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[en] Highlights: • A novel optimization model for CCHP microgrid system schedule under uncertainty. • Explicit cost-risk tradeoff curve provided to overcome the deficiencies of traditional ILP model. • Ambiguous risk attitude of decision maker considered and addressed by fuzzy set theory. - Abstract: In this paper, a fuzzy risk-explicit interval parameter programming (FREIPP) approach was provided for multiple energy supply and demand management in microgrid system under uncertainties. The FREIPP method integrates risk-explicit interval linear programming and fuzzy theory within a general framework. It can tackle fuzzy and interval uncertainties in terms of various cost coefficients, forecasted load demand, decision maker's risk attitude and other uncertainties in microgrid system management. Compared with traditional interval parameter programming, the proposed method has distinct advantages in minimizing the system cost and risk simultaneously and providing more risk explicit solutions with the regard of obscure risk preference of decision maker. The FREIPP approach was successfully applied in a microgrid system with combined cooling, heating and power (CCHP) generation for three types of decision maker (i.e. defensive, neutral and aggressive). The obtained results indicated that the proposed FREIPP approach could provide optimal operation strategies with explicit cost-risk tradeoff information for decision maker when facing multiple complex uncertainties. Furthermore, it could help decision maker with different risk tolerance select desired optimal risk-aversion strategies, which is more realistic in real-world decision making process.
[en] Highlights: • We examine the volatility correlations and spillover effects between WTI and oil & gas firms. • We employ a firm-level approach which is useful for portfolio investments and risk management. • Correlations are impacted by global economic events, as well as, firm-specific events. • WTI is a net receiver of spillover shocks to oil and gas firms' volatility. • Optimal portfolio weights strategy is more effective than the optimal hedge ratio strategy. - Abstract: This paper investigates the volatility spillovers and co-movements among oil prices and stock prices of major oil and gas corporations over the period between 18th June 2001 and 1st February 2016. To do so, we use the spillover index approach by Diebold and Yilmaz (2009, 2012, 2014, 2015) and the dynamic correlation coefficient model of Engle (2002) so as to identify the transmission mechanisms of volatility shocks and the contagion of volatility among oil prices and stock prices of oil and gas companies, respectively. Given that volatility transmission across oil and major oil and gas corporations is important for portfolio diversification and risk management, we also examine optimal weights and hedge ratios among the aforementioned series. Our results point to the existence of significant volatility spillover effects among oil and oil and gas companies' stock volatility. However, the spillover is usually unidirectional from oil and gas companies' stock volatility to oil volatility, with BP, CHEVRON, EXXON, SHELL and TOTAL being the major net transmitters of volatility to oil markets. Conditional correlations are positive and time-varying, with those between each of the aforementioned companies and oil being the highest. Finally, the diversification benefits and hedging effectiveness based on our results are discussed.
[en] Traditional analysis of distribution network tariff design assumes a lack of alternatives to grid connection for the fulfilment of consumers' electricity needs. This is radically changing with breakthroughs in two technologies: (1) Photovoltaics (PV) enable domestic and commercial consumers to self-produce energy; (2) Batteries allow consumers and self-producers to gain control over their grid energy and capacity parameters. Contributing to the state of the art, the grid cost recovery problem for the Distribution System Operator (DSO) is modelled as a non-cooperative game between consumers. In this game, the availability and costs of the two named technologies strategically interact with tariff structures. Four states of the world for user's access to technologies are distinguished and three tariff structures are evaluated. The assessed distribution network tariff structures are: energy volumetric charges with net-metering, energy volumetric charges for both injection and withdrawal, and capacity-based charges. Results show that in a state of the world with new technology choices for grid users both efficiency and equity issues can arise when distribution network charges are ill-designed.
[en] Highlights: • Energy-only markets have an inherently unstable equilibrium. • Rising levels of VRE is thought to make conditions harder. • Modelling demonstrates a stable long-run equilibrium if thermal plant exits perfectly. • But hedge markets in imperfectly interconnected regions enter an unstable zone. - Abstract: Energy-only markets have an inherently unstable equilibrium, even under ideal conditions, because participants are unable to optimise VoLL events. The addition of intermittent renewable generation is thought to make conditions harder. In this article, optimal VoLL events in an islanded NEM region is modelled by substituting high price caps for Boiteux capacity charges, then analysing the impact of adding progressively more Variable Renewable Energy (VRE) – up to 35% market share. Spot market conditions prove stable and tractable provided thermal plant exit and adjust perfectly. But VRE asset allocation is important; absent highly elastic demand or ultra-low cost storage, solar PV market share has economic limits because the technology rapidly cannibalises itself. Furthermore, as VRE rises in imperfectly interconnected regions, a tipping point appears to exist where hedge markets enter an unstable zone through shortages of ''asset-backed'' firm intra-regional swaps and caps. Government-initiated CfDs for VRE need to be designed carefully to ensure any instability is not exacerbated by extracting contracts from an already shortening hedge market.
[en] Highlights: • Adams and Parmenter's (2013) stylised model is modified to explain simulation results • ETS-linking, even with permit trading, may reduce aggregated welfare. • Pareto-improvement could be attainable in ETS-linking. • More generous caps shall be given to China's less developed regions. - Abstract: China is moving from regional Emissions Trading Schemes (ETSs) to a nation-wide ETS. Although a larger ETS will be more efficient, the literature warns that it could make net permit selling regions worse off. We use a CGE model to simulate the linking of two provincial ETSs, namely those of Hubei and Guangdong. Our simulations suggest a trade-off between efficiency and equity as the richer regions (typified by Guangdong) will benefit from linking but the poorer regions (typified by Hubei) may lose. This is because poorer provinces in China tend to be more emissions intensive and therefore likely to face a carbon price rise upon linking, the costs of which may be only partially offset by trading, if indeed trading is permitted. We show this, and explain why it is the case by improving on the stylized model suggested by Adams and Parmenter (2013). Following Atkinson (1970), we find that worsened equity from linking may dominate improved efficiency, thus reducing aggregated welfare. We advise more generous caps to be given to more emissions intensive and less developed regions. If so, as suggest our simulation results, a Pareto-improvement could be attainable.
