White Certificates for energy efficiency improvement with energy taxes: A theoretical economic model

In this paper we analyze interactions of two energy policy instruments, namely a White Certificates (WhC) scheme as an innovative policy instrument for energy efficiency improvement and energy taxation. These policy instruments differ in terms of objectives and final impacts on the price of electricity. We examine the effect of these policy instruments in the electricity sector, focusing on electricity producers and suppliers in a competitive market. Using microeconomic theory, we identify synergies between market players and demonstrate the total effect on the electricity price when suppliers internalize the behaviour of producers in their decisions. This model refers to an ideal market situation of full liberalization. The cases we examine consist of electricity producers with and without a carbon tax, electricity suppliers with and without an electricity tax, and with WhC obligations. Furthermore, we present a parallel implementation of WhC for electricity suppliers with carbon tax on electricity producers and an electricity tax with WhC obligations to electricity suppliers. We demonstrate differences in optimization behaviour of producers and suppliers. Based on a couple of cases of WhC with carbon and electricity taxes, various positive and negative effects of both schemes in terms of target achievement and efficiency are present, which can lead to an added value of such schemes in the policy mix, although uncertainties of outcomes are quite high. A basic finding is that in a merit order several parameters can increase final electricity price after the implementation of different policies: demand for electricity and electricity supply cost at a large scale and then follow the level of level of obligation for energy saving, level of penalty, and price of WhC (representing the marginal costs of energy saving projects). The impact magnitude of parameters depends on the values chosen and on the initial position of suppliers (i.e. if their actual behaviour deviates from full compliance with targets).     

A comparative analysis of energy and CO2 taxes on the primary energy mix for electricity generation

In many countries, economies are moving towards internalization of external costs of greenhouse‐gas (GHG) emissions. This can best be achieved by either imposing additional taxes or by using an emission‐permit‐trading scheme. The electricity sector is under scrutiny in the allocation of emission‐reduction objectives, not only because it is a large homogeneous target, but also because of the obvious emission‐reduction potential by decreasing power generation based on carbon‐intensive fuels. In this paper, we discuss the impact of a primary‐energy tax and a CO₂ tax on the dispatching strategy in power generation. In a case study for the Belgian power‐generating context, several tax levels are investigated and the impact on the optimal dispatch is simulated. The impact of the taxes on the power demand or on the investment strategies is not considered. As a conclusion, we find that a CO₂ tax is more effective than a primary‐energy tax. Both taxes accomplish an increased generation efficiency in the form of a promotion of combined‐cycle gas‐fired units over coal‐fired units. The CO₂ tax adds an incentive for fuel switching which can be achieved by altering the merit order of power plants or by switching to a fuel with a lower carbon content within a plant. For the CO₂ tax, 13 €/tonCO₂ is withheld as the optimal value which results in an emission reduction of 13% of the electricity‐related GHG emissions in the Belgian power context of 2000. A tax higher than 13 €/tonCO₂ does not contribute to the further reduction of GHGs. Copyright © 2005 John Wiley & Sons, Ltd.     

Making the energy transition

A major objective of the energy transition is to reduce dependence on oil imports through structural change in energy systems leading to lower and sustained oil use. This paper outlines possible directions which can be followed under conditions of healthy economic growth to achieve a smooth transition. It also provides a framework to identify and analyse potential energy problem areas. An important conclusion is that although IEA net oil imports in 2000 could be reduced to about 15 million bbl/day, this will not be easy. To supplement market forces, effective energy policies will be necessary to bring on non-oil supplies in time, promote the replacement of oil by other fuels and restrain oil demand.     

Microwave-induced high-energy sites and targeted energy transition promising for efficient energy deployment

Diverse interactions between microwaves and irradiated media provide a solid foundation for identifying novel organization pathways for energy flow. In this study, a high-energy-site phenomenon and targeted-energy transition mechanism were identified in a particular microwave heating (MH) process. Intense discharges were observed when microwaves were imposed on irregularly sized SiC particles, producing tremendous heat that was 8-fold the amount generated in the discharge-free case. Energy efficiency was thereby greatly improved in the electricity-microwaves-effective heat transition. Meanwhile, the dispersed microwave field energy concentrated in small sites, where local temperatures could reach 2000°C– 4000°C, with the energy density reaching up to 4.0 × 10⁵ W/kg. This can be called a high-energy site phenomenon which could induce further processes or reactions enhancement by coupling effects of heat, light, and plasma. The whole process, including microwave energy concentration and intense site-energy release, shapes a targeted-energy transition mechanism that can be optimized in a controlled manner through morphology design. In particular, the discharge intensity, frequency, and high-energy sites were strengthened through the fabrication of sharp nano/microstructures, conferring twice the energy efficiency of untreated metal wires. The microwave-induced high-energy sites and targeted energy transition provide an important pathway for high-efficiency energy deployment and may lead to promising applications.     

