Danish Market Research Articles

Household electricity consumers’ incentive to choose dynamic pricing under different taxation schemes

Dynamic pricing of retail electricity, as opposed to the widely applied average pricing, has often been proposed to enhance economic efficiency through demand response. The development of variable production from renewable energies and expectations about the installation of heat pumps and electric vehicles has now reinforced interest in flexible demand and dynamic pricing. With a roll‐out of smart metering one important technical hurdle is going to be cleared, and dynamic retail pricing may soon become an eligible option for many households. We quantify the potential incentives to adopt new pricing schemes using exemplary Danish data. Until now, limited activity of household consumers on retail markets indicates that switching supplier or contract is perceived costly. We apply the concept of switching costs to explain this hesitant behavior, and use it to estimate a threshold level based on recent observations in the Danish market. We calculate potential savings from dynamic pricing and show how the choice of electricity taxation technique may hamper or enhance potential benefits. In the light of switching costs, our results suggest that the combination of smart meter roll‐out and dynamic pricing offerings might be insufficient to convince the majority of households to switch contracts and become active in response to prices, unless they hold a substantial flexibility potential. Dynamic taxation, even if applied to parts of the levies, could contribute significantly to inducing flexible consumption. WIREs Energy Environ 2018, 7:e270. doi: 10.1002/wene270.This article is categorized under: Energy Infrastructure > Economics and Policy Energy Systems Economics > Economics and Policy Energy Policy and Planning > Economics and Policy

Parallel trade of pharmaceuticals: The Danish market for statins.

This paper investigates and quantifies the impact of parallel trade in markets for pharmaceuticals. The paper develops a structural model of demand and supply using data on price, sales, and the characteristics of statins in Denmark and simulates outcomes under a complete ban of parallel imports, keeping other regulatory schemes unchanged. There are two sets of key results. The first set focuses on price effects. On average, prices increase more in markets where the molecule has lost patent protection; wholesale prices for both generic and original products increase after competition from parallel importers is removed, but the final price paid by consumers (after deducting reimbursement) increases more for original products than for generics because most changes in wholesale prices are absorbed by the prevailing reimbursement rules. The second set of results reports the effects on market participants. My model takes into consideration consumers' preferences, allowing them to substitute between products. Prohibiting parallel imports induces consumers to substitute towards original products for which they have stronger preferences. In sum, banning parallel imports leads to (a) an increase in variable profits for original producers and a decrease for generic firms, (b) an increase in governmental health-care expenditures, and (c) a decrease in the welfare of Danish patients and firms.

Designing a joint market for procurement of transmission and distribution system services from demand flexibility

Demand flexibility and other distributed energy resources (DER) have potential to provide ancillary services (AS) to the power system on both transmission and distribution level. AS markets for transmission system operation have existed for many years. The development of Smart Grid has led to an idea of introducing similar markets for distribution system services. Since DER represent a common pool of resources located in the distribution grid which can be used for either transmission or distribution system AS, a more holistic approach to the power system operation with a greater coordination between the transmission and the distribution level is being encouraged by energy regulators today.In this paper, we propose a market framework for joint procurement of transmission and distribution system services from demand flexibility. To better illustrate the idea, we use the Danish market for tertiary control reserves as an example of a market that can be linked to a potential distribution system market for congestion management services. We discuss the details of the market design and formulate the joint market clearing procedure where demand flexibility offers are allocated to either transmission system service or distribution system service. A numerical example illustrates the economic benefit of the joint market clearing, and we further discuss some other advantages of the proposed design.

Search for Internal Cancers in Mice Tattooed with Inks of High Contents of Potential Carcinogens: A One-Year Autopsy Study of Red and Black Tattoo Inks Banned in the Market

