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Special Issue "Energy Challenges in an Uncertain World" Editorial

Anna Creti, Duc Khuong Nguyen, and Lutz Kilian

Year: 2018
Volume: Volume 39
Number: Special Issue 2
DOI: 10.5547/01956574.39.SI2.acre
No Abstract



Stranded Asset Risk and Political Uncertainty: The Impact of the Coal Phase-Out on the German Coal Industry

Miriam Breitenstein, Carl-Philipp Anke, Duc Khuong Nguyen, and Thomas Walther

Year: 2022
Volume: Volume 43
Number: Number 5
DOI: 10.5547/01956574.43.5.mbre
View Abstract

Abstract:
We assess the value of stranded coal-fired power plants in Germany in the light of the critical decision to phase them out by 2038. In a Monte Carlo simulation, the scenarios under consideration (slow decommissioning at the end of the technical lifetime in 2061, the highly probable phase-out by 2038, and an accelerated phase-out by 2030) are additionally assigned distributions to display the uncertainty of future developments. The results show an overall stranded asset value of €2.6 billion given the phase-out by 2038 and an additional €11.6 billion if the phase-out is brought forward by 8 years. This study also describes the impacts of carbon pricing and the feed-in from renewable energy sources on the merit order and eventually the deterioration in economic conditions for hard coal and lignite power plants. Lastly, we discuss the immediate concerns for the share prices of the affected companies and help to close the research gap regarding stranded physical and financial assets.



News Media and Attention Spillover across Energy Markets: A Powerful Predictor of Crude Oil Futures Prices

Oguzhan Cepni, Duc Khuong Nguyen, and Ahmet Sensoy

Year: 2022
Volume: Volume 43
Number: Special Issue
DOI: 10.5547/01956574.43.SI1.ocep
View Abstract

Abstract:
We develop two news-based investor attention measures from the news trends function of the Bloomberg terminal and investigate their predictive power for returns on crude oil futures contracts with various maturities. Our main results after controlling for relevant macroeconomic variables show that the Oil-based Institutional Attention Index is useful in predicting oil futures returns, especially during price downturn periods, while the forecasting accuracy is further improved when the Commodity Market Institutional Attention Index is used. This forecasting accuracy decreases, however, with the maturity of oil futures contracts. Moreover, we find some evidence of Granger-causality and regime-dependent interactions between investor attention measures and oil futures returns. Finally, variable selection algorithms matter before making predictions since they create the best forecasting results in many cases considered. These findings are important for informed traders and policymakers to better understand the price dynamics of the oil markets.





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