Impacts of reforming energy subsidies on small scale generator business in Iran

Iran had been dedicating a substantial amount of its budget, known as subsidy, to keep the price of natural gas and electricity for customers considerably lower than real cost until 2011. Legislatures passed a law reforming energy subsidy in 2011, but this process is to take five years. Iran ceased to fully-subsidize from 2011, and gradually continues this process through 2015 when no subsidy will be paid. After 2015, the energy price will reach its prime cost. In addition, Tavanir organization, official organization of electrical energy management, published the “contract of guaranteed purchase price of energy for small scale generator”. Based on the contract, the Ministry of Energy guaranties that electricity generated by a small scale generator is purchased at a price higher than market purchase price (http://www.tavanir.org.ir: letter no. 52504/350, October 22, 2008). These two issues, reforming subsidies and incentives for small scale generators' owners, would affect distributed generation areas in terms of operation and investment. This research studies effects of reforming energy subsidy on optimum daily operation of a Fuel Cell Power Plant (FCPP), as an example; however, the results are not only helpful for FCPP but also extendable to some extent to other small scale distributed generators.     

Impact of energy subsidies on energy consumption and supply in Zimbabwe. Do the urban poor really benefit?

Twenty percent of Zimbabwe's urban poor households are still to be connected to the grid. The majority of these households are poor. There are several reasons why the Zimbabwe urban poor are still not connected to the grid, the most important one being the household incomes and the cost of different sources of energy. In order to facilitate wider usage of electricity by the poor, the policy makers have introduced a subsidy policy.

The objective of this paper is to ascertain the extent to which the poor urban households could afford the cost of electricity with or without subsidies. This gives an indication on whether contrary to the current thinking, subsidies are decisive for the affordability of electricity by the urban households. The paper also examines the distribution of the subsidies, amongst the different urban household income categories and other economic sectors. Furthermore the impact of such subsidies on the utility's finances is assessed.     

Thermodynamics,energy price and standard of living

This article takes issue with Per Thoresen's assertion, in an earlier paper, that energy price increases need not reduce living standards. Edward Saraydar maintains that Thoresen's conclusion is based on very strong assumptions, ignoring the basic economic proposition that, given demand, it is conditions of supply that determine price. Thoresen's ‘thermodynamic analysis’ does emphasize the role of energy input into production, but adds little insight as to how increasingly scarce non-renewable energy sources may affect future economic welfare, and is misleading in its policy response to price increases.     

Energy consumption and economic activities in Iran

The causal relationship between overall GDP, industrial and agricultural value added and consumption of different kinds of energy are investigated using vector error correction model for the case of Iran within 1967–2003. A long-run unidirectional relationship from GDP to total energy and bidirectional relationship between GDP and gas as well as GDP and petroleum products consumption for the whole economy was discovered. Causality is running from value added to total energy, electricity, gas and petroleum products consumption and from gas consumption to value added in industrial sector. The long-run bidirectional relations hold between value added and total energy, electricity and petroleum products consumption in the agricultural sector. The short-run causality runs from GDP to total energy and petroleum products consumption, and also industrial value added to total energy and petroleum products consumption in this sector.     

Improving energy consumption structure: A comprehensive assessment of fossil energy subsidies reform in China

Fossil energy subsidies reform would be an effective way to improve the energy consumption structure; however, the reform needs to be assessed comprehensively beforehand as it would exert uncertain impacts on economy, society and environment. In this paper, we use price-gap approach to estimate the fossil energy subsidies of China, then establish CGE model that contains pollutant emissions accounts and CO₂ emissions account to stimulate the fossil energy subsidies reform under different scenarios, and the environmental economic analysis concept is introduced to monetize the pollutant reduction benefits. Furthermore, we analyze the possibility and scope of improving the energy consumption structure from the perspective of technical and economic analysis. Analytical results show that the energy consumption structure could be improved by different extent by removing coal or oil subsidies, while the economic and social indexes will be influenced distinctively. Meanwhile, the effects of cutting coal subsidies are more feasible than that of cutting oil subsidies overall. It is recommended to implement fossil energy subsidies gradually, cut the coal first and then cut oil subsidies successively.     

