The United States has highly competitive gas markets (spot and futures), showing prices in recent years that have definitively diverged from world oil prices. Those gas markets were not “built” in the manner of administered electricity markets. Rather, they were the result of a revolution in federal pipeline regulation designed purposely to free the gas…
Rethinking Gas Markets–and Capacity
The “U.S. Model” of natural gas markets is based on long-term, point-to-point commercial capacity rights (MDQXY) that reflect the physical capacity of the pipeline and are traded frequently among system users (shippers) in markets independent of the transmission system operator (TSO). When physical capacity is complex and scarce and the gas market is dynamic there…
Editorial
Book Reviews
Global Climate Games: How Pricing and a Green Fund Foster Cooperation
The most efficient global climate policy is to price carbon. The Kyoto-Copenhagen agenda was intended to do this with a system of international cap and trade. We view these negotiations as a game in which countries choose their quantity targets based on self interest. Like the analogous public-goods game, in which countries choose their abatement…
How a “Low Carbon” Innovation Can Fail–Tales from a “Lost Decade” for Carbon Capture, Transport, and Sequestration (CCTS)
This paper analyzes the discrepancy between the high hopes placed in Carbon Capture, Transport, and Storage (CCTS) and the meager results that have been observed in reality, and advances several explanations for what we call a “lost decade” for CCTS. We trace the origins of the high hopes placed in this technology by industry and…
The Future of Nuclear Power After Fukushima
This paper analyzes the impact of the Fukushima accident on the future of nuclear power around the world. We begin with a discussion of the “but for” baseline and the much discussed “nuclear renaissance.” Our pre-Fukushima benchmark for growth in nuclear generation in the U.S. and other developed countries is much more modest than many…
Support Schemes for Renewable Energy: An Economic Analysis
We consider leading approaches to the decarbonisation of electricity supply. Price supports through long term contracts, such as feed-in-tariffs have been very effective at eliciting rapid escalation of renewable supply, largely because risks have been transferred away from suppliers and tariffs have been generous. However, countries with the most ambitious programs of this type (Denmark,…
Can Bioenergy Assessments Deliver?
The role of biomass as a primary energy resource is highly debated. Next generation biofuels are suggested to be associated with low specific greenhouse gas emissions. But land consumption, demand for scarce water, competition with food production and harmful indirect land-use effects put a question mark over the beneficial effects of bioenergy deployment. In this…
Market and Policy Barriers to Deployment of Energy Storage
There has recently been resurgent interest in energy storage, due to a number of developments in the electricity industry. Despite this interest, very little storage, beyond some small demonstration projects, has been deployed recently. While technical issues, such as cost, device efficiency, and other technical characteristics are often listed as barriers to storage, there are…