Energy and Environmental Economics Inc.

Energy, United States

Energy and Environmental Economics Inc.

Energy, United States
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Woo C.K.,Energy and Environmental Economics Inc. | Woo C.K.,Hong Kong Baptist University | Horowitz I.,University of Florida | Moore J.,Energy and Environmental Economics Inc. | Pacheco A.,Energy and Environmental Economics Inc.
Energy Policy | Year: 2011

The literature on renewable energy suggests that an increase in intermittent wind generation would reduce the spot electricity market price by displacing high fuel-cost marginal generation. Taking advantage of a large file of Texas-based 15-min data, we show that while rising wind generation does indeed tend to reduce the level of spot prices, it is also likely to enlarge the spot-price variance. The key policy implication is that increasing use of price risk management should accompany expanded deployment of wind generation. © 2011 Elsevier Ltd.

Woo C.K.,Hong Kong Baptist University | Sreedharan P.,Energy and Environmental Economics Inc. | Hargreaves J.,Energy and Environmental Economics Inc. | Kahrl F.,Energy and Environmental Economics Inc. | And 3 more authors.
Applied Energy | Year: 2014

This review is motivated by our recognition that an adequate and reliable electricity supply is a critical element in economic growth. From a customer's perspective, electricity has several distinct attributes: quality, reliability, time of use, consumption (kW. h) volume, maximum demand (kW), and environmental impact. A differentiated product can be formed by packaging its non-price attributes at a commensurate price. The review weaves the academic literature with examples from the real world to address two substantive questions. First, is product differentiation a meaningful concept for electricity? Second, can product differentiation improve grid operations and planning, thereby lowering the cost of delivering electricity services? Based on our analysis and comprehensive review of the extant literature, our answer is "yes" to both questions. We conclude that applying product differentiation to electricity can greatly induce end-users to more effectively and efficiently satisfy their demands upon the system, and to do so in an environmentally friendly way. © 2013 Elsevier Ltd.

Woo C.K.,Hong Kong Baptist University | Woo C.K.,Energy and Environmental Economics Inc. | Li R.,Hong Kong Polytechnic University | Shiu A.,Hong Kong Polytechnic University | And 2 more authors.
Applied Energy | Year: 2013

A large sample of daily electricity consumption and pricing data are available from a pilot study conducted by BC Hydro in British Columbia (Canada) of its residential customers under optional time-varying pricing and remotely-activated load-control devices for the four winter months of November 2007-February 2008. We use those data to estimate the elasticity of substitution σ, defined as the negative of the percentage change in the peak-to-off-peak kW. h ratio due to a 1% change in the peak-to-off-peak price ratio. Our estimates of σ characterize residential price responsiveness with and without load control during cold-weather months. While the estimates of σ sans load control are highly statistically significant (α=0.01), they are less than 0.07. With load control in place, however, these σ estimates more than triple. Finally, we show that time-varying pricing sans load control causes a peak kW. h reduction of 2.6% at the 2:1 peak-to-off-peak price ratio to 9.2% at the 12:1 peak-to-off-peak price ratio. Load control raises these reduction estimates to 9.2% and 30.7%. © 2013 Elsevier Ltd.

Woo C.-K.,Energy and Environmental Economics Inc. | Horowitz I.,University of Florida | Sulyma I.M.,BC Hydro
IEEE Transactions on Smart Grid | Year: 2013

We apply graphical exploration and regression analysis to estimate 1717 participants' relative kW responses in BC Hydro's residential TOU/CPP pilot study. We define a customer's relative kW response as the percentage change in the customer's hourly kW demand due to exposure to time-varying pricing. Compared to the control group of customers facing non-TOU rates, we find that TOU pricing yields a statistically-significant evening peak kW decrease of 4-11%, after controlling for the effects of day of the week, month of the year, weather, customer location, and customer size. CPP produces an additional peak kW reduction of about 9%, which can be further increased to about 33% through remotely-activated load control of space and water heaters. Hence, a scheme of TOU pricing augmented with CPP and load control on system peak days can be a highly effective demand-response strategy for winter-peaking utilities. © 2013 IEEE.

Alagappan L.,Energy and Environmental Economics Inc. | Orans R.,Energy and Environmental Economics Inc. | Woo C.K.,Energy and Environmental Economics Inc. | Woo C.K.,Hong Kong Baptist University
Energy Policy | Year: 2011

This viewpoint reviews renewable energy development in 14 markets that differ in market structure (restructured vs. not restructured), use of feed-in-tariff (FIT) (yes vs. no), transmission planning (anticipatory vs. reactive), and transmission interconnection cost allocated to a renewable generator (high vs. low). We find that market restructuring is not a primary driver of renewable energy development. Renewable generation has the highest percent of total installed capacity in markets that use a FIT, employ anticipatory transmission planning, and have loads or end-users paying for most, if not all, of the transmission interconnection costs. In contrast, renewable developers have been less successful in markets that do not use a FIT, employ reactive transmission planning, and have generators paying for most, if not all, of the transmission interconnection costs. While these policies can lead to higher penetration of renewable energy in the short run, their high cost to ratepayers can threaten the economic sustainability of renewable energy in the long-run. © 2011 Elsevier Ltd.

