The UK Electricity Markets: Its Evolution, Wholesale Prices and Challenge of Wind Energy

This thesis addresses the problems associated with security of the electricity supply in the UK. The British electricity supply industry has experienced a significant structural change. Competition has been brought into the electricity industry and a single wholesale electricity market of Great Britain has been established. The evolution of the British electricity market raises new challenges, such as improving the liquidity of wholesale markets and developing clean energy. The wholesale electricity prices are less transparent and trading arrangements are very complex in the British electricity market. In this thesis a fundamental model, called a stack model, has been developed in order to forecast wholesale electricity prices. The objective of the stack model is to identify the marginal cost of power output based on the fuel prices, carbon prices, and availability of power plants. The stack model provides a reasonable marginal cost curve for the industry which can be used as an indicator for the wholesale electricity price. In addition, the government's targets for climate change and renewable energy bring new opportunities for wind energy. Under the large wind energy penetration scenario the security of the energy supply will be essential. We have modelled the correlations between wind speed data for a set of wind farms. The correlation can be used to measure the portfolio risk of the wind farms. Electricity companies should build their portfolio of wind farms with low or negative correlations in order to hedge the risk from the intermittency of wind. We found that the VAR(1) model is superior to other statistic models for modelling correlations between wind speeds of a wind farm portfolio

The Rebound Effect: Some Questions Answered

Greenhouse gas (and other pollutant) emissions from energy use are now taken to be a problem both internationally and for individual national and regional governments. A number of mechanisms are being employed to reduce energy consumption demand as part of climate and energy policies internationally. A central policy focus is increased efficiency in the use of energy. However, the straightforward link between increased energy efficiency and reduced energy consumption has been questioned. This is due to the notion of the ‘rebound effect’. Rebound occurs when improvements in energy efficiency actually stimulate the direct and indirect demand for energy in production and/or consumption. It is triggered by the fact that an increase in the efficiency in the use of energy acts to reduce the implicit price of energy, or the price of effective energy services for each physical unit of energy used. Thus, it is an economic phenomenon. The rebound effect implies that measures taken to reduce energy use might lead to increases in carbon emissions, or at least not offset them to the extent anticipated. It is possible to distiguish between direct rebound effects in energy consumption in the activity where energy efficiency has increased, indirect rebound effects from income and substitutuion effects and economy-wide rebound effects (impacts on macro-level energy use). This paper attempts to provide a non-technical overview of work on the latter, carried out under an ESRC-funded project investigating the source and magnitude of econom-wide rebound effects from increased energy efficiency in the UK.General equilibrium, energy efficiency, rebound effects, disinvestment.

Input-output analyses of the pollution content of intra- and inter-national trade flows

This paper considers the application of input-output accounting methods to consider the pollution implications of different production and consumption activities, with specific focus on pollution embodied in intra-and inter-national trade flows. We consider the illustrative case studies of interregional trade flows between two regions of the UK and between five Mid-West regions/states within the US. We focus on different types of air pollutant of current policy concern in each case and demonstrate how use of the environmental input-output framework allows us to analyse the nature and significance of interregional pollution spillovers. Our results raise questions in terms of the extent to which authorities at regional level can control local emissions where they are limited in the way some emissions can be controlled, particularly with respect to changes in demand elsewhere within the national economy. This implies a need for policy co-ordination between national and regional level authorities to meet emissions reductions targets. Moreover, the existence of pollution trade balances between regions also raises issues in terms of net losses/gains in terms of pollutants as a result of interregional trade. In conducting analyses for different types of air pollutant (here CO2 as a global warming gas, GHG, in the UK case and ammonia, NH3, as a pollutant of more local concern in the US case) we also consider how pollution embodied in international trade flows may be accounted for and attributed

The Rebound Effect: Some Questions Answered

Greenhouse gas (and other pollutant) emissions from energy use are now taken to be a problem both internationally and for individual national and regional governments. A number of mechanisms are being employed to reduce energy consumption demand. A central one is increased efficiency in the use of energy. The Intergovernmental Panel on Climate Change (IPCC) of the United Nations (IPCC, 2007) projects that by 2030 energy efficiency gains will provide a substantial part of the remedy for climate change by reducing global energy consumption to approximately 30% below where it would otherwise be. Such a reduction is argued to be almost sufficient to offset energy consumption increases driven by projected global economic growth. Similarly the widely cited Stern report (Stern, 2007), and the International Energy Agency (e.g. IEA, 2009), attach crucial importance to the potential for efficiency improvements to reduce energy use and related emissions. Within the European Union, one of the EU 20-20-20 targets for member states is to reduce energy consumption by 20% through increased energy efficiency (see, for example, European Commission, 2009). Moreover, the European Strategic Energy Technology Plan (SET-Plan) – see, for example, European Commission (2010) – places energy efficiency at the centre of its Smart Cities and European Electricity Grid Initiatives (among the European Industrial Initiatives (EII)). At the UK level, the UK Energy White Paper (2003) describes energy efficiency as one of the most cost effective and safest ways of addressing energy and climate policy objectives. In Scotland, the recently published ‘Energy Action Plan’, the Scottish Government sets out Scotland’s first national target to improve energy efficiency and how this will be achieved with the use of grants given to local authorities. In the Appendix to this paper, for the reader’s information, we provide a summary overview of energy efficiency policy instruments currently active within the UK and Scotland. The purpose of the current paper is to clarify some issues relating to the phenomenon of rebound effects. The paper originates from an interview with the Principle Investigator, Dr Karen Turner (University of Stirling, formerly of the University of Strathclyde) by Maggie Koerth-Baker, a science journalist working on a book for Wiley & Sons about the future of energy in the United States. The following is not a precise transcript of that interview; rather it picks out and develops key issues from the questions posed and the answers given