The role of income in energy consumption behaviour: Evidence from French households data

The main purpose of this paper is to characterise quantitatively the impact of income on household energy consumption in the residential and transport sectors. Starting from the data collected in a paper survey, we analyse the extent of the constraint experienced by households in terms of equipment purchasing behaviour and daily energy consumption. This analysis shows that the least well-off households are particularly constrained since the share of their budget represented by these energy services is very large (15–25%), and this corresponds to a level of energy service well below that of the better-off households. The case of space-heating shows a factor of 2 in terms of level of comfort achieved between the extreme 10-percentiles. These households also face a strong capital constraint for equipment purchases. This leads either to a large increase in the required rate of return or to a reduction in the proportion of households that are prepared to replace their equipment earlier. The least well-off households are thus doubly constrained, since it is more difficult for them to invest. In our opinion, it is crucial to take into account this observation in the context of political measures aimed at reducing households’CO₂ emissions.     

新疆城市供热价格改革研究

针对新疆地区集中供热事业面临的问题，价格主管部门进行的供热价格改革的研究。方法：2004～2005年供暖期间，在乌鲁木齐市选择三栋住宅楼进行热计量收费的试点，进行调研。结果：根据试点的情况，提出两种制定供热价格的方式。     

Estimates of energy subsidies in China and impact of energy subsidy reform

For a transitional economy such as China, some energy subsidies are reasonable, and sometimes even necessary for achieving social goals. However, with rising energy prices and environmental concerns, we see conflicts emerging between energy subsidies, energy demand/supply fundamentals and climate change considerations. Energy subsidies have important implications for sustainable development through their effects on energy use, efficiency and the choice of fuel source. This paper applies the price-gap approach to estimate China's energy subsidies. Results indicate that China's energy subsidies amounted to CNY 356.73 billion in 2007, equivalent to 1.43% of GDP. Subsidies for oil products consumption are the largest, followed by subsidies for the electricity and coal sectors. Furthermore, a CGE model is used to analyze the economic impacts of energy subsidy reforms. Our findings show that removing energy subsidies will result in a significant fall in energy demand and emissions, but will have negative impacts on macroeconomic variables. We conclude that offsetting policies could be adopted such that certain shares of these subsidies are reallocated to support other sustainable development measures, which could lead to reducing energy intensity and favoring the environment.     

Nairobi households and their energy use: An economic analysis of consumption patterns

This paper describes and analyses the results of an urban household energy survey conducted in Nairobi, Kenya, during 1981. Aggregate data on fuel and energy demand are examined in light of the problems facing urban areas in developing countries such as the increases in petroleum prices in the 1970s and the depletion of non-commercial energy resources such as wood. The paper provides a disaggregation of urban household fuel demand by income group. Using regression analysis, the results confirm that there is a high income elasticity for electricity (approximately 1.6), while charcoal exhibits a negative income elasticity of -0.23. Gas energy consumption is primarily explained by price movements.     

Energy sector reform,energy transitions and the poor in Africa

There is little systematic information about the impact of energy sector reform on all sources and methods of energy utilised or potentially utilised by the poor. It is not sufficiently known what fuels the poor use, if a larger range of fuels becomes available and affordable and if barriers to access and consumption are reduced. A detailed assessment is presented for four countries, three in Africa (Botswana, Ghana and Senegal) and for comparison one in Latin America (Honduras), of steps taken to reform the energy sector and their effect on various groups of poor households. The paper analyses the pattern of energy supply to, and use by, poor households and explores the link—or its absence—to energy policy. We investigate what works for the poor and which type of reforms and implementation are effective and lead to a transition to more efficient and clean fuels from which the poor benefit.     

