Rent seizing and environmental concerns: a parametric valuation of the italian hydropower sector

This paper is the first attempt to estimate the hydroelectricity rent in Italy, as several concessions are about to expire, and the first to analyze the implications of different redistribution mechanisms. Due to budgetary constraints, local authorities want to capture a higher part of the rent, thought to be considerable. At the same time, the renewal procedure entails the implementation of environmental mitigation measures, as set forth in the water framework directive. Hence, rent-seizing and environmental protection generate a major trade-off. We focus our analysis on the County of Sondrio, home to 18% of the overall hydropower capacity, where the first renewals will take place. We obtain the highest rent ever estimated for hydropower production, averaging from 30.3. \u20ac/MWh to 82.4. \u20ac/MWh. These high values explain why local authorities are pushing for the introduction of a 30% revenue sharing fee, as they would earn almost 90% of the rent, much more than the 50% currently seized. Albeit satisfying the rent-seizing objective, the proposed fee hinders the implementation of costly mitigation measures. In this paper, we advocate the adoption of a resource rent tax, as we show that it would reduce the trade-off between rent-seizing and environmental protection

Essais sur l'économie de l'eau

La thèse est structurée autour de quatre articles. Le premier article - What determines efficiency? An analysis of the Italian water sector – offre une évaluation d’efficience du plus grand échantillon d’entreprises italiennes dans le secteur de l’eau qui ait jamais été rassemblé. Cela sur un horizon temporel de quatre ans. Le deuxième article – Hydropower rent in Northern Italy: economic and environmental concerns in the renewal procedure – a deux objectifs: le premier est d’estimer la rente de l’hydroélectricité en Italie, ce qui n’a jamais été intenté auparavant ; le seconde est d’analyser le trade-off entre l’appropriation de la rente et les améliorations environnementales. Le troisième article – Estimating a performance-based environmental fee for hydropower production: a choice experiment approach – développe une redevance basée sur la performance environnementale à mesure non seulement d’internaliser les coûts environnementaux que l’hydroélectricité détermine, mais aussi d'inciter les producteurs à aller au delà de la régulation environnementale existante : de cette façon, ils payent moins. Enfin, le quatrième article – Cheaper electricity or a better river? Estimating fluvial ecosystem value in Southern France – applique la méthodologie CE à l’étude du trade-off potentiel entre revenue-sharing et améliorations environnementales dans la Vallée d’Aspe (Pyrénées français), où plus de 100 MW de capacité hydroélectrique sont installés.The thesis is structured as a collection of four papers and it is ideally divided into two parts: the first one, composed of just one paper, is an efficiency analysis of the Italian integrated water sector; the second part, made of the other three papers, is thematic and studies hydropower production in terms of rent generation and environmental impacts.The first paper – What determines efficiency? An analysis of the Italian water sector – offers an original evaluation of the efficiency of the biggest sample ever gathered of Italian water companies over a period of four years.The first paper of the thematic part – Hydropower rent in Northern Italy: economic and environmental concerns in the renewal procedure – has two objectives: the first one is to estimate the hydropower rent in Italy, which has never been done before; the second one is to investigate the trade-off between rent seizing and environmental improvements.The second thematic paper – Estimating a performance-based environmental fee for hydropower production: a choice experiment approach – develops a performance-based environmental fee able not only to internalize the environmental costs that hydropower causes, but also to stimulate producers to outperform existing environmental regulation: the more they outperform, the less they pay.Finally, the third thematic paper – Cheaper electricity or a better river? Estimating fluvial ecosystem value in Southern France – applies the DCE approach to study the potential trade-off between revenue-sharing and environmental improvements in the Aspe valley, located in the French Pyrenees, where more than 100 MW of hydropower capacity are installed

Investigating policy and R&D effects on environmental innovation: A meta-analysis

In the last decades, awide research effort has been devoted at the analysis of the determinants of environmental innovation (EI).Whereas agreement seemed to emerge around a cluster of determinants, mainly “Technology push”, “Market pull”, “Policy push–pull” and “firm specific factors”, empirical analyses have failed to provide strong confirmation on the relevance of some core variables. After a qualitative discussion of this literature,we empirically assess it by exploiting meta-regression-analysis techniques to test the effectiveness of two determinants: policy and R&D. Our findings are clear: as for the first, we showthat only certain types of policy have proven to affect EI, in particular regulatory stringency. As for R&D, we show that the use of estimationmethods is not neutral to the outcome of the primary studies

