Security of supply and retail competition in the European gas market: Some model-based insights

In this paper, we analyze the impact of uncertain disruptions in gas supply upon gas retailer contracting behavior and consequent price and welfare implications in a gas market characterized by long-term gas contracts using a static Cournot model. In order to most realistically describe the economical situation, our representation divides the market into two stages: the upstream market that links, by means of long-term contracts, producers in exporting countries (Russia, Algeria, etc.) to local retailers who bring gas to the consuming countries to satisfy local demands in the downstream market. Disruption costs are modeled using short-run demand functions. First we mathematically develop a general model and write the associated KKT conditions, then we propose some case studies, under iso-elasticity assumptions, for the long- short-run inverse-demand curves in order to predict qualitatively and quantitatively the impacts of supply disruptions on Western European gas trade. In the second part, we study in detail the German gas market of the 1980s to explain the supply choices of the German retailer, and we derive interesting conclusions and insights concerning the amounts and prices of natural gas brought to the market. The last part of the paper is dedicated to a study of the Bulgarian gas market, which is greatly dependent on the Russian gas supplies and hence very sensitive to interruption risks. Some interesting conclusions are derived concerning the necessity to economically regulate the market, by means of gas amounts control, if the disruption probability is high enough

The prisoner’s dilemma in Cournot models: when endogenizing the level of competition leads to competitive behaviors.

In resource based economies, regulating the production and export activities have always been an important challenge. Examples in oil and gas show that different behaviors have been adopted ranging from the export monopoly to the complete opening of the export market. This paper tries to explain this multitude of solutions via strategic interactions. When modeling imperfect competition, players are separated in two categories: those who exert market power and those who are competitive and propose the good at their marginal supply cost. Letting a player freely choose whether it wants to exert market power or not when it optimizes its utility is not discussed in the literature. This paper addresses this issue by letting the players choose the level of competition they want to exert in the market. To do so, we analyze the behavior of two countries competing to supply a market with a homogeneous good in an imperfect competition setting. Each country decides the number of firms it authorizes to sell in the market. The interaction between the firms is of a Nash-Cournot type, where each one exerts market power and is in competition with all other firms allowed to sell, whether they belong to the same country or not. Each country optimizes its utility, that is the sum of the profits of its firms. We have studied four kinds of interaction between the countries. The first calculates the closed loop Nash equilibrium of the game between the countries. The second setup analyzes the cartel when the countries collude. The third focuses on the open loop Nash equilibrium and the fourth models a bi-level Stackelberg interaction where one country plays before the other. We demonstrate that in the closed loop Nash equilibrium, our setting leads to the prisoner’s dilemma: the equilibrium occurs when both countries authorize all their firms to sell in the market. In other words, countries willingly chose not to exert market power. This result is at first sight similar to the Allaz & Vila (1993) result but is driven by a completely different economic reasoning. In the Stackelberg and coordinated solutions, the market is on the contrary very concentrated and the countries strongly reduce the number of firms that enter the market in order to fully exert market power and increase the price. The open loop result lies in between: the countries let all their firms sell but market power remains strong. These results suggest that the prisoner’s dilemma outcome is due to the conjectural inconsistency of the Nash equilibrium. Finally, in the Stackelberg setting, we give countries the choice of being leader or follower and demonstrate that the counter-intuitive competitive outcome is very unlikely to occur in the market

Unintended consequences: The snowball effect of energy communities

Following the development of decentralized generation and smart appliances, energy communities have become a phenomenon of increased interest. While the benefits of such communities have been discussed, there is increasing concern that inadequate grid tariffs may lead to excess adoption of such business models. Furthermore, snowball effects may be observed following the effects these communities have on grid tariffs. We show that restraining the study to a simple cost-benefit analysis is far from satisfactory. Therefore, we use the framework of cooperative game theory to take account of the ability of communities to share gains between members. The interaction between energy communities and the DSO then results in a non-cooperative equilibrium. We provide mathematical formulations and intuitions of such effects, and carry out realistic numerical applications where communities can invest jointly in solar panels and batteries. We show that such a snowball effect may be observed, but its magnitude and its welfare effects will depend on the grid tariff structure that is implemented, leading to possible PV over-investments

