Fossil Energy Prices Research Articles

Trend Changes and the Driving Forces of Environmental Indicators in Countries Worldwide: A Structural Change Analysis of Variations in CO2 Emissions and Eco-Efficiency

Many authors state that climate change is driven by increasing CO2 emissions worldwide. An understanding of the major driving forces affecting emissions over time in both developed and developing countries is important. Thus, in this study, structural break analysis is used to identify when the trends of environmental indicators—CO2 emissions and environmental efficiency (EE)—across countries worldwide change. Our findings revealed notable structural breaks occurring in countries in 1994, coinciding with ballooning fossil energy prices. Regarding CO2, 55 of 143 countries experienced a structural break. Furthermore, another wave of structural breaks emerged in 2014, corresponding to the implementation of CO2 emission reduction plans by certain nations. For CO2, 64 of 143 countries experienced a structural break. Upon detecting breakpoints and their trends, we utilized LMDI factor decomposition analysis to discern their driving factors, thereby elucidating the underlying dynamics. In Latin America and the Caribbean, most breakpoints were undesirable shifts, but recently, desirable shifts have increased in North America, Oceania, and Europe, which include many countries with high economic levels, improving energy-related factors. Sub-Saharan Africa can also be said to have undergone an undesirable shift regarding energy-related factors. This study clarifies the precise influences on the trend of CO2 emissions at the global level by identifying the point in time when there is a significant statistical, rather than a subjective, breakpoint.

Antecedent and outcome study on energy transition - empirical evidence from G7 countries in TBL approach

Increasing investment in energy R&D (SDG 7.4) is critical to fostering the renewable energy transition (SDG 7.2) and in a way to meet the global climate target (SDG 13). Although public investments in renewable energy are increasing, they remain insufficient to meet the G7 countries' climate commitments. In the present study, renewable R&D investment (RRDI) is considered as an antecedent variable to determine its influence on the outcome variable renewable energy share (RES) when mediated by transition variables. The energy transition variables are categorized into Triple Bottom Line (TBL) factors namely, Economic factors (Fossil Energy Price, Low carbon trade), Social factors (Nationally determined contributions, Unemployment), and Environmental factors (Renewable energy installed Capacity, Environmental Tax, Fossil Fuel Subsidies), they play the role of the mediating variables. The proposed conceptual framework is supported by regulatory focus theory to promote R&D investment. The hypotheses are tested for G7 countries' annual data spanning the years 2000 to 2021 using SPSS mediation analysis with Process-Macro. The analysis reveals that TBL factors are significantly enhancing the RRDI and RES relationships in Germany, Japan, and the UK. The USA and Japan experience less economic impact from oil price fluctuations. The NDCs are mediating to a greater extent to improve the relationship between R&D and renewable energy in Canada, France, and the UK. The lack of significant mediation effects of economic, social, and environmental factors in the USA and Italy indicates that policies in the USA and Italy are not strategically managed to improve the relationship between RRDI and RES. Further, the study suggests designing policies considering TBL principles to increase their average renewable R&D public investments to attain Sustainable Development Goal 7 (SDG7). The G7 energy transition has slowed down due to an imbalance in the policies to regulate the prevention-promotional aspects of the energy transition.

Fossil energy risk exposure of the UK electricity system: The moderating role of electricity generation mix and energy source

The UK's energy policy aiming to reduce carbon emissions has effectively driven down the use of coal in its electricity generation mix. But unless the power system can transition to a predominantly renewable mode of generation, it may still be unable to significantly reduce its reliance on traditional fossil fuels. To observe the effects of energy policies in the UK, this paper measures risk exposure of the UK electricity system to fossil energy prices. We analyze the moderating role played by the electricity generation mix and energy sources in the relationship between the two. The study finds that although the UK power system has greatly reduced its dependence on coal in its power generation mix, the risk of coal price shocks in electricity prices remains significant. Self-sufficiency in the UK gas market is essential for electricity price risks. The results imply that in addition to carbon reduction, the UK must propose policies to increase incentives that will encourage power companies to pivot towards renewable energy generation. This will allow the electricity market to reduce fossil fuel dependence. In doing so such policies offer the potential to achieve the goals of Electricity Market Reform: an affordable and sustainable power system.

