What governs the transition to a sustainable hydrogen economy? Articulating the relationship between technologies and political institutions

There is a lack of integrated knowledge on the transition to a sustainable energy system. The paper focuses on the relationship between technologies and institutions in the field of hydrogen from the perspective of political theory. The paper unfolds four paradigms of governance: ‘Governance by policy networking’, Governance by government’, ‘Governance by corporate business’, and ‘Governance by challenge’, and looks into the major line of argument in support of these paradigms and into their possible bias with respect to hydrogen options. Each of these paradigms reveals an institutional bias in that it articulates specific opportunities for collaboration and competition in order to stimulate the transition to a sustainable hydrogen economy. The paper makes the observation that there is a compelling need to reframe fashionable discourse such as the necessary shift from government to governance or from government to market. Instead, specific questions with respect to the impact of guiding policy frameworks on innovation will highlight that neither ‘neutral’ nor ‘optimal’ frameworks for policy making exist, where competing hydrogen options are at stake. The identification of paradigms of governance maybe considered a methodological device for (participator) policy analysis.     

Effects of foreign investors on energy firms' innovation: Evidence from a natural experiment in China

Based on a natural experiment of foreign investment access relaxation, this paper investigates impacts of foreign institutional investors (FIIs) on energy firms' innovation. It is still unclear the real effect of FIIs on energy firms' innovation in the literature. We detect a significantly positive relationship between foreign institutional investors and innovation outputs of energy firms using firm-level data. Three possible mechanisms driving our findings are explored. Foreign institutions increase the proportion of R&D expenditures in revenues, limit the scale of related party transactions to improve corporate governance, and widen the pay gap within firms to stimulate the efficiency of human capital. Our main findings are weakened in state-owned companies with high financing constraints. Jointly, our findings offer clear policy implications to emerging markets by identifying the effects of FIIs on energy firms' innovation.     

Japanese investment in Australian coal assets through the demise of concessional financing

The Australian coal industry has been described as being a perpetual case of ‘profitless prosperity’. This implies that foreign companies invest in low-margin mining activities with motives other than profit. It is argued that foreign investors and Japanese trading companies in particular used government investment concessions and subsidies to help create oversupply in the seaborne coal market. The aim of this strategy is to depress contract prices at the cost of achieving reasonable profitability levels, which have historically been well below that of other investors in the Australian mining sector. This study shows that the quasi-integration via concessional funding arrangements is not a credible strategy employed by Japanese trading companies or the Japanese Government. The analysis rejects the hypothesis that via foreign direct investment, Japanese companies are securing coal at below average prices. Furthermore we find no clear evidence of Japanese trading companies using their information advantage as equity investors to secure coal at favourable prices during contract negotiations. Finally we examine the investment behaviour of new entrants in the Australian coal production sector to highlight the differences in investment strategy between Japanese companies and other foreign investors regarding the security of supply.     

The Russian oil industry between public and private governance: obstacles to international oil companies’ investment strategies

The low level of involvement by international oil companies in Russia seems difficult to explain given what development of its resources and production has to offer. There are still many restrictions and contradictions, born of the particular institutional and political environment of the Russian oil industry at the end of 15 years of transition, that act as a bar to international integration. Three factors currently define the establishment of relations with foreign investors. First, because of the many different levels of negotiation with Russian companies, the State and the Regions, the decisions are based on complex relations between the various forces. Second, the reforms, and especially privatisation and the allocation of rights of ownership to deposits, are considered by sizeable sections of public opinion and many political classes to be illegitimate, thus making the issue of international investment and foreign presence still more complicated. Finally, the State's wish to take back the oil industry in order to use it to fulfil its economic and foreign policies is creating further uncertainty. These three elements seriously restrict the entry of international oil companies to the Russian market.     