Background and Objective: Tattoo ink stock products often contain potential carcinogens, which on large-scale population exposure may be clinically relevant. The aim of this autopsy study in mice was to screen major organs for clinical and subclinical cancers. Methods: Mice were tattooed on their backs. In total, 48 mice were included and divided into 4 groups; 11 mice tattooed black, 10 tattooed red, and 5 mice serving as untreated controls. A group of 22 mice with black tattoos and exposed to ultraviolet radiation (UVR) were also studied. The black and red inks were both stock products banned on the Danish market due to the measured contents of potential carcinogens; benzo(a)pyrene and 2-anisidine, respectively. The mice were housed for 1 year after tattooing, and autopsy study on internal organs was performed. Tissue samples were systematically taken from major organs for screening of subclinical changes, not detected by visual examination. Any observed deviation from normal structure was subject to biopsy and light microscopy. Results: All mice survived the 1-year observation period. Autopsy revealed no macroscopic signs of cancer. Microscopic search of internal organs showed no subclinical or clinical cancer. Conclusion: Despite extensive tattoos with 2 banned inks, the long-term observation in mice showed no internal cancers nor was the combination of carcinogen and UVR associated with cancer. Lack of observed malignancy might be explained by the fact that tattooing is only a single dose exposure. Registered data on carcinogens relies on repeated or chronic exposures. The study does not support the hypothesis that tattooing causes cancer.

Spillover Censorship: The Globalization of US Corporate Music Self-Censorship

This article discusses how current practices of corporate self-censorship within the US record industry, originating in a local legal and political context and moral climate, spill over into foreign markets as a side effect of the global operations of dominant multinational entertainment and media conglomerates. A specific case, the dissemination of D12’s “Purple Pills” in various versions on the Danish market since its release in 2001, illustrates the release policies and practices of national or regional divisions of transnational record companies and other commercial agents and leads to reflection on broader ethical issues pertaining to the now widespread phenomenon of censorship in “the cloud.”

Consumer preferences for pig welfare – Can the market accommodate more than one level of welfare pork?

The purpose of the present paper is to investigate the market potential of pork labelled to indicate medium and high levels of animal welfare. The paper asks, in particular, whether there is a risk that Danish consumers will abandon high level welfare pork if less expensive products with a medium level of animal welfare became available. The study was based on an online questionnaire with a choice experiment involving 396 Danish respondents. The results indicated that the Danish market could accommodate more than one pork product with a welfare label but the price differential separating medium and high level animal welfare pork will have to be quite narrow. In addition, full willingness-to-pay of consumers who want to buy high level welfare pork cannot be relied upon to incentivise new consumers to buy medium welfare pork. Further, raising brand awareness in the shopping situation and improving consumer's understanding of brand attributes for high level welfare brands were found to be vital.

Do monetary policy expectations influence transmission mechanism of Danish interbank market under the negative interest rate policy?

In Denmark, monetary policy expectations have some impact on the interbank interest rates in the maturities of one, three and six months. The Danish central bank is successful, to some extent, in influencing the interbank interest rates in the maturities from one to six months through communication with financial markets. But the maturities from nine to 12 months are beyond their control. This fact indicates that market segmentation is observed in the short-term money market in Denmark. The ordinary transmission mechanism of interbank interest rates does not function because of the increased fluctuations in money market rates under a negative interest rate policy. It is therefore suggested that a negative interest rate policy presents complications that could limit policy effectiveness. Negative interest rate policy presents complications that could limit policy effectiveness.

Saga og eiginleikar danskra íbúðalána

Danskur skuldabréfamarkaður er mjög þróaður og hlutfallslega stór miðað við umfang hagkerfisins. Rætur hans liggja í langri regluhefð stofnana sem sýsla með veðlán. Í þessari grein er rakin saga tegundar skuldabréfa sem ganga undir heitinu realkredit-skuldabréf. Þannig bréf eiga sér langa hefð í Danmörku en eru lítt þekkt utan Danmerkur. Markmið útgáfunnar er að miðla markaðsvöxtum beint til lántaka þannig að þeir nái sem hagstæðustum vöxtum. Þessi tegund skuldabréfa er notuð til að fjármagna fasteignir, bæði í íbúðar- og atvinnuhúsnæði. Dregin er upp mynd af 200 ára þróun vaxta og fjármálaafurðum. Tengslum vaxtaþróunar, greiðslubyrði lána og fasteignaverðs á tímabilinu 1992-2013 er lýst og borið lauslega saman við íslenska þróun. Nokkrir þættir í samspili við bankakerfi og Evrópusambandið eru raktir.

