How the removal of energy subsidy affects general price in China: A study based on input–output model

In China, most energy prices are controlled by the government and are under-priced, which means energy subsidies existing. Reforming energy subsidies have important implications for sustainable development through their effects on energy price, energy use and CO₂ emission. This paper applies a price-gap approach to estimate China's fossil-fuel related subsidies with the consideration of the external cost. Results indicate that the magnitude of subsidies amounted to CNY 1214.24 billion in 2008, equivalent to 4.04% of GDP of that year. Subsidies for oil products are the largest, followed by subsidies for the coal and electricity. Furthermore, an input–output model is used to analyze the impacts of energy subsidies reform on different industries and general price indexes. The findings show that removal of energy subsidies will have significant impact on energy-intensive industry, and consequently push up the general price level, yet with a small variation. Removing oil products subsidies will have the largest impact, followed by electricity, coal and natural gas. However, no matter which energy price increases, PPI is always the most affected, then GDP deflator, with CPI being the least. Corresponding compensation measures should be accordingly designed to offset the negative impact caused by energy subsidies reform.     

Fine structure of the price–demand relationship in the electricity market: Multi-scale correlation analysis

In this research we investigate the problems of dynamic relationship between electricity price and demand over different time scales for two largest price zones of the Russian wholesale electricity market. We use multi-scale correlation analysis based on a modified method of time-dependent intrinsic correlation and the complete ensemble empirical mode decomposition with adaptive noise for this purpose. Three hypotheses on the type and strength of correlations in the short-, medium- and long-runs were tested. It is shown that price zones significantly differ in internal price–demand correlation structure over the comparable time scales, and not each of the theoretically formulated hypotheses is true for each of them. We can conclude that the answer to the question whether it is necessary to take into account the influence of demand-side on electricity spot prices over different time scales, is significantly dependent on the structure of electricity generation and consumption on the corresponding market.     

Optimal operation of cold–heat–electricity multi-energy collaborative system based on price demand response

In a multi-energy collaboration system, cooling, heating, electricity, and other energy components are coupled to complement each other. Through multi-energy coordination and cooperation, they can significantly improve their individual operating efficiency and overall economic benefits. Demand response, as a multi-energy supply and demand balance method, can further improve system flexibility and economy. Therefore, a multi-energy cooperative system optimization model has been proposed, which is driven by price-based demand response to determine the impact of power-demand response on the optimal operating mode of a multi-energy cooperative system. The main components of the multi-energy collaborative system have been analyzed. The multi-energy coupling characteristics have been identified based on the energy hub model. Using market elasticity as a basis, a price-based demand response model has been built. The model has been optimized to minimize daily operating cost of the multi-energy collaborative system. Using data from an actual situation, the model has been verified, and we have shown that the adoption of price-based demand response measures can significantly improve the economy of multi-energy collaborative systems.     

Flexibility improvement evaluation of hydrogen storage based on electricity–hydrogen coupled energy model

To achieve carbon neutrality by 2060, decarbonization in the energy sector is crucial. Hydrogen is expected to be vital for achieving the aim of carbon neutrality for two reasons: use of power-to-hydrogen (P2H) can avoid carbon emissions from hydrogen production, which is traditionally performed using fossil fuels; Hydrogen from P2H can be stored for long durations in large scales and then delivered as industrial raw material or fed back to the power system depending on the demand. In this study, we focus on the analysis and evaluation of hydrogen value in terms of improvement in the flexibility of the energy system, particularly that derived from hydrogen storage. An electricity–hydrogen coupled energy model is proposed to realize the hourly-level operation simulation and capacity planning optimization aiming at the lowest cost of energy. Based on this model and considering Northwest China as the region of study, the potential of improvement in the flexibility of hydrogen storage is determined through optimization calculations in a series of study cases with various hydrogen demand levels. The results of the quantitative calculations prove that effective hydrogen storage can improve the system flexibility by promoting the energy demand balance over a long term, contributing toward reducing the investment cost of both generators and battery storage and thus the total energy cost. This advantage can be further improved when the hydrogen demand rises. However, a cost reduction by 20% is required for hydrogen-related technologies to initiate hydrogen storage as long-term energy storage for power systems. This study provides a suggestion and reference for the advancement and planning of hydrogen storage development in regions with rich sources of renewable energy.     