Cheaper electricity or a better river? Estimating fluvial ecosystem value in Southern France

In the next years, France will renew a consistent share of hydroelectric concessions, among which we find those insisting on the Aspe and its tributaries (for a total of almost 100 MW). Beauty contests will take place, where bidders will present offers for technical and environmental improvements, as well as a revenue sharing percentage for Local Authorities. This framework generates a potential trade-off between revenue-sharing and environmental improvement. Our work investigates this trade-off by means of a discrete choice experiment (DCE) to estimate people's preferences. The experiment has been conducted on a representative sample living in the Aspe valley. In our DCE, we translate the revenue sharing in an immediate rebate in the electricity bill. Respondents could choose higher rebates and lower ecosystem improvements or lower (or no) rebate and higher ecosystem amelioration. According to the experiment results, the highest total willingness to pay (WTP) is above € 144 per household and per year. Moreover, people's marginal WTP for a satisfactory fish stock reaches 250 €/year, that is three times the maximum rebate that was offered. Finally, all environmental attributes are considered as significant and worth a monetary effort. Therefore, hydroelectric concession bidders should give clear priority to environmental aspects

Italian Regulation of Electricity Distribution and its Impact on Efficiency, Investments and Innovation: A Qualitative Assessment

The increase in distributed generation and the pro-active role of consumers call for smarter networks. Consequently, regulation must change to promote this evolution. This article performs a critical overview of the Italian regulation of electricity distribution and its effectiveness in encouraging efficiency, quality and innovative investments. The analysis shows that the regulator has followed a building-block approach: throughout different regulatory periods, it has added new modules to its previous regulatory mechanism to take care of the constantly increasing set of objectives. This does not give DSOs a unitary and coherent regulatory framework and has led to the overlapping of different incentive mechanisms

Natural gas balancing, storage, and flexibility in Europe: assessing the recent literature

The liberalization process of European gas markets has shown how pivotal is the role of both balancing mechanisms and flexibility instruments. Before the liberalization, in fact, these activities were perceived as being very technical. A growing body of literature, instead, has demonstrated how decentralized and market-oriented forms of managing both issues is crucial for achieving well-functioning and liquid wholesale markets. The aim of our paper is precisely to show how the evolution of theoretical models, coupled with findings from empirical investigations, has provided scientific justifications for the introduction of market-oriented rules by regulators and policy makers. At present, to achieve a fully integrated European market, the Energy Union policy framework has to attain one last final target: the harmonization and integration of balancing and flexibility mechanisms among markets, particularly with the expected increase in intermittent generation

Incentivi alle nuove infrastrutture d'approvvigionamento di gas: il caso del GNL

A primary concern of the European Union in recent years has been to promote the stability and assurance of the supply of energy to Member States. The European Council has identified the LNG chain as a way to achieve this goal, leading many EU-member States to adopt incentive regulations to encourage companies to build new regasification plants. Our paper discusses and compares these regulations and then focuses on the Italian case. Italy is very reliant on natural gas, but still has no importation infrastructures operated by newcomers. This has prompted the Italian authority to implement a special incentive regulation aimed at facilitating the entry of newcomers to the market. This regulation (No. 178/05) has attracted a higher filing of new infrastructure plans than all those filed in the rest of the EU combined. Our paper claims that this regulation is over-weighted on the incentive side, with the risk that it will both reduce the possibility of newcomers to enter the market and create considerable costs to the entire Italian gas system.GNL, regolazione degli incentivi

Ownership Separation of the Gas Transportation Network: Theory and Practice

This article analyzes the pros and cons of ownership separation of the gas transportation network. This analysis is made with a specific test that confronts two pairs of different theoretical approaches on vertical integration. The result of this test shows that no uncontroversial solution can be offered to this problem, since all arguments (be them in favour or against) can be comfortably contrasted by a counterargument. In our view, an effective regulation would solve the problem, even though it has to be highlighted that ownership separation of the gas transportation network is not the key aspect of the gas industry. EU directives, in fact, cannot be applied where the biggest part of the value chain is produced, that is to say beyond the European borders, where an oligopoly operates. Due to its bargaining power, this oligopoly captures almost all the scarcity rent, reducing the scope for market liberalization.Separazione proprietaria, chiusura verticale, capacità negoziale