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Antidumping and Feed-In Tariffs as Good Buddies? Modeling the EU-China Solar Panel Dispute

Patrice Bougette and Christophe Charlier

Year: 2018
Volume: Volume 39
Number: Number 6
DOI: 10.5547/01956574.39.6.pbou
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Abstract:
The paper analyzes the interactions between trade and renewable energy policies based on the EU-China solar panel dispute which is the most significant antidumping (AD) complaint in Europe. We build a price competition duopoly model with differentiated products and intra-industry trade in photovoltaic (PV) equipment. We show that an optimal antidumping duty always increases with the feed-in tariff (FIT) program set in the home country. An appropriate antidumping duty - nullifying the dumping margin - decreases with the FIT program. We show that optimal FIT increases with the AD duty. Therefore, trade and renewable energy optimal policies may complement one another. Lastly, we introduce R&D activities in the PV sector, and international spillovers. We show that R&D makes the optimal FIT lower and increases the dumping margin. These effects are reinforced by technological spillovers.



Evaluating an Interconnection Project: Do Strategic Interactions Matter?

Sébastien Debia, David Benatia, and Pierre-Olivier Pineau

Year: 2018
Volume: Volume 39
Number: Number 6
DOI: 10.5547/01956574.39.6.sdeb
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Abstract:
High-Voltage Direct Current (HVDC) merchant transmission lines allow trade across separate power markets and often in different countries. Flows on existing cross-border lines are often assessed as suboptimal, which may be due to the light regulation that often prevails in these cases. This paper studies the impact of market power on HVDC interconnections as a determinant of imperfect arbitrage. We assess the impact of Physical Transmission Rights (PTRs) allocation on the management of an HVDC interconnection between a thermal and a hydroelectricity market, assuming dynamic water management. We use a two-stage game formulated as an Equilibrium Problem with Equilibrium Constraints (EPEC) to model the strategic trade between the New York (US) and Quebec (Canada) systems. The numerical model is calibrated with public data. We find that although the interconnection can create wealth, a high concentration of PTRs can destroy value because of dumping strategies. The impact of trade on local price levels may be of concern and calls for the functional unbundling of traders and generators.





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