Topic Energy Economics

Stabilized Benders Decomposition for Energy Planning under Climate Uncertainty

Heat Monitor 2023: Despite Continued Price Increases, Lower Decline in Households’ Heating Energy Consumption

In 2023, heating energy prices increased by substantial 31 percent compared to the previous year, following a 33 percent increase already seen in 2022. Calculations based on data from the energy service provider ista show average price increases were the highest in the German state of Rhineland- Palatinate, and the lowest in Hamburg. Owing to these price hikes and ongoing energy-saving efforts, the ...

Catalyzing the Transition to a Climate-Neutral Industry with Carbon Contracts for Difference: Commentary

VAT Pass-through and Competition: Evidence from the Greek Islands

We examine how competition affects VAT pass-through in isolated oligopolistic markets as defined by the Greek islands. Using daily gasoline prices and a difference-in-differences methodology, we investigate how changes in VAT rates are passed through to consumers in islands with different market structure. We show that pass-through increases with competition, going from 50% in monopoly to around 80% ...

Power Sector Benefits of Flexible Heat Pumps in 2030 Scenarios

Heat pumps play a major role in decreasing fossil fuel use in heating. They increase electricity demand, but could also foster the system integration of variable renewable energy sources. We analyze three scenarios for expanding decentralized heat pumps in Germany by 2030, focusing on the role of buffer heat storage. Using an open-source power sector model, we assess costs, capacity investments, and ...

Energy-Efficient Building Renovation: Price‑Adjusted Investments Declining; Trend Reversal Needed to Reach Climate Targets

In light of rising oil and gas prices, investments in energy-efficient building renovation in Germany have risen recently in nominal terms. In 2023, around 72 billion euros were spent on the energy-efficient renovation of residential, public, and commercial buildings, about 12 billion more than in 2021. Nevertheless, investments declined by over six percent in price-adjusted terms, as construction ...

The Political Economy of Fossil Fuel Subsidy Removal: Evidence from Bolivia and Mexico

We study the impact of fossil fuel subsidy removal on presidential popularity using difference-indifference approaches and a stylized theoretical model. Analyzing macro level data for two subsidy removal events in Mexico and Bolivia in the early 2010s, we find evidence of a negative impact on presidential approval. Our theoretical probabilistic voting model predicts that the decline in popularity is ...

Effectiveness and Heterogeneous Effects of Purchase Grants for Electric Vehicles

We evaluate German purchase subsidies for battery electric vehicles (BEVs) and plug-in hybrid electric vehicles (PHEVs) using data on new vehicle registrations in Germany dur¬ing 2015-2022. We account for confounding time trends and interacting EU-level CO2 standards using neighboring countries as a control group. We find that 40% of BEV and 25% of PHEV registrations were subsidy-induced. The program ...

Impacts of Electric Carsharing on a Power Sector with Variable Renewables

Electrifying the car fleet is a major strategy for mitigating emissions in the transport sector. As electrification cannot solve all negative externalities associated with cars, reducing the size of the car fleet would be beneficial. Electric carsharing could reconcile current car usage habits with a smaller fleet, but this may reduce the potential of electric cars to align their grid interactions ...

Cream-skimming through PPAs – Interactions between Private and Public Long-term Contracts for Renewable Energy

Public support systems and private investments in renewable energy are increasingly existing side-by-side and are both emphasized in policy proposals on the European and national levels. This paper assesses the interaction between the two approaches with respect to cream-skimming, i.e., the potential for low-cost projects to sign private contracts that increase the costs of publicly supported renewable ...