Research Update

March 2014

The listing below illustrates the range of topics addressed in the new working papers and publications posted since the last Research Update.

Energy Efficiency Policies as Part of Carbon Reduction Efforts: Lessons from the EU for the U.S.

The United States and the European Union have taken different approaches toward energy policy as illustrated by their respective policies on carbon emissions reduction. A comparison of those policy approaches suggests that the interaction of policies must be well understood in order to achieve success in three key areas: energy efficiency, electricity production from renewable sources, and carbon market/tax.

Regulatory Functions Affecting Renewable Energy in Developing Countries

The role of energy sector regulators in facilitating renewable energy (RE) projects depends on the laws and policies established in the executive and legislative branches of government. This article shows how ten functions of energy sector regulators in developing (and developed) countries affect the pace and pattern of investments in renewable energy.

Energy Efficiency in Developing Countries: Roles for Sector Regulators

Sector regulators generally have significant roles in the implementation of Renewable Energy (RE) initiatives. They also have roles to play in promoting Energy Efficiency since EE can be expanded via utility actions (incentivized and monitored by the regulator) and actions by other agencies. The former include reduced line losses, improvements in load patterns and system reliability, decision-relevant customer billing information, energy audits, and smart grids. The adequacy and cost-effectiveness of utility programs clearly falls under regulatory oversight. Other agencies set appliance standards, provide government financial support, create tradable certificates, award tenders, and establish targeted government programs, like improving EE in schools and hospitals. The sector regulator must then factor in the interdependencies among EE programs when determining the cost-effectiveness of utility-based programs.

Motivating energy suppliers to promote energy conservation

This paper examines the design of regulatory policy to induce electric utilities to deliver the surplus-maximizing level of energy efficiency services, e∗. The rebound effect (whereby increased energy efficiency stimulates the demand for energy) typically renders revenue decoupling insufficient in this regard. The additional financial incentive required to induce e∗ is shown to vary with such factors as the prevailing price of energy, the magnitude of the rebound effect, the extent of observable energy efficiency investments, and the utility’s objective.

Trends in Alternative Fuel Cards, Solar Panels, and Internet Access and Use

The Bureau of Business and Economic Research (BEBR) surveys about 500 consumers each month to gauge their confidence about the economy and their personal economic well-being. As part of its consumer sentiment surveys, BEBR began asking questions in April 2012 on a quarterly basis about consumers’ access to the Internet at home and on a biannual basis about their ownership of alternative fuel cars and houses with solar panels. The questions were revised in July 2012 to: collapse alternative fuel questions, better capture whether houses with solar panels were purchased and the incentives governing the purchase, and to elicit responses about Internet service usage.

States' RPS Policies: Serving the Public Interest?

In the absence of a national renewable portfolio standard (RPS) in the United States, states have taken the lead in adopting RPS policies. States have recently begun to reassess those policies, spurred by a combination of lower natural gas prices; declining prices for certain renewable technologies; and political pressure. However, natural gas prices are projected to increase in both the short term and long term and the business case for new coal and nuclear plants is presently hard to justify. There also appears to be public support for renewable energy production. While RPS policies are suboptimal, they remain a viable tool for states to use in pursuing the goals of fuel diversity and carbon emission reduction.

Challenges in quantifying optimal co2 emissions policy: The case of electricity generation in Florida

Implementing public policy without understanding its economic impacts can be costly and unproductive. This problem is paramount when a price of carbon dioxide (CO2) emissions is considered as a vehicle for abatement. The United States Congressional Budget Office, Environmental Protection Agency, and Department of Energy’s Energy Information Administration have all released their estimates of the macro-economic impact of various proposals for environmental legislation. The focus of these studies is on the level of output variables such as the amount of CO2 emissions, the cost of emissions allowances, and the broad impact of increased electricity prices, rather than on the marginal effects of policy change. This paper utilizes a model that simulates the dispatch of electric generating units in the state of Florida under various prices for CO2 emissions, and analyzes the challenges that may arise in the determination of optimal emissions abatement policy. At relatively low CO2 prices emissions levels decrease as CO2 prices increase. However, once this initial reduction has been achieved, further increases in CO2 prices may do little to decrease emissions until a ‘critical point’ has been achieved and more coal generation is displaced by natural gas. This paper demonstrates how the incremental cost of abatement curves may intersect with a CO2 tax at many levels of abatement, allowing for different characterizations of the ‘optimum’. Therefore, agreement on the marginal costs and the marginal benefits of CO2 abatement can be seen as a necessary condition for the determination of an optimal level of abatement, but not a sufficient one.

