The impact of policy elements on the financing costs of RE investment: The case of wind power in Germany

Renewable energy support mechanisms affect the attractiveness of projects by influencing uncertainties in revenues or expenditures and ultimately result in a change in the financing costs. The influence of feed-in tariffs on financing costs was investigated. 26 wind onshore investors were surveyed in a conjoint analysis and the results were used in a cash flow model to quantify the impact. The introduction of premium models under a fixed remuneration tariff scheme seems to increase the financing costs considerably. --

Are Profits Shared Across Borders? Evidence on International Rent Sharing

In the literature on rent sharing in the labor market, many studies have documented a robustly positive correlation between wages for various micro-units firms, individuals, union-firm bargaining units with profits per worker at the level of that micro-unit's industry, where industry profits are interpreted as prosperity in the product market enjoyed by firms and available for sharing with workers. But these industry studies delineate product markets by the same country as that of the micro-units, and this implicitly closed-economy perspective may miss important international aspects of wage setting. In this paper we examine how profit sharing may be conditioned by the international linkages which help shape economic openness, by analyzing negotiated contract wages for a sample of over 1000 Canadian labor contracts spanning all manufacturing from 1980 through 1992. Our central finding is that the relevant measure of product-market prosperity, and thus the pattern of rent or profit sharing, varies significantly across international linkages including multinational ownership, union type, and trade barriers. There seems to be international rent sharing, with profit sharing across borders conditioned by institutions at both the firm and industry level.

Applying tax policy models in country economic work : Bangladesh, China, and India

General principles can guide the design of the overall contours of a tax reform package to a considerable extent. This paper reports on the use of three tax policy models to analyze issues in the course of undertaking economic work with the regional departments in the World Bank's Operational Complex. The first model, that for Bangladesh, is used to demonstrate how the relative attractiveness of different revenue-raising options depends sensitively on the workings of labor markets and substitution relationships in production. The second model, that for China, emphasizes the importance of taking a system-wide view of taxation in a decentralizing socialist economy, where the coexistence of administered and free market prices for the same commodities can make standard tax reform prescriptions most inappropriate. The third model, that for India, examines the kinds of domestic tax adjustment that would be necessary in the wake of reductions in import tariffs in order to allow the government to continue to meet its real expenditures wihout any change in foreign borrowing, but taking into account changes in the prices of intermediates and capital goods resulting from tariff reform. The paper also discusses the costs involved in constructing and implementing tax policy models and summarizes the principal finding of the paper.Environmental Economics&Policies,Public Sector Economics&Finance,Economic Theory&Research,Banks&Banking Reform,Municipal Financial Management

Evaluating consumer investments in distributed energy technologies

The adoption of solar photovoltaic and electrical energy storage by end users depends on their economic attractiveness, which is typically assessed with metrics of future cash flow such as Net Present Value (NPV). Yet analyses using NPV typically do not account for the evolution towards low-carbon electricity systems in the short and long term. We show this to be of critical importance for accurately calculating the profitability of these technologies. By linking an energy system model with a power system model, we observe substantial differences between NPV estimates calculated with and without representing potential evolutions of the electricity system. Our results suggest that not accounting for short- and long-run changes in the electricity system could underestimate the NPV of an investment in photovoltaic and storage by around 20%, especially in scenarios with high levels of renewables, moderate flexibility, and high electrification in the energy system. Using system-dependent cash flow metrics can have a major impact on end-users' energy technology profitability

WLAN Hot Spot services for the automotive and oil industries :a business analysis Or : "Refuel the car with petrol and information, both ways at the gas station"