中国与欧美大型石油公司间职工人数对比分析及其启示

职工人数是评价公司经营的重要参数之一。在美国《石油情报周刊》评出的2010年综合排名前50大石油公司中,职工人数排名前12位且超过9.5万人的石油公司,都是从计划经济体制脱胎而来和/或由政府直接控制经营,这些公司基本都没能完全按照现代化的公司管理体制运营。在2003~2011年间,欧美三大跨国石油公司埃克森、壳牌、BP的职工人数趋于减少,中国三大石油公司职工人数趋于增加。从销售收入、净利润、总资产和油气产量这4项定量指标来看,欧美三大跨国石油公司和中国三大石油公司皆可称为"大"公司;但如果按4项定量指标的人均值计,中石油和中石化就很难说是"强"公司了;而中海油则明显强于欧美三大跨国石油公司,这缘于中海油从成立之初就走上与国际公司接轨的现代化管理体制之路,并坚持专业公司相对独立、基地系统逐步分离。调整人员结构、精兵简政是我国石油工业体制改革的重要一环,而专业化重组分流、分离非核心业务是调整人员结构的重要途径。在人员结构改革调整中要充分依托市场经济日趋成熟的社会大环境,坚持市场经济的用人原则,稳步快走。     

Sustainability development for supply chain management in U.S. petroleum industry by DEA environmental assessment

Environmental assessment and protection are important concerns in modern business. Consumers are interested in environmental protection. They avoid purchasing products from dirt-imaged companies even if their prices are much less than the ones produced by green-imaged companies. The green image is very important for business survivability in our global market. A business concern associated with the green image is how to attain corporate sustainability where companies can attain both economic success and pollution prevention in their operations. There is tradeoff between economic prosperity and environmental concern. To attain a high level of corporate sustainability, companies need to measure the current performance in terms of their operational and environmental achievements. This study proposes a use of Data Envelopment Analysis (DEA) for such assessment. The proposed DEA assessment provides corporate leaders and managers with not only the measure of corporate sustainability but also information regarding how to invest for technology innovation for abatement of undesirable outputs (e.g., CO₂). As an application, this study utilizes the proposed approach to measure the corporate sustainability of petroleum firms in the United States. The petroleum industry is functionally separated into integrated and independent companies. The integrated companies, referred to as “Major”, have their large supply chains for both “upstream” (e.g., exploration, development and production of crude oil or natural gas) and “downstream” (e.g., oil tankers, refineries, storages and retails). Meanwhile, the independent companies focus upon the upstream function, but not the downstream, in their business operations. The empirical comparison between the two groups of petroleum firms identifies that the integrated companies outperform the independent companies because a large supply chain incorporated into the former group provides them with both a scale merit in their operations and an opportunity to obtain consumer's opinions on their business operations. Thus, the large supply chain system, covering business functions for upstream and downstream, enhances corporate sustainability in the U.S. petroleum industry. It is easily envisioned that the empirical findings discussed in this study are useful in preparing business strategy and industrial policy for the petroleum industry of not only the United States but also other nations involved in oil and gas production.     

The role of corporate reputation and employees' values in the uptake of energy efficiency in office buildings

Although office market actors in the United Kingdom show a growing interest in energy efficiency, the pace of takeup of energy efficient office features is slow. Previous studies have highlighted the roles of limited direct financial costs and benefits (‘efficiency gaps’) and market barriers in limiting the rate of technology adoption. This study provides further evidence on the importance of these factors, but the primary contribution is focused on the role of corporate reputation and on the importance of individuals' values in shaping corporate behaviour. The paper presents a theoretical framework to explain environmental decision making in firms and we present qualitative evidence drawing from sixteen semi-structured individual and group interviews with office market stakeholders in London, Glasgow and Edinburgh. The research finds that companies, despite gradually becoming more energy conscious, still regard energy costs as a negligible part of their business costs. Nevertheless, an increasingly important driver is the reputational gain obtained by corporate businesses implementing sustainable practices. All the interviewees agreed that the pace of change in the office market is slow and that only further policy interventions will accelerate it.     

Robust incentives and the design of a climate change governance regime

In building a governance regime to address climate change, should we prioritize the development of global institutions or national ones? This paper focuses on two neglected characteristics to inform the governance problem: the incentives for investment in low-carbon energy technology and the influence of historical policy volatility. Examining a case study of an important low-carbon energy technology, wind power, this study finds: (1) policy volatility has been substantial, (2) policy changes were uncorrelated across jurisdictions, suggesting that (3) investors could have substantially reduced their exposure to the risk of policy volatility by operating globally. While it also has downsides, a poorly coordinated international policy regime has the advantage of reducing the risk associated with a global policy failure. Beyond this case study, the importance of this positive effect depends on: the probability of policy failures in each country, the correlations among them, and the probability of a global policy failure.     

