Increase In Natural Gas Prices Research Articles

Retail Electricity Market Restructuring and Retail Rates

Prior to the 1990s, all U.S. states used a “cost of service (COS)” regulation regime in which investor-owned utilities were allowed to recover prudently incurred costs plus a rate of return on capital expenditures, and retail customers were unable to choose their electricity supplier. From 1996–2000, multiple states passed retail electricity market “restructuring.” This empirical research examines the effect of retail restructuring on electricity prices to final consumers. We find that rates increased in restructured states relative to plausible counterfactuals in the years post-restructuring. But by twelve years after retail restructuring, we no longer observe any difference. We investigate plausible mechanisms, finding evidence that retail prices became more responsive to natural gas prices due to retail restructuring, the timing of which coincided with increases in natural gas prices nationally. We also test for whether restructuring had distributional effects across customer classes and find that in the short run residential customers benefited relative to industrial customers during transition periods, but that this difference does not persist into full implementation.

Challenges to environmental governance arising from the Russo–Ukrainian conflict: Evidence from carbon emissions

The destruction of ecosystems, increase in carbon emissions, and volatility of energy prices following the outbreak of the Russo–Ukrainian conflict constitute a complex situation that environmental managers must cope with. In response, this study aims to explore the impact of the Russo–Ukrainian conflict on carbon emissions in the European Union (EU) and associated heterogeneity factors. This study utilized stacked data from 2021 to 2022 on daily carbon emissions and used the differences-in-differences (DID) model as its methodological framework. This study also provides additional analyses for the United States (US), the United Kingdom (UK), and Russia. The full-blown Russo–Ukrainian conflict led to a significant increase in carbon emissions in the EU, averaging 0.092 MtCO2. Further investigations showed that the conflict led to a significant increase in energy prices and that changes in the prices of different energy sources had a heterogeneous effect on carbon emissions. Specifically, an increase in natural gas prices drove a rise in carbon emissions, whereas an increase in oil prices led to a decrease in carbon emissions in the EU. Third, the conflict also affected countries outside the EU, including the US and the UK, which experienced significant increases in carbon emissions in contrast to Russia, which underwent a decline. Finally, the study identified four sectors - international aviation, industry, power, and residential - as the primary contributors to elevated carbon emissions in the EU. This study provides a novel perspective for exploring the interplay between conflicts and carbon emissions and offers valuable insights into shaping effective environmental management policies and measures.

The Unprecedented Natural Gas Crisis in Europe: Investigating the Causes and Consequences with a Focus on Italy

The energy prices in Europe have in recent years surpassed unprecedented thresholds and varied in unexpected ways compared to previous years. This paper presents a study of the fuel markets in Italy, supplemented by insights from Sweden. Italy is heavily dependent on natural gas. The results show that natural gas demand changed only slightly in the period 2017–2022, but prices started to increase at the end of 2021. Notable spikes occurred at the beginning of the events in Ukraine, even though the baseline was already three times higher than the average price from 2017 to 2019. Distinct dynamics can be identified with the increase in demand for power generation, contrasted with a decrease in industrial natural gas demand after August 2022. The trends in coal and wood chip prices are consistent with those of natural gas, while oil prices appear to be less correlated. Additionally, events such as CO2 trading and the launch of the Fit for 55 program by the EU show some correlation with the trend in natural gas prices during 2021. Interestingly, the origin of the increase in natural gas prices during 2021–2022 cannot be simply attributed to the mismatch of supply and demand or any singular external event. This paper aims at starting a discussion on the topic by proposing some explanations.

