Consumer–supplier–government triangular relations: Rethinking the UK policy path for carbon emissions reduction from the UK residential sector

The UK residential (household) sector is responsible for approximately 30% of total carbon dioxide emissions and is often seen as the most promising in terms of early reductions. As most direct household emissions come from only two fuel sources, this paper critically examines how existing emissions reduction policies for the sector shape – and are shaped by – relations between the three main groups of actor in this policy domain: central government, gas and electricity suppliers, and energy users. Focusing on relations between three dyads (government–suppliers, suppliers–consumers and consumers–government) enables us to examine aspects of demand reduction that have often been overlooked to date. By ‘relations’ we refer to services, power relationships and flows of capital and information, as well as less easily defined elements such as loyalty, trust and accountability. The paper argues that the chosen government policy path to deliver demand reduction, which heavily emphasises the suppliers’ role, suffers from principal-agent problems, fails to align consumers and supplier interests toward emissions reduction, and does not yet portray a lower-carbon future in positive terms. It suggests that more attention should be paid to government–consumer relations, recognising that energy consumers are also citizens.     

SWOT analyses of the national energy sector for sustainable energy development

A holistic perspective of various energy stakeholders regarding the Strengths, Weaknesses, Opportunities and Threats (SWOTs) of the energy sector in Macedonia is utilized as baseline to diagnose the current state and to sketch future action lines towards sustainable energy development. The resulting SWOT analyses pointed to the progressive adoption of European Union (EU) standards in energy policy and regulation as the most important achievement in the energy sector. The most important problems the national energy sector faces are scarce domestic resources and unfavorable energy mix, low electricity prices, a high degree of inefficiency in energy production and use, as well as insufficient institutional and human capacities. The formulated portfolio of actions towards enabling sustainable energy development urges the adoption of a comprehensive energy strategy built upon sustainability principles, intensified utilization of the natural gas, economic prices of electricity, structural changes in industry, promotion of energy efficiency and renewables, including Clean Development Mechanism (CDM) projects, enforcement of EU environmental standards and meeting the environmental requirements, as well as institutional and human capacity building.     

The political economy of energy regulation in OECD countries

This paper examines the effect of government ideology, political factors and globalization on energy regulation in electricity and gas industries using the bias-corrected least square dummy variable model in a panel of 23 OECD countries over the period of 1975–2007. We find that left-wing governments promote regulation in gas and electricity sectors. Also, less politically fragmented institutions contribute to deregulation of gas and electricity industries. Long tenures of incumbent government have limited impact on regulation in electricity sector, while it is associated with an increase in regulation of gas sector. Further, we find that higher political constraints and more globalized countries lead to deregulation in electricity and gas sectors. We discover that economic and social integration are the forces that promote deregulation in the gas industry, whereas political integration advance deregulation in the electricity industry. We emphasize that political economy factors are important determinants of energy regulation.     

Productivity growth and deregulation of Japanese electricity distribution

Deregulation of Japanese electric power industry began in 1995. After the amendment of Electricity Utility Industry Law in 1995, competition was partially introduced in a generation sector and retail competition started from 2000. Eligibility to choose suppliers was gradually extended from larger to smaller customers. As of 2008, almost all customers except households can choose their electricity suppliers. Based upon both previous implementation result of competition policy and review on their achievement, Japanese government will begin new policy debate in 2013 to assess further retail competition which includes household customers. To prepare for policy suggestion on the future electric power industry, this study examines the cost structure of Japanese electricity distribution. For the purpose, we estimate a multi-product translog cost function of Japanese electricity distribution from 1983 to 2003. Using the estimated cost function, we calculate several economic measures such as productivity growth, technical change and economies of scale and scope. The empirical results of this study indicate the improvement in productivity growth after deregulation.     

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).     

Renewable energy policy and public perceptions of renewable energy: A cultural theory approach

Public opposition to the siting of renewable energy (RE) facilities and public reluctance to invest in RE remain key obstacles to the expansion of the renewables sector in the UK and a number of other European countries. Although there is a growing body of qualitative research on factors that inform public attitudes towards RE, the majority of studies have tended to be quantitative and to view ‘the public’ and ‘public opinion’ as homogeneous wholes. This study uses a cultural theory framework and focus groups conducted in the South West UK to develop deeper understandings of how individuals’ worldviews can inform opinions and behaviour in relation to RE. These findings are used to explore ways in which government policies on RE might be tailored to engender greater public support and participation. Issues discussed include the provision of economic incentives, information on climate change and RE, linking renewables to overall energy behaviour, and landscape aesthetics.     