Windstorm risk assessment for offshore wind farms in the North Sea

The North Sea is becoming increasingly attractive to wind energy developers and investors, with 38 wind farms belonging to five different countries and representing over€35 billion of assets. Concerns about offshore wind turbines being damaged by extreme windstorms pose a challenge to insurers, investors and regulators. Catastrophe modeling can adequately quantify the risk. In this study, a Monte Carlo simulation approach is used to assess the number of turbines that buckle using maximum wind speeds reaching each wind farm. Damage assessment is undertaken for each wind farm using a log‐logistic damage function and a left‐truncated Weibull distribution. The risk to offshore wind power in the North Sea is calculated using an exceedance probability (EP) curve for the portfolio of wind farms. The European Union Solvency II directive requires insurance companies to hold sufficient capital to guard against insolvency. The solvency capital requirement (SCR) is based on a value‐at‐risk measure calibrated to a 99.5% confidence level over a 1‐year time horizon. The SCR is estimated at €0.049 billion in the case of yawing turbines. Simulations are repeated for different climate change scenarios. If wind speeds grow by 5% and the frequency of storms increases by 40%, the SCR is seen to rise substantially to €0.264 billion. Relative to the total value of assets, the SCR is 0.14% compared with 0.08% for European property, confirming that these wind farm assets represent a relatively high risk. Furthermore, climate change could increase the relative SCR to levels as high as 0.75%.     

Multidimensional evaluation of global investments on the renewable energy with the integrated fuzzy decision‐making model under the hesitancy

This study aims to assess global investment alternatives with respect to renewable energy. Within this framework, five different renewable energy types (biomass, hydropower, geothermal, wind, and solar) are determined as investment alternatives. Moreover, eight different criteria are selected by considering the four different dimensions of balanced scorecard. Additionally, the fuzzy‐based decision making trial and the evaluation laboratory under the hesitancy (HF‐DEMATEL) model are taken into the account to weight these dimensions and criteria and the technique for order the preferences by the similarity to the ideal solution with the fuzzy hesitant methodology (HF‐TOPSIS) is considered to select the alternatives of renewable energy investments. The novelties of this study are to propose an integrated model and provide the balanced scorecard–based evaluations of global renewable energy investment alternatives. The findings show that learning and growth and customer are the most important dimensions for the investment on renewable energy. It is also identified that market potential, product customization, and technological development are the most significant criteria for this situation. On the other side, solar and wind energy are the most important renewable investment alternatives. These results explain that technological improvement should be maintained, and customer expectations should be met by the companies. Furthermore, solar power plant and wind power plant should be developed in the countries. For this purpose, governments should give necessary incentives to the investors, such as allocating appropriate lands. These actions can attract the attentions of the potential investors for these renewable energy alternatives. Owing to this issue, it can be possible to increase the capacity of electricity productions in the countries with a potential minimum cost.     

水电板块有望脱颖而出

电力是典型的非周期或者说是抗周期性行业,水电板块有着资产良好的盈利能力、未来经营现金流相对稳定,使得该板块具有避风港特征。2005年政策扶持及“煤电联动”的预期将助推水电板块成为主流资金资产配置的重要组成部分,事实上长江电力早就位列一线篮筹之列,更多的水电股将跻身二线篮筹。     

Guidelines for clockspeed acceleration in the US natural gas transmission industry

