Questions tagged [energy-economics]

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How can high automation dependence and abundance in energy affect salaries?

Let's assume that we could find a very cheap source of energy that the cost of energy drops to say 1% of its current value. And let's also assume that automation and robots advanced to a level at ...
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Which algorithm is used to solve for an equilibrium in Nordhaus's RICE?

Nordhaus-Yang's paper on the RICE model is available here; see pg 24 for its defining equations. https://www3.nd.edu/~nmark/Climate/Nordhaus_Yang_AER.pdf In S4 on pg 7, they explain that the solution ...
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Why did investments in the production of solar cells not succeed outside China?

Most solar panels are produced in China, followed by neighbouring countries. https://www.statista.com/statistics/668749/regional-distribution-of-solar-pv-module-manufacturing/ Why is there no ...
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4 votes
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Adding an energy sector to Nordhaus's RICE model

This is a follow-up question: Modelling effect of renewable energy investment on GDP (via integrated assessment models) I'm interested in adding an energy sector to Nordhaus's RICE model. Has there ...
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Is there any mechanism to prevent the EU's new "temporary solidarity contribution" causing higher electricity bills?

The question Is there any mechanism to prevent the EU's new "temporary solidarity contribution" from being passed on to electricity customers / causing higher electricity bills ? The "...
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Modelling effect of renewable energy investment on GDP (via integrated assessment models)

I'm interested in modelling the effects of renewable energy investments and fossil fuel plant closures on the GDP using an energy-economy model of America's economy (eg. Nordhaus's RICE). Any ...
3 votes
0 answers
56 views

Cost of UK Wind Power

I am looking for reliable information on the cost of wind power. Is there any source which, ideally: Relates to wind power in the UK. Is recent – say within the last 5 years. Is published in a peer-...
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New gas link from Spain to Germany - Could it result in higher gas bills for Spaniards?

The Question There seem to be plans now to connect the gas from Spain to Germany, Could it result in higher gas bills for Spaniards ? I wonder if it will also involve increasing the gas pressure ( or ...
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25 votes
5 answers
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Why is the spot price of electricity determined by the highest price that gets offered? Can't they scale it according to the actually offered prices?

most energy markets work using "spot markets", where everyone puts in an offer for how much electricity they can provide and at what price, and then everyone gets paid the highest price ...
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1 answer
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Why we’d need carbon tax when we have nuclear plants?

Why would we ever need a carbon tax to reduce our emissions ? Isn’t it simpler and less painful for a country to have its State invest massively in nuclear plants or renewable energy to produce non ...
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Could a mandatory intermediary for EU energy imports help in managing price spikes?

Due to the ongoing Russia-Ukraine war, there have been significant increases in the price of energy in Europe, not only for natural gas, but also for electricity and oil. The problem seems to be that ...
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1 answer
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Does countries building gas plants result in rising gas prices?

Looking at the following chart we can see that while volatile, the gas price is reaching new record heights. Now I want to refer to some articles: Germany has to decide on gas-to-power plants quickly ...
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1 answer
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How do you convert or move from a linear cost function to a quadratic cost function?

I am reading a book on electricity cost modelling. I understand equation 2.7 below, which indicates that the total cost for an ith plant is a function of fixed cost(FC), fuel cost(FL), plant ...
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2 votes
1 answer
292 views

Uniform price vs. pay-as-bid auctions in energy markets

These two types of auctions are most commonly used in the energy trading markets. What would be advantages and disadvantages of each? And in the end, can we expect them to deliver similar outcome? One,...
2 votes
2 answers
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If renewable energy is now cheaper than non-renewable energy, why are we still worried about the climate?

From a recent Our World In Data post, For the world to transition to low-carbon electricity, energy from these sources needs to be cheaper than electricity from fossil fuels. Fossil fuels dominate ...
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1 answer
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Why offer curves of a power plant are stepwise increasing?

I was wondering why the supply curve of a power plant in the auction for the Day-Ahead Market is stepwise increasing and not a continuous function with first and second derivative strictly positive. I ...
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how to adjust price data due to clock changes?

