the influential factors affecting it. In Pakistan, there is excess production capacity and under-utilized power plants, which pose a challenge to the economy due to their burden on the exchequer account and the high power costs. The present study employs the most recent 11 distribution firms panel data from Pakistan for the period 2016–2020 to evaluate the performance ranking of distribution utilities. The study employs standard frontiers, composite indexes, and a novel DEA-windows analysis to measure the efficiency of the distribution utilities. The results of the analysis show that electricity sales, consumer density, and industrial consumers have a positive impact, while distribution losses have a negative association with the efficiency of the distribution utilities. These findings provide valuable insights for policymakers and industry stakeholders in improving the resource utilization and overall performance of the electricity distribution sector. The study highlights the implications of the results in terms of reducing greenhouse gas emissions, which are one of the main contributors to global warming. In conclusion, this study provides an essential contribution to the literature on efficient resource utilization in the electricity distribution sector in Pakistan.     

天然气分布式能源系统高效性、经济性评价

结合工程实例,对天然气分布式能源系统的高效性(评价指标为节能率)进行评价,对经济性的影响因素进行分析。经济性指标为静态投资回收期,影响因素:单因素:项目总投资额、天然气价格、运行时间、售电价格、售冷价格;双因素:单位发电功率投资额+电气比(售电价格与天然气价格比)、单位发电功率投资额+冷气比(售冷价格与天然气价格比)。运行时间、售电价格、售冷价格对静态投资回收期的影响一致,随着运行时间、售电价格、售冷价格的延长和增大,静态投资回收期缩短,3个因素的影响显著性依次减弱。天然气价格、项目总投资额对静态投资回收期的影响一致,随着天然气价格、项目总投资额的增大,静态投资回收期延长,天然气价格的影响更.显著。单位发电功率投资额一定时,静态投资回收期随电气比的增大而缩短。电气比一定时,静态投资回收期随单位发电功率投资额的减小而缩短。单位发电功率投资额越小,电气比越大,静态投资回收期越短。单位发电功率投资额一定时,静态投资回收期随冷气比的增大而缩短。冷气比一定时,静态投资回收期随单位发电功率投资额的减小而缩短。单位发电功率投资额越小,冷气比越大,静态投资回收期越短。     

The impact of the integration of renewable energy sources in the electricity price formation: is the Merit-Order Effect occurring in Portugal?

This study investigates the relationship between wholesale electricity price behaviour and the integration of new renewable energy sources in the electricity system in Portugal. The research analyses two different samples, namely: the significant deployment of wind power versus the abrupt increase in the installed capacity of solar photovoltaic. Daily data from 2011 until 2019 and, a SARMAX/EGARCH approach has been conducted to assess the merit-order effect. The main results suggest that electricity production from wind power is decreasing the price of electricity but increasing its volatility. In addition, there is evidence for the leverage effect in electricity price.     

Bulgarian electricity market restructuring

The energy sector in Bulgaria has undergone major restructuring in recent years. It faces the dual challenges of achieving regulatory stability to attract private investors, and creating a functioning competition energy market. As of the EU Accession in 2007, Bulgaria has fully liberalized power and gas markets. The 2003 Energy Law establishes the energy sector legal framework and sets the basis for creation of a transparent and predictable regulatory environment where the key regulatory responsibilities are vested with the State Energy and Water Regulatory Commission (SEWRC).The energy sector experienced significant problems in the first half of 2007 due to lost production capacities and regulatory failures on the electricity market. Excess price regulations on the market of electricity supplies to household, coupled with insufficient liberalization of imports and exports, create unfavorable conditions for power producers and large electricity users. The energy regulator has tried to achieve several incompatible targets as of July 1, 2007 for maintaining low electricity prices for households in response to political pressure, low power generation prices amid rising input costs, and market opening in compliance with EU regulations.     

Organisation and reforms of the electricity sector in Slovenia

As a new member state of the EU, Slovenia has been required to adopt EU legislation in full. The Slovenian electricity market has been partially opened since 2001. From 1 July 2007, when households became eligible customers, the electricity market opened fully. The electricity reforms carried out so far comprise of market liberalization, unbundling of activities, allowing regulated TPA, formation of an organized power market, adoption of incentive-based price cap regulation and the establishment of an independent regulatory body. The challenge that remains to be addressed is how to enhance competition in an electricity market that has a net importer position with limited cross-border capacity. Envisaged investments in generating and cross-border capacities will partially close the gap between domestic generation and consumption. Furthermore, since Slovenia has one of the largest levels of state ownership in the electricity sector among EU member states, privatization of electricity companies is envisaged in the near future.     