Body of Knowledge on Infrastructure Regulation: The Challenge of Renewables

The Body of Knowledge on Infrastructure Regulation contains summaries of regulatory literature, tutorials, self-paced tests, and more than 500 downloadable references for regulatory reform and performance improvements in infrastructure industries. The online glossary has been translated from English into Chinese, French, Italian, Portuguese, and Spanish. The redesigned site also includes Frequently Asked Questions. This online resource was originally developed in 2006 and has benefitted from funding from The World Bank and the Public-Private Infrastructure Advisory Facility (PPIAF).

PURC has led the effort to update content for the new site, Body of Knowledge on Infrastructure Regulation. This site is a comprehensive online resource for utility and regulation professionals, policy makers, and academics focusing on regulatory reform and the promotion of strong performance in energy, telecommunications, transportation, and water sectors.

The resource has been used in in-house training programs for regulatory commissions and regulated companies. The most recent additions include new Frequently Asked Questions related to the regulation of state-owned utilities and how energy regulators can promote cost-effective renewable energy (RE) and energy efficiency (EE). The new material on RE and EE addresses eight questions, including:

  • What should be the involvement and mandate of the energy regulator in connection with promotion of Renewable Energy and what are the main challenges associated from a regulatory perspective?
  • What is the best choice of regulatory instruments/tools for Renewable Energy promotion based on efficiency and effectiveness of reaching policy targets (FiT versus Green Certificates versus Central Procurement and others)?
  • How have countries linked policy-making related to energy efficiency to regulatory functions?

The “answers” are not meant to be definitive, but to provide a foundation that would enable the user to ask better questions of consultants and to begin his (or her) own analysis of these issues.

Public-Private Partnerships for Wind Power Generation: The Portuguese Case

Today’s portfolio of energy production, based mostly on fossil fuels, and the increasing energy consumption go against the sustainable vision for the world’s development. Governments are shifting their energy policies towards renewable, non pollutant sources of energy, developing large investment plans to ensure an adequate response the energy consumption while keeping the environmental impact within reasonable boundaries. Like in many other infrastructure related sectors, new models for the provision of these facilities, and services, are being developed. Over the past 20 years, highways, hospitals, social housing, airports and dams have been developed in close collaboration with the private sector, not only in a contractor-supplier relation but also in deeper partnerships where the private sector assumes a substantial responsibility in managing and running the business. These models are known as Public-Private Partnerships (PPPs). This research will look at the Portuguese experience in the application of PPP arrangements in the energy sector, particularly as far as the wind power plants development is concerned. The evaluation procedures for selecting the private partner, the contract structure and the risk-sharing agreement are some of the issues deserving special attention.

Call for papers for the 2014 TPRC | 42nd Research Conference on Communication, Information and Internet Policy

TPRC is an annual conference on communication, information and Internet policy that convenes international and interdisciplinary researchers and policymakers from academia, industry, government, and nonprofit organizations. Its purpose is to present original research relevant to policy making, share information about areas where research is needed, and engage in discussion on current policy issues. The conference program consists of presentations selected from submitted paper abstracts, student papers, posters and proposals for panels, tutorials, and demonstrations. This year's conference will also host a Graduate Student Consortium.

TPRC is now soliciting abstracts of papers, proposals for panels, tutorials and demonstrations, and student papers for presentation at the 2014 conference, to be held September 12-14, 2014 at the George Mason University Law School, in Arlington, Virginia. These presentations should report current theoretical or empirical research relevant to communication and information policy.Contributions may be from any disciplinary perspective; the sole criterion is research quality. Topic areas in previous conferences have included competition, antitrust, and other market issues; broadband deployment and adoption; spectrum and wireless application policy; media, old and new; intellectual property, technology, and Internet law; privacy, security, identity and trust; governance and institutions; innovation and entrepreneurship; and distributional outcomes and social goals. Read the complete Call for Papers. Abstract deadline is March 31.

In anticipation of the Turkey Energy Summit, Dr. Mark Jamison and Dr. Ted Kury delivered a webinar “Evolution of the U.S. Natural Gas Market & Evolution of Regulation and Markets for Energy” on March 18th.

Explore PURC Research

Explore more PURC research by using our Research Papers Search.


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