I'm trying to analyze the hourly price variation of the electricity market. However, because of clock changes, due to daylight saving time, we have a missing hour in March and an additional hour in ...
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Necessary Goods, Price Elasticity, Long-Term Calculations

My question is a conceptual one, though it arose from a concrete calculation that I'm working on. I'm looking at the economic viability of thermal retrofits, and this author suggests including the ...
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3 votes
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Calculating Social Welfare from an Energy Subsidy

In Allcott and Greenstone's paper, "Is there an energy efficiency gap?", one finds the following figure I quote now from p. 13: "When there are investment inefficiencies, the original marginal ...
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2 answers
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Benchmarking an Energy Investment

I am currently working on a calculation to see whether it is economically feasible for a household to invest in an energy retrofit. I obtain a total profit of around $13\%$ over the lifetime of the ...
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4 votes
3 answers
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Are businesses and individuals buying clean / green / renewable energy contribute to slowing down the climate change?

I'm not sure if an individual choosing a "green energy supplier" is making any difference. My (potentially naive, uneducated) logic is as follows: ...
2 votes
1 answer
84 views

Uniform price vs discriminatory price double auction

Uniform price and discriminatory price double auctions are the most commonly used auction mechanisms in the trading markets especially in peer-to-peer energy trading markets. However, I could not find ...
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1 answer
48 views

Costs of transportation

I assume that it makes sense to ask for the energy costs of transportation of different goods per weight and volumetric mass density, depending on the means of transportation (truck, train, ship, etc.)...
3 votes
0 answers
71 views

Can technical change have a negative growth rate?

Using the following nested CES function I have backed out augmentation indices $A_L$ and $A_E$. Where $A_L$ is a labour-augmenting technical change index and $A_E$ is an energy-augmenting technical ...
5 votes
2 answers
270 views

Was the 2008 financial crisis caused more by the US subprime mortgage lending or more by an international energy and oil pricing crisis?

I recently read The Big Short by Michael Lewis in which the depiction of the role of subprime mortgage lending in the US and then run away speculation on CDOs are shown to be the central and primary ...
1 vote
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Market modelling with prosumers

I am working on energy integration modelling in a system with prosumers. I was wondering if there is any well-known theory or model in the economics literature for markets (specially multi-commodity ...
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1 answer
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Energy Costs by Source over Time

I'm looking for a comparison I can make between "traditional" energy sources and solar energy. Ideally, I'd like to show how much solar energy has yet to come down in price before it is cheaper than,...
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1 vote
1 answer
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Electric Vehicle effects on family and macro-economics?

What happens economically when cars last 1000,000 miles on cheap local energy? EV's can save an average family 2000 dollars a year on energy costs, and 2000 per year on automotive investment. That'...
4 votes
2 answers
244 views

If 1% of the solar energy of the Sahara can power the entire world, why isn't it happening?

There is an article on Forbes where Mehran Moalem, UC Berkeley professor, argues: 1.2% of the Sahara desert is sufficient to cover all of the energy needs of the world in solar energy. [...] The ...
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1 answer
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What is the best example social norm effect economy?

Here is my example. I read the paper called "Social norms and Energy Conservation" (2010) by Hunt Allcott, about the energy conservation of households by providing them with the amount of energy ...
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3 votes
2 answers
743 views

How can energy consumption be an indicator of per capita availability of capital?

"An important indicator of low capital per head available in developing countries is the consumption of energy". I could not decipher the concept.
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1 answer
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Levelized cost of electricity, to calculate the absolute costs?

I'm doing my master thesis about the renewable energies. So my goal is to calculate how much it will cost to switch our fuel based energy generation to renewable energy generation. So my first thought ...
26 votes
4 answers
4k views

How can power/electricity prices be negative?