Analyzing the degree persistence of shocks to energy security of the G7 countries: Evidence using panel SPSM-quantile unit root test

Energy security is affected by extreme natural, human, domestic political, geopolitical, and fossil energy price shocks/events and green energy policies. The degree of persistence in energy security determines the magnitudes of social, economic, and environmental outcomes of the shocks/policies. In this paper, we examined the degree of persistence in energy security of G7 countries using a new proxy namely the energy security risk index, and a novel second-generation panel quantile unit root test over the period 1980–2018. In addition, we applied the sequential panel selection method (SPSM), to identify the stationary members within each quantile. Our results indicated the stochastic properties of the energy security risk indexes vary across the quantile and the countries. Among the G7 countries, the energy security risk index of the US displays unit root process within all quantiles. While the energy security risk indexes of other countries display stationary processes, especially within high quantiles. Our results have important policy implications regarding the effectiveness of green policies in improving the energy security of the G7 countries and the disturbance effects of anti-energy security shocks. According to our findings, the US has to constantly pursue the risks that threaten the country's energy system while other G7 countries likely do not have such severe concerns about shocks affecting energy security, and these shocks have a short-term effect on their energy security.

A global perspective on the nexus between energy and stock markets in light of the rise of renewable energy

The rise in renewable energy and the associated divestment initiatives from fossil fuel around the world have become prominent in combating climate change. This paper revisits the relationship between energy and stock markets by accounting for renewable energy through the use of the Divisia index method. The paper contributes to the literature by using three renewable energy tariffs rather than relying on clean energy stocks as a proxy for renewable energy. We retrieve data for both the price and consumption of fossil energy (oil, coal and gas) and renewable energy (solar, wind and hydro). We estimate a Vector Autoregressive (VAR) model over the period 2000–2019 across 25 countries globally. Our study identifies a significant time-dependent dynamics between renewable energy and both the energy stock and carbon markets, while fossil energy has no significant influence on those markets. The increasing influence of renewable energy in this nexus signals to policymakers that investors have started to shift their focus of attention from fossil to renewable energy.

Business Perspectives of Distributed System Operators for Solar Rooftop-as-a-Service

Rising fossil energy prices and the significantly decreasing prices of energy technology have resulted in electricity consumers having the option to install solar PV rooftops to rely on the self-consumption of clean energy. However, the increase in this amount is affecting the revenue of electricity as a utility, which must adapt and develop its business model to accommodate the situation. If the utility cannot be adapted in time, it may lead to a loss of income from services and the sale of electricity from fossil energy. The utility in Thailand’s electricity market that acts as the distribution system operator (DSO) is known as the Provincial Electricity Authority (PEA), and the Metropolitan Electricity Authority (MEA) is responsible for managing distribution networks and customers. There are four types of solar rooftop-as-a-service (RaaS) business perspectives they could consider as opportunities through which to minimize revenue impact. The business services were designed for the DSO customer as follows: Consulting, Design, and Installation (CDI); Operation and Maintenance (O&M); Energy Service Company (ESCO); and Power Purchase Agreement (PPA). The model comprises four customer segments: residential buildings and small-, medium-, and large-scale commercial buildings. This paper applies SWOT, Five Forces, 4P marketing, and economic impact analyses to identify the possibilities when using the DSO business model. The SWOT analysis demonstrates that ESCO and PPA are strengths in the DSO’s performance characteristics and existing customer data. In the electricity industry, both models offer enormous customer bargaining power in terms of a Five Forces analysis. The main reason is that there is currently high competition in the installation service. In the 4P analysis result, the price per unit is found to be significantly lower than in residential scenarios. Therefore, there is a format for presenting promotions with an advantage over competitors. Deploying an after-sales service that brings convenience to all customer segments is needed. The economic analysis conducted using Cournot competition game theory shows a significant differential in the Medium (M) and Large (L) customer sectors’ competition due to lower technology prices. In conclusion, with the current regulatory framework and criteria, the ESCO and PPA show the best practical model from a utility business perspective. The recommendation for DSO is to create a strategic ecosystem and to link it with private companies as their partnership business.