Interactions and implications of renewable and climate change policy on UK energy scenarios

As a response to the twin challenges of climate change mitigation and energy security, the UK government has set a groundbreaking target of reducing the UK’s economy-wide carbon emissions by 80% from 1990 levels by 2050. A second key UK energy policy is to increase the share of final energy consumption from renewables sources to 15% by 2020, as part of the wider EU Renewable Directive. The UK’s principle mechanisms to meet this renewable target are the Renewable Obligation (RO) in the electricity sector, the Renewable Transport Fuel Obligation (RTFO), and most recently the Renewable Heat Programme (RHP) for buildings. This study quantifies a range of policies, energy pathways, and sectoral trade-offs when combining mid- and long-term UK renewables and CO₂ reduction policies. Stringent renewable policies are the binding constraints through 2020. Furthermore, the interactions between RO, RTFO, and RHP policies drive trade-offs between low carbon electricity, bio-fuels, high efficiency natural gas, and demand reductions as well as resulting 2020 welfare costs. In the longer term, CO₂ reduction constraints drive the costs and characteristics of the UK energy system through 2050.     

A regulatory policy to promote renewable energy consumption in China: Review and future evolutionary path

Renewable energy has become the world's strategic choice to solve environmental pollution, address the energy crisis and achieve social sustainable development. The establishment of a regulatory system coincides with the development stage of renewable energy and electricity market operation is significant in standardizing the market competition and guaranteeing healthy development of renewable energy in China. This paper analyses the current situation of renewable energy development and the existing renewable energy regulation system in China, pointing out that the main problems restricting renewable energy development are institutional mechanisms and market factors. The existing regulatory mechanisms also have deficiencies, such as the inclination towards economic regulation and the lack of a market adjustment mechanism. This paper proposes that China should comprehensively consider the renewable energy development stage, electricity market trading mechanisms and other factors in electricity regulatory requirements when policy making, actively exploring a new renewable energy regulation model adapted to different development phases. In addition, this paper suggests China's regulatory policy path based on the forecasting of renewable energy developing models.     

Demand reduction in the UK—with a focus on the non-domestic sector

A demand reduction strategy is considered in the context of the UK and in the light of the UK Government's 2006 Energy Review. This paper discusses how a mechanism—a Demand Reduction Obligation (DRO)—can be established to achieve radical energy demand reduction targets in electricity and gas use in the industrial, commercial and public administration sectors. A DRO would require energy suppliers to invest in energy-saving measures so as to reduce energy demand in these sectors. The investment for this activity would be funded by energy suppliers who would increase prices in order to cover the cost of achieving the carbon reductions. Public opinion surveys suggest that a large proportion of the public would prefer to support demand reduction measures compared to other energy options. It may be practical to deliver carbon emission reductions equivalent to around 30% of emissions from the UK electricity sector over a 15-year period through a broad-based demand reduction strategy. Demand reduction is considered in the context of an assessment of costs and resources available from other low carbon options including renewable energy and nuclear power.     

Electricity restructuring in Turkey and the share of wind energy production

This paper presents the current status of Turkey's electricity power sector, efforts for introducing competition in the Turkey's power industry, and concerns with the restructuring in Turkey. Turkey include long-term high-cost agreements, low quality of power, and therefore restrictions for synchronization with UCTE network, increase in the reliance on imported natural gas, and the urgent need for highly qualified staff that would be capable of fast and reliable implementation of ongoing reforms in the electricity sector. The contribution of the exploiting wind energy potential in Turkey to reconstruction of Turkey electricity structure is investigated. The strong development of wind energy in Turkey is expected to continue in the coming years.     

A comparative multi-disciplinary policy review in wind energy developments in Europe

Over recent decades, European Union countries have committed to increasing their electricity production from renewable energy sources (RESs). Wind energy plays a significant role in a sustainable future. This paper presents a political, economic, social, technological, legal and environmental analysis. Although these countries have made many improvements in their legal frameworks aiming to attract investors and boost the RE sector, there are still challenges. The UK focuses on offshore wind energy, adjusts the economic strategy and changes the legislation context. Germany has the healthiest economic conditions, as it keeps following its initiative to design a new programme for an energy transition from conventional to RESs with emphasis on the onshore. Greece has only a few installations and much room for development but needs to make further changes in the legislation and economy so as to attract more investors in the long term. The purpose of this research is to analyse, highlight and discuss vital aspects of these countries as well as the European environment, with reference to their current wind energy activities. Ultimately, it attempts to give a wider perspective and to serve as a guide for future studies on the wind energy sector.     

