Modeling the deployment of plug-in hybrid and electric vehicles and their effects on the Australian National Electricity Market.

The development of hybrid and fully electric vehicles could deliver significant reductions of emissions from the Australian transportation sector by shifting its major energy source from internal combustion to electricity. This shift towards the the use of electricity shifts the point source emissions to one which has a lower emissions intensity. Changes in load behaviour as a result of the consumer uptake of these vehicles will have significant consequences for network and central planners for the future of Australia’s electricity supply industry. This paper investigates the effects on the security of supply of energy during these previously unseen demand patterns, while also examining changes to spot market prices and changes in emissions rates. The simulation results indicate that wholesale prices during the off-peak period will increase slowly over time with controlled charging. While uncontrolled charging increases the incidence of extreme price events and a considerable number of hours with un-served energy within the network. This increase in spot prices may have consequences for regulated retail electricity tariffs. We also discuss the implementation of possible changes to the retail tariff structure to accommodate the charging of these vehicles.Electricity Markets, Hybrid Vehicle, Transportation Economics.

Emissions Trading and the Convergence of the Australian Electricity and Transport Markets

Bottom up partial equilibrium modelling of the energy sector has tended to focus on the electricity sector given its typically large share of total emissions, the deregulation of that market in many countries and the relatively well understood technology options. In contrast, this paper employs a model of the energy sector to investigate the proportion electricity and transport may contribute given the relative cost of abatement in those sectors, for specified emission targets. A related issue is the potential convergence of the two sectors through greater uptake of electrically powered transport.Energy, Emissions trading, Electricity and transport, integrated modelling, Environmental Economics and Policy, Public Economics,

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The Death of the Overreaction Anomaly? A Multifactor Explanation of Contrarian Returns

Are the returns accruing to De Bondt and Thaler’s (1985) (DT) much celebrated overreaction anomaly pervasive? Using the CRSP data set used by for the period 1926 through 1982, and, for the first time, an additional two decades of data (1983 through 2003), we provide preliminary support for the original work of DT, reporting that the overreaction anomaly has not only persisted over the past twenty years but has increased, on a risk-unadjusted basis. However, using the three factor model of Fama and French (1993) (FF), we find no statistically significant alpha can be garnered via the overreaction anomaly, with contrarian returns driven by the factors of size and value, not the behavioral biases of investors. It is our conjecture that the anomaly is not robust under the FF framework, with ‘contrarian’ investors following such a scheme simply compensated for the inherent portfolio risk held.Overreaction, anomaly, multifactor asset pricing model