Market and regulatory factors influencing smart-grid investment in Europe: Evidence from pilot projects and implications for reform

Electricity distribution system operators (DSOs) are expected to invest heavily in system innovation in the form of smart grids (SG) in order to help achieve energy policy goals. In this context, regulatory reforms to spur DSOs investments are considered a policy priority. Based on a review of the European regulatory status and using a dataset of 459 innovative SG projects, this study focuses on market and regulatory factors and performs a series of statistical tests to investigate how the different factor levels affecting SG investments in Europe. The results show that (1) lower market concentration in the electricity distribution sector (2) the use of incentive-based regulatory schemes; and (3) the adoption of innovation-stimulus mechanisms are key enablers of SG investments.     

European Union emissions trading scheme impact on the Spanish electricity price during phase II and phase III implementation

The European Union Emissions Trading Scheme (EU ETS) is a cornerstone of the European Union's policy to combat climate change and its key tool for reducing industrial greenhouse gas emissions cost-effectively. The purpose of the present work is to evaluate the influence of CO₂ opportunity cost on the Spanish wholesale electricity price. Our sample includes all Phase II of the EU ETS and the first year of Phase III implementation, from January 2008 to December 2013. A vector error correction model (VECM) is applied to estimate not only long-run equilibrium relations, but also short-run interactions between the electricity price and the fuel (natural gas and coal) and carbon prices. The four commodities prices are modeled as joint endogenous variables with air temperature and renewable energy as exogenous variables. We found a long-run relationship (cointegration) between electricity price, carbon price, and fuel prices. By estimating the dynamic pass-through of carbon price into electricity price for different periods of our sample, it is possible to observe the weakening of the link between carbon and electricity prices as a result from the collapse on CO₂ prices, therefore compromising the efficacy of the system to reach proposed environmental goals. This conclusion is in line with the need to shape new policies within the framework of the EU ETS that prevent excessive low prices for carbon over extended periods of time.     

Clean energy transition in the Turkish power sector: A techno-economic analysis with a high-resolution power expansion model

The Turkish power sector achieved rapid growth after the 1990s in line with economic growth and beyond. However, domestic resources did not support this development and therefore resulted in a high dependency on imported fossil fuels. Furthermore, the governments were slow off the mark in introducing policies for increasing the share of renewable energy. Even late actions of the governments, as well as significant decreases in the cost of wind and especially solar technologies, have recently brought the Turkish power sector into a promising state. A large-scale generation-expansion power-system model (TR-Power) with a high temporal resolution (hours) is developed for the Turkish power generation sector. Several scenarios were analyzed to assess their environmental and economic impacts. The results indicate that a transition to a low-carbon power grid with around half of the electricity demand satisfied by renewable resources over 25 years would be possible, with annual investments of 3.97–6.88 billion in 2019 US$. Moreover, TR-Power indicates that the shadow price of CO₂ emissions in the power sector will be around 17.1 and 33.8 $/per tCO2 by 2042, under 30% and 40% emission reduction targets relative to the reference scenario.     

Electricity reform in Bosnia and Herzegovina

Bosnia and Herzegovina suffered greatly during an intense war that resulted in human catastrophe, economic collapse, and the destruction of the electricity sector. The Dayton Agreement that brought a close to fighting helped to win peace, but it created a government system that is inefficient, is largely duplicated along ethnic lines and has a largely ineffective central state. This pattern of duplication carries over to the electricity sector and creates incentives that hinder its development. In this context, sectoral reform has proved difficult, with almost all effort devoted to the sector since 1996 channeled towards restoration to pre-war operational conditions and overcoming opposition to reform. Nevertheless, Bosnia and Herzegovina's efforts at reforming the electricity sector are underway and substantial progress has been made. Lingering questions about the success of reforms essentially reduce to questions about the future of Bosnia and Herzegovina itself and the ability of the central state to consolidate power while preserving the rights and interests of all ethnic groups.     

Revenue decoupling,energy demand,and energy efficiency: Empirical evidence from the U.S. electricity sector

This paper investigates the relationship between the regulatory policy revenue decoupling, which separates utilities’ revenue from sales fluctuations, and electricity customers’ energy demand and efficiency in the U.S. electricity sector. To this end, we use recent Stochastic Frontier Analysis estimation techniques that account for both persistent and transient energy efficiency. The results show a significant negative correlation between decoupling and electricity consumption. However, the implementation year, which serves as a reference for price adjustments, is associated with increasing electricity demand and decreasing transient energy efficiency. Therefore, utilities seem to anticipate the implementation of decoupling, which partially offsets the benefits.     

