Measuring the Potential of Renewable Energy

Energy Policy, 2018

Renewable electricity, particularly solar PV and wind, creates external benefits of learningby-doing that drive down costs and reduce CO 2 emissions. The Global Apollo Programme called for collective action to develop renewable energy. This paper sets out a method for assessing whether a trajectory of investment that involves initial subsidies is justified by the subsequent learning-by-doing spillovers and if so, computes the maximum justifiable additional subsidy to provide, taking account of the special features of renewable electricitygeographically dispersed and variable quality resource base and local saturation. Given current costs and learning rates, accelerating the current rate of investment appears globally socially beneficial for solar PV in most but not all cases, less so for onshore wind. The optimal trajectory appears to involve a gradually decreasing rate of growth of installed capacity. 1 The case for supporting renewables The Global Apollo Programme called for collective action with "one aim only-to develop renewable energy supplies that are cheaper than those from fossil fuels.. .. These price trends help to create a prima facie case in favour of focussing heavily on solar energy." (King et al., 2015, p15). The case for support is primarily to compensate for the otherwise unremunerated learning spill-overs arising from cumulative production. Each additional installation adds to the cumulative production, which figure 1 1 persuasively suggests is the prime driver of cost reductions * This paper was prompted by Neuhoff (2008), who was pessimistic about the social profitability of PV when its cost was much higher, but noted that increasing current investment might relax constraints on future investment rates, which conferred an additional and potentially large extra benefit. I am indebted to insightful comments from Rutger-Jan Lange, and very careful checking of the paper and formulae to Linden Ralph and Bowei Guo, as well as to very helpful reviewers. 1 Source: Delphi234-Own work, CC0, https://commons.wikimedia.org/w/index.php?curid=33955173. The straight green line predicts that modules decrease in price by 20% for every doubling of cumulative shipped modules. The other line (with squares) shows worldwide module shipments vs. average module price. The data 1 of solar modules (Fraunhofer, 2016; Rubin et al., 2015a). Renewable electricity technologies, particularly wind and solar PV (hereafter just PV), have been heavily subsidized for many years. Both PV and wind are finally at the point of becoming commercially viable without subsidies in some locations, but new installations continue to enjoy significant, if now much lower, support in many jurisdictions. This paper asks whether past and continued support for such technologies is justified, and, more fundamentally, how to determine the appropriate level of support now and in the future for emerging low-carbon technologies with learning spillovers. While it is easy to present qualitative arguments for such support, the practical question is to quantify the level of justified support, and relate it to observable features of the technology and the location. The strongest case is one in which all countries recognize the social value of supporting immature zero-carbon technologies and collectively fund that support. Mission Innovation is a recent example, through which "22 countries and the European Union are taking action to double their public clean energy R&D investment over five years". 2 This paper provides a method for calculating the justified subsidy to compensate for the learning spillovers. There is typically also a shortfall between the social cost of carbon and its market price to account for in the social cost-benefit analysis. To justify the learning subsidy the investment must be socially profitable-if it never becomes socially profitable there is little point in pursuing these cost reductions. The paper sets out a methodology for a social cost-benefit analysis of a global support programme for low-carbon electricity generation technologies, illustrated for PV and onshore wind. The electricity supply industry has particular characteristics that need careful modeling if the results are to carry credibility. Consumption is constrained by current available capacity as storage is costly, and transmission constraints limit the size of the market that can be supplied from local capacity. As a result the value of electricity can vary strongly over time and space in ways that make the concept of a global market inappropriate. Local saturation is an important element, while the value of any one low-carbon option depends on what others are available and when they become competitive. A key issue is whether to accelerate deployment to reap earlier learning, or delay until the technology becomes more competitive against rising fossil energy costs. 3 are from ITRPV 2015 edition and can be updated to 2015 with ITRPV (2016). later updates are available annually at http://www.itrpv.net/Reports/Downloads/. 2 See http://mission-innovation.net/ 3 Grubb et al. (2002) review the implications of induced technical change for energy modeling. They note the contrast between learning, which argues for earlier support for climate mitigation, while autonomous technical change argues for later support when more knowledge has accumulated, making action later cheaper. Our emphasis is on changing relative costs rather than autonomous technical change.

