Essays On Environmental Regulations In Electricity Markets

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Essays On Environmental Regulations In Electricity Markets

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Author : Yanming Sun
language : en
Publisher:
Release Date : 2013

Essays On Environmental Regulations In Electricity Markets written by Yanming Sun and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2013 with categories.

Reducing the Greenhouse Gas pollution and promoting energy efficiency among consumers' energy use have been major public policy issues recently. Currently, both the United States and the European Union have set up explicit percentage requirements that require energy generators or consumers to undertake a certain percentage of their energy production or consumption from renewable sources. To achieve their renewable targets, the Tradable Green Certificates (TGC) system has been introduced in their electricity markets. Moreover, in order to promote energy conservation and achieve energy efficiency targets, price policies and price changes derived from environmental regulations have played a more important role in reducing electricity consumption. My research studies problems associated with these policy implementations. In Chapter 1, I analyze a competitive electricity market with two countries operated under a common TGC system. By using geometric illustrations, I compare the two countries' welfare when the renewable quota is chosen optimally under the common certificate market with three different situations. The policy recommendation is that when the value of damage parameter is sufficiently small, full integration with a TGC market is welfare superior to full integration of an all fossil-fuel based market with an optimal emissions standard. In Chapter 2, by analyzing a stylized theoretical model and numerical examples, I investigate the performance of the optimal renewables policy under full separation and full integration scenarios for two countries' electricity markets operated under TGC systems. In my third chapter, I look at residential electricity consumption responsiveness to increases of electricity price in the U.S. and the different effect of a price increase on electricity use for states of different income levels. My analysis reveals that raising the energy price in the short run will not give consumers much incentive to adjust their appliances and make energy conservation investments to reduce electricity use, while in the long run, consumers are more likely to lower their electricity consumption, facing the higher electricity price induced from regulation policies. In addition, for states of higher per capita GDP, raising the electricity price may be more effective to ensure a cut in electricity consumption.

Essays On Environmental Policy In Energy Markets

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Author : Judson Paul Boomhower
language : en
Publisher:
Release Date : 2015

Essays On Environmental Policy In Energy Markets written by Judson Paul Boomhower and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2015 with categories.

Producing and consuming energy involves costly environmental externalities, which are addressed through a wide range of public policy interventions. This dissertation examines three economic questions that are important to environmental regulation in energy. The first chapter measures the effect of bankruptcy protection on industry structure and environmental outcomes in oil and gas extraction. The second chapter measures additionality in an appliance replacement rebate program. Finally, the third chapter focuses on the environmental impacts of subsidizing electricity production from forest-derived biomass fuels. The first chapter measures the incentive effect of limited liability. When liability is limited by bankruptcy, theory says that firms will take excessive environmental and public health risks. In the long run, this ``judgment-proof problem'' may increase the share of small producers, even when there are economies of scale. I use quasi-experimental variation in liability exposure to measure the effects of bankruptcy protection on industry structure and environmental outcomes in oil and gas extraction. Using firm-level data on the universe of Texas oil and gas producers, I examine the introduction of an insurance mandate that reduced firms' ability to avoid liability through bankruptcy. The policy was introduced via a quasi-randomized rollout, which allows me to cleanly identify its effects on industry structure. The insurance requirement pushed about 6% of producers out of the market immediately. The exiting firms were primarily small and were more likely to have poor environmental records. Among firms that remained in business, the bond requirement reduced oil production among the smallest 80% of firms by about 4% on average, which is consistent with increased internalization of environmental costs. Production by the largest 20% of firms, which account for the majority of total production, was unaffected. Finally, environmental outcomes, including those related to groundwater contamination, also improved sharply. These results suggest that incomplete internalization of environmental and safety costs due to bankruptcy protection is an important determinant of industry structure and safety effort in hazardous industries, with significant welfare consequences. The second chapter focuses on the importance of a regulator's inability to distinguish between households responding to a subsidy, and households doing what they would also have done in the absence of policy. Economists have long argued that many recipients of energy-efficiency subsidies may be ``non-additional, '' getting paid to do what they would have done anyway. Demonstrating this empirically has been difficult, however, because of endogeneity concerns and other challenges. In this paper we use a regression discontinuity analysis to examine participation in a large-scale residential energy-efficiency program. Comparing behavior just on either side of several eligibility thresholds, we find that program participation increases with larger subsidy amounts, but that most households would have participated even with much lower subsidy amounts. The large fraction of inframarginal participants means that the larger subsidy amounts are almost certainly not cost-effective. Moreover, the results imply that about half of all participants would have adopted the energy-efficient technology even with no subsidy whatsoever. Finally, the third chapter addresses consequences of renewable energy subsidies in other markets. Electricity generated from logging residues provides a large and growing share of US renewable electricity generation. Much of the low-value wood used by biomass power plants might otherwise be left in the field. This increased harvest can negatively affect forest health. I investigate the supply of woody biomass fuel in Maine using a 15-year panel of prices and quantities for whole tree wood chips. I find that doubling the price of woody biomass increases harvest by about 64%. I also find that coal prices are a major determinant of woody biomass harvest. This suggests that environmental policies that raise the price of coal will affect forest health.