ASSESSMENT OF METHODS FOR DETERMINING THE NATURAL GAS HEAT OF COMBUSTION

The shortage of fuel and energy resources, the increase in natural gas prices and the continuous increase in gas consumption indicate the relevance of the issues of measuring the natural gas amount and assessing its quality indicators. Ukraine is implementing the European methodology for calculating gas consumption based on its quality and efficiency. The problem of determining the gas quality in Ukraine requires a thorough assessment and research.
 The main physical and chemical indicator of the natural gas quality, which characterizes its energy value, is the specific volumetric gas heat of combustion. The value of this parameter differs for different gas fields. The gas heat of combustion determines the efficiency of its use both in everyday life and in industry.
 The aim of the work is to analyze the main methods for determining the calorific value of natural gas.
 The gas heat of combustion is determined by calorimetric, chromatographic and correlation methods.
 The calorimetric method is characterized by the complexity of the measurement process, complete combustion of the test gas, and long term process. This ensures the objectivity of the results, which is based on taking into account the moisture content of the gas and the presence of non-combustible components in it.
 The basis of the chromatographic method is the separation of the components of a gas sample in a chromatographic column. The result is a chromatogram that shows the percentage composition of hydrocarbons in the gas. The characteristic properties of the method are the identification of a wide range of components and the repeatability of the results.
 When using correlation methods for determining the heating value of natural gas, various physicochemical parameters of samples are measured (such as total hydrocarbon concentration, heat capacity, acoustic wave propagation velocity, carbon dioxide concentration, thermal conductivity, dielectric constant, dynamic viscosity, and others).
 Correlation dependence is based on the choice and association of such parameters. This dependence is studied on different test gas mixtures and allows us to determine the empirical dependence. The mixtures correspond to gases with different calorific values. The obtained empirical dependence is used to register the heat of combustion of real natural gas. The paper evaluates the features of these methods application and instruments based on them.

Analysis of select utilities passing fuel costs and risks onto customers

AbstractAn electric utility bill often includes a fuel adjustment clause (FAC) charge that can be changed up or down to recoup the utility's fuel costs. The fuel adjustment clause was first introduced after fluctuations in coal prices during World War 1. The continued use of the FAC, which shifts the risk of fuel price spikes to the customer, is particularly concerning where energy burdens for vulnerable residents are high. To estimate the impact of an increase in natural gas prices on residential electricity bills because of the rise in the use of gas to generate energy in recent years. In 2020, electricity production accounted for around 33% of gas usage. One approach to address the high‐energy burden is providing clean and efficient energy for households, reducing energy bills, and freeing up household resources for other necessities. To determine this; first, a few utilities were selected, then the residential rate schedules were examined so a model could be built to calculate the bill based on a range of usage levels. The selected utilities, Florida Power & Light, Duke Energy Florida, Duke Energy Progress, and Duke Energy Carolinas, all rely on different fuel mixes to serve customers. Our findings suggest that with a heavy reliance on gas and a direct pass‐through of gas prices to customers, customers bear the risks of the volatile gas market. A slight increase in electric bills can have an outsized impact on customers, particularly low‐income households and individuals on fixed incomes.

Techno-economic optimization of the industrial excess heat recovery for an industrial park with high spatial and temporal resolution

With increasing heating and cooling demands, decarbonisation of the heating and cooling sectors is key to achieving a carbon–neutral energy system. Using industrial excess heat in heating systems helps offset emissions by reducing the use of fossil fuels. While several studies have analysed the temperature of heat availability, the cost of extending or constructing the heating network and techno-economic feasibility, it is important to consider all aspects together to achieve a comprehensive design of industrial excess heat recovery. This study proposes a method to link an energy system optimisation tool with a spatial analysis tool and an exergy analysis tool to achieve a comprehensive design. An iterative soft link is implemented between the energy system model and the spatial analysis tool for high spatial and temporal resolution. The developed method is applied to a case study of an industrial park in Greece. Scenarios are developed to assess the robustness of the developed method and the system profitability of excess heat recovery. The scenarios indicated that the profitability of excess heat depends heavily on the price of natural gas with the share of excess heat increasing from 10% to 45% with a 20% increase in natural gas prices in cases where heat pumps are needed for temperature boosting. In cases where heat pumps are not needed, excess heat indicates higher system profitability with a share of around 40% and reduces the emissions by around 50 times. The method provides robust results in considered scenarios with convergence within four iterations.