2016

Writing Master Thesis has been both challenging and exciting job for me. I wrote my first master thesis on the topic "Performance Measurement of the Norwegian Humanitarian Organization, A case of Norwegian People's Aid during my first Masters Degree on Business Administration. This thesis was completely based on qualitative research design. Now coming to quantitative research design in my second master thesis, starting from data collection, data sorting, arranging and running a meta regression analysis was really one of the best experience for me. This thesis helped me to explore more in econometrics and its use in environmental economics. I really enjoyed writing my thesis, especially in the parts concerning the understanding and use of meta analysis to find the factors that effect the consumer's willingness to pay for renewable energy and to explore the efficiency and robustness of the result when transferring the values along with the transfer error. I cannot take every credit of writing my thesis by myself, as this work is possible by the combine effort of my respected supervisor, professors along with my parents and my friends. First of all, I would like to express my gratitude to my Master Thesis Supervisor Professor Dr. Scient. Ståle Navrud for his valuable suggestions, guidance and feedback for preparing my master thesis. This thesis would not have been possible without his warm supervision and proper guidance. I would also like to thank Mr Henrik Lindhjem Phd, who is working as an Environmental Economist in Norwegian Institute for Nature Research (NINA) for providing me the raw data which helped me to understand the use of meta analysis for environmental valuation. I would also like to thank Associate Proffesor Dr Chunbo Ma of the School of Agriculture and Resource Economics, The University of Western Australia for providing me the raw data of his research on consumer willingness to pay for renewable energy. I would also like to than Mrs Swantje Sundt, Guest Researcher of The Kiel Institute for the World Economy for providing me raw data of her study on renewable energy Furthermore, I would like to thank HH, NMBU School of Economics and Business, Norwegian University of Life Sciences for giving me an opportunity to write my Master Thesis. I would also like to acknowledge University Library for providing me related books and articles. I also owe a decent gratitude to my dad and mom who always support me in every step of my life. Last but not least I would like to thank Mr. Raju Rimal, PhD Candidate of Department of II Statistics, NMBU and Mr Vishwa Raj Adhikari for guiding me during my master thesis and to my dear friends, who have always supported me to write my Master Thesis. I take the full responsibility for any mistakes and omission in the thesis.

Energy Economics, 2019

While support schemes to renewable energy are ubiquitous around the world today, there are few systematic welfare evaluations of their social benefits and costs in an economy-wide setting. We develop a general equilibrium cost-benefit rule to assess changes in quantity based subsidy schemes, "green" certificates, that support renewable electricity generation. An advantage to large-scale numerical models of the same issue is that we can go "into the black box" and uncover key economic mechanisms. We study a second-best economy with distorting taxes and pollution, so that a perturbation of the certificate scheme causes both benefits and costs; these items can be uncovered and estimated using our framework. To this end, we provide a user-friendly approximation for empirical implementation, which means that data requirement is modest relative to a typical computable general equilibrium model. We apply the theory to a currently existing scheme in Sweden taking into account "trickle-down" effects, including e.g. a loss of value-added tax income in the rest of the economy and environmental costs (i.e. externalities from electricity generation not currently internalized). We first present an ex post estimate, i.e. the welfare consequences of having scrapped the existing system 2003-2017 and then an ex ante analysis of extending the system to 2045. The latter includes a systematic sensitivity analysis based on Monte-Carlo simulation. Overall, we find net present value gains from removing the subsidy scheme, taking into account externalities, "trickle-down" and public finance repercussions.

Greater use of renewable energy is seen as a key component of any move to combat climate change, and is being aggressively promoted as such by the new U.S. administration and by other governments. Yet there is little economic analysis of renewable energy. This paper surveys what is written and adds to it. The conclusion is that the main renewables face a major problem because of their intermittency (the wind doesn’t always blow nor the sun always shine) and that this has not been adequately factored into discussions of their potential. Without new storage technologies that can overcome this intermittency,much of the decarbonization of the economy will have to come from nuclear, carbon capture and storage(CCS) and energy efficiency (geothermal and biofuels can make small contributions). Nuclear andCCS are not without their problems. New energy storage technologies could greatly increase the roleof renewables, but none are currently in sight.