Essays On Environmental Regulation

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Author : Alessio D'Amato
language : en
Publisher:
Release Date : 2003

Essays On Environmental Regulation written by Alessio D'Amato and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2003 with categories.

The Regulation Of Power Exchanges In Europe

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Author : Martha M. Roggenkamp
language : en
Publisher: Intersentia nv
Release Date : 2005

The Regulation Of Power Exchanges In Europe written by Martha M. Roggenkamp and has been published by Intersentia nv this book supported file pdf, txt, epub, kindle and other format this book has been release on 2005 with Electric power distribution categories.

The liberalisation of the electricity sector has changed the way in which electricity is traded. De facto or legal vertical monopolies are gradually abandoned and new participants have entered the market. At the wholesale level, one of the important developments is the establishment of organised electricity markets, i.e. electricity power exchanges. This book analyses the role and evaluates the impact of these new organised markets, which until now received little attention. The introduction provides an overview of the developments on EC level as this creates the legal environment within which power exchanges operate. The implementation of the EC Electricity Directive has inter alia resulted in a commodization of electricity trading. Thereupon the development of power pools and electricity exchanges is discussed as well as the products which can be traded. Subsequently, the development of the most important national and/or regional exchanges in Europe will be examined. National experts will analyse the role of power exchanges in the Nordic countries, the United Kingdom, the Netherlands, Germany, France, Austria, Spain and Italy. The authors analyse the most important developments in their jurisdictions according to a fixed outline (e.g. implementation of the EC Electricity Directive, market structure, emergence and functioning of the organised market, products traded and the impact of cross-border trade) which allows for a comparative analysis and facilitates understanding. Finally, some conclusions with regard to the establishment of a single electricity market will be presented as well as some future developments.

Hard No Subscript X

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Author : Kevin Nakolan
language : en
Publisher:
Release Date : 2020

Hard No Subscript X written by Kevin Nakolan and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2020 with categories.

This dissertation focuses on understanding the private and social impacts of environmental policies amid the diverse landscape of the U.S. electricity sector. Many of the environmental policies we employ today are grounded in economic theory. In theory, these programs are efficient, allowing us to achieve a desired environmental outcome at the lowest possible cost to society. Unfortunately, however, it is exceedingly rare for markets to conform to the ideal standards by which these theories are based. The U.S. electricity sector is a prime example of this. Our national electricity markets are rife with what we could consider to be market imperfections. These imperfections often influence the performance of our environmental policies, leading to unintended and potentially detrimental environmental and societal outcomes. This dissertation consists of three essays that focus on various environmental policies in place within the U.S. electricity sector, and how imperfections in the electricity market shape the performance of said policies. Chapter 2 focuses on a cap and trade program for nitrogen oxide emissions in the eastern United States known as the NO[subscript x] Budget Trading Program (NBP). While the NBP undoubtedly led to significant reductions in nitrogen oxide emissions, current estimates of the program's performance may be overstated, as they fail to account for exogenous trends in emissions rates. Additionally, the means by which these emissions reductions were achieved is unclear. In this chapter, I use daily emissions and generation data for fossil fuel units in the NBP region to re-evaluate the efficacy of the program, and to identify how this abatement was achieved. I find the NBP led to a 50% drop in emissions, relative to a counterfactual estimate, with over 70% of these reductions achieved through falling emissions intensity at existing fossil fuel generators. Chapter 3 also focuses on the NBP, building upon the results from Chapter 2. Declining emissions rates in the NBP can be largely attributed to operation of emissions control technology. This chapter analyzes whether or not electricity generators are operating this technology efficiently with regard to the price incentives created by the cap and trade program (i.e. pollution permits, or lack thereof). Consistent with long-standing IO literature, I find that regulations on retail electricity rates fail to incentivize cost-minimizing behavior from electricity generators, leading generators to overuse expensive technology when complying with program. I show that overuse of this technology is often not beneficial, with the private cost of operating the technology often outweighing its environmental benefits, and may be creating even more detrimental effects under current cap and trade programs. Chapter 4 investigates the impact of growing solar generating capacity on air pollution outcomes in California. California has experienced an explosive growth in solar generating capacity over the last decade, and is anticipated to grow even further in coming years. Recent literature has shown that this growth in solar generating capacity has led to an increase in generation from relatively dirty fossil fuel generators during the early morning and later afternoon, when demand for electricity is high and solar generating capabilities are low. This chapter considers the local air pollution damages associated with this increase in fossil fuel generation and, more importantly, whether or not these damages are disproportionately affecting more susceptible parts of the state.