This study presents the clockspeed analysis of a peer group comprising six major integrated US energy companies with substantial US interstate natural gas pipeline business activities: El Paso, Williams, NiSource, Kinder Morgan, MidAmerican and CMS Energy. For this peer group, the three clockspeed accelerators have been benchmarked at both corporate level and gas transmission business level, using time-series analysis and cross-sectional analysis over a 6-year period (2002–2007). The results are visualized in so-called clockspeed radargraphs. Overall corporate clockspeed winners – over the performance period studied – are: Williams, El Paso and Kinder Morgan; MidAmerican is a close follower. Corporate clockspeed laggards are: CMS Energy and NiSource. The peer group ranking for the natural gas transmission business segment shows similar clockspeed winners, but with different ranking in the following order: Kinder Morgan, MidAmerican and El Paso; Williams is a close follower. Clockspeed laggards for the natural gas transmission segments coincide with the corporate clockspeed laggards of the peer group: CMS Energy and NiSource (over the performance period studied); laggards of the past may become clockspeed leaders of the future if adjustments are made. Practical recommendations are formulated for achieving competitive clockspeed optimization in the US gas transmission industry as a whole. Recommendations for clockspeed acceleration at individual companies are also given. Although the US natural gas market is subject to specific regulations and its own geographical dynamics, this study also provides hints for improving the competitive clockspeed performance of gas transmission companies elsewhere, in other world regions.     

Understanding business decision making on the environment

This paper considers the influence of a range of factors within and around the firm on business decision making relating to the environment. Within the firm, it emphasises the importance of governance structures, corporate cultures and organisational capacities. Around the firm, it stresses the importance of the incentives, imperatives and informational pressures that emerge from governments, markets and civil society. It is argued that change is most likely where the various external pressures resonate with each other, and where they impact upon firms with receptive corporate cultures and adequate organisational capacities. It is also argued that these preconditions for change are often absent, which makes change more difficult or more expensive. It is further argued that even when these preconditions are in place, they are likely to engender only to incremental change. As prolonged periods of incremental change must eventually encounter diminishing returns, the key challenge for those seeking to promote significant changes in business behaviour is to put in place the full range of conditions needed to allow companies to make them. This can mean focusing not only on the operational but also on the strategic activities of businesses, and not only on individual businesses but also on the broader systems and networks within which they operate.     

浅析我国光伏企业的可持续发展之路

阐述了光伏发电的基本原理以及优缺点,在此基础上对光伏发电的应用及其前景进行展望,分析并总结了中国太阳能光伏发电行业发展的制约因素,最后针对光伏发电企业可持续发展提出建议。     

Determinants of success for promoting solar energy in Rajasthan,India

Out of a total 1100 MW new project allocations, Rajasthan received the maximum share of 873 MW (i.e., 79.36% of all India allocations) through competitive bidding in the first phase of Jawaharlal Nehru National Solar Mission (JNNSM). Furthermore, 722 reputed companies have already registered their interest for setting up of solar power plants amounting to a total capacity of 16,900 MW in Rajasthan. This preference is often attributed to geographical and climatic advantage of Rajasthan. Yet it remains unclear why some other States with similar climatic and geographical factors are less favored by investors? Here we argue that the answer to this paradox lies in other determinants such as policy, infrastructure, facilitation and governance that make Rajasthan a lucrative investment opportunity. The fact that our argument is robust is also validated by other studies that indentify critical barriers which if removed may provide enabling environment to solar energy development in India. Accordingly, we present a practitioner perspective and review the initiatives responsible for accelerated development of solar energy in Rajasthan. We also envision the future course of actions for this promising solar hotspot in western India. Understanding early ground-level efforts for solar energy development in Thar desert of Rajasthan may prove valuable for other regions in India and elsewhere.     

Electric power grid interconnection in Northeast Asia

In spite of regional closeness, energy cooperation in Northeast Asia has remained unexplored. However, this situation appears to be changing. The government of South Korea seems to be very enthusiastic for power grid interconnection between the Russian Far East and South Korea to overcome difficulties in finding new sites for building power facilities to meet its need for increased electricity supplies. This paper analyzes the feasibility of this electric power grid interconnection route. The issues addressed include electricity market structures; the prospects for electric power industry restructuring in the Russian Federation and South Korea; the political issues related to North Korea; the challenges for the governments involved and the obstacles anticipated in moving this project forward; project financing and the roles and concerns from multilateral and regional banks; and institutional framework for energy cooperation. While there are many technical issues that need to be resolved, we think that the great challenge lies in the financing of this commercial project. Thus, the governments of the Russian Federation and South Korea involved in the project need to foster the development of their internal capital markets and to create confidence with international investors. To this end, on energy side, this involves defining a clear energy policy implemented by independent regulators, speeding up the already started but delayed reform process of restructuring electric power industry and markets, and establishing a fair and transparent dispute resolution mechanism in order to reduce non-commercial risks to a minimum. The paper argues that establishing a framework for energy cooperation in this region will contribute positively towards that end, although views differ regarding its specific form. Finally, given that North Korea has a crucial transit role to play and faces a very unstable political situation, it is concluded that moving the project forward needs to be contingent on a resolution of the North Korea's nuclear crisis.     