The influence of the Ukraine-Russia conflict on renewable and fossil energy price cycles

This study investigates the impact of the Ukraine-Russia conflict on energy cycles by extending a business cycle-based approach in the energy sector. We employ the Markov Switching Bayesian Vector Autoregressive (MS-BVAR) model to derive filtered probabilities that represent energy cycles. By utilizing the Russia Economic Policy Uncertainty Index and dummy variables derived from Google search data as conflict indicators, we conduct regression analysis and examine the generalized impulse response function to assess the effects of the conflict on energy cycles. Our research reveals notable differences in renewable and fossil energy price cycles. The renewable price cycle exhibits greater persistence, indicating a limited response to the conflict shock. In contrast, the fossil energy price cycle exhibits more significant and enduring adjustments in high- and low-volatility regimes. These findings highlight the heterogeneous impacts of the Ukraine-Russia conflict on the fossil energy market, indicating potential disruptions in supply chains and market sensitivities. Notably, fossil energy prices demonstrate higher responsiveness to the Ukraine-Russia conflict across market conditions.

Coordinating economic growth and carbon emission reduction in China: evidence from the optimal levels of energy price distortions

Distorted energy prices cause resource mismatch and hinder the coordinated development of economic growth and carbon emission reduction (CDEC) in China. Therefore, it is essential to determine the optimal levels of energy price distortions. This paper first measures the price distortions of fossil and renewable energy sources and applies a panel smooth transition regression model to assess the optimal threshold values for the degree of energy price distortions. The results show that 1) Fossil energy price distortions are negative, and the price distortion for renewable energy is positive. 2) Energy price distortions inhibit CDEC, and this effect is regionally heterogeneous. 3) The panel smooth transformation model results indicate that distorted energy prices have a nonlinear impact on CDEC. CDEC is significantly hampered in the low regime by distorted fossil energy prices and facilitated in the high regime. In contrast, the distorted renewable energy price shows positive in the low regime and negative in the high regime. We also obtain the optimal intervals for the degree of energy price distortions that promote CDEC. With the target of “growth” and “carbon reduction,” this study provides a reference for improving the energy pricing mechanism and exploring the effective ways of CDEC.

Dynamics of energy and biofuel markets in the context of rising oil prices

AbstractRising fossil energy prices have sparked interest in biofuels, which has led to a closer link between biofuels and fossil energy markets. We apply a thermal optimal path approach based on daily returns to examine the lead‐lag correlation between three biomass futures and three energy futures for 2020–2022. The empirical results show that the biomass futures market first leads the energy futures market with a significant probability of 20–30 days. Second, the lead days decrease sharply after regional conflicts occur, and the link between the two markets strengthens. Third, the sequence of risk transmission between overseas and domestic energy markets changes, and domestic energy markets become more resilient. Finally, the epidemic disrupted the normal transmission of signals between markets, while regional conflicts reconstructed the links, and the transmission time was shorter. In the post‐Covid‐19 period, ongoing conflicts have synchronized risks between markets, further amplifying the possibility of crises.