[en] Highlights: • The car purchase decisions is modeled as a nested logit. • Corporate purchases react less to fuel price changes than private purchases. • Two reforms are simulated: an alignment of diesel and gasoline tax, and a carbon tax. • Both policies have small impact on fuel efficiency and CO2 intensity in the short-run. • Aligning diesel and gasoline tax shifts consumption away from diesel cars. - Abstract: This study evaluates the impact of fuel taxes on new car purchases, using exhaustive individual-level data of monthly new car registrations in France. We use information on the car holder to account for heterogeneous preferences across purchasers, and we identify demand parameters through the large oil price fluctuations of this period. We find that the short-term sensitivity of demand with respect to fuel prices is low, particularly for corporate purchases. Using our estimates to compute elasticities, we assess the impact of a policy equalizing diesel and gasoline taxes. Such a policy reduces the share of diesel-engines without substantially changing the average fuel consumption or CO2 intensity of new cars. Alternatively, we find that a (revenue-equivalent) carbon tax has only small effects on average fuel consumption and CO2 intensity of new cars.
[en] Highlights: • I propose a time series model that simultaneously captures long memory and Markov switching dynamics to analyze and forecast oil price return volatility. • The out-of-sample results at several time horizons show that the model produces superior forecasts over those obtained from the selected GARCH competitors. • Results are obtained using Patton's robust loss functions and the Hansen's superior predictive ability test. - Abstract: I propose a time series model that simultaneously captures long memory and Markov switching dynamics to analyze and forecast oil price return volatility. I compare the fit and forecasting performance of the model to that of a range of linear and nonlinear GARCH models widely adopted in the literature. Complexity-penalized likelihood criteria show that the Markov switching long memory model improves the description of the data. The out-of-sample results at several time horizons show that the model produces superior forecasts over those obtained from the selected GARCH competitors. Results are obtained using Patton's robust loss functions and the Hansen's superior predictive ability test. I conclude that the proposed model provides a useful alternative to the usually employed GARCH models.
[en] Highlights: • Consumer preferences for utilities' corporate governance are studied. • WTP for participation related attributes amounts to one quarter of total price. • Co-determination rights, transparency, and profit redistribution increase WTP. • Women have higher WTP of one Eurocent per kWh for participation related attributes. • Governmental labeling on utilities' governance could enhance consumer welfare. - Abstract: Numerous countries seek to decarbonize their economy. Previous research has shown that the active involvement of citizens raises the acceptance of change in the energy system. While most studies on citizen participation have focused on citizens as investors, in this paper, we take a consumer perspective. Based on a sample of more than 2000 German electricity consumers, we conduct a Discrete Choice Experiment to estimate willingness to pay for co-determination rights, transparent pricing policies, and an electricity utility's profit distribution. We find large additional willingness to pay for all of these attributes, which, in total, amount to more than a quarter of the overall electricity price per kilowatt hour. Women have a higher willingness to pay of up to one Eurocent per kilowatt hour. We discuss the implications of our findings for Germany's and the European Union's energy policy. Among other things, we conclude that governmental labeling initiatives should include participation-related information to enhance consumer welfare.
[en] Highlights: • Documents a patent burst in biofuels during the years 2000s; • Shows that this burst was caused by large variations in oil prices; • The elasticity of the number of biofuel patents with respect to oil prices equates 1.4 both at the country and at the applicant level; • No such relation is found for an alternative energy source or close technological fields; • Sectors exhibit different reactions: specialized entrants react less strongly to oil price variations than diversified incumbents. - Abstract: This paper documents an innovation burst in biofuels in the second half of the years 2000s, and empirically confronts it to the massive variations of oil prices between 1985 and 2009. Our results show that increases in oil prices greatly spurred innovation in biofuels. The elasticity of the number of patent families in biofuels with respect to oil prices is greater than 1, and holds both at the country and at the firm level. We find that the effect cannot be caused by the contagion of oil prices to cereal prices, an important input for biofuels. Similarly, we find that the effect is very specific: no such effect is found substituting oil prices with electricity prices, or substituting biofuel patents with biotechnology or environment-related patents. Delving into applicants' sectors suggests that specialized biofuel firms were less responsive to oil price variations than diversified firms.
[en] Highlights: • Examine the short and long-run causal link between growth, energy, and financial development. • Multi-step procedure has applicate: Co-integration, ARDL approach and VECM method. • The Granger causality results for individual countries give mixed results. • Design a comprehensive energy policy to minimize the consequences of massive energy on growth by adding financial development. - Abstract: This study aims at examining the short-run and long-run causal link between economic growth, energy consumption and financial development by using data set of 6 SMCs for the 1995–2015 periods. The basic testing procedure requires four steps: ADF and PP unit root tests, Bound tests for Co-integration, ARDL approach and VECM method. The results confirm cointegration between the variables. It means that the long-run relationship exists. The short-run causal relationships (unidirectional) exist at least once for each country (except Egypt). The Granger causality results for individual countries give mixed results. These results urge for the attention of the policy makers in SMCs to design a comprehensive energy conservation policy to minimize the consequences of massive energy consumption on economic growth by adding financial development.