While you refuel for gas ,why not refuel for information or download vehicle data ? This paper analyzes in extensive detail the user segmentation by vehicle usage , service offering , and full business models from WLAN hot spot services delivered to vehicles (private, professional , public) around gas stations . Are also analyzed the parties which play a role in such service authorization, provisioning and delivery , with all the dependencies modelled by attributed digraphs . Sevice planning is included as to WLAN base station capabilities . Five year financial models (CAPEX,OPEX) , and data pertain to two possible service suppliers : multi-service oil companies, and mobile service operators (or MVNO) . Model optimization on the return-on-investment (ROI) is carried out for different deployment scenarios ,geographical coverage assumptions, as well as tariff structures . Comparison is also being made with public GPRS data services ,as precursors for 3G services,and the effect of WLAN roaming is analyzed .Analysis shows that due to manpower costs and marketing costs , suitable ROI will not be achieved unless externalities are accounted for and innovative tariff structures are introduced . Open issues and further research are outlined . Further work is carried out,also with automotive electronics sector , wireless systems providers , wireless terminals platform suppliers , and vehicle manufacturers .WLAN services;WLAN;business models;fuel stations;mobile operator;oil company;professional vehicles

Peak shaving through battery storage for low-voltage enterprises with peak demand pricing

The renewable energy transition has introduced new electricity tariff structures. With the increased penetration of photovoltaic and wind power systems, users are being charged more for their peak demand. Consequently, peak shaving has gained attention in recent years. In this paper, we investigated the potential of peak shaving through battery storage. The analyzed system comprises a battery, a load and the grid but no renewable energy sources. The study is based on 40 load profiles of low-voltage users, located in Belgium, for the period 1 January 2014, 00:00-31 December 2016, 23:45, at 15 min resolution, with peak demand pricing. For each user, we studied the peak load reduction achievable by batteries of varying energy capacities (kWh), ranging from 0.1 to 10 times the mean power (kW). The results show that for 75% of the users, the peak reduction stays below 44% when the battery capacity is 10 times the mean power. Furthermore, for 75% of the users the battery remains idle for at least 80% of the time; consequently, the battery could possibly provide other services as well if the peak occurrence is sufficiently predictable. From an economic perspective, peak shaving looks interesting for capacity invoiced end users in Belgium, under the current battery capex and electricity prices (without Time-of-Use (ToU) dependency)

Evaluating consumer investments in distributed energy technologies

The adoption of solar photovoltaic and electrical energy storage by end users depends on their economic attractiveness, which is typically assessed with metrics of future cash flow such as Net Present Value (NPV). Yet analyses using NPV typically do not account for the evolution towards low-carbon electricity systems in the short and long term. We show this to be of critical importance for accurately calculating the profitability of these technologies. By linking an energy system model with a power system model, we observe substantial differences between NPV estimates calculated with and without representing potential evolutions of the electricity system. Our results suggest that not accounting for short- and long-run changes in the electricity system could underestimate the NPV of an investment in photovoltaic and storage by around 20%, especially in scenarios with high levels of renewables, moderate flexibility, and high electrification in the energy system. Using system-dependent cash flow metrics can have a major impact on end-users' energy technology profitability

That's Not Fair: Tariff Structures for Electric Utilities with Rooftop Solar

(1) Problem definition: Utility regulators are grappling to devise compensation schemes for customers who sell rooftop solar generation back to the grid, balancing environmental interests and the financial interests of utilities, solar system installers, and retail customers. This is difficult: Regulatory changes made in Nevada in 2015 to protect Nevada's utility induced SolarCity, the market leader in solar systems, to suspend local operations. We show that the choice of tariff structure is crucial to achieving socially desirable objectives. (2) Academic/Practical Relevance: It is important for regulators to understand how tariff structure interacts with social objectives. This has implications for consumers, regulators and industry. (3) Methodology: We use a sequential game to analyze the regulator's social welfare maximization problem in a market with a regulated utility, an unregulated, price-setting, profit-maximizing solar system installer, and customers who endogenously determine whether to adopt solar or not, based on utility tariffs, solar prices and their heterogeneous usage profiles and generation potentials. (4) Results: We illustrate that the effectiveness of tariff structures is not governed simply by the number of free tariff parameters, but by the functions these parameters serve. In particular, an effective tariff must discriminate among customer usage tiers between customers with and without rooftop solar to achieve socially desirable outcomes. We present a tariff structure with these two characteristics and show how it can be implemented as a simple buy-all, sell-all tariff while retaining its favorable properties. We illustrate our findings numerically using data from Nevada and New Mexico, two states grappling with this issue. (5) Managerial Implications: Many utilities in the U.S. operate tariff structures that are missing at least one of the two identified features. Regulators must overhaul these tariff structures to adequately safeguard all stake-holders