How does coal price drive up inflation? Reexamining the relationship between coal price and general price level in China

Due to the coal-dominated energy structure, China is currently facing significant economic uncertainties brought forward by instability of coal price. By separating the asymmetric effects that how upward and downward coal price changes pass through to the economy, this paper reexamines the relationship between coal price and general price level in China. The asymmetric effects are investigated via vector autoregression models, Granger Causality tests, and impulse response function analyses using the monthly time series data from Jun-98 to Sep-14. Results show negative coal price change presents more significant impact on inflation than positive one. The inflation responses very abruptly to coal price shock in the short run, but the impact regresses rapidly along time. Accumulatively, a 1% increase of coal price will push CPI and PPI up by 0.04% and 0.12%, while a 1% decrease of coal price will pull them down by 0.08% and 0.17%, respectively. The linkage among coal price change, PPI, and CPI is demonstrated as the main transmission channel of price shock. The inflationary effect is strong in the initial stage, but will be weakened in the later stage since the pass through effect from PPI to CPI is tiny, which confirms PPI is more responsive than CPI to coal price change. For policy implications, how to avoid extreme volatility in general price level is a major concern of recent agendas such as reforming energy market and building green fiscal system.     

Economic analysis of a typical solar–coal hybrid power plant

Since the 1990s, solar energy has been hybridized with fossil power plants to improve reliability and efficiency. This study proposed an economical model for the solar–coal hybrid system. A conventional 200 MW coal-fired power plant was hybridized with solar heat at approximately 300°C and compared with a typical solar-only thermal power plant. The annual thermal performances of the proposed system were estimated and they were economically assessed using the economic model. The appropriate replacement configurations for the system can be determined for lower solar electricity cost. Therefore, this system may utilize solar energy on the utility scale cost-effectively.     

International cooperation on renewable energy electricity in China – A critical analysis

Facing the energy crisis and the requirement of green power, China is making great efforts to fulfill the international cooperation on renewable energy electricity aimed at protecting the security of electricity supply and economy development. This paper firstly utilizes the tool of SWOT strategy analysis to make a research on internal and external environment of international cooperation on renewable energy electricity in China. Secondly discusses the current situation and existing problems of international cooperation from four dimensions of strength, weakness, opportunity and threat. Then, gives a propose of four different kinds of international cooperation strategies based on the combination analysis of SWOT matrix. Finally puts forward the detailed implementation strategies of the policy recommendations for international cooperation on renewable energy electricity.     

CO2 emissions in the global supply chains of services: An analysis based on a multi-regional input–output model

As the service sector dominates the economy in developed countries, its environmental impact has become an important issue. Based on a multi-regional input–output model, this paper estimates consumption-based emissions of service sectors of 41 countries and regions, and discusses the emission abatement policy of service sectors. The results indicate that consumption-based emissions of the service sector in most countries and regions are much greater than direct emissions generated by the service sector. Further decomposition by production sources demonstrates that final demand for services in certain countries causes substantial emissions in the other countries. In most countries, major parts of consumption-based emissions of the service sector come from upstream emissions in non-service sectors due to the intermediate consumption of non-service inputs in the service sector. For the US and China, the consumption-based emissions of their service sectors are traced back to different service consumption bundles and production sectors, which enable us to identify service categories and production sectors that play key roles in the impact of service sectors on CO₂ emissions. Finally, policy implications of the results are discussed for the climate effect of the service-oriented economy, global mitigation of climate change, sustainability, and the decarbonization of the service sector.     

Movable injection point–based syngas production in the context of underground coal gasification

Underground coal gasification (UCG) has been proven as a viable technology for the generation of high calorific value syngas using deep mine coal seams. The use of multiple injection points/movable injection point method could be an alternate technique for efficient gasification of high ash Indian coals. In this context, the present study is focused on evaluating the heating value of syngas using a variety of gasifying agents such as pure O₂, air, humidified O₂, and CO₂-O₂ dual-stage gasification under movable injection method for high ash coals. It is found that the use of movable injection point method had significantly increased the heating value of the product gas, compared with the fixed point injection method. For high and low ash coal under pure O₂ gasification, the calorific value of syngas obtained using movable injection point is 123.2 and 153.9 kJ/mol, which are 33.5% and 24.3% higher than the syngas calorific value obtained using fixed injection point, respectively. Further, the air as a gasification agent for high ash coals had increased the gross calorific value of the syngas by 24%, using this technology. The results of high ash coal gasification using humidified oxygen at optimum conditions (0.027-kg moisture/kg dry O₂) and CO₂-O₂ gas had enhanced the syngas calorific value by 12.6% and 5%, respectively. Humidified O₂ and CO₂-O₂ gasifying agents produced a high-quality syngas with the calorific value of 190 kJ/mol, among the gasifying agents used. The experimental results had shown that the movable injection point method is found to be a better alternative for the generation of calorific value-enriched syngas using high ash-based Indian coals.     