The impact of the energy crisis on the UK’s net-zero transition

Recent drastic increases in natural gas prices have brought into sharp focus the inherent tensions between net-zero transitions, energy security, and affordability. We investigate the impact of different fuel prices on the energy system transition, explicitly accounting for the increasingly coupled power and heating sectors, and also incorporate the emerging hydrogen sector. The aim is to identify low-regret decisions and optimal energy system transitions for different fuel prices. We observe that the evolution of the heating sector is highly sensitive to gas price, whereas the composition of the power sector is not qualitatively impacted by gas prices. We also observe that bioenergy plays an important role in the energy system transition, and the balance between gas prices and biomass prices determines the optimal technology portfolios. The future evolution of the prices of these two resources is highly uncertain, and future energy systems must be resilient to these uncertainties.

Clean heating and air pollution: Evidence from Northern China

In response to the severe air pollution caused by winter heating, the Chinese government has proposed a clean heating policy since 2017. This paper first uses air quality monitoring and household micro-survey data in northern cities to investigate the impact of this policy on air pollution through the DID approach. The empirical results show that the air quality index of the pilot cities has decreased by 12.3 units, which means that the clean heating policy has significantly reduced air pollution. The finding still holds through a series of robustness analyses such as controlling for confounding policies and Goodman-Bacon decomposition. Besides, we explore the mechanism at the urban and household levels. It shows that this policy has significantly increased the consumption of natural gas and the number of natural gas users in urban central heating and also prompted more households to use natural gas and electricity instead of solar energy to replace coal for heating. The heterogeneity analysis shows that this policy has a greater impact on both low-urbanization cities and developed cities. Furthermore, we analyze price sensitivity and the costs and benefits of the policy, and find that the increase in natural gas prices significantly inhibits the policy effect, while the price of coal has no significant effect. In addition, the policy significantly reduces the incidence of lung disease among middle-aged and elderly people and leads to a significant increase in household heating costs in winter, which indicates that the clean heating policy has generated environmental and health benefits despite increasing government and household expenditures.

Cleaner technologies for sustainable development

Anthropogenic influence on global warming is now undeniably proven scientific fact. Ever-increasing efforts directed towards cleaner technologies are needed given the fact that COVID-19 caused disturbances in global supply chains, and a record increase in natural gas prices led to coal power production revitalization, nuclear renaissance and overall hampering of the energy transition. Cleaner technologies are becoming increasingly important on our path towards sustainable development. Present work builds on contributions from this special issue dedicated to the four Sustainable Development of Energy, Water and Environment Systems Conferences held in 2020 by emphasizing the role of cleaner technologies and detecting research trends. By dissecting recent examples of cleaner technologies in environmental systems, water systems and industrial processes, circular economy principles are obeyed through the application of cleaner technologies, where the material and energy loops are closed through cross-sectoral integration. Digitalization and advanced control concepts are expected to accelerate that integration under the smart paradigm. As technology for decarbonization is maturing and becoming increasingly compatible with the market, the focus is placed more on the social dimension of sustainability.

Shale gas resources across the world: A future source of energy

Unconventional natural gas resources are very important for ensuring energy security. It is a concern that conventional natural gas resources will be unable to meet growing supply requirements. This concern has prompted a scramble to secure long-term natural gas supplies. In a high oil and gas price environment, unconventional resources are viewed as important and economically attractive components of future natural gas supplies. Shale gas is natural gas produced from shale formations. Gas shales are organic-rich shale formations. Shale gas is a dry gas composed of methane. Various factors which have contributed to its rapid development are mainly advancements in horizontal drilling, hydraulic fracturing, and, perhaps most importantly, the rapid increase in natural gas prices in the last several years as a result of significant variation in supply and demand. India has a high potential for shale reserves. According to the available data, a comprehensive shale gas pilot project carried out in the Damodar Valley Basin has made an initial gasin- place estimate of 300 to 2,100 trillion cubic feet (TCF) in Indian shale gas basins, which is around 300 times higher than the Krishna Godavari Dhirubhai 6 (KG-D6) basin, by far the largest gas field in the country. In this paper, a brief review of shale gas reserves across the world and their government policies has been explained.