Lam J.C.K.,University of Hong Kong | Woo C.K.,Hong Kong Baptist University | Kahrl F.,Energy and Environmental Economics Inc. | Yu W.K.,Airport Authority Hong Kong
Applied Energy | Year: 2013

China's wind industry has grown rapidly over the past decade. Continued growth in this industry is critical for China's domestic energy security and the global environment. However, little is known about the microeconomic drivers that move wind energy development in China. Based on a survey of experts in Mainland China and Hong Kong Special Administrative Region, this paper finds that the most important drivers of wind energy investment in China are perceived to be those that can have an immediate impact on a wind energy developer's cash flow: government financial assistance, easy and inexpensive transmission access, wind energy cost decline, and a high feed-in-tariff. A renewable portfolio standard, tax incentives and international research and development cooperation are seen as less important. These findings underscore the importance of reducing the financial risk in wind energy development. However, none of the key drivers is directly tied to energy output, which suggests that China's wind energy policies must be modified to incentivize energy output, rather than just installed capacity. © 2012 Elsevier Ltd.

Kahn-Lang J.,Energy and Environmental Economics Inc.
Energy Journal | Year: 2016

Most economists agree that revenue decoupling eliminates utilities' incentives to encourage overconsumption of energy, but critics argue that decoupled utilities have no incentive to promote energy efficiency. This paper models the repeated game between regulator and utility and shows that decoupled utilities have greater equilibrium utility demand-side management (DSM) investment in the presence of DSM-related shareholder incentives. It then shows empirically that decoupling is historically associated with significant residential electricity consumption reductions, augmented DSM spending levels, and increased DSM investment efficacy. Copyright © 2016 by the IAEE. All rights reserved.

Mileva A.,Energy and Environmental Economics Inc. | Johnston J.,University of California at Berkeley | Nelson J.H.,Union of Concerned Scientists UCS | Kammen D.M.,University of California at Berkeley
Applied Energy | Year: 2016

We explore the operations, balancing requirements, and costs of the Western Electricity Coordinating Council power system under a stringent greenhouse gas emission reduction target. We include sensitivities for technology costs and availability, fuel prices and emissions, and demand profile. Meeting an emissions target of 85% below 1990 levels is feasible across a range of assumptions, but the cost of achieving the goal and the technology mix are uncertain. Deployment of solar photovoltaics is the main driver of storage deployment: the diurnal periodicity of solar energy availability results in opportunities for daily arbitrage that storage technologies with several hours of duration are well suited to provide. Wind output exhibits seasonal variations and requires storage with a large energy subcomponent to avoid curtailment. The combination of low-cost solar technology and advanced battery technology can provide substantial savings through 2050, greatly mitigating the cost of climate change mitigation. Policy goals for storage deployment should be based on the function storage will play on the grid and therefore incorporate both the power rating and duration of the storage system. These goals should be set as part of overall portfolio development, as system flexibility needs will vary with the grid mix. © 2015 The Authors.

Kahrl F.,University of California at Berkeley | Williams J.,Energy and Environmental Economics Inc. | Williams J.,Monterey Institute of International Studies | Jianhua D.,Energy and Environmental Economics Inc. | Junfeng H.,North China Electrical Power University
Energy Policy | Year: 2011

We examine the challenges to China's transition to a low carbon electricity system, in which renewable energy would play a significant role. China's electricity system currently lacks the flexibility in planning, operations, and pricing to respond to conflicting pressures from demand growth, rising costs, and environmental mandates in a way that simultaneously maintains reliability, decarbonizes the system, and keeps prices within acceptable bounds. Greater flexibility crucially requires the ability to more systematically and transparently manage and allocate costs. This will require re-orientating sector institutions still rooted in central planning, and strengthening independent regulation. Some of the necessary changes require fundamental political and legal reforms beyond the scope of energy policy. However, the system's flexibility can still be increased through the development of traditional planning and regulatory tools and approaches, such as an avoided cost basis for energy efficiency investments, more integrated planning to improve the coordination of generation, transmission, and demand-side investments, and a transparent ratemaking process. The judicious application of OECD electricity sector experience and skills can support these developments. © 2011 Elsevier Ltd.

Olson A.,Energy and Environmental Economics Inc. | Jones R.,Stanford University
Electricity Journal | Year: 2012

The concept of 'grid parity' posits that declining costs will cause renewables to become cost-competitive with conventional resources and create a self-sustaining market. However, grid parity is a moving target-as renewable deployments increase, their value in displacing conventional resources declines. This means there may be limits to the ability of renewables to compete on cost alone. © 2012 Elsevier Inc..

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