Sources of energy productivity change in China during 1997–2012: A decomposition analysis based on the Luenberger productivity indicator

Given that different energy inputs play different roles in production and that energy policy decision making requires an evaluation of productivity change in individual energy input to provide insight into the scope for improvement of the utilization of specific energy input, this study develops, based on the Luenberger productivity indicator and data envelopment analysis models, an aggregated specific energy productivity indicator combining the individual energy input productivity indicators that account for the contributions of each specific energy input toward energy productivity change. In addition, these indicators can be further decomposed into four factors: pure efficiency change, scale efficiency change, pure technology change, and scale of technology change. These decompositions enable a determination of which specific energy input is the driving force of energy productivity change and which of the four factors is the primary contributor of energy productivity change. An empirical analysis of China's energy productivity change over the period 1997–2012 indicates that (i) China's energy productivity growth may be overestimated if energy consumption structure is omitted; (ii) in regard to the contribution of specific energy input toward energy productivity growth, oil and electricity show positive contributions, but coal and natural gas show negative contributions; (iii) energy-specific productivity changes are mainly caused by technical changes rather than efficiency changes; and (iv) the Porter Hypothesis is partially supported in China that carbon emissions control regulations may lead to energy productivity growth.     

Does electricity price matter for innovation in renewable energy technologies in China?

Though the development of renewable energy is rapid, innovation in renewable energy technologies is relatively weak due to the late commencement of renewable energy in China. In addition, renewable energy is mainly introduced into the supply mix of electricity generation, which increases the costs of electricity generation. Higher electricity price will make renewable energy more competitive and call forth renewable energy technological innovation. Based on FMOLS and DOLS models, as well as PMG model, this paper investigates the induced long and short run effects of electricity price, funding support, and economic growth on innovation in renewable energy technologies at the provincial level in China during the period 2006–2016. The Conclusions drawn were: (1) R&D expenditure and economic growth have positive impacts on innovation in renewable energy technologies in the long and short run; (2) Electricity price only has a long run effect on patenting in renewable energy technologies; (3) In the long run, a 1% increase in electricity price can lead to a 0.7825%–1.0952% increase in the patent counts of renewable energy technologies; (4) Electricity pricing system in China does not play any role in driving renewable energy technological innovation in the short run.     

Consumers’ evaluation of national new energy vehicle policy in China: An analysis based on a four paradigm model

The Chinese government has issued numerous policies to promote the development and adoption of new energy vehicles (NEVs) to address the problem of excessive energy consumption and environmental pollution. In this study we divided these policies into seven categories: macroscopic, demonstration, subsidization, preferential tax, technical support, industry management, and infrastructure. Since consumers’ opinions affect the policy choices of government, based on questionnaire data we use a four paradigm model to analyze the consumers’ evaluation of each policy in terms of perceptions of importance and satisfaction. The results show that macroscopic policies are perceived to be of high importance and satisfaction, whereas for industry management policies they are perceived to be of low importance and satisfaction. The importance perceptions of preferential tax and demonstration policies are low, whereas perceptions of their satisfaction are high. Perceptions of the importance of subsidization, technical support, and infrastructure policies are high, whereas perceptions of their satisfaction are low. We find that the subsidization, technical support, and infrastructure policies need urgent improvement. Finally, we put forward several suggestions to improve the current policies and increase the consumers’ intention to adopt NEVs.     

Quantifying the impacts of national renewable electricity ambitions using a North–West European electricity market model

This work builds a comprehensive North–West European Electricity Market model for the year 2020 and uses it to quantify the impacts of ambitious national renewable electricity targets. The geographical coverage of the model comprises Germany, France, Belgium, Netherlands, Luxemburg, Great Britain and Ireland. The model simulates the electricity market operation for the entire region at half hourly resolution and produces results in terms of electricity prices, cross border flows, emissions and associated total system costs. The impact of two carbon prices is examined within the model. Results highlight the policy challenges that arise when individual Member States formulate renewable energy plans in isolation in the absence of integrated modelling of interconnected regions as cross border power flows play a more significant role in market dynamics especially in the presence of geographically dispersed variable renewable generation sources such as wind and solar. From a policy perspective results suggest that based on these national plans, congestion will be present on a number of key lines at long periods during the year.     

Simulating the impact of policy,energy prices and technological progress on the passenger car fleet in Austria—A model based analysis 2010–2050

This paper investigates the effects of policy, fuel prices and technological progress on the Austrian passenger car fleet in terms of energy consumption and greenhouse gas (GHG) emissions. To analyse these effects a simulation model is used. We model the car fleet from a bottom-up perspective, with a detailed coverage of vehicle specifications and propulsion technologies. The model focuses on the technological trend toward electrified propulsion systems and their potential effects on the fleet's energy consumption and GHG emissions. To represent the impact of prices and income on the development of the fleet, we combine the fleet model with top-down demand models.     

