Europe’s Electricity Supply Security: Strengthening the Chain. CEPS Policy Brief No. 224/November 2010

Acknowledging that efficient development of electricity transmission infrastructure is crucial to achieving EU targets for a secure, competitive and sustainable electricity supply, this paper explores ways of strengthening the supply chain. Research for the paper was carried out in the context of the SECURE project (Security of Energy Considering its Uncertainties, Risks and Economic Implications), funded by the European Commission under the Seventh Framework Programme. The project develops appropriate tools for evaluating the vulnerability of the EU to the different energy supply risks, and for promoting the optimisation of EU energy insecurity mitigation strategies, including investment, demand side management and dialogue with producing countries

A Track Record of Success: High-Speed Rail Around the World and Its Promise for America

Highlights the economic and transportation benefits of high-speed rail in Japan and Europe, including creating jobs, saving energy, protecting the environment, and encouraging sustainable land use and development. Details lessons for the United States

Incentives for Transmission Investment in the PJM Electricity Market: FTRs or Regulation (or Both?)

This paper presents an application of a mechanism that provides incentives to promote transmission network expansion in the area of the US electric system known as PJM. The applied mechanism combines the merchant and regulatory approaches to attract investment into transmission grids. It is based on rebalancing a two-part tariff in the framework of a wholesale electricity market with locational pricing. The expansion of the network is carried out through the sale of financial transmission rights for the congested lines. The mechanism is tested for 14-node and 17-node geographical coverage areas of PJM. Under Laspeyres weights, it is shown that prices converge to the marginal cost of generation, the congestion rent decreases, and the total social welfare increases. The mechanism is shown to adjust prices effectively given either non-peak or peak demand.Electricity transmission expansion, incentive regulation, PJM

Agent-Based Model of Price Competition and Product Differentiation on Congested Networks

Using consistent agent-based techniques, this research models the decision-making processes of users and infrastructure owner/operators to explore the welfare consequence of price competition, capacity choice, and product differentiation on congested transportation networks. Component models include: (1) An agent-based travel demand model wherein each traveler has learning capabilities and unique characteristics (e.g. value of time); (2) Econometric facility provision cost models; and (3) Representations of road authorities making pricing and capacity decisions. Different from small-network equilibrium models in prior literature, this agent-based model is applicable to pricing and investment analyses on large complex networks. The subsequent economic analysis focuses on the source, evolution, measurement, and impact of product differentiation with heterogeneous users on a mixed ownership network (with tolled and untolled roads). Two types of product differentiation in the presence of toll roads, path differentiation and space differentiation, are defined and measured for a base case and several variants with different types of price and capacity competition and with various degrees of user heterogeneity. The findings favor a fixed-rate road pricing policy compared to complete pricing freedom on toll roads. It is also shown that the relationship between net social benefit and user heterogeneity is not monotonic on a complex network with toll roads.Network dynamics, road pricing, autonomous links, privatization, price competition, product differentiation, agent-based transportation model

Globalization of Production and the Competitiveness of Small and Medium-sized Enterprises in Asia and the Pacific: Trends and Prospects

The focus of this section is on the trends and prospects for the competitiveness of the region's SMEs, based on a review of the literature (as distinct from original research). In this context, the key dynamic shaping the prospects of Asia- Pacific SMEs relates to the globalization of production. This is changing the competitive environment for the region's SMEs in both international markets and at home. Therefore, at the core of the story is the need to understand the nature of globalization and its implications for the competitive performance of Asia-Pacific SMEs. From this perspective, small traditional firms serving only small local markets are not primary interest here, except insofar as they may evolve, or may be forced to evolve, into competitive enterprises in the above context.SMEs, Globalization, competitiveness, Asia, Pacific, trends

Revenue recycling and the welfare effects of road pricing

The authors explore the interaction between taxes on work-related traffic congestion and preexisting distortionary taxes in the labor market. A congestion tax raises the overall costs of commuting to work and discourages labor force participation at the margin when revenues are returned in lump-sum transfers. The resulting efficiency loss in the labor market can be larger that the Pigouvian efficiency gains from internalizing the congestion externality. By contrast, if congestion tax revenues are used to reduce labor taxes, the net impact on the labor supply is positive and the efficiency gain in the labor market can raise the overall welfare gains of the congestion tax by as much as 100 percent. Recycling congestion tax revenues in public transit subsidies produces a positive, but smaller, impact on the labor supply. In short, the authors'results indicate that the presence of preexisting tax distortions, and the form of revenue recycling, can crucially affect the size - and possibly even the sign - of the welfare effect of road pricing schemes. The efficiency gains from recycling congestion tax revenues in other tax reductions can amount to several times the Pigouvian welfare gains from congestion reduction.Public Sector Economics&Finance,Economic Theory&Research,Labor Policies,Environmental Economics&Policies,Banks&Banking Reform,Environmental Economics&Policies,Public Sector Economics&Finance,Economic Theory&Research,Banks&Banking Reform,Municipal Financial Management

Implementing Connections: The Benefits for Greater Philadelphia

This analysis utilizes DVRPC's modeling capabilities to illustrate and quantify the benefits of implementing the policies and goals defined in the Connections Plan, through a Plan scenario, compared to a continuation of our region's business-as-usual Trend scenario. Both scenarios are set in the horizon year of the Plan, 2035, and compared to each other and current conditions (2010)

Investing in Mobility: Freight Transport in the Hudson Region

Proposes a framework for assessing alternative investments in freight rail, highway, and transit capacity that would increase the ability to improve mobility and air quality in the New York metropolitan area

The single European electricity market: A long road to convergence

In the context of a first Working Paper the authors argued that electricity has a number of characteristics that set it apart from other commodities. It was demonstrated that some of these characteristics might complicate the deregulation process. This paper analyses the ongoing deregulation process in the European electricity sector and attempts to establish whether these difficulties can more readily be solved at European level. It would appear that some problems, e.g. economies of scale in electricity generation, have less of an impact at European level than within smaller national markets. However, a number of difficulties have to be overcome before a unified European electricity market can become a reality. These include the limited interconnection capacities between Member States. The European Commission has taken steps to improve the situation, for example by offering financial support for investments and promoting the development of regional markets as an interim measure ultimately leading to a fully integrated market. Apart from the difficulties related to electricity generation and transmission there are also exogenous factors that influence the ongoing deregulation process, e.g. the implementation of the Kyoto protocol and the dramatic increases in primary fuel prices. This paper argues that a consistent, stable and uniform European regulatory framework must be put in place if the impact of these difficulties is to be minimised.Electricity deregulation