Distributed energy resources allow for new business models that have the potential to substantially change today's power system functioning paradigm. In particular, these changes pose challenges for distribution system operators (DSOs) and their regulation alike. This article sheds light on missing aspects in current regulation, recognizing DSOs as regulated monopolies, but also as key players along the supply chain. We provide insights on how regulation should be adjusted so that DSOs are incentivized to facilitate the market entry of welfare-enhancing technologies in a timely fashion, and to manage the distribution system efficiently in the presence of distributed energy resources.
Interest in Demand Response (DR) is increasing due to its potential to improve reliability and save costs for electricity systems. DR can provide a sustainable and cost-effective option for supply balancing, especially in a scenario with more volatile inflows from renewable energy sources. End-users can be incentivized to provide DR through time-based pricing in general and dynamic pricing in particular. This paper provides a theoretic framework and practice-oriented review of the status of DR in Europe, outlining the major challenges currently hampering further DR development. Important challenges involve the split-incentive issue for investments in enabling technologies, traditional market rules for flexibility that favor large generation units and the need for electricity market and network operation coordination.
This paper deals with site selection problems for wind power plants and aims to propose a structural procedure for determining the most feasible sites. The application area is Western Turkey. The methodology is mainly composed of two stages: the first stage is pre-elimination of infeasible sites, and the second stage is evaluation of the available ones. Geographic Information Systems (GIS) are used to generate layers of data and to apply the elimination criteria and constraints. The alternative land areas are handled in terms of identical-sized grids, which are large enough to install one wind turbine each. Multiple Criteria Decision Analysis (MCDA) is then used to rank and sort the grids via the identified evaluation criteria. The problem is evaluated in 13 fields, which are a collection of several grids in order to evaluate larger scale areas to construct wind farms rather than for individual turbines. The evaluations are made both at grid (micro) and field (macro) levels and both deterministic and uncertain data are used. The results reveal a high level of consensus on the most feasible sites between the different MCDA methods applied. The proposed methodology provides a structured decision aid, which can be applied to other energy site selection problems.
In the unbundled national electricity markets in Europe, the balancing market is the institutional arrangement that deals with the balancing of electricity demand and supply. This paper presents a framework for policy makers that identifies the relevant design variables and performance criteria that play a role in the design and analysis of European balancing markets. We outline the full extent of the design challenge through a discussion of trade-offs among performance criteria, uncertain effects of design variables, and the many inter-linkages between the balancing market and the electricity market at large. Policy makers can address the balancing market design challenge by adopting a structured approach in which design variables, performance criteria, market conditions, system developments, and resultant market incentives are explicitly considered.
Over the past twenty years there has been increasing interest in the productivity and efficiency of, and the optimal structures for, the water supply and wastewater industries. In part this interest has manifested itself in the increased use of numerous statistical techniques to determine the productivity and efficiency of the water sector in a variety of countries. The purpose of this paper is threefold. First it briefly reviews the various measures that have been used to gauge the levels of productivity and efficiency in the water sector, with particular reference to input and output data requirements of these measures. Second it summarises the key structural findings that have been determined from this research, particularly with respect to economies of scale and scope, public versus private ownership and the impact of regulation. Third, it considers potential areas for potential future research, such as the effect of environmental management activities (including water conservation) and regulation on productivity and efficiency, the role of wastewater as a potential source of potable or ‘fit-for-purpose’ water and the relationship between water supply and urban planning.
Megaprojects are historically associated with poor delivery, both in terms of schedule and cost performance. Empirical research is required to determine which characteristics of megaprojects affect schedule and cost performance. Capital-intensive power plants can be understood as megaprojects and time delays and cost escalation during the construction phase can undermine their overall economic viability. This paper presents a systematic, empirically based methodology that employs the Fisher Exact test to identify the characteristics of power plant megaprojects (PPMs) that correlate with schedule and cost performance. We present the results of applying this methodology to a dataset of 12 PPMs using nuclear, coal, and renewable resources as case studies. The results highlight the importance of modular technologies, project governance, and external stakeholder involvement. Key findings both support and contradict the literature. The paper provides two major original contributions. First, we present and apply a systematic, empirical and statistical approach to understanding PPMs planning and construction. Second, we show how this approach can be used to inform public policy and project management with regard to PPMs.
This paper examines linkages among transportation intensity, the extent of urbanization, CO 2 emissions, and economic growth. We use two measures of transportation intensity: (i) per-capita rates of utilization of air-passenger transport facilities and (ii) per-capita rates of utilization of air-freight transport facilities. By studying the G-20 countries over the period 1961-2012 and employing a panel vector auto-regressive model for detecting Granger causality, we find a network of causal connections among these four variables in the short run. We also find that economic growth tends to converge to its long-run equilibrium path in response to changes in the other variables. Our fundamental conclusion is that passenger carriage intensity should be improved in the developing countries within the G-20 for the purpose of propelling economic growth.
The increasing share of distributed energy resources in the distribution grid provides opportunities to use the resources for the overall benefit of both the Transmission System Operator (TSO) and the Distribution System Operator (DSO) to solve problems related to frequency control, congestion management, and voltage control. Consequently, coordination between system operators is needed to guarantee a safe, reliable, and cost-efficient use of flexibility-based services. This article presents five coordination schemes to enhance interaction between system operators. For each scheme, roles, responsibilities and market design are discussed. The advantages, disadvantages and feasibility of each coordination scheme are evaluated.
