Increasing climate-related hazards demand a more resilient system that can withstand, adapt, and quickly recover from such shocks. Simultaneously, the drive towards a cleaner energy system, a rapid rise in renewables, and increased sector integration have led to a less stable system that is more volatile than before and more vulnerable to shocks. This development calls for more and better energy-network system services. EU energy legislation addresses specific sides of resilience. Grid planning involves specific resilience assessment requirements for regulators as part of the network development plans. However, resilience must be better integrated and defined as a mandatory assessment requirement. Some national regulatory authorities have already incorporated resilience in their frameworks, but we argue that a targeted regulatory and legislative approach at the EU level is also needed. The benefits of resilience investments must be measured and monetised to be adequately incentivised and included in CBA analyses. In particular, due to the increased coupling between the gas and electricity sectors, new resilience metrics that reflect the growing interdependence and feedback between the two sectors are needed. We examine several approaches to measuring resilience and suggest an approach to monetisation.
Tag: Energy Policy
Does the Shale Gas Revolution Hinder Clean Energy Innovation?
We analyze the causal impact of the U.S. shale gas revolution on technological innovation in the electricity generation sector. Using a country-level data set of electricity patents from 1978-2018, we find that the U.S. shale gas revolution led to a 1.60 decrease in the ratio of green to fossil-fuel electricity patents and a 0.93 decrease…
The Impact of Renewable Energy Forecasts on Intraday Electricity Prices
In this paper we study the impact of errors in wind and solar power forecasts on intraday electricity prices. We develop a novel econometric model which is based on day-ahead wholesale auction curves data and errors in wind and solar power forecasts. The model shifts day-ahead supply curves to calculate intraday prices. We apply our…
Energy System Transition in the Nordic Market: Challenges for Transmission Regulation and Governance
The energy system in the Nordic countries faces changes driven by increasing integration with the rest of Europe and changes to the generation mix. These developments pose challenges with respect to future network development and operation. We focus on three major aspects: market integration; generation and network adequacy; the need for more flexibility and frequency…
The Importance of Penalties and Pre-qualifications: A Model-based Assessment of the UK Renewables Auction Scheme
This paper assesses the multi-technology auctions for Contracts for Difference (CfDs) in the UK, with a special focus on how pre-qualifications and penalties affect bidders’ behaviour, risk aversion and bidding strategies and thus the auction outcomes in terms of prices and project implementation probability. The auctions are modelled to closely represent the auction design foreseen…
Are Credit Rating Agencies Punishing Petrostates for Energy Transition Risks?
The energy transition is expected to leave fossil fuel producers with weakened economies and stranded assets, but the time horizon of these effects is uncertain. This article offers a window into these effects by studying the sovereign credit ratings of petrostates. Credit ratings are both forward-looking indicators of their economic outlook and determinants of petrostates’…
The Green Paradox of U.S. Biofuel Subsidies: Impact on Greenhouse Gas Emissions
This paper presents the first comprehensive estimates of the impact of U.S. biofuel subsidies on greenhouse gas emissions. Although U.S. support for biofuels is large and growing, the associated impact on greenhouse gas emissions remains unclear. The effect of biofuel subsidies on emissions is determined by the relative magnitudes of countervailing substitution and price effects….
Evaluating Renewable Portfolio Standards for In-State Renewable Deployment: Accounting for Policy Heterogeneity
Renewable portfolio standards (RPS) are the most common state-level policies for promoting renewable electricity in the United States. State RPS policies are heterogeneously designed, particularly with respect to their use of flexibility mechanisms that allow obligations to be met with renewable energy generated in other states. However, the renewable energy that is produced within an…
The Dynamics of Energy Poverty: Evidence from Spain
Reducing the proportion of households defined as energy poor is an increasingly important policy objective. This paper uses longitudinal data to examine the level and dynamics of energy poverty in Spain, comparing the results to the level and dynamics of income poverty. Two alternative measures of energy poverty are used in the analysis – one…
The Influence of Shale Gas on U.S. Energy and Environmental Policy
The emergence of U.S. shale gas resources to economic viability affects the nation’s energy outlook and the expected role of natural gas in climate policy. Even in the face of the current shale gas boom, however, questions are raised about both the economics of this industry and the wisdom of basing future environmental policy on…