New Paradigm in Mortgage Loan Advice

The Danish mortgage market has undergone considerable changes during the last 15 years. New and more complex variations of loan products have been introduced. Nevertheless, mortgage loan advice has remained, by large, unchanged. This paper addresses a study where a number of new refinancing rules are constructed with the help of a stochastic optimization model and the data mining method, CART.

Factors driving and influencing the development of serious games

There are a large variety of serious games aimed at infusing knowledge into both teams and organizations. Some games aims at supporting the team in a given project or development process, whereas others aim at widening the knowledge, skills and competences in an organization on a more general level. In the serious game literature most focus and attention is given to the design and development of digital games. However in Denmark, at least, there has been a growing industry of analogue serious games and serious game facilitation, which give evidence to the fact that not all development in the area of serious games happens in terms of the digital versions. This paper investigate these new analog serious games and learning tools in the Danish market with focus on the drivers and influencing factors during their development and the effort of making a business out of the serious games. Empirically, the paper is based on close interaction and semi-structured interviews with some of the key serious game developers in Denmark (plus one in the US), some of them with a portfolio of up to ten serious games. Besides from uncovering some of the basic motivations to design and develop serious games, the paper will show, how the game developers’ interaction with the end-users and their different business strategies, influences the way the game is developed.

Parallel Trade of Pharmaceuticals: The Danish Market for Statins

The goal of this paper is to investigate and quantify the impact of parallel trade in markets for pharmaceuticals. The paper develops a structural model of demand and supply using data on prices, sales and characteristics of statins, medicines used in the treatment for high cholesterol, in Denmark. The model provides a framework to simulate outcomes under a complete ban of parallel imports, keeping other regulatory schemes unchanged. There are two sets of key results from prohibiting parallel imports. The first set focuses on price effects, which differ substantially along two dimensions: the patent protection status of the molecule and the type of the firm. On average, prices increase more in markets where the molecule has lost patent protection. On the other dimension, both generic firms and original producers increase their pharmacy purchase prices when competition from parallel importers is removed. Given the prevailing reimbursement rules, most changes in pharmacy purchase prices are absorbed by the government. The final price paid by consumers after reimbursement increases more for original firms than for generic producers. The second set of empirical results reports the effects on market participants. My model takes into consideration consumers’ preferences allowing them to substitute between products. Prohibiting parallel imports induces consumers to substitute towards original products for which they have stronger preferences. In sum, banning parallel imports leads to (i) an increase in variable profits for original producers and a decrease for generic firms, (ii) an increase in governmental health care expenditures, and (iii) a decrease in consumers’ welfare.

‘Good order and the police’

The emergence of police ordinances and police authorities in the early modern period has traditionally been seen as a way to discipline society in order to increase the power of the absolutist state. However, recent investigations of early modern policing in German and French regions show that ‘good order and police’ was in demand by the subjects and also adapted to local needs. Inspired by this research this article investigates the enforcement of police ordinances in the Danish market towns of Aalborg and Sæby and the country district of Børglum-Jerslev. The results show that policing remained focused on local needs even after the creation of a royal police office in 1682. Policing mainly concerned the welfare and privileges of burghers in market towns until the introduction of a country police in 1791, when agrarian reforms began to erode the patriarchal order in the countryside. As a new way of governing, ‘police’ was a way both to govern free burghers and preserve traditional order.

Cumulative dietary exposure of the population of Denmark to pesticides

We used the Hazard Index (HI) method to carry out a cumulative risk assessment after chronic dietary exposure to all monitored pesticides in fruit, vegetables and cereals for various consumer groups in Denmark. Residue data for all the pesticides were obtained from the Danish monitoring programme during the period 2004–2011. Food consumption data were obtained from DANSDA (the DAnish National Survey of Diet and physical Activity) for the period 2005–2008. The calculations were made using three different models to cope with residues below the limit of reporting (LOR). We concluded that a model that included processing factors and set non-detects to ½ LOR, but limited the correction (Model 3), gave the most realistic exposure estimate. With Model 3 the HI was calculated to be 0.44 for children and 0.18 for adults, indicating that there is no risk of adverse health effects following chronic cumulative exposure to the pesticides found in fruit, vegetables and cereals on the Danish market. The HI was below 1 even for consumers who eat more than 550 g of fruit and vegetables per day, corresponding to 1/3 of the population. Choosing Danish-produced commodities whenever possible could reduce the HI by a factor of 2.