The strong political support for biogas production in Germany over the past decade has greatly affected agricultural production, farms and land markets. This paper analyzes the effects of Germany's biogas policies on agricultural development by using the agent-based simulation model AgriPoliS. Particular focus is placed on the effects of the previous German Renewable Energy Act (REA, German “EEG”) of 2012, as well as the latest amendments, which were added in 2014. Our results show that under the previous REA and its predecessors, biogas production provided an attractive investment opportunity, especially for large farms, which led to a boost in biogas production. However, this policy also caused distortions within the agricultural sector, including increasing land rental prices. These effects particularly threatened farms that were not able to invest in biogas, as well as smaller biogas farms. On average, biogas farms could not increase their profitability. The main reason for this effect can be seen in the fact that a significant share of the value added is transferred via increased rental prices to land owners. The amendment of the REA in 2014, which reduced support levels substantially, partly attenuates some of these effects, though the previous policy will cast a long shadow.
This paper updates the literature on water utility benchmarking studies developed worldwide, focusing on scale and scope economies. Using meta-regression analysis, the study investigates which variables from published studies influence these economies. Our analysis yields several conclusions. The results indicate that there is a higher probability of finding diseconomies of scale and scope in large utilities; however, only the results for scale economies are significant. Diseconomies of scale and scope are more likely to be found in publicly-owned utilities than when the ownership is private; as would be expected, multi-utilities are more likely to have scale and scope economies. ► This paper investigates variables that influence scale and scope economies in water utilities. ► A meta-regression analysis was applied to studies developed worldwide. ► We concluded that there is a higher probability of finding diseconomies in large utilities. ► Scale and scope diseconomies are more likely to be found in publicly-owned utilities. ► We also found that multi-utilities are more likely to have scale and scope economies.
Nowadays, the European electricity systems are evolving towards a generation mix that is more decentralised, less predictable and less flexible to operate. In this context, additional flexibility is expected to be provided by the demand side. Thus, how to engage consumers to participate in demand response is becoming a pressing issue. In this paper, we provide an analytical framework to assess consumers' potential and willingness to participate in active demand response from a contract perspective. On that basis, we present policy recommendations to empower and protect consumers in their shift to active demand response participants.
In this paper, we employ a public choice perspective to analyze the development of policies for renewable energy sources (RES) in the EU in general and in Germany more specifically. In doing so, we explain the main characteristics of current RES policies by reference to the self-interest driven motivations of voters, stakeholders and political actors. One important puzzle, which we address, is the following: How could effective RES-policies be introduced against the political opposition of fossil-fuel interest groups in the past? Via analyzing the German example in more detail, we show how over time a self-reinforcing interplay of ideological and financial RES support has emerged. Moreover, we argue that observed specific design choices for RES policies in Germany, such as largely riskless remuneration schemes and high degrees of technology differentiation, as well as decentralized decision-making across EU Member States, can be traced back to politicians' need to balance a variety of partly opposing interests. A major benefit of the presented analysis is that it provides a realistic assessment of the challenges for RES policy reform – any reform effort critically depends on its ability to balance stakeholder interests.
This paper examines linkages among transportation intensity, the extent of urbanization, CO emissions, and economic growth. We use two measures of transportation intensity: (i) per-capita rates of utilization of air-passenger transport facilities and (ii) per-capita rates of utilization of air-freight transport facilities. By studying the G-20 countries over the period 1961–2012 and employing a panel vector auto-regressive model for detecting Granger causality, we find a network of causal connections among these four variables in the short run. We also find that economic growth tends to converge to its long-run equilibrium path in response to changes in the other variables. Our fundamental conclusion is that passenger carriage intensity should be improved in the developing countries within the G-20 for the purpose of propelling economic growth.
Risk transfer in public private partnerships (PPPs) may not always be conducive to efficient management due to principal agent problems. This paper identifies three parameters: (i) competition, (ii) monitoring and (iii) incentives, for transferring risks in a principal agent relationship. These parameters are applied to three PPP wastewater projects. The findings illustrate that competition determines the private sectors’ ability to bear risks, monitoring reduces ex-post information asymmetry and incentive ensures that risks are efficiently managed. The lessons learnt from the case studies can provide guidance for governments in transferring risks efficiently in PPP wastewater treatment projects.
This paper considers the impact of tourism on airports efficiency. Using stochastic frontier analysis (SFA) methods, an input-oriented distance function was estimated for a sample of 35 Spanish airports over the 2009 to 2016 period. Air transport and tourism are highly connected. Results suggest that may achieve higher efficiency levels than non-touristic ones. We also demonstrate a relationship between airline business models for tourist arrivals and airport efficiency. Airports with higher shares of "low-cost carrier" passenger traffic appear to perform more efficiently. By comparison, airports with higher shares of “charter passenger” traffic appear to perform less efficiently.
Decentralized energy resources (DERs) may affect the revenues of distribution utilities, depending on their rate structure. Based on a typical household load profile, we model the impacts of rooftop photovoltaics (PV) and electric vehicles (EV) on revenues of electricity distribution utilities under alternative rate structures. Our case study finds that EVs and PVs decouple peak load and energy consumption, which is problematic with volumetric rates for distribution utilities. The optimization of EV charging load can create a new peak, rendering time-of-use (ToU) counterproductive. Our findings suggest that charges to recover capacity-related costs help shield distribution utilities from undesirable revenue impacts.