Performance evaluation of distributed energy system integrating photovoltaic, ground source heat pump, and natural gas-based CCHP

A distributed energy system (DES) is considered energy-efficient and eco-friendly. However, with increasing renewable energy penetration into energy supply systems, the DES design has become diversified. This study aims to scrutinize the DES performance considering DES design characteristics and renewable energy penetration. Two DESs consisting of photovoltaic, ground source heat pump, and natural gas-based combined cooling, heating, and power with different operation strategies are modeled by TRNSYS. In DES1, the building cooling demand is first met by absorption chillers, while in DES2, it is first met by the ground source heat pump. The energy, environmental, and economic performances under different photovoltaic electricity supplies are analyzed with a cultural industrial park selected for a case study. The sensitivity analysis considering energy price and renewable electricity penetration on the system performance is also performed. The results reveal that the primary energy saving ratio and comprehensive emission reduction ratio of DES1 are respectively 5.52–13.47% and 36.76–54.09%, while those of DES2 are respectively 16.75–26.83% and 16.29–26.71%. Besides, the total cost saving ratio is 0.29–4.79% for DES1 and −14.27– -10.77% for DES2, respectively. The sensitivity analysis indicates that the cost saving ratio of the two DESs rises as the grid electricity price increases. In contrast, their trends are opposite as the natural gas price increases. The renewable electricity penetration has a greater effect on DES1 performance than on DES2 performance. This study can facilitate the better design and performance evaluation of DESs.

A retrospective study of the 2012–2016 California drought and its impacts on the power sector

Over the period 2012–2016, the state of California in the United States (U.S.) experienced a drought considered to be one of the worst in state history. Drought’s direct impacts on California’s electric power sector are understood. Extremely low streamflow manifests as reduced hydropower availability, and if drought is also marked by elevated temperatures, these can increase building electricity demands for cooling. Collectively, these impacts force system operators to increase reliance on natural gas power plants, increasing market prices and emissions. However, previous investigations have relied mostly on ex post analysis of observational data to develop estimates of increases in costs and carbon dioxide (CO2) emissions due to the 2012–2016 drought. This has made it difficult to control for confounding variables (e.g. growing renewable energy capacity, volatile natural gas prices) in assessing the drought’s impacts. In this study, we use a power system simulation model to isolate the direct impacts of several hydrometeorological phenomena observed during the 2012–2016 drought on system wide CO2 emissions and wholesale electricity prices in the California market. We find that the impacts of drought conditions on wholesale electricity prices were modest (annual prices increased by $0–3 MWh−1, although much larger within-year increases are also observed). Instead, it was an increase in natural gas prices, punctuated by the 2014 polar vortex event that affected much of the Eastern U.S., which caused wholesale electricity prices to increase during the drought. Costs from the drought were very different for the state’s three investor owned utilities. Overall, we find that increased cooling demands (electricity demand) during the drought may have represented a larger economic cost ($3.8 billion) than lost hydropower generation ($1.9 billion). We also find the potential for renewable energy to mitigate drought-cased increases in CO2 emissions to be negligible, standing in contrast to some previous studies.