Simulation of a Solar Collector Array Consisting of two Types of Solar Collectors, with and Without Convection Barrier

Abstract The installed area of solar collectors in solar heating fields is rapidly increasing in Denmark. In this scenario even relatively small performance improvements may lead to a large increase in the overall energy production. Both collectors with and without polymer foil, functioning as convection barrier, can be found on the Danish market. Depending on the temperature level at which the two types of collectors operate, one can perform better than the other. This project aimed to study the behavior of a 14 solar collector row made of these two different kinds of collectors, in order to optimize the composition of the row. Actual solar collectors available on the Danish market (models HT-SA and HT-A 35-10 manufactured byARCON Solar A/S) were used for this analysis. To perform the study, a simulation model in TRNSYS was developed based onthe Danish solar collector field in Braedstrup. A parametric analysis was carried out by modifying the composition of the row, in order to find both the energy and economy optimum.

Lifetime and economic analyses of lithium-ion batteries for balancing wind power forecast error

Summary Wind power plant operators are often faced with extra charges when their power production does not match the forecasted power. Because the accuracy of wind power forecasts is limited, the use of energy storage systems is an attractive alternative even when large-scale aggregation of wind power is considered. In this paper, the economic feasibility of lithium-ion batteries for balancing the wind power forecast error is analysed. In order to perform a reliable assessment, an ageing model of lithium-ion battery was developed considering both cycling and calendar life. The economic analysis considers two different energy management strategies for the storage systems and it is performed for the Danish market. Analyses have shown that the price of the Li-ion BESS needs to decrease by 6.7 times in order to obtain a positive net present value considering the present prices on the Danish energy market. Moreover, it was found that for total elimination of the wind power forecast error, it is required to have a 25-MWh Li-ion battery energy storage system for the considered 2 MW WT. Copyright © 2015 John Wiley & Sons, Ltd.

Reactions to corporate insider’s transactions: Do legal stock market disclosure rules have an impact?

We test the impact on security prices of top manager’s requirement’s to disclose their own share transactions in the firm. Specifically we study whether buy or sales transactions convey relevant information for market participants thereby studying the effects of legal stock market disclosure rules. Based on a comprehensive collection of stock market announcements from Danish CEOs and chairmen we find that insiders’ transactions influence share prices. However, it appears that there is a surprisingly difference, as buy transactions by chairmen have a much higher impact compared to CEO transactions, which to our knowledge have not been noticed already by others. Thus, our event study shows that the Danish stock market seems to be efficient in the semi-strong from.

Occurrence of volatile and non-volatile N-nitrosamines in processed meat products and the role of heat treatment

Most of the available data on the occurrence of N-nitrosamines (NA) in processed meat products have been generated in the 1980s and 1990s and especially data on the occurrence of non-volatile NA (NVNA) are scarce. Therefore we have studied the levels of volatile nitrosamines (VNA) and NVNA in processed meat products on the Danish market (N = 70) and for comparison also products on the Belgian market (N = 20). The effect of heat treatment on the NA levels, in selected samples, was also studied, in order to enable an evaluation of how preparation before consumption affects the levels of NA. For the Danish products the mean levels of the VNA were generally low (≤0.8 μg kg−1), whereas the mean levels of the NVNA were considerably higher (≤118 μg kg−1). Slightly higher mean levels were indicated for the Belgian products (i.e. VNA ≤1.5 μg kg−1 and NVNA ≤270 μg kg−1). The sums of VNA were higher than 10 μg kg−1 for one Danish sample and two Belgian samples. Levels of up to 2000 and 4000 μg kg−1 of N-nitroso-thiazolidine-4-carboxylic acid (NTCA) an NVNA occurred in the Danish and the Belgian samples, respectively. The majority of the Danish processed meat products contain NVNA but also VNA occur. The levels of NA are comparable with those reported in previous and recent studies; however the frequency in which they are found may be lower and thereby also the mean contents. The levels of N-nitrosopiperidine (NPIP) increased by frying and baking, whereas varying impacts were observed for N-nitrosoproline (NPRO), N-nitrosodimethylamine (NDMA), N-nitrosopyrrolidine (NPYR), N-nitrosodiethylamine (NDEA) and N-nitrosomethylaniline (NMA) depending on the type of product and/or the heat treatment. The levels of the NVNA, NTCA and N-nitroso-2-methyl-thiazolidine 4-carboxylic acid (NMTCA) decreased after frying and baking.

