Offsets, such as the U.N.’s Certified Emission Reductions (CERs), provide incentives for developing countries to refuse meaningful caps. And they have. Which means the Kyoto approach is left with only offsets, which are no substitute for caps..
Google has introduced a way to make electricity usage information easily accessible from anywhere.
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As economic scholars we are pleased to respond to the invitation from the members of the Champsaur commission to react to their report on the organization of the French electricity market.
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Concerns about the economic, geopolitical, and national security consequences of U.S. imports of oil have triggered arguments for adopting policies to reduce oil imports. Many members of Congress have advocated “energy independence” for the United States.
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The Third Energy Package has been agreed. From the publication of the proposals by the Commission, in September 2007, discussions have been dominated by the issue of (ownership) unbundling. Following heavy pressure from some Member States, notably Germany and France, a ‘Third Way’ of unbundling was accepted as another unbundling option. The discussions have taken away attention from other issues and the quality of the Package has suffered as a result. But has it been worth it?
Long-term contracts play an important role in the energy industry, both in the electricity sector and in the gas sector. Gas importers sign long-term take-or-pay contracts with gas exporters, and resell the gas on a long-term basis to gas retailers. Similarly, energy-intensive companies often contract their electrical energy several years ahead.
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To promote competition in the retail market of electricity and to ensure that the cost advantage of the fleet of nuclear reactors continues to benefit to French households and companies a commission has recently recommended to the government to introduce a price and quantity regulation of the nuclear kWh. No doubt planning à la française is alive and well.
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It is beginning to dawn on the CEO’s of the electric power sector that emerging policies on climate change will be unevenly distributed among countries, companies and their customers. Coal heavy utilities who tend to be low-cost generators are not excited about the prospects of weaning off coal, or paying for carbon permits and are likely to see their prices rise significantly. Nuclear, hydro, natural gas and renewable heavy utilities, on the other hand, are likely to be modestly affected. Since their current prices tend to be higher, they will rise by smallish percentages as they switch to lower carbon sources. For this and other reasons, the impact of any carbon regulations will be unevenly felt.
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How should energy regulators manage contractual relationships in wholesale and retail markets ? I suggest that two decades after the start of the first liberalization programs around the world this question is more pressing than ever. The opening of energy markets to competition was blessed with mixed results.
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The biggest challenge facing any politician pushing for legislation on climate change is to convince skeptical voters that the bitter medicine is in fact good for them, and they should embrace it. No matter how it is enacted and what it is called, the net effect is likely to be increased costs of fossil fuels, especially carbon-heavy coal for power generation and petrol in the transportation sector. Continue reading »