Job retention in the British offshore sector through greening of the North Sea energy industry

For the case of the UK there are currently three ways of obtaining energy from sea areas, namely from wind, tides and waves. A methodology was developed to determine the future size of the offshore renewable industry based on the concept of employment factor, or the number of people required to maintain each unit of electricity production. An assessment was made of the decline in the number of people employed in oil related jobs in the North Sea and the gap that this could create in the UK's economy unless this pool of offshore expertise could find an alternative employment in the renewable sector. The paper will also investigate the effect of gradually transforming the UK's oil and gas sector into offshore renewables. If this was to happen by 2050 the UK offshore renewable industry could produce between 127 and 146 TWh of electricity, equivalent to around 57–66% of the current energy consumption in the country.     

Green energy in Europe

As a platform for green electricity suppliers and customers, Greenprices tracks deals contracted on the green power market. Greenprices asked the Dutch and Swedish railways, ABN AMRO in The Netherlands, Body Shop, Cooperative Bank and University of Edinburgh in UK, 3E in Belgium and Weleda AG in Germany their reasons for “going green”.     

Soft-linking energy systems and GIS models to investigate spatial hydrogen infrastructure development in a low-carbon UK energy system

This paper describes an innovative modelling approach focusing on linking spatial (GIS) modelling of hydrogen (H₂) supply, demands and infrastructures, anchored within a economy-wide energy systems model (MARKAL). The UK government is legislating a groundbreaking climate change mitigation target for a 60% CO₂ reduction by 2050, and has identified H₂ infrastructures and technologies as potentially playing a major role, notably in the transport sector. An exploratory set of linked GIS–MARKAL model scenarios generate a range of nuanced insights including spatial matching of supply and demand for optimal zero-carbon H₂ deployment, a crucial finding on successive clustering of demand centres to enable economies of scale in H₂ supply and distribution, the competitiveness of imported liquid H₂ and of liquid H₂ distribution, and sectoral competition for coal with carbon sequestration between electricity and H₂ production under economy-wide CO₂ constraints.     

Optimal technological choices in meeting Australian energy policy goals

Australia's energy system faces a number of environmental challenges and chief among them is reducing greenhouse gas emissions. In the electricity sector, the Australian government has began implementing policies, which require greater use of gas and renewables based technologies. In this study, we simulate the optimal shares of several electricity generation technologies for Australia under a policy of greenhouse gas mitigation. In doing so, we seek to determine the likely technological investment paths over the next two decades and consider the sensitivity of those projections to assumptions regarding technological change, resource scarcity and economies or diseconomies of scale.     

Sustainable electricity generation fuel mix analysis using an integration of multicriteria decision-making and system dynamic approach

To achieve a national energy access target of 90% urban and 51% rural by 2035, combat climate change, and diversify the energy sector in the country, the Zambian government is planning to integrate other renewable energy resources (RESs) such as wind, solar, biomass, and geothermal into the existing hydro generation–based power system. However, to achieve such targets, it is essential for the government to identify suitable combination of the RESs (electricity generation fuel mix) that can provide the greatest sustainability benefit to the country. In this paper, a multicriteria decision-making framework based on analytic hierarchy process and system dynamics techniques is proposed to evaluate and identify the best electricity generation fuel mix for Zambia. The renewable energy generation technologies considered include wind, solar photovoltaic, biomass, and hydropower. The criteria used are categorized as technical, economic, environmental, social, and political. The proposed approach was applied to rank the electricity generation fuel mix based on nine sustainability aspects: land use, CO₂ emissions, job creation, policy promotion affordability, subsidy cost, air pollution reduction, RES electricity production, RES cumulative capacity, and RES initial capital cost. The results indicate that based on availability of RESs and sustainability aspects, in overall, the best future electricity generation mix option for Zambia is scenario with higher hydropower (40%) penetration, wind (30%), solar (20%), and lower biomass (10%) penetration in the overall electricity generation fuel mix, which is mainly due to environmental issues and availability of primary energy resources. The results further indicate that solar ranks first in most of the scenarios even after the penetration weights of RES are adjusted in the sensitivity analysis. The wind was ranked second in most of the scenarios followed by hydropower and last was biomass. These developed electricity generation fuel mix pathways would enable the country meeting the future electricity generation needs target at minimized environmental and social impacts by 2035. Therefore, this study is essential to assist in policy and decision making including planning at strategic level for sustainable energy diversification.     