Analysis of the impacts of carbon taxes on energy systems in Japan

This research examines the impacts of using carbon and energy taxes to reduce carbon emissions from the Japanese energy system. A partial equilibrium model of the Japanese energy sector has been developed to forecast changes in the energy system out to the year 2040. The model accounts for the changes in energy technology capacities, fuels, and consumption in response to policy initiatives, such as taxes. We find that carbon and energy taxes will decrease carbon dioxide emission to a proposed target. The total cost in terms of supplying energy will be similar for either approach. However, the model also indicates that carbon taxes cause a shift in resources used from coal to gas. IGCC does not penetrate the market in carbon tax case. Since energy security is a primary concern to Japan, maintaining a diverse base of resources is very important. Policies that would eliminate coal, and efficient coal-based technologies, may not be desirable. The development of clean coal technologies and advanced transportation technologies suitable for Japan's energy systems should be the next target to overcome the limit of carbon taxes.     

Dedicating new real estate transfer taxes for energy efficiency: A revenue option for scaling up Green Retrofit Programs

As the labor market in the U.S. remains weak, with high unemployment and sluggish job growth, policymakers at various levels of government are looking for new ways to support job growth and investment during an increasingly tight fiscal climate. Policies that promote the “Green Economy” in general and energy efficiency in particular remain politically popular as potential win–win solutions that will create jobs and curb greenhouse gas emissions. Yet, efforts to promote energy efficiency in the residential sector through rebates and incentives alone have yet to reach critical mass. This paper outlines a policy option for state and local governments to use real estate transfer taxes to generate stronger incentives for home buyers to undertake significant retrofit projects at the time of sale. The economic impact of the proposed energy efficiency transfer tax (EETT) is then modeled for the State of North Carolina, using standard input–output techniques. Ultimately, based on housing sales figures from 2010, a new EETT of 2.5 percent on home purchases would generate a net positive increase of approximately 3485 direct construction jobs and 5900 annually total jobs for the state.     

An innovation idea for energy transition towards sustainable and resilient societies: Global energy interconnection

Global Energy Interconnection(hereafter GEI) is not only connectivity of power grid, but also a series of methodical innovations for energy transition towards sustainable and resilient societies,which is different from the traditional energy development mode in the past. This paper seeks to summarize the key features about the above-mentioned innovations, as Green & Clean, Balanced & Reciprocal, Efficient & Intelligent and Vitality & Business opportunity. Finally it puts forward some reflections on the future development of GEI based on ASEAN practice cases.     

The energy transition of the transition economies: An empirical analysis

The aggregate manufacturing energy intensity of 28 countries in Eastern Europe and Central Asia had declined by 35% during 1998–2008. This study reveals a strong evidence of convergence: less efficient countries improved more rapidly and the cross-country variance in energy productivity narrowed over time. An index decomposition analysis indicates that energy intensities declined largely because of more efficient energy use rather than shifts from energy intensive to less intensive manufacturing activities. Income growth and energy price increases were the main drivers of the convergence. They dominated the impact of trade, which led to specialization in energy intensive industries.     

The transition between energy efficient and energy inefficient states in Cameroon

I use a two-state (energy efficient/inefficient) Markov-switching dynamic model to study energy efficiency in Cameroon in a novel manner, employing yearly data covering 1971 to 2012. I find that the duration of an energy inefficient state is about twice as long as an energy efficient state, mainly due to fuel subsidies, low income, high corruption, regulatory inefficiencies, poorly developed infrastructure and undeveloped markets. To escape from an energy inefficient state a broad policy overhaul is needed. Trade liberalization and related growth policies together with the removal of fuel subsidies are useful, but insufficient policy measures; the results suggest that they should be combined with structural policies, aiming at institutional structure and investment in infrastructure.     