The effects of environmental sustainability and R&D on corporate risk-taking: International evidence

In this paper, we ask an important question: can firm-level environmentally sustainable practices and research and development (R&D) intensity individually and jointly affect corporate risk-taking? Using firm-level data from 41 countries spanning 2002–2013, we find environmentally sustainable practices and R&D intensity enhance the risk-taking of firms. Voluntary sustainable practices generate a positive and significant effect on corporate risk-taking. We also find that country-level determinants play a complementary role. Firms operating in countries with better intellectual property rights protection and overall infrastructure benefit more from environment-friendly practices and R&D intensity. Further, we find that ESI has a positive effect on risk taking in countries with higher CO₂ emissions per capita, energy usages per capita and more stringent environmental policies. These results are robust after correcting for potential endogeneity, alternative measures of R&D intensity or ESI score. Overall, our findings provide key insights on policy recommendations at the national and international levels.     

Actuarial pricing of energy efficiency projects: lessons foul and fair

Recent market convulsions in the energy industry have generated a plethora of post-mortem analyses on a wide range of issues, including accounting rules, corporate governance, commodity markets, and energy policy. While most of these analyses have focused on business practices related to wholesale energy trading, there has been limited analysis of retail energy services, particularly energy efficiency projects. We suggest that there were several business concepts and strategies in the energy efficiency arena whose inherent value may have been masked by the larger failure of companies such as Enron. In this paper, we describe one such concept, namely, actuarial pricing of energy efficiency projects, which leverages a portfolio-based approach to risk management. First, we discuss the business drivers, contrasting this approach with conventional industry practice. We then describe the implementation of this approach, including an actuarial database, pricing curves, and a pricing process compatible with commodity pricing. We conclude with a discussion of the prospects and barriers for the further development of transparent and quantifiable risk management products for energy efficiency, a prerequisite for developing energy efficiency as a tradeable commodity. We address these issues from an experiential standpoint, drawing mostly on our experience in developing and implementing such strategies at Enron.     

Play to your strengths in difficult times [electric utility strategy]

The electric utility landscape has changed dramatically in the little more than two years. There has been California's catastrophic experiment with retail deregulation and the fall of Enron and other high-profile companies, as well as the crisis in credibility throughout corporate America. What happened in California and what happened to Enron has changed the business parameters for all energy companies. The changes are numerous. Retail electricity deregulation has moved to the back burner and in some states has been reversed, energy trading has fallen off sharply, and there has been a decline in the merchant power plant business. Some of the developments over the past couple of years have reinforced our belief that this industry is different in important ways from others and that it has to be seen in that light. This article discusses the changing landscape facing electric utilities and Southern Company's strategy for maintaining success in this environment.     

Auction approaches of long-term contracts to ensure generation investment in electricity markets: Lessons from the Brazilian and Chilean experiences

The implementation of auctions of long-term electricity contracts is arising as an alternative to ensure generation investment and therefore achieve a reliable electricity supply. The aim is to reconcile generation adequacy with efficient energy purchase, correct risk allocation among investors and consumers, and the politico-economic environment of the country. In this paper, a generic proposal for a long-term electricity contracts approach is made, including practical design concepts for implementation. This proposal is empirically derived from the auctions implemented in Brazil and Chile during the last 6 years. The study is focused on practices and lessons which are especially useful for regulators and policy makers that want to facilitate the financing of new desirable power plants in risky environments and also efficiently allocate supply contracts among investors at competitive prices. Although this mechanism is generally seen as a significant improvement in market regulation, there are questions and concerns on auction performance that require careful design and which are identified in this paper. In addition, the experiences and proposal described can serve to derive further mechanisms in order to promote the entrance of particular generation technologies, e.g. renewables, in the developed world and therefore achieve a clean electricity supply.