Essays On Regulations In The Electricity Industry

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Author : Yaran Jin
language : en
Publisher:
Release Date : 2017

Essays On Regulations In The Electricity Industry written by Yaran Jin and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2017 with categories.

In this dissertation, I study the welfare consequences of environmental and price regulations in the electricity industry. I address two important questions. One is that what are the welfare consequences of allowing firms to self-select between different types of environmental regulations. Another is how does the choice of transmission congestion pricing structure affect the emission externalities and fuel efficiency in the wholesale markets. I answer these questions by exploring several policy experiments in the state of Texas in the United States. The first chapter is a general introduction to the Texas electricity industry and the conceptual framework of analysis in this dissertation. It consists of the institutional details of the industry, including market organizations, transmission congestion pricing structures, and emission regulations. Based on the institutional details, I discuss the theoretical implications and propose the empirical hypothesis for above research questions. In the second chapter, I evaluate the welfare consequences of allowing firms to self-select between cap-and-trade regulation and intensity standards using the data from a unique voluntary NO [subscript x] emission cap-and-trade program in Texas from 2001 to 2005. The welfare evaluation focuses on the effects of such mixed policy instruments on emissions, industry profits, and market exit. I construct and estimate a structural model of power generating units equilibrium choices of policy instrument, emission abatement, and production to recover their abatement costs. With the estimated parameters, I simulate the equilibrium outcomes under a counterfactual mandatory cap-and-trade regulation. Results reveal that the mixed policy framework mainly benefits small and high-cost generating units. However, the aggregate emissions are lower and the aggregate profits are higher under the mandatory cap-and-trade regulation. I also document that the mixed policy instruments lead to a higher exit rate of older generating units. In the year 2010, the Electric Reliability Council of Texas (ERCOT) changed from a zonal market structure to a nodal market structure to incorporate the cost of transmission congestion into the wholesale price. The third chapter compares the emission intensities and fuel efficiency of power generating units in the ERCOT before and after this regulatory change, to investigate its efficiency and environmental impacts in the congested areas. I find that the new nodal market structure has heterogeneous impacts on areas with different causes of transmission congestion. For counties located along the path to transferring wind generation from west Texas to east Texas, the nodal pricing leads to increases in emissions from fossil-fired power plants, although the total increase in emission cost is not economically significant. Contrarily, the nodal pricing increases the fuel efficiency by 2-9.6% for power plants located around congested areas with excess load, and the estimated fuel cost saving is around $154.8m. The results provide important policy implications for future transmission network planning.

Essays In Energy And Environmental Markets

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Author : Mar Reguant-Rido
language : en
Publisher:
Release Date : 2011

Essays In Energy And Environmental Markets written by Mar Reguant-Rido and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2011 with categories.

In this thesis, I explore issues related to energy and environmental markets. In the first chapter, I examine the benefits of complementary bidding mechanisms used in electricity auctions. I develop a model of complex bidding and estimate its structural parameters in the context of the Spanish electricity market. I then perform a counterfactual analysis in which the original mechanism is compared to one in which complex bids are not allowed. I find that, while firms do exercise market power through complex bids, the positive coordination benefits of complex bidding dominate. In the second chapter, I explore the impacts of cap-and-trade in the Spanish electricity market, quantifying the rate at which firms internalized the costs of the emissions as well as the rate at which they passed it through. I find evidence that supports a full internalization rate at the firm-level, which results in a partial pass-through due to both demand and supply factors. Finally, in chapter 3, in joint work with Meredith Fowlie and Stephen Ryan, we explore the long run dynamic implications of subjecting an imperfectly competitive industry to market-based pollution regulation. Using two decades of panel data on the US Portland cement industry, we estimate a fully dynamic model of firms' strategic entry, exit, production, and investment decisions. We then use the model to simulate counterfactual outcomes under three general classes of allocation regimes: auctioning, grandfathering, and contingent updating. We find that the imposition of a carbon trading program would lead to large social losses at low to medium carbon prices.

