A modelling approach for allocating land-use in space to maximise social welfare - exemplified on the problem of wind power generation

Land-use conflicts arise if land is scarce, land-use types are mutually exclusive, and vary in their effects with regard to more than one incongruent policy objective. If these effects depend on the spatial location of the land-use measures the conflict can be mediated through an appropriate spatial allocation of land use. An example of this conflict is the welfare-optimal allocation of wind turbines (WT) in a region in order to achieve a given energy target at least social costs. The energy target is motivated by the fact that wind power production is associated with relatively low CO2 emissions and is currently the most efficient source of renewable energy supply. However, it is associated with social costs which comprise energy production costs as well as external costs caused by harmful impacts on humans and biodiversity. We present a modelling approach that combines spatially explicit ecological-economic modelling and choice experiments to determine the welfare-optimal spatial allocation of WT in Western Saxony, Germany. We show that external costs are significant. The welfare-optimal sites are therefore not those with the highest energy output (i.e., lowest production costs). However, they show lower external costs than the most productive sites. A sensitivity analysis reveals that the external costs represent about seven percent of the total costs (production costs plus external costs). Increasing the energy production target increases both production and external costs. The absolute (percentage) increase of production costs is higher (lower) than that of external costs. --choice experiment,ecological-economic modelling,externality,spatial allocation,welfare-optimal,wind power

Consensus-based approach to peer-to-peer electricity markets with product differentiation

With the sustained deployment of distributed generation capacities and the more proactive role of consumers, power systems and their operation are drifting away from a conventional top-down hierarchical structure. Electricity market structures, however, have not yet embraced that evolution. Respecting the high-dimensional, distributed and dynamic nature of modern power systems would translate to designing peer-to-peer markets or, at least, to using such an underlying decentralized structure to enable a bottom-up approach to future electricity markets. A peer-to-peer market structure based on a Multi-Bilateral Economic Dispatch (MBED) formulation is introduced, allowing for multi-bilateral trading with product differentiation, for instance based on consumer preferences. A Relaxed Consensus+Innovation (RCI) approach is described to solve the MBED in fully decentralized manner. A set of realistic case studies and their analysis allow us showing that such peer-to-peer market structures can effectively yield market outcomes that are different from centralized market structures and optimal in terms of respecting consumers preferences while maximizing social welfare. Additionally, the RCI solving approach allows for a fully decentralized market clearing which converges with a negligible optimality gap, with a limited amount of information being shared.Comment: Accepted for publication in IEEE Transactions on Power System

Economics of irrigation water management : a literature survey with focus on partial and general equilibrium models

Water policy is an important topic on the agenda of the international community, and efficiency and equity in the allocation of water have emerged as important factors to be considered. Water pricing can be used to mitigate both the quantity and quality dimensions of water scarcity. This paper reviews partial equilibrium models and general equilibrium models that are relevant to irrigation water management issues. The most widely discussed issues in these models are water markets and water pricing. The interrelationships between economic, cultural, social, and political aspects that are related to water policy make it difficult to provide a comprehensive policy analysis. General equilibrium models of irrigation water management allow incorporation of both the irrigation sector and the other sectors in the economy and analysis of policies affecting each of them and the interaction between them. In addition to being able to address sector and household specifications, production factors, time horizon, pricing policies, and institutions such as water markets, general equilibrium models allow the analysis of the impact of water policies on equity and poverty alleviation. The authors conclude that, although there has been a significant increase in efforts to analyzewater related problems, analytical and empirical research in the field is still deficient and more effort is needed to address them.Environmental Economics&Policies,Water Supply and Sanitation Governance and Institutions,Town Water Supply and Sanitation,Water Supply and Systems,Water Conservation