The relationship among energy prices and energy consumption in China

The pricing mechanism for energy is not in line with the international standards, because the energy prices are controlled by the government partly or completely in China. Chinese government made a lot of efforts to improve the pricing mechanism for energy. The relations between Chinese energy prices and energy consumption are the foundations to reform the mechanism. In this paper, the relations between Chinese energy consumption and energy prices are researched by cointegration equations, impulse response functions, granger causality and variance decomposition. The cointegration relations among energy prices, energy consumption and economic outputs show that higher energy price will decrease energy consumption in Chinese industrial sectors but will not reduce the economic output in the long run. The cointegration relation between energy price and household energy consumption shows that higher energy price will decrease household energy consumption in the long run and increase it in the short run. So Chinese government should deepen the reform of pricing mechanism for energy, and increase the energy prices reasonably to save energy.     

Innovation and the price of wind energy in the US

In the last ten years, the wind energy industry has experienced many innovations resulting in wider deployment of wind energy, larger wind energy projects, larger wind turbines, and greater capacity factors. Using regression analysis, this paper examines the effects of technological improvements and other factors on the price of wind energy charged under long-term contracts in the United States. For wind energy projects completed during the period 1999–2006, higher capacity factors and larger wind farms contributed to reductions in wind energy contract prices paid by regulated investor owned utilities in 2007. However, this effect was offset by rising construction costs. Turbine size (in MW) shows no clear relationship to contract prices, possibly because there may be opposing factors tending to decrease costs as turbine size increases and tending to increase costs as turbine size increases. Wind energy is generally a low-cost resource that is competitive with natural gas-fired power generation.     

Application of the Structural Decomposition Analysis to assess the indirect energy consumption and air emission changes related to Italian households consumption

The design of sustainable production and consumption strategies and the assessment of implemented actions require to identify the driving forces that influence the trend of energy consumption and environmental impacts.For this purpose, the Structural Decomposition Analysis (SDA) was developed as a suitable methodology to analyse the driving forces of the changes in economic, energy and environmental indicators.The paper presents one of the first Italian studies that apply an energy and environmental extended input-output model, opportunely shaped to the examined context, combined with SDA. In detail, it aims at: (1) investigating the energy use and the air emissions arisen from the productive sectors to meet the household final demand in the period 1999-2006; (2) identifying the sources of variations in energy and environmental indicators; and (3) identifying which economic sectors are the most relevant sources of variation and must to be taken into account in the definition of sustainable production and consumption strategies.As sources of changes, the authors investigate: energy and emission intensity effects, Leontief effect and final demand effect.Outcomes point out that the increase of the final consumptions often nullifies the energy and environmental benefits due to the improvement of the eco-efficiency and to the introduction of innovative technologies of production.The sector level analysis shows that “tertiary” and “electricity, gas and vapour” result the highest Italian consuming sectors of energy. Thus they should be focused for energy saving strategies. “Agriculture, hunting and sylviculture” and “road transports”, that are primarily sectors affecting air emissions, should be taken into account for the reduction of environmental impacts.Results highlight that the current dichotomy of final demand growth and improvement of eco-efficiency represents a key problem that needs to be addressed. Therefore the presented study can aid to define suitable oriented strategies for the energy and environmental impact reduction.     

The prospective environmental impacts of Iran nuclear energy expansion

Nuclear energy has direct impacts on the environment. Uranium mining, milling, and enrichment affect the livelihoods around and stress on the water resources. In addition, nuclear power plants consume huge amount of water and elevate the water temperature of the ambient water resources. The Iranian nuclear program has pledged for 20,000 MW of nuclear energy by 2025. The fulfillment of such ambitious target stresses the environment and increases the environmental degradation cost of the country. Iran central semi-arid area and the Persian Gulf are the major regions with high risk of impacts from the current nuclear program.     

Efficient and inefficient aspects of residential energy behaviour: What are the policy instruments for change?