Technical-economic prospect for photovoltaic on fixed lift net in Indonesia

The limited fossil energy and uncertain prices have an indirect effect on fishing activities using a fixed lift net. Therefore, energy diversification is carried out by utilizing solar energy with photovoltaics on the fixed lift net. This energy is very abundant and available throughout the year, except during the rainy season. This study uses observation, interviews, and questionnaires given to fishermen and tries to compare the utilization of photovoltaic (PV) systems with generators using different types of lamps, such as LED, CFL, incandescent lamps, and halogen lamps. The use of PV systems in fixed lift nets from a technical and economic perspective allows it to be utilized in the long term. Based on the technical aspects, the PV system can produce 471.59 Wh per day. This technical result will be more profitable if the lamp used is a light emitting diode (LED) lamp. Meanwhile, from economic aspect, the use of electrical energy from a PV system is more profitable because it provides a lower operational value than a generator, and provides good net present value (NPV) and internal rate of return (IRR) values. This utilization is also supported by the good response from fishermen towards the energy produced and the ease of operation and maintenance of the PV system.

Put an eye on the future: Rethinking the theoretical price of fossil energy based on the perspective of intergenerational equity

Discovering the true value of fossil energy resources can make full use of the price regulation leverage to adjust the energy structure, relieve carbon emissions, and gain more time for renewable energy to replace fossil energy. As exhaustible resources, the exploitation and consumption of coal, oil, and natural gas can directly affect the environment and resources reserve of future generations, which will directly destroy the fairness of intergenerational transmission. To make the price of fossil resources work better, the theoretical energy prices composed of production costs (PC), user costs (UC), environmental costs (EC), and especially intergenerational compensation costs (IC) are taken into consideration in this study. In addition, the study probes the impact of the theoretical and actual prices of fossil energy resources on carbon intensity with the path analysis method and detects the key paths. Results show that the theoretical price of natural gas is compensated the most, followed by coal and oil. From the result of intergenerational equity, the theoretical prices of coal and oil have higher impacts on carbon intensity than their actual prices, while the condition of natural gas is not the same. It is necessary for decision-makers to fully consider the characteristics of environmental damage, scarcity, and especially intergenerational compensation when repricing coal and oil price. Fortunately, the actual price of natural gas is the most effective for realizing the intergenerational equality target. It is crucial to put an eye on the future in reexamining fossil energy prices and formulating relevant emission reduction policies.

Primary fossil energy cost and price regulation in energy processing sectors---the perspective of price regulation market with Chinese characteristics

All enterprises in the field of energy processing in China are state-owned enterprises (SOEs), and the government regulates the prices of their products. China's SOEs have multiple objectives, so the market is not mimic a simple oligopoly market. Energy processing sectors are the links between primary fossil energy and the economy. We apply a dynamic recursive computable general equilibrium model with multi-sectors and multi-households, named CEEEA/CGE model, to simulate and analyze the impact of primary fossil energy cost changes and what will happen if prices are regulated in these energy processing sectors. These results underscore the role of price regulation in energy processing sectors: the regulation seems to stabilize the economy. It will reduce the impact of rising and falling energy costs, whether the impact is good or bad. Other findings are: 1) “resource curse” is spotted when the primary energy cost is reduced dramatically. 2) CPI only increases by a little, even if the primary energy costs increase significantly. 3) The economic impact of the changes in fossil energy costs is asymmetric.

Time-varying effects of structural fossil energy price shocks and economic policy uncertainty on new energy stock market: new evidence from China

ABSTRACT We focus on the Chinese new energy stock market and explore the impacts of structural fossil energy price shocks and economic policy uncertainty (EPU). To this end, we synthesize the prices of three fossil energy sources, decompose the dynamics of fossil energy prices into energy supply shocks (SS), demand shocks (DS) and risk shocks (RS), and run a TVP-SVAR-SV model. Our findings show that SS significantly influence the new energy stock prices (NE) in that DS have a positive short-term impact for most of the sample periods while the mid- and long-term impacts of RS on NE are negative and larger than those of both SS and DS. We also find that in all three categories of shocks, EPU is the most important predictor negatively related to NE, indicating that a stable policy environment is essential to equity financing in the new energy market. Besides, different categories of EPU have varied impacts on NE in that exchange rate policy uncertainty (ERPU) has the most detrimental effect while the impact of trade policy uncertainty (TPU) shows a positive influence. Finally, we discuss the implications of these findings for both market regulators and investors participating in transactions of new energy stock portfolios.

