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Understanding the Determinants of Electricity Prices and the Impact of the German Nuclear Moratorium in 2011

Stefan Thoenes

Year: 2014
Volume: Volume 35
Number: Number 4
DOI: 10.5547/01956574.35.4.3
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This paper shows how the effect of fuel prices varies with the level of electricity demand. It analyzes the relationship between daily prices of electricity, natural gas and carbon emission allowances with a semiparametric varying smooth coefficient cointegration model. Different electricity generation technologies have distinct fuel price dependencies, which allows estimating the structure of the power plant portfolio by exploiting market prices. The semiparametric model indicates a technology switch from coal to gas at roughly 85% of maximum demand. This model is used to analyze the market impact of the nuclear moratorium by the German Government in March 2011. Futures prices of electricity, natural gas and emission allowances are used to show that the market efficiently accounts for the suspended capacity and correctly expects that several nuclear plants will not be switched on after the moratorium.

Heterogeneous Returns to Scale of Wind Farms in Northern Europe

Giacomo Benini, Maria Carvalho, Ludovic Gaudard, Patrick Jochem, and Kaveh Madani

Year: 2019
Volume: Volume 40
Number: The New Era of Energy Transition
DOI: 10.5547/01956574.40.SI1.gben
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The present paper tries to identify the optimal size of a wind farm using North European data. An empirical analysis of 61 sites constructed between 2004 and 2014 suggests that economies-of-scale are highly heterogeneous across on-shore and off-shore projects. A Varying Coefficient Model captures such diversity by making the impact of the farm site on the amount of its potential capacity a non-linear function of the number of installed turbines. The resulting scale elasticities suggest that small on-shore farms have a bigger per-turbines output than off-shore ones, while the opposite is true for big projects.

Effects of Ownership and Business Portfolio on Production in the Oil and Gas Industry

Binlei Gong

Year: 2020
Volume: Volume 41
Number: Number 1
DOI: 10.5547/01956574.41.1.bgon
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The Shale Revolution and the two oil crises have overwhelmingly reshaped the petroleum industry in the last decade. Heterogeneity across companies is also a big concern as many multi-product (oil and gas) and multi-segment (upstream and downstream) firms exist, both state-owned and privately-owned. Therefore, a varying coefficient model is introduced to capture the effects of time, ownership, and business portfolio on both productivity and input elasticities to closely observe the fundamental transition, which is further interpreted using decomposition equations. The shape of the production function is indeed firm- and time-variant, which confirms the transition of the industry and the necessity of using the varying coefficient model. The average productivity achieved tremendous growth after the 2007-2009 financial crisis but lost momentum following the 2014 price crash. Finally, privately-owned, gas production and downstream activities are more productive than state-owned, oil production and upstream activities, respectively. Some policy implications are also discussed.

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