An integrated model for electricity market coupling simulations: Evidence from the European power market crossroad

Motivated by the project of European Power Exchanges to develop a single price-coupling solution to calculate electricity prices across Europe that respects the cross-border capacity constraints on a day-ahead basis, we empirically examine and quantify market inefficiencies in non-coupled day-ahead electricity markets. These result from inefficient cross-border capacity allocation and its underlying effect on the market clearing prices. Efficient cross-border capacity allocation and new market clearing prices are simulated using a social welfare maximisation algorithm for the capacity of relevant network elements, whereas the order book generation process is reproduced by the econometrically estimated supply price elasticity functions. The estimated vector autoregression model and the underlying impulse response functions examine price shock transmission under different market regimes. The market coupling process is simulated on the historical non-coupled day-ahead market realisations at the junction of three regional power markets: Central Western Europe, Northern Italian, and South Eastern European markets. Simulation results confirm steady, efficient cross-border capacity utilisation, reduced price variance, improved overall price convergence and amplified price shock transmission in coupled electricity markets. Furthermore, in the simulated period, we have estimated an increase in the overall suppliers' and consumers’ surplus of almost EUR 16 million. The proposed simulation framework is a clear choice for applied simulation in coupled day-ahead electricity markets, offering valuable visual insights into the cross-border capacity allocation and its implications on electricity prices.     

The dynamic impact of carbon reduction and renewable support policies on the electricity sector

Carbon reduction and renewable energy policies are implemented in Europe to improve the sustainability of the electricity sector while achieving security of supply. We investigate the interactions between these policies using a dynamic investment model. Our analysis indicates that both policies are necessary to achieve a sustainable power sector. However, renewable energy generation significantly affects carbon markets and could lead to very low prices. These would attract investments in carbon intensive technologies, locking the sector into future higher emissions. To contrast this effect, policy makers may introduce a floor price in the carbon market or adjust the emissions quota periodically.     

The responses of manufacturing businesses to geographical differences in electricity prices

The price of electricity varies considerably across localities and states. This paper focuses on the geographical differences in electricity prices and the consequences of those differences for business production and location. It accounts for the dynamic nature of business responses to these geographical differences by classifying manufacturing businesses into three groups based on intensity of electricity use and business mobility: (1) heavy users of electricity that are relatively highly mobile; (2) heavy users that are relatively tied to their location; and (3) businesses for which electricity is not a significant cost of production. For empirical analysis, plant- or firm-level data is most desirable, but was not available. As an alternative, the most disaggregate (6-digit NAICS) industry data has been utilized. Findings suggest that heavy users of electricity, regardless of the degree of business mobility, tend to stay in their current location rather than relocate, as they often have a greater technical ability to substitute away from electricity when electricity prices are high.     

Coordination between clean energy generation and thermal power generation under the policy of “direct power-purchase for large users” in China

The inefficient utilization of clean energy and distorted pricing mechanism are the most critical problems that have hampered the reform of China's electric power industry for many years. A large number of clean energy generators have recently been constructed, but water spillage at hydroelectric facilities and wind curtailment persist due to integration challenges. The adjustment of electricity price has relied on executive orders of the Chinese government and the National Development and Reform Commission (NDRC). Distorted prices that are not derived from a market economy have seriously hampered the development of China's electricity market. Therefore, in recent years, the Chinese government has issued a number of reform measures concerning “direct power-purchase for large users”. The main idea of this pricing mechanism is to form direct negotiations between large users and generators to determine the electricity price. To a certain extent, this pricing mechanism is conducive to the electricity market reform in China. However, the coordination between clean energy generation and thermal power generation under the policy of “direct power-purchase for large users” has become the key issue in China's electric power industry. This paper summarizes the policies of “direct power-purchase for large users” in different provinces in China. The electricity market in Yunnan, for which the contradiction between thermal power generation and hydropower generation is increasingly severe, is the focus of the research. At last, a feasible electricity market scheme has been derived to coordinate thermal power generation and hydropower generation. This scheme has considerable theoretical and practical significance to the future of China's electricity market reform.     

Pricing of electricity distribution: an empirical efficiency study in Finland,Norway and Sweden

The Nordic countries have long experience of a liberalized electricity sector. The monopoly operations—namely, distribution and transmission of electric energy—are regulated in an attempt to prevent monopoly rents and to induce improvements in efficiency. This paper presents the main results of an empirical study on network pricing in Finland, Norway and Sweden, with special focus on efficiency in the performance of the utilities. The results of this efficiency study indicate that there is in theory great potential for cost saving in Nordic electricity distribution.