Productivity Growth, Decoupling and Pollution Leakage

This paper examines the issue of decoupling economic growth and pollution through growth driven by productivity improvements; and the extent to which pollution effects spill over national borders. Focus is widened from conventional production measures of pollution to a consumption accounting principle (carbon footprints). This adds a useful dimension to understanding pollution leakage effects. Using an interregional empirical general equilibrium framework, we consider the impacts of productivity growth in one region in that region and a neighbour linked through trade in goods and services and in the factor of production that is targeted with the productivity improvement (here through interregional migration of labour). The key finding is that while economic growth resulting from the productivity improvement in one region is accompanied by increased absolute pollution levels across both regions, positive competitiveness effects lead to a reduction in imports and pollution embodied therein to both regions from the rest of the world

Impacts of regional productivity growth, decoupling and pollution leakage

This is an Open Access article distributed under the terms of the Creative Commons Attribution License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited. © 2016 The Author(s). Published by Informa UK Limited, trading as Taylor & Francis Group.Impacts of regional productivity growth, decoupling and pollution leakage. Regional Studies. This paper examines the issues of decoupling regional economic growth and pollution and the extent to which pollution effects spillover regional/national borders. Specifically, a UK, regionally disaggregated, computable general equilibrium (CGE) model is used to investigate the relationship between economic growth and the level of CO2 emissions posited by the ‘environmental Kuznets curve’ (EKC) conjecture using production accounting principle (PAP) and consumption accounting principle (CAP) environmental accounting methods. The simulation results suggest that at the regional level the existence of an EKC relationship depends on the source of regional growth and the how this relationship is specified.Peer reviewedFinal Published versio

LSST: from Science Drivers to Reference Design and Anticipated Data Products

(Abridged) We describe here the most ambitious survey currently planned in the optical, the Large Synoptic Survey Telescope (LSST). A vast array of science will be enabled by a single wide-deep-fast sky survey, and LSST will have unique survey capability in the faint time domain. The LSST design is driven by four main science themes: probing dark energy and dark matter, taking an inventory of the Solar System, exploring the transient optical sky, and mapping the Milky Way. LSST will be a wide-field ground-based system sited at Cerro Pach\'{o}n in northern Chile. The telescope will have an 8.4 m (6.5 m effective) primary mirror, a 9.6 deg$^2$ field of view, and a 3.2 Gigapixel camera. The standard observing sequence will consist of pairs of 15-second exposures in a given field, with two such visits in each pointing in a given night. With these repeats, the LSST system is capable of imaging about 10,000 square degrees of sky in a single filter in three nights. The typical 5$\sigma$ point-source depth in a single visit in $r$ will be $\sim 24.5$ (AB). The project is in the construction phase and will begin regular survey operations by 2022. The survey area will be contained within 30,000 deg$^2$ with $\delta<+34.5^\circ$, and will be imaged multiple times in six bands, $ugrizy$, covering the wavelength range 320--1050 nm. About 90\% of the observing time will be devoted to a deep-wide-fast survey mode which will uniformly observe a 18,000 deg$^2$ region about 800 times (summed over all six bands) during the anticipated 10 years of operations, and yield a coadded map to $r\sim27.5$. The remaining 10\% of the observing time will be allocated to projects such as a Very Deep and Fast time domain survey. The goal is to make LSST data products, including a relational database of about 32 trillion observations of 40 billion objects, available to the public and scientists around the world.Comment: 57 pages, 32 color figures, version with high-resolution figures available from https://www.lsst.org/overvie

Econometric estimation of nested production functions and testing in a computable General equilibrium analysis of economy-wide rebound effects

Quantitative models, such as computable general equilibrium (CGE), that are increasingly used to inform policy processes rely on a number of assumptions concerning how good and services are produced. Previous research has shown that the elasticity of substitution between inputs and the structure in which these inputs interact can have large impacts on model output. However, the choice of elasticities and production structure is often made without the support of statistical evidence. This research aims to address these points by estimating nesting structure and the elasticities of substitution therein across a number of sectors in the UK then testing the implications of introducing these estimates to parameterise a CGE model that is then used to simulation the economy-wide impacts of increased efficiency in the productive use of energy

Input-output analyses of the pollution content of intra- and inter-national trade flows

This paper considers the application of input-output accounting methods to consider the pollution implications of different production and consumption activities, with specific focus on pollution embodied in intra-and inter-national trade flows. We consider the illustrative case studies of interregional trade flows between two regions of the UK and between five Mid-West regions/states within the US. We focus on different types of air pollutant of current policy concern in each case and demonstrate how use of the environmental input-output framework allows us to analyse the nature and significance of interregional pollution spillovers. Our results raise questions in terms of the extent to which authorities at regional level can control local emissions where they are limited in the way some emissions can be controlled, particularly with respect to changes in demand elsewhere within the national economy. This implies a need for policy co-ordination between national and regional level authorities to meet emissions reductions targets. Moreover, the existence of pollution trade balances between regions also raises issues in terms of net losses/gains in terms of pollutants as a result of interregional trade. In conducting analyses for different types of air pollutant (here CO2 as a global warming gas, GHG, in the UK case and ammonia, NH3, as a pollutant of more local concern in the US case) we also consider how pollution embodied in international trade flows may be accounted for and attributed.Interregional input-output models; pollution trade balance; pollution attribution; air pollution