FLECH: A Danish market solution for DSO congestion management through DER flexibility services

Future electric power systems will face new operational challenges due to the high penetration of distributed energy resources (DERs). In Denmark, distribution system operator (DSO) expects a significant congestion increased in distribution grids. In order to manage these congestions and mobilize the DERs as economically efficient as possible in the future distribution grid, the brand new notion of flexibility clearing house (FLECH) is proposed in this paper. With the aggregator-based offers, the proposed FLECH market has the ability to promote small scale DERs (upto 5 MW) for actively participating in trading flexibility services, which are stipulated accommodating the various requirements of DSO. Accordingly, the trading setups and processes of the FLECH market are also illustrated in detail. A quantitative example is utilized to illustrate the formulation and classification of flexibility services provided by the DERs in the proposed FLECH market.

Field Experience from Li-Ion Bess Delivering Primary Frequency Regulation in the Danish Energy Market

Introduction Li-ion batteries, after dominating the sector of portable electronics, are currently entering into a new market of the short and medium time stationary energy storage applications. Energy storage systems (ESSs) are considered to play a key role in the integration of the renewables in the grids of the high wind energy penetration and to participate in the future grids ancillary services. Nevertheless, they are currently missing market mechanisms and incentives for ESSs, which could attract potential investors and be economic viable.This paper will present results and one year field experience gained from operation of the 1.6MW /0.4MWh Li-ion battery energy storage (BESS) demonstrator used for providing primary frequency regulation on the Danish market. Moreover, the results from the periodic check-ups of the Li-ion BESS performance degradation and ageing will be presented. System description The ESS, located in Western Denmark, is composed of two Li-ion battery containers connected in parallel, through the power converter system, to the MV bus of the transformer, as illustrated in Fig. 1. The first ESS (ESS1) is based on lithium iron phosphate (LiFePO4/C) battery cells (3.3V/2.3Ah) and it can deliver 0.4 MW/ 0.1MWh. The second ESS (ESS2) is based on lithium titanate oxide (LMO2/Li4Ti5O12) battery cells (2.3V/60Ah) and it can deliver 1.2 MW/ 0.3MWh. Lifetime Periodical reference performance tests of the both Li-ion BESSs were performed for a period of one year in order to determine and analyze the performance degradation, which is caused by delivering the PFR service. The reference performance tests consists of capacity test, hybrid pulse power characterization (HPPC test) and electrochemical impedance spectroscopy measurements performed on some battery modules removed from the BESS for a duration of the reference performance tests. Economic analyses High prices of the primary frequency regulation service, low BESS utilization factor and low depth of discharge cycles (Fig. 2) are making this service potentially economic viable on the Danish market. Thus, economic calculations will be provided including revenues, predicted lifetime of the BESSs and auxiliary power consumption (cooling systems of the BESS, cooling of the converter, etc).

Digging deeper

Purpose – This article aims to investigate how sub-markets with different degrees of maturity develop during a period of general organic growth, and how different consumer segments behave on these sub-markets. Design/methodology/approach – This paper uses actual purchasing behaviour of six consumer segments with different attitudes towards food in general, and organic production and products in particular. The data is from the Danish market for organic foods, which is one of the most mature markets in the world. Findings – The segmentation splits consumers into a positive and a non-positive half, each half consisting of three different segments. The estimations show that the development in general organic consumption varies between segments, and that their behaviour varies between sub-markets. The positive half of the population has driven the overall growth in organic budget share at the Danish market over the period 2005 to 2007, while the other half have not changed their consumption significantly. Practical implications – The results indicate that for the most dedicated organic consumers, the organic budget share may be approaching a saturation point for some types of food, but also identify other types of food which still have a growing organic budget share, even among the most dedicated consumers. Originality/value – The combination of attitudes and actual behaviour for a large number of consumers is new, and the results provide a valuable contribution to the ongoing investigation of organic consumers, and provide new nuances to the understanding of the latest organic growth.