Bloomberg shows this chart: I understand the above chart to mean that consumers were actually paid to use electricity. (Please correct me if I'm mistaken.) I was wondering how this is possible? How ...
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2 votes
1 answer
33 views

Energy saving technology and energy service price

I want to assess the effects of energy saving technologies on output growth using time series data. My work would benefit from time series data on patents for energy saving innovations, but this is ...
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1 vote
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Technology, Prices, and the Derived Demand for Energy

I was reading the paper by Berndt and Wood (1975), "Technology, Prices, and the Derived Demand for Energy". It was an interesting paper to read but there has not been anything done on this in nearly ...
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1 answer
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Locational Marginal Pricing when different prices and when the same?

I am kinda confused about this YouTube video. So the LMP with no constraints is the same in both nodes. For me it was the same because I used those offers from node 1 also in node 2 and we chose the ...
1 vote
2 answers
274 views

Are risk-costs a form of external costs?

An example to make to question more clear: With the use of nuclear power plants come several risk-costs (the risk of a nuclear disaster). These costs aren't included in the energy price and there is ...
2 votes
2 answers
132 views

Are there any drawbacks to a hypothetical climate policy?- Carbon tax for reducing Income tax

Disclaimer: I do not have a formal education in economics Here is the idea of my hypothetical policy: graduated over a period, say about 10 years or longer, the income tax is phased out and a carbon ...
2 votes
0 answers
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Economics of grid extension versus off-grid electrification in developing countries

Quite a bit of research is available on the local economic effects of electrification in communities in developing countries (this article and its references go into quite a bit of detail on the topic)...
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6 votes
3 answers
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Why does BC Hydro want us to use less power?

I live in British Columbia, Canada, and we have a hydro electric company called BC hydro that supplies our power. They run ads encouraging us to use less power. I have been wondering why they would do ...
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Capital - augmenting and energy-augmenting technical progress

I've read a number of papers on factor - augmenting technical progress and directed technical change. Authors do not note about the implications of factor - augmentation in sufficient details. Assume ...
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3 votes
1 answer
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Electricity as inelastic good

Could be electricity considered as an inelastic good? I am interested in the electricity delivered to final consumers in member countries of Nordpool Spot (Norway, Sweden, Finland, Denmark, Estonia, ...
1 vote
1 answer
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What are the implication of state-run oil production vs. private production from leases?

I'm not any kind of expert in this area, so please be gentle. It seems that we speak of oil (and other natural resources) as though control of output and revenue from extraction adheres to the ...
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1 vote
1 answer
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Dec 2015: What would cause natural gas and crude oil to go up?

Natural gas prices are down like crazy this year as you can see from the chart below: I don't understand how these prices are maintainable. I know these this price trend is largely because of the ...
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2 votes
1 answer
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Principal Components Analysis in Economic analysis

I have a data set of annual prices of various energy carriers over several decades. I want to estimate a model of output using these price series - I guess, I will do a co-integration analysis. There ...
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2 votes
1 answer
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Ireland wholesale electricity prices are higher during the weekends

Some data from Ireland SEMO (weekday electricity prices) and quarterly prices from the European Commission imply that Irish weekend prices are greater than weekday prices. The same datasets used ...
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2 votes
1 answer
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How do oil prices rise when crude oil inventories fall?

I am new to economics, I am reading a post on CNBC which states Weekly crude oil inventories unexpectedly fell, supporting further gains in oil prices. 1) Why does crude oil inventories unexpetedly ...
3 votes
1 answer
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Composition of EEX energy prices

I am working currently on EEX energy price data from Germany and so far I couldn't find out, if the prices already include taxes and the German Renewable Energy Act feed-in tarif (EEG-Umlage). I ...
2 votes
2 answers
1k views

In Indonesia, reducing fuel subsidy strongly impacts the price of everyday goods. Why?

In Indonesia, petrol/gasoline price is regulated by the government and historically it is heavily subsidized. I know, economists typically consider fuel subsidy to be a bad policy, for many reasons, ...
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1 answer
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Introductory or Primer text on Economics?

I've been meaning to learn more about economics, and am looking for an introductory text or a primer on the topic. I've already taken a subject on this back in high school, but I guess what I'm ...
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