[PDF] Three Essays On Energy Prices And The Energy Transition eBook

Author : Aurélien Saussay (économiste).)
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File Size : 13,11 MB
Release : 2018
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This thesis takes advantage of the remarkable volatility of energy prices across both time and space over the past two decades to identify the impacts of increased fossil fuel energy prices on economic agents. It first examines one of the main sources of this renewed energy price volatility, the U.S. shale gas revolution, before turning to the analysis of two policy issues related to the implementation of carbon pricing: the risk of industrial investment relocation as a consequence of degraded competitiveness, and the distributional impacts of increased gasoline prices for households. The first chapter performs a detailed statistical analysis of an original dataset of 40,000 U.S. shale gas wells to calibrate a techno-economic model of shale gas extraction profitability, and finds that the shale gas revolution is not transferrable to continental Europe. The second chapter combines a database of 70,000 industrial M&A transactions covering 20 years and 41 countries with a sectoral industrial energy price index to identify the impact of relative energy prices on industrial investment location. Findings imply that firms tend to engage in more cross-border investments when their domestic energy prices increase in relative terms against foreign prices, which broadly supports the pollution haven hypothesis. Counterfactual policy simulations show that this effect is limited though. The third chapter develops a simple dynamic model of household gasoline consumption, using the rational habits framework to capture the intertemporal dimension of gasoline demand. This model is then estimated on PSID household-level data between 1999 and 2015 using localized gasoline prices. Estimation results show that households exhibit habits formation and forward-looking behavior in their gasoline consumption, and find a -0.88 long term price elasticity. Micro-simulations also find suggestive evidence of interactions between dynamic heterogeneity and the regressivity of gasoline price increases. The findings of this thesis strengthen the case for compensatory policies aimed at improving carbon pricing acceptance by economic agents, and provide tools that can contribute to their design and calibration.

Author : Gaurav Doshi (Ph.D.)
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File Size : 18,71 MB
Release : 2023
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This dissertation studies the impact of energy policy on U.S. electricity markets and energy transition. The first chapter examines the impact of grid expansion on market power and emissions from fossil fuel firms in the short-run and the transition to wind energy in the long-run. For the empirical analysis, I use the rollout of a large-scale transmission expansion project in Texas that linked windy areas in the west to population centers in the east, costing $6.8 billion. Results show significant benefits due to declines in markups, emissions, and increases in wind investment. The payback periods range from 5 - 12 years and are much shorter than the previous estimates in the literature. In the second chapter, I study the effect of market structure on technology adoption in the U.S. solar and wind power industries. I compare adoption across two market types: restructured markets, which are designed to promote competition, and traditional markets, which are dominated by regulated monopolists. Solar projects in restructured markets are 24 percent less likely to adopt frontier technology, while the effect for wind projects is negative but statistically insignificant. I provide evidence that differences in financing costs across the two market types explain this negative relationship between competition and adoption. In the third chapter, I study the effect of transmission expansion on the cost of hedging risk in the wholesale electricity market. Market participants (generating firms, retailers, and financial traders) use forward contracts to hedge risk from price volatility in the market. I show that transmission integration in Texas significantly lowered the prices of these contracts, which translates to about $265 million worth of annual benefits in terms of lower cost of hedging risk. Further, I show evidence of greater market efficiency measured by the geographical convergence of prices across regions in Texas.

Author : Gaurav Doshi (Ph.D.)
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Page : 0 pages
File Size : 36,8 MB
Release : 2023
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This dissertation studies the impact of energy policy on U.S. electricity markets and energy transition. The first chapter examines the impact of grid expansion on market power and emissions from fossil fuel firms in the short-run and the transition to wind energy in the long-run. For the empirical analysis, I use the rollout of a large-scale transmission expansion project in Texas that linked windy areas in the west to population centers in the east, costing $6.8 billion. Results show significant benefits due to declines in markups, emissions, and increases in wind investment. The payback periods range from 5 - 12 years and are much shorter than the previous estimates in the literature. In the second chapter, I study the effect of market structure on technology adoption in the U.S. solar and wind power industries. I compare adoption across two market types: restructured markets, which are designed to promote competition, and traditional markets, which are dominated by regulated monopolists. Solar projects in restructured markets are 24 percent less likely to adopt frontier technology, while the effect for wind projects is negative but statistically insignificant. I provide evidence that differences in financing costs across the two market types explain this negative relationship between competition and adoption. In the third chapter, I study the effect of transmission expansion on the cost of hedging risk in the wholesale electricity market. Market participants (generating firms, retailers, and financial traders) use forward contracts to hedge risk from price volatility in the market. I show that transmission integration in Texas significantly lowered the prices of these contracts, which translates to about $265 million worth of annual benefits in terms of lower cost of hedging risk. Further, I show evidence of greater market efficiency measured by the geographical convergence of prices across regions in Texas.