That’s Not Fair: Tariff Structures for Electric Utilities with Rooftop Solar

Problem definition: Utility regulators are grappling to devise compensation schemes for customers who sell rooftop solar generation back to the grid, balancing environmental interests and the financial interests of utilities, solar system installers, and retail customers. This is difficult: Regulatory changes made in Nevada in 2015 to protect Nevada’s utility induced SolarCity, the market leader in solar systems, to suspend local operations. We show that the choice of utility tariff structure is crucial to achieving socially desirable objectives. Academic/practical relevance: It is important for regulators to understand how tariff structure interacts with social objectives. This has implications for consumers, regulators, and industry. Methodology: We use a sequential game to analyze the regulator’s social welfare maximization problem in a market with a regulated utility; an unregulated, price-setting, profit-maximizing solar system installer; and customers who endogenously determine whether to adopt solar or not, based on utility tariffs, solar prices, and their heterogeneous usage profiles and generation potentials. Results: We illustrate that the effectiveness of tariff structures is not governed simply by the number of free tariff parameters, but by the functions these parameters serve. In particular, an effective tariff must discriminate among customer usage tiers and between customers with and without rooftop solar to achieve socially desirable outcomes. We present a tariff structure with these two characteristics and show how it can be implemented as a simple buy-all, sell-all tariff while retaining its favorable properties. We illustrate our findings numerically using data from Nevada and New Mexico, two states grappling with this issue. Managerial implications: Many utilities in the United States operate tariff structures that are missing at least one of the two identified features. Regulators must overhaul these tariff structures to adequately safeguard all stakeholders

Arbitrage Trading Opportunities with Bidirectional Charging : Optimizing Charging Costs by Exploiting Electricity Price Fluctuations in Norway

The Norwegian government has established ambitious climate goals, with the electrification of society playing an essential role in achieving them. Specifically, the electrification of the transportation sector is deemed crucial. However, local and geopolitical factors have led to record-high electricity prices in Norway, undermining the benefits of electrification. Consequently, there is an increased urgency to adopt technologies that provide incentives for electrification. This thesis focuses on adopting bidirectional charging in Norway, specifically exploring the potential for electric vehicle owners to capitalize on arbitrage opportunities using this technology compared to smart charging. Bidirectional charging allows electric vehicles to take advantage of price fluctuations in electricity markets by utilizing the energy storage capabilities of the EV battery. The analysis is conducted through an optimization model that captures EVs' bidirectional charging behavior in the NO5 Norwegian power market, where the objective is to minimize charging costs. The thesis examines three simplified behavior patterns representing Norwegian driving habits and includes a scenario analysis considering various input parameters. The obtained results show that bidirectional charging offers advantages over smart charging and unmanaged charging in terms of accumulated cost savings. The annual cost savings when utilizing bidirectional charging range from NOK 415 – NOK 1,275 in 2022 and NOK 176 – NOK 625 in 2021. The main finding is that substantial volatility in day-ahead prices is a prerequisite for the economic benefits of bidirectional charging to be perceptible, and the magnitude of the economic benefits increases with higher day-ahead prices during periods of high volatility. Results from the scenario analysis show that arbitrage opportunities increase by investing in a larger battery capacity and changing the current grid tariff model. In contrast, a higher charging capacity does not show cost benefits to the same extent, as the increasing cost of the capacity component of the current grid tariff outweighs any potential arbitrage gains from utilizing higher charging capacities. Lastly, the electricity support package introduced by the Norwegian government compromises the full potential of bidirectional charging. This subsidy eliminates the essential price volatility necessary for bidirectional charging, thus eradicating incentives for intelligent technologies like bidirectional charging.nhhma