Observable Electron EDM and Leptogenesis

In the context of the minimal supersymmetric seesaw model, the CP-violating neutrino Yukawa couplings might induce an electron EDM. The same interactions may also be responsible for the generation of the observed baryon asymmetry of the Universe via leptogenesis. We identify in a model-independent way those patterns within the seesaw models which predict an electron EDM at a level probed by planned laboratory experiments and show that negative searches on \tau-> e \gamma decay may provide the strongest upper bound on the electron EDM. We also conclude that a possible future detection of the electron EDM is incompatible with thermal leptogenesis, even when flavour effects are accounted for.Comment: 26 pages, 6 figure

Low energy effects of neutrino masses

While all models of Majorana neutrino masses lead to the same dimension five effective operator, which does not conserve lepton number, the dimension six operators induced at low energies conserve lepton number and differ depending on the high energy model of new physics. We derive the low-energy dimension six operators which are characteristic of generic Seesaw models, in which neutrino masses result from the exchange of heavy fields which may be either fermionic singlets, fermionic triplets or scalar triplets. The resulting operators may lead to effects observable in the near future, if the coefficients of the dimension five and six operators are decoupled along a certain pattern, which turns out to be common to all models. The phenomenological consequences are explored as well, including their contributions to $\mu \to e \gamma$ and new bounds on the Yukawa couplings for each model.Comment: modifications: couplings in appendix B, formulas (121)-(122) on rare leptons decays (to match with published version) and consequently bounds in table

Chiral Fluid Dynamics and Collapse of Vacuum Bubbles

We study the expansion dynamics of a quark-antiquark plasma droplet from an initial state with restored chiral symmetry. The calculations are made within the linear $\sigma$ model scaled with an additional scalar field representing the gluon condensate. We solve numerically the classical equations of motion for the meson fields coupled to the fluid-dynamical equations for the plasma. Strong space-time oscillations of the meson fields are observed in the course of the chiral transition. A new phenomenon, the formation and collapse of vacuum bubbles, is also predicted. The particle production due to the bremsstrahlung of the meson fields is estimated.Comment: 12 pages Revtex,5 figures, Figures modified, minor changes in text. To be published in Phys. Rev. Let

Finite Temperature Correlators in the Schwinger Model

We discuss the correlation function of hadronic currents in the Schwinger model at finite temperature $T$. We explicitly construct the retarded correlator in real time and obtain analytical results for the Euclidean correlator on a torus. Both constructions lead to the same finite temperature spectral function. The spatial screening lengths in the mesonic channels are related to the dynamical meson mass $m=e/\sqrt{\pi}$ and not $2\pi T$ even in the infinite temperature limit. The relevance of our results for the finite temperature problem in four dimensions is discussed.Comment: in LATEX, 30 pages; two figures available on request from the authors; USITP-93-19, SUNY-NTG-43, (explanations to the figures have been clarified

Comment on ``Relativistic kinetic equations for electromagnetic, scalar and pseudoscalar interactions''

It is found that the extra quantum constraints to the spinor components of the equal-time Wigner function given in a recent paper by Zhuang and Heinz should vanish identically. We point out here the origin of the error and give an interpretation of the result. However, the principal idea of obtaining a complete equal-time transport theory by energy averaging the covariant theory remains valid. The classical transport equation for the spin density is also found to be incorrect. We give here the correct form of that equation and discuss briefly its structure.Comment: 5 pages LaTe

On the viability of energy communities

Following the development of decentralized production technologies, energy communities have become a topic of increased interest. While the potential benefits have been described, we use the framework of cooperative game theory to test the ability of such communities to adequately share the gains. Indeed, despite the potential value created by such coalitions, there is no guarantee that they will be viable: a subset of participants may find it profitable to exit the community and create another one of their own. We take the case of a neighborhood, having access to a limited resource e.g. a shared roof or piece of land which they can exploit if they invest in some renewable production capacity. By joining the community, participants also enjoy aggregation gains in the form of reduced network fees. We find conditions depending on the structure of renewable installation costs, on the magnitude of the aggregation effect and coordination costs and, most importantly, on the chosen sharing rule, under which the whole energy community is stable. Efficiency could require the intervention of a social planner or a change in network tariff structures

Renormalization group evolution of neutrino masses and mixing in seesaw models: A review

We consider different extensions of the standard model which can give rise to the small active neutrino masses through seesaw mechanisms, and their mixing. These tiny neutrino masses are generated at some high energy scale by the heavy seesaw fields which then get sequentially decoupled to give an effective dimension-5 operator. The renormalization group evolution of the masses and the mixing parameters of the three active neutrinos in the high energy as well as the low energy effective theory is reviewed in this article.Comment: 54 pages. Invited review submitted to IJMP