Hydrogen in energy transition: A review

The energy transition is not something that awaits us in the next decade. On the contrary, it is a process in which we are already deeply enrolled. The main step towards the creation of a carbon-neutral society is the implementation of renewable energy sources (RES) as replacements for fossil fuels. Given the intermittency of RES, energy storage has an essential role to play in this transition. Hydrogen technology with its many advances was recognized to be the most promising choice. As multiple hydrogen applications were researched relatively recently, the current development of its technology is not yet on the large-scale implementation level. With the increasing number of studies and initiated projects, the utilization of hydrogen's immense ecological potential is to be expected in the next few decades. New innovative solutions of hydrogen technology that includes hydrogen production, storage, distribution, and usage, are permeating all industry sectors. In a rapidly changing world, technological advances bring forth public discussions, that are a deciding factor whether society will be able to adapt and accept those new contributions or reject them. Currently, hydrogen is the best associated with fuel cell electric vehicles which emit only water vapour and warm air, producing no harmful tailpipe emissions. As various scientists are stressing the gravity of climate change effects that are reaching the physical environment, ecosystems, and humanity in general, concern for the future is becoming the main global topic. Consequently, governments are implementing new sustainable policies that promote RES as a substitute for fossil fuels. Increasing progress in hydrogen technology instigated nations worldwide to incorporate hydrogen in their energy legislations and national development plans, which resulted in numerous national hydrogen strategies. This work shows the progress of hydrogen taking its place as a key factor of the future green energy society. It reviews recent developments of hydrogen technologies, their social, industrial, and environmental standing, as well as the stage of transitioning economies of both advanced and beginner countries. An example of the ongoing energy transition is Croatia, which is in the process of implementing a hydrogen strategy with the ambition to be able to one day equally participates in the rapidly emerging hydrogen market.     

Electricity network planning targeting Low-Carbon energy transition

Electricity sector, as one of the major emission sources of carbon dioxide (CO₂), is responsible for reducing carbon emissions and is a major player that addresses global climate change. In the efforts to mitigate the impacts of climate change over the coming decades, decarbonizing power systems is critical. To achieve this goal, power generation systems need a transition from a high reliance on coal-fired power stations to a low-carbon energy mix. This paper proposes a transition planning method that includes the retirement of coal-fired generators and the integration of large-scale renewable power plants. Hence, transmission systems need to be upgraded simultaneously with the changing of generation mix to ensure system reliability. This paper also considers carbon emission cost and introduces and compares two models, which include carbon trading and carbon tax. Furthermore, issues related to the ramping of renewable power systems that are caused by the large penetration of renewable power generators are taken into account by adding the cost related to the sudden change of renewable generation (ramping cost) in the objective function. The proposed model is demonstrated on a modified IEEE 24-bus RTS system.     

Accelerating the transition to sustainable energy systems

The slow pace of transition to sustainable energy systems is the result of several factors running in parallel.     

Alternative energy sources or integrated alternative energy systems? Oil as a modern lance of Peleus for the energy transition

In this viewpoint, we discuss the importance of consorting alternative energy sources with oil, and not of opposing them. That is why we introduce the concept of alternative energy systems, which we feel is broader-ranging and more effective than alternative energy sources, as this deals with the actual transformation process of the global energy system. Alternative energy systems integrate oil with other energy sources¹ and pave the way for new systems, which will benefit from what we call the “virtues of oil”. They produce energy carriers for multi-fuel and multi-product strategies, where flexibility is a key target, allied to other co-benefits, especially those related to the increased use of renewable energy sources. The concept of alternative energy systems can bring a new light to the oil transition era discussion and might also influence energy policies for promoting renewables.     

Does renewable energy substitute LNG international trade in the energy transition?