SSRN Electronic Journal

To my people, the nicest, strongest, most underappreciated people in the globe, the Kurds, the biggest nation in the globe without a state. I sincerely hope I can be a valuable asset and give something back to the society in general, and my people in particular. As we say: First and foremost, I would like to thank my dissertation co-chairs Drs. Janie Chermak and Jennifer Thacher. Financial aid provided by Dr. Chermak helped me to get through graduate school, attend conferences, and create a network of energy economists which opened up a completely new horizon. Dr. Thacher's dedication in the survey design and analyses were imperative; I learned a great deal from her. The system dynamics model of chapter 2 would not exist without the help and guidance of Leonard Malczynski; I learned a tremendous amount from him. Extensive discussions with the great Dr. Ronald Cummings especially on the topic of hypothetical bias and ways to address it led to the solemn oath chapter. Worth to mention Dr. Cummings support and strong belief in me is something that I will cherish dearly for the rest of my life. He reached out to his contacts and addressed me as "a winner" and "brilliant young man" whom "you will be lucky to have him." Dr. Robert Berrens edits and comments were fundamental in shaping the last chapter of the dissertation. I would also like to thank Dr. Kate Cartwright for agreeing to become my external dissertation committee member in the short notice. I cannot thank everyone on my committee enough.

The Royal Society of Chemistry eBooks, 2011

I am grateful to Columbia Business School students in my course "Current Developments in Energy Markets" for discussions of the material in this paper. The views expressed herein are those of the author(s) and do not necessarily reflect the views of the National Bureau of Economic Research. NBER working papers are circulated for discussion and comment purposes. They have not been peerreviewed or been subject to the review by the NBER Board of Directors that accompanies official NBER publications.

2013

Handbook of Research on Green Economic Development Initiatives and Strategies, 2000

Large-scale deployment of renewable energy technologies, such as wind power and solar energy, has been taking place in industrialized and developing economics mainly because of various fiscal and regulatory policies. An understanding of the economy-wide impacts of those policies is an important part of an overall analysis of them. Using a perfect foresight computable general equilibrium model, this study analyzes the economy-wide costs of achieving a 10 percent share of wind power in Brazil's electricity supply mix by 2030. The study finds that the expansion of wind power would increase GDP in Brazil. The study also finds that a production subsidy financed through increased value-added tax would be superior to a consumption mandate where electricity utilities are allowed to pass the increased electricity supply costs directly to consumers. These two policies would impact various production sectors differently to achieve the wind power expansion targets.

TECHNOLOGIES AND MATERIALS FOR RENEWABLE ENERGY, ENVIRONMENT AND SUSTAINABILITY: TMREES19Gr, 2019

In the late 1980s, Argentina faced frequent blackouts due to a lack of investment in generation capacity and high electricity demand growth. Argentina was one of the first developing countries to implement the liberalisation and privatisation of public utilities. In 2015, the Argentine electricity market faced a crisis due to low capacity investment. This arose from consumer prices that poorly reflected the true electricity cost, increasing risk for companies to invest in new generation capacity. Since 2016, Argentine government has called an auction to increase generation capacity; in addition, the government has cut incentive to consumers looking for reduce the electricity demand. Moreover, Argentina's government is promoting policies to increase renewable energy share. However, it is unknown how renewable energies may affect security of supply and electricity price. This paper presents a simulation model to analyse policies for increasing generation capacity and promote renewable energy in Argentina. In this paper is concluded that renewable energies do indeed reduce the energy dependency of fossil fuels, and they lead to reduce electricity prices.

Renewable Energy, 2013

This article appeared in a journal published by Elsevier. The attached copy is furnished to the author for internal non-commercial research and education use, including for instruction at the authors institution and sharing with colleagues.