New accountabilities in utilities: fifty years of legal accountability in the gas industry

Privatisation was to have released the nationalised industries from the ‘dead hand of government’. Regulation with a ‘light hand’ was imposed to curb abuse of monopoly power. But as the industries have matured in the private sector we have seen regulation extended to cover a wider area, both in theory and in practice. This paper examines the change in responsibilities and the way they are divided between industry, regulator and government, tracing the legal accountability of the UK gas industry through nationalisation, privatisation and more recent regulation reform as an example. It concludes by questioning the appropriateness of the ‘vertical separation’, instituted by the privatisation and competition legislation, of responsibilities for the public interest and for organisational operations.     

Quantifying the water–energy nexus in Greece

In this paper we provide an assessment of the water–energy nexus for Greece. More specifically, the amount of freshwater consumed per unit of energy produced is determined: for both conventional (lignite, diesel and fuel oil-fired) and advanced (combined operation of gas turbine) thermal power plants in the electricity generation sector; for extraction and refining activities in the primary energy production sector; and for the production of biodiesel that is used as a blend in the ultimately delivered automotive diesel fuel. In addition, the amount of electricity consumed for the purposes of water supply and sewerage is presented. In view of the expected effects of climate change in the Mediterranean region, the results of this study highlight the need for authorities to prepare a national strategy that will ensure climate resilience in both energy and water sectors of the country.     

Hybrid modelling of long-term carbon reduction scenarios for the UK

This paper summarizes the development of a new hybrid MARKAL–Macro (M–M) energy system model for the UK. This hybrid model maintains the technological and sectoral detail of a bottom-up optimisation approach with aggregated energy demand endogeneity and GDP impacts from a single sector neoclassical growth model. The UK M–M model was developed for underpinning analysis of the UK's groundbreaking mandatory long-term − 60% carbon dioxide (CO₂) emissions reduction target. Hybrid modelling illustrates that long-term UK CO₂ emission reductions are feasible. However, there are endemic uncertainties, notably a trade-off between behavioural and technological decarbonisation options with resultant energy system impacts in the requirements for zero-carbon electricity. UK M–M model sensitivity runs further illustrate the range of energy system interactions including the deployment of the UK's limited CO₂ storage capacity, alternate timing of power vs. transport sectoral reductions, the relative ease of switching between electricity generation portfolios, and substitution opportunities between natural gas and coal. The macro-economic cost impacts range from 0.3% to 1.5% reduction in UK GDP by 2050, with higher cost estimates strongly influenced by pessimistic assessments of future low-carbon technologies. However cost impacts from the UK M–M model are likely to be in the lower range for stringent CO₂ reduction pathways as the simplicity of the reduced form macro-linkage omits competitiveness and transitional impacts on the UK economy.     

The role of energy efficiency in reducing Scottish and UK CO2 emissions

In 2003, the UK government launched its long-anticipated White Paper on energy, the centrepieces of which were ambitious targets for the production of electricity from renewable technologies and the long-term aspiration of a 60% reduction in UK greenhouse gas emissions by 2050. In the White Paper it was recognised that such a dramatic reduction in emissions will require significant changes in the way in which energy is produced and used. However there has been a general failure to recognise the fact that in order to meet emissions targets, the UK will have to significantly reduce its energy consumption; this is not helped by the general misconception in the UK that reductions in CO₂ emissions will occur simply by increasing the production of electricity from renewable sources.

Specifically, this paper highlights the current trends in renewables deployment and energy demand, with a specific focus on Scotland, where the authorities have set more ambitious renewables targets than the rest of the UK. As will be demonstrated in this paper, without energy demand reduction, the deployment of renewables alone will not be sufficient to curtail growth in UK CO₂ emissions. This is illustrated using a case study of the Scottish housing sector; whilst this case study is necessarily local in scope, the results have global relevance. The paper will also address the magnitude of energy savings required to bring about a reduction in emissions and assesses the status of the policies and technologies that could help bring such reductions about.