How can we make an orderly transition away from fossil fuels? A global tour of modern energy

This paper analyzes the economic, social and political three-dimensional driving effects of new energy substitution for fossil energy under the joint action of market, government and international competition from three perspectives: profit motive, mutual benefit and responsibility motive, combined with the relevant data of 78 countries from 1965 to 2021. The results show that fossil energy prices and energy security positively influence the process of new energy substitution, and environmental pollution negatively affects the process of new energy substitution, and the pushback effect of energy security on new energy substitution is more significant in the study interval, indicating that at the beginning of the new energy revolution, global environmental governance and willingness to reduce emissions drive the development of new energy industry, but the “carbon emission reduction” of each country has increased the complexity of new energy substitution, especially in some developed countries in taking responsibility for global environmental governance divergent views. Further heterogeneity analysis reveals that each country’s energy strategy affects the degree of substitution of “quality” and “quantity” of new energy, and the speed, areas and corrective ability of new energy development vary among countries under different strategic choices.

Configuration screening of ceramic membrane heat exchanger for an energy-efficient carbon capture process

A CO2 regeneration test rig integrated with rich solvent-split mechanism was built in this study to recover the waste heat from the hot stripped gas by using different heat exchanger configurations in carbon capture process. Five ceramic membrane heat exchangers (CMHEs) and two stainless-steel heat exchangers (SSHEs) were experimentally investigated in terms of the reboiler duty saving. The experimental results of the key parameters showed that the CMHEs have overall higher reboiler duty reduction than the SSHEs, and the Config-B (two multi-channel CMHEs in series), the Config-C (three multi-channel ceramic membrane tubes assembled in parallel), and the Config-E (seven mono-channel ceramic membrane tubes assembled in parallel) could reduce the reboiler duty by around 22%. Accordingly, the economic analysis of the different modified versions of rich-split carbon capture process was conducted. The maximum CO2 capture cost saving reached $ 4.41/t-CO2 by using the Config-D (three mono-channel ceramic membrane tubes assembled in parallel). The sensitivity analysis predicted that the development of membrane technology is expected to further promote savings in capture cost by reducing membrane unit price and prolonging membrane life. In addition, the modified rich-split system could be more suitable for the situation of rising fossil energy prices in the future.

Potential analysis of hydrogen energy technology in the power grid based on carbon tax: A case study in Japan

Electrolytic hydrogen storage technology of renewable energy is considered as one of the important measures to realize the high proportion of renewable energy. However, developing this technology has been slow due to the cost. This study proposes highlighting the environmental advantages of renewable power combined with a carbon tax at the national level to expand the application space of hydrogen storage technology. First, the economy and technical characteristics of hydrogen storage technology and conventional energy-storage technology were compared. Then, Japan's top 10 power companies, which account for 90% of the power supply, were taken as the research objects. The proportion of change in renewable power after introducing a carbon tax was studied, taking the weighted minimum of the feed-in tariffs as the optimization objective. The contribution of hydrogen storage technology to the change in renewable power share was analyzed. Next, a sensitivity analysis was conducted on the fossil energy price and cost of renewable power equipment that affects the research. Finally, the contribution of a carbon tax and hydrogen storage technology to Japan's emission reduction target was calculated and analyzed. The results showed that the characteristics of long-distance transportation of hydrogen energy and making renewable energy have economic advantages under the current carbon tax (5–6 JPY/kg-CO2). The cost of liquified natural gas (LNG) and the investment of photovoltaic (PV) have a significant impact on the weighted minimum feed-in price, which can make the development of hydrogen storage technology no longer rely on the setting of carbon tax. The results obtained in this study provide a theoretical reference for the application of hydrogen storage technology in the high proportion of renewable energy consumption. At the same time, it can also provide data reference for large-scale construction of renewable energy in regions where solar and wind energy resources are not excellent.