Sustainable Energy And The States

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Author : Dianne Rahm
language : en
Publisher: McFarland
Release Date : 2014-11-18

Sustainable Energy And The States written by Dianne Rahm and has been published by McFarland this book supported file pdf, txt, epub, kindle and other format this book has been release on 2014-11-18 with Political Science categories.

With America’s dependence on fossil fuels painfully apparent due to world events and the resultant sharply rising gas prices, the search for renewable energy sources has never been more important. Still, the quest for sustainable energy is far from new. Since passage of the National Energy Act of 1978, states and the federal government have encouraged technological advances designed to make the United States self-sufficient when it comes to energy production. Government incentives and global-minded policymakers encourage development of alternative energy sources. While addressing the national issues of global climate change and energy security, the idea of sustainable energy must also find a way to appeal to an increasingly competitive market. Through nine case studies, this volume explores the roles which politics, market forces and leadership play as barriers or facilitators in the development of sustainable energy sources. Beginning with an overview of energy-related programs and legislation including the National Energy Act of 1978 and the Energy Policy acts of 1992 and 2005, the book discusses the various financial programs and policy mechanisms used by the states. Each of the nine essays examines sustainable energy development within a particular state or region. The importance of the political climate, the impact of free markets and the value of effective leadership with regard to this particular technological development remains a common thread. Topics such as the perceived effectiveness of state and federal governmental efforts and prevalent attitudes regarding renewable energy are also discussed. Each essay includes an in-depth bibliography with many website resources to encourage further research. Statistical tables are also provided. Instructors considering this book for use in a course may request an examination copy here.

Essays On Regulatory Impact In Electricity And Internet Markets

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Author : Thomas Edward Roderick
language : en
Publisher:
Release Date : 2014

Essays On Regulatory Impact In Electricity And Internet Markets written by Thomas Edward Roderick and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2014 with categories.

This dissertation details regulation's impact in networked markets, notably in deregulated electricity and internet service markets. These markets represent basic infrastructure in the modern economy; their innate networked structures make for rich fields of economic research on regulatory impact. The first chapter models deregulated electricity industries with a focus on the Texas market. Optimal economic benchmarks are considered for markets with regulated delivery and interrelated network costs. Using a model of regulator, consumer, and firm interaction, I determine the efficiency of the current rate formalization compared to Ramsey-Boiteux prices and two-part tariffs. I find within Texas's market increases to generator surplus up to 55% of subsidies could be achieved under Ramsey-Boiteux pricing or two-part tariffs, respectively. The second chapter presents a framework to analyze dynamic processes and long-run outcomes in two-sided markets, specifically dynamic platform and firm investment incentives within the internet-service platform/content provision market. I use the Ericson-Pakes framework applied within a platform that chooses fees on either side of its two-sided market. This chapter determines the impact of network neutrality on platform investment incentives, specifically whether to improve the platform. I use a parameterized calibration from engineering reports and current ISP literature to determine welfare outcomes and industry behavior under network neutral and non-neutral regimes. My final chapter explores retail firm failure within the deregulated Texas retail electricity market. This chapter investigates determinants of retail electric firm failures using duration analysis frameworks. In particular, this chapter investigates the impact of these determinants on firms with extant experience versus unsophisticated entrants. Understanding these determinants is an important component in evaluating whether deregulation achieves the impetus of competitive electricity market restructuring. Knowing which economic events decrease a market's competitiveness helps regulators to effectively evaluate policy implementations. I find that experience does benefit a firm's duration, but generally that benefit assists firm duration in an adverse macroeconomic environment rather than in response to adverse market conditions such as higher wholesale prices or increased transmission congestion. Additionally, I find evidence that within the Texas market entering earlier results in a longer likelihood of duration.

Energy In A Competitive Market

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Author : Colin Robinson
language : en
Publisher: University of Pennsylvania Press
Release Date : 2003

Energy In A Competitive Market written by Colin Robinson and has been published by University of Pennsylvania Press this book supported file pdf, txt, epub, kindle and other format this book has been release on 2003 with Competition categories.

Covering a wide and fascinating selection of topics incorporating the whole spectrum of energy economics, this book examines the belief that markets are the key to the effective allocation of resources, a notion which arguably applies as much to energy as it does to any other commodity. In particular it focuses on several pertinent issues including: competition and regulation in gas and electricity; comparative efficiency analysis in electricity regulation; UK coal in competitive markets; vertical integration in the oil industry; cluster developments in the UK continental shelf; modelling underlying energy demand trends; and emissions targets, environmental Kuznets curves and incentive mechanisms.