Did the expiration of retail price caps affect prices in the restructured Texas electricity market?

On January 1, 2007, the Electric Reliability Council of Texas (ERCOT) market became the first restructured market in the US to completely remove caps on the prices which could be charged to residential energy consumers by the retailers associated with the traditional or incumbent utility service providers. Our analysis suggests that the expiration of the price-to-beat (PTB) price caps may have led to a reduction in the average prices charged by competitive retail electric providers (REPs).     

A note on using the Hodrick–Prescott filter in electricity markets

Recently, Nowotarski et al. (2013) have found that wavelet-based models for the long-term seasonal component (LTSC) are not only better in extracting the LTSC from a series of spot electricity prices but also significantly more accurate in terms of forecasting these prices up to a year ahead than the commonly used monthly dummies and sine-based models. However, a clear disadvantage of the wavelet-based approach is the increased complexity of the technique, as compared to the other two classes of LTSC models, and the resulting need for dedicated numerical software, which may not be readily available to practitioners in their work environments. To facilitate this problem, we propose here a much simpler, yet equally powerful method for identifying the LTSC in electricity spot price series. It makes use of the Hodrick–Prescott (HP) filter, a widely-recognized tool in macroeconomics.     

Estimation of Japanese price elasticities of residential electricity demand, 1990–2007

This paper estimates elasticities of Japanese residential price electricity from 1990 to 2007. The first difference generalized method of moment estimator is employed to avoid dynamic panel bias, which is not considered in most previous studies. The results show that while short-run elasticities are similar to those in previous studies, long-run elasticities are significantly lower in our study. We also find that the price elasticity of Japanese residential electricity consumption is notably affected by income inequality and severe weather. Based on these results, we provide some insights to tailor environmental taxation so as to effectively attain the Kyoto Protocol.     

CO2 emissions embodied in China–US trade: Input–output analysis based on the emergy/dollar ratio

To gain insight into changes in CO₂ emissions embodied in China–US trade, an input–output analysis based on the emergy/dollar ratio (EDR) is used to estimate embodied CO₂ emissions; a structural decomposition analysis (SDA) is employed to analyze the driving factors for changes in CO₂ emissions embodied in China's exports to the US during 2002–2007. The results of the input–output analysis show that net export of CO₂ emissions increased quickly from 2002 to 2005 but decreased from 2005 to 2007. These trends are due to a reduction in total CO₂ emission intensity, a decrease in the exchange rate, and small imports of embodied CO₂ emissions. The results of the SDA demonstrate that total export volume was the largest driving factor for the increase in embodied CO₂ emissions during 2002–2007, followed by intermediate input structure. Direct CO₂ emissions intensity had a negative effect on changes in embodied CO₂ emissions. The results suggest that China should establish a framework for allocating emission responsibilities, enhance energy efficiency, and improve intermediate input structure.     

Numerical investigations of catalyst–liquid slurry flow in the photocatalytic reactor for hydrogen production based on algebraic slip model

A new device of photocatalytic reactor with solar concentrator for hydrogen production was introduced in this paper. In order to investigate the effects of the slurry flow and catalyst distributions in the reactor on photocatalysis for hydrogen production, an algebraic slip mixture model (ASM) was used to simulate the dynamics of the catalyst–water slurry flow. A block-structured non-uniform grid was applied to discretize the entire domain and an algebraic multi-grid (AMG) method was used to solve the pressure field. The mean slurry pressure gradients obtained by the model were in agreement with the experimental data in former literature. Based on this verification, catalyst particle distributions, slurry velocity distributions and inter-phase slip velocity distributions in photocatalytic reactor pipe were investigated. The results show that the catalyst tends to distribute near the bottom of the pipe in the reactor, leading to a concentration gradient along the vertical direction of cross section. But due to the effects of turbulence force against the gravity, a heterogeneous suspending state will be achieved in a fully developed flow.     

Thermodynamic analysis of energy intensive systems based on exergy–topological models

Improving the efficiency of energy intensive systems is a major challenge. The primary conventional techniques for tackling such problems are thermodynamic analysis and optimization. This paper describes an innovative general approach called the structural exergy analysis method for thermodynamic analysis of systems with arbitrary structures. The innovative method is based on the construction and analysis of a particular exergy–topological model. An example of its application to a gas-turbine installation is provided.