Overview and Comparative Study of Energy Management Strategies for Residential PV Systems with Battery Storage

PV and battery systems have been widely deployed in residential applications due to increasing environmental concerns and fossil energy prices. Energy management strategies play an important role in reducing energy bills and maximize profits. This paper first reviews the state of energy management problems, including commonly used objectives, constraints, and solutions for PV and battery applications. Then, a comparative study of different energy management strategies is conducted based on a real applied product and household profile. Moreover, results are discussed, and suggestions are given for different scenarios. Finally, conclusions and insights into future directions are also provided.

The dynamic spillovers among carbon, fossil energy and electricity markets based on a TVP-VAR-SV method

The linkage among carbon, fossil energy and electricity markets are gradually strengthening, but few studies focus on the dynamics of the spillover intensity and direction, as well as the time lag and periodicity. Using TVP-VAR-SV method and impulse response functions, this paper explores the time lag and periodicity of spillover intensity and direction among carbon, fossil energy and electricity markets. The empirical results show that the intensity and direction of spillovers among carbon, fossil energy and electricity markets are characterized by time-varying asymmetry. Moreover, the duration of the time-varying spillover effect among carbon, fossil energy and electricity markets are basically maintained at three months, and the spillover effect weakens with the passage of time, especially when the lag period is one month, the intensity of spillover reaches the maximum, which indicates that the dynamic spillovers among carbon, fossil energy and electricity markets have obvious time lag and periodicity. Finally, in the short term, the rise in carbon and fossil energy prices will reduce the value of the electricity market. However, in the long run, it may promote the electricity market to speed up the adjustment of energy structure, reduce carbon emissions and improve the value of the electricity market.

Forecast of renewable energy penetration potential in the goal of carbon peaking and carbon neutrality in China

In the context of carbon peaking and carbon neutrality goals, improving the renewable energy penetration potential is an effective strategy to develop a new-type power system. However, the penetration strain is enormous due to the instability of renewable energy power generation. Accurately predicting the development trend of renewable energy penetration potential and analyzing its influence mechanism have vital theoretical and practical significance for the government to promote carbon neutrality in the power industry. We first analyze the driving factors of renewable energy penetration, and then apply the quantum harmony search (QHS) optimized modified discounted mean squared forecast error (MDMSFE) combined forecast model to forecast renewable energy penetration potential for the next five years. Furthermore, we use scenario analysis and single-factor sensitivity analysis to investigate the impact mechanism of renewable energy penetration. The main conclusions include: the renewable energy power generation proportion will reach 33.815% under the benchmark scenario by 2025; economic growth, the proportion of non-fossil energy in primary energy consumption, the implementation of transmission line projects, and power consumption all have a positive effect on renewable energy penetration; the increase in the price of fossil energy has a negative effect on the renewable energy penetration; and the current carbon trading market and cross-regional power trading do not significantly promote renewable energy penetration.

Does a Recycling Carbon Tax with Technological Progress in Clean Electricity Drive the Green Economy?

The environmental issue is a significant challenge that China faces in leading the development of the green economy. In this context, reducing CO2 emissions is the key to combatting this problem. Taking the 2017 social accounting matrix (SAM) as the database and combing macroeconomic parameters from previous studies, this article constructed the environmentally computable general equilibrium (CGE) model as an analytical model to analyze the economic–environmental–energy impacts of recycling carbon tax with technological progress in clean electricity. We found that when the rate of clean electricity technological progress reaches 10%, the carbon recycling tax that reduces corporate income taxes will achieve a triple dividend of the carbon tax, namely, promoting economic development, reducing carbon emissions, and improving social welfare. In the meantime, on the basis of carbon tax policies that raise the price of fossil energy, clean electricity technological progress will help accelerate the transformation of electricity structure, reduce the proportion of thermal power generation, and better promote emission reduction. In addition, due to the high carbon emission coefficient, coal contributes significantly to carbon emission reduction. Therefore, China should implement a carbon tax recycling policy supplemented by the progress of clean power technology as soon as possible to better promote green economy development.