The empirical part of this study is based on a survey of 600 Swedish households and a number of interviews where questions about residential energy behaviour and possible policy instruments for change were raised. The study provides insight into current behavioural patterns and gives a bottom-up perspective on the realistic perspective potentials for change and ways to achieve them. Residential energy use accounts for a fifth of the total in Northern nations and patterns of behaviour may influence levels of energy use to the same extent as choice of appliances. The study revealed those behavioural patterns that are efficient and those that need to be improved for energy conservation. Several policy instruments for change were identified in the study and they include combinations of information, economic measures, administrative measures and more user friendly technology as well as equipment with sufficient esthetic quality. Policy instruments that have fostered energy efficient behaviour in Sweden include the massive information campaigns during the oil crises in the 1970s as well as energy labelling of appliances. Still, many households are “energy-unaware” and several energy efficient behaviours are motivated not by energy conservation concern but of a perceived lack of time. This shows that it is important to have a broad perspective in energy conservation, to evaluate trends and to use policy instruments timely to support or discourage them.     

Energy production trend in Iran and its effect on sustainable development

The purpose of this study is to review the energy production trend from different energy resources in recent decades and its effect on sustainable energy production as one of the basic axis of sustainable development in Iran.Ninety nine percent of energy production in Iran comes from oil & gas and only 1% from renewable energy resources. Since Iran has very rich fossil energy resources, little attention has been paid to explore alternative ways of energy production. Majority of country's income is from oil & gas which put extra pressure on its natural resources. Continuing with the existing trend may lead to a path away from the goals of sustainable development, set for the country. Therefore, the sustainability study should be of interest to decision-makers.     

The sensitivity of consumption of oil products to price changes : An econometric investigation

This paper presents a small econometric model of the supply and demand of motor spirit, diesel, fuel oil and other gas/diesel oil. By modelling at this level of disaggregation it is possible to identify the dynamic structure of each market and estimate own-price and cross-price elasticities.     

Examination of energy price policies in Iran for optimal configuration of CHP and CCHP systems based on particle swarm optimization algorithm

The current subsidized energy prices in Iran are proposed to be gradually eliminated over the next few years. The objective of this study is to examine the effects of current and future energy price policies on optimal configuration of combined heat and power (CHP) and combined cooling, heating, and power (CCHP) systems in Iran, under the conditions of selling and not-selling electricity to utility. The particle swarm optimization algorithm is used for minimizing the cost function for owning and operating various CHP and CCHP systems in an industrial dairy unit. The results show that with the estimated future unsubsidized utility prices, CHP and CCHP systems operating with reciprocating engine prime mover have total costs of 5.6 and $2.9×10⁶ over useful life of 20 years, respectively, while both systems have the same capital recovery periods of 1.3 years. However, for the same prime mover and with current subsidized prices, CHP and CCHP systems require 4.9 and 5.2 years for capital recovery, respectively. It is concluded that the current energy price policies hinder the promotion of installing CHP and CCHP systems and, the policy of selling electricity to utility as well as eliminating subsidies are prerequisites to successful widespread utilization of such systems.     

The relationship between energy consumption structure,economic structure and energy intensity in China

This paper investigates the long-run equilibrium relationships, temporal dynamic relationships and causal relationships between energy consumption structure, economic structure and energy intensity in China. Time series variables over the periods from 1980 to 2006 are employed in empirical tests. Cointegration tests suggest that these three variables tend to move together in the long-run. In addition, Granger causality tests indicate that there is a unidirectional causality running from energy intensity to economic structure but not vice versa. Impulse response analysis provides reasonable evidences that one shock of the three variables will cause the periods of destabilized that followed. However, the impact of the energy consumption structure shock on energy intensity and the impact of the economic structure shock on energy consumption structure seem to be rather marginal. The findings have significant implications from the point of view of energy conservation and economic development. In order to decrease energy intensity, Chinese government must continue to reduce the proportion of coal in energy consumption, increase the utilization efficiency of coal and promote the upgrade of economic structure. Furthermore, a full analysis of factors that may relate to energy intensity (e.g. energy consumption structure, economic structure) should be conducted before making energy policies.