Renewable energy is a vital tool for the energy transition and sustainable development goals. The global economy, however, remains heavily reliant on fossil fuels despite efforts to reduce global greenhouse gas emissions. Demand for natural gas is rising as a bridge for moving towards a low-carbon economy, but whether natural gas and renewable energy represent substitutes in the global energy mix remains underexplored. We tackle this concern by examining the impact of renewable policies on international trade in liquified natural gas (LNG) among 1359 trading partners during the period 1988–2017. We measure renewable energy policies based on the ratio of renewable energy to total energy usage in importing trading partners, which also corresponds to a proxy for energy transition policies. The analysis is conducted using a global panel dataset in a trade gravity framework by applying various econometric methods and model specifications to measure LNG trade as a dependent variable. The results show that the energy transition, measured by the share of renewable energy, has a negative impact on LNG trade. This suggests that investing in cleaner energy technologies can reduce LNG trade globally, as a channel towards reducing natural gas demand. The results are consistent with the narrative where natural gas and renewable energy represent partial substitutes at the global level. However, subgroup analysis suggests that less-developed economies and the shale revolution period seem to impede progress towards the energy transition.     

Why turquoise hydrogen will Be a game changer for the energy transition

With hydrogen being promoted as a promising energy vector for a decarbonized world, low-carbon hydrogen production methods are of interest to replace the current Steam-Methane-Reforming production of “grey” hydrogen. While existing studies focus on the life-cycle-assessment of green hydrogen produced by water electrolysis, an alternative, which has attracted growing interest due to a much lower energy intensity (10–30 kWh/kgH2 < 50–60 kWh/kgH2), is turquoise hydrogen produced by the pyrolysis of methane. Specifically, this study conducts a life-cycle-assessment on hydrogen produced by the pyrolysis of methane via thermal-plasma. A sensitivity analysis is also conducted on the environmental-metric time-horizon and on the methane emissions rates. Results show that the carbon-intensity of hydrogen produced using this novel method is 88.3–90.8% lower than that of grey hydrogen. Furthermore, using renewable-natural-gas with a feedstock percentage as low as 8–18% leads to a negative hydrogen carbon-intensity (reaching ?4.09 to ?10.40 kgCO2e/kgH2 at 100% renewable natural gas), the lowest compared to grey, blue, and green hydrogen, making turquoise hydrogen a game-changer for the energy transition.     

Restructuring energy systems for sustainability? Energy transition policy in the Netherlands

Increasingly, researchers and policy makers are confronting the challenge of restructuring energy systems into more sustainable forms. A ‘transition management’ model, and its adoption in the Netherlands, is attracting attention. Starting from the socio-technical multi-level theory that informs ‘transition management’, we analyse the ‘energy transition’ project carried out by the Dutch Ministry of Economic Affairs. Despite considerable achievements, their approach risks capture by the incumbent energy regime, thereby undermining original policy ambitions for structural innovation of the energy system. This experience presents generic dilemmas for transitions approaches.     

Hydrogen strategy as an energy transition and economic transformation avenue for natural gas exporting countries: Qatar as a case study

In the wake of the apparent impacts of climate change, the world is searching for clean energy transformations and a consequent transition to a carbon-neutral economy and life. The intermittent nature of renewable energy sources introduces several risks, and efficient energy storage technologies are developed to circumvent such issues. However, these storage methods also come with additional costs and uncertainties. Hydrogen is considered a viable option as an energy carrier and storage medium, offering versatility to the energy mix. This study reviews hydrogen production, storage, transmission, and applications avenues, describes the current global hydrogen market and compares national hydrogen strategies. A framework for evaluating the relative competitiveness of natural gas-exporting countries as hydrogen exporters is developed. Qatar's national hydrogen strategy should focus on blue and turquoise hydrogen production in the short/medium term with a mix of green hydrogen in the future term and investment in technological research and development to compete with other gas exporters that have abundant renewable energy potential.     

Fuel taxes: An important instrument for climate policy

This article shows that fuel taxes serve a very important role for the environment and that we risk a backlash of increased emissions if they are abolished. Fuel taxes have restrained growth in fuel demand and associated carbon emissions. Although fuel demand is large and growing, our analysis shows that it would have been much higher in the absence of domestic fuel taxes. People often assert that fuel demand is inelastic but there is strong research evidence showing the opposite. The price elasticity is in fact quite high but only in the long-run: in the short run it may be quite inelastic which has important implications for policy makers. Had Europe not followed a policy of high fuel taxation but had low US taxes, then fuel demand would have been twice as large. Hypothetical transport demand in the whole OECD area is calculated for various tax scenarios and the results show that fuel taxes are the single most powerful climate policy instrument implemented to date—yet this fact is not usually given due attention in the debate.