Türkiye'de Yenilenebilir Enerji Tüketimini Etkileyen Faktörlerinin MARS Metodolojisi İle Belirlenmesi

The aim of this study is to determine the factors affecting the renewable energy consumption in Turkey. In this context, firstly, similar studies in the literature have been examined. As a result of the investigation, 11 different variables have been identified that may affect the use of renewable energy. Annual data of the mentioned variables in the period of 1990-2018 are taken into consideration. On the other hand, MARS method is used in the analysis process of the study. As a result, it has been determined that renewable energy use increases when the population in the country goes up. As can be seen from here, with the increasing population, the demand for energy has also increased. As a result, renewable energy has started to be used more. In addition, it is also determined that the increase in natural gas prices leads to higher consumption of renewable energy. In the event that natural gas becomes more expensive, it is understood that people are turning to other alternatives. The loan amount in the country is another factor that has an impact on renewable energy consumption. In case the loan amount exceeds a certain rate, it is seen that these loans are concentrated on non-renewable energy sources. In addition, it has been determined that there is a negative relationship between carbon emissions in the country and renewable energy use. It can be understood that renewable energy usage can be increased mainly because of the obligatory reasons, such as higher demand for energy and natural gas prices increase. This indicates that no sufficient consciousness is formed in Turkey for renewable energy. Therefore, it is important to provide the necessary incentives such as tax advantage by the state to make renewable energy use more attractive.

Oil & gas sector development, as a component of energy of Ukraine

The article analyzes the current state and perspective directions of development of the energy sector of Ukraine in general and the oil and gas complex in particular, which should meet the Plan of measures for the implementation of the stage “Reform of the energy sector (until 2020)” of the Energy Strategy of Ukraine for the period until 2035 “Security, energy efficiency, competitive”. According to the study, at the time the report was released, 80% of the points foreseen by the Plan were not fulfilled. Some legislative initiatives and changes in the regulation of markets of fuel and energy resources are considered. The article analyzes the dynamics of changes in energy consumption. The main trends in the development of the gas and oil products markets are identified. It is found that, despite progress on diversification of supply sources, the country is heavily dependent on imports of energy from The Russian Federation. Separate consideration is given to the transit of natural gas from the Russian Federation to the EU. It is noted that the signed contract is quite compromise and provides a transit pipeline load of less than 40%. The main reasons for the change in the structure of the use of fuel and energy resources, in particular, the practical termination of the use of fuel oil as a boiler-furnace fuel, are also highlighted. The data of the State Statistics Service of Ukraine on the dynamics of prices for natural gas for all categories of consumers, including tariffs for transportation, distribution and trade margin (for household consumers), were also processed. A steady increase in natural gas prices for household consumers was noted during almost the entire analyzed period. Naftogaz Ukraine’s unbinding process was investigated. It is revealed that all necessary steps have been taken to create an independent gas transmission system operator, which took place on January 1, 2020. The implementation of the Energy Community Directives and Regulations in the energy sector has been analyzed, with overall sales less than 50%. The main results of the Stockholm Arbitration between Naftogaz of Ukraine and Gazprom are considered.

The effect of wind and solar power generation on wholesale electricity prices in Australia

Our paper investigates the effect of wind and utility-scale solar electricity generation on wholesale electricity prices in Australia over 2010–2018. We use both high frequency (30-min) and daily datasets for the Australian National Electricity Market (NEM). We estimate autoregressive distributed lag models (ARDL) to decompose the merit order effect of wind and utility-scale solar PV generation over time and across states. We find that an extra GW of dispatched wind capacity decreases the wholesale electricity price by 11 AUD/MWh at the time of generation, while solar capacity by 14 AUD/MWh. The daily merit order effect is lower. We show that the wind merit order effect has been increasing as a function of dispatched wind capacity over time. Despite of this, wholesale electricity prices in Australia have been increasing, predominantly driven by the increase in natural gas prices. Our findings further strengthen the evidence of the merit order effect of renewable energy sources, with important implications for the current energy policy debate in Australia.

PROSPECTS FOR APPLICATION OF COGENERATION TECHNOLOGIES IN MUNICIPAL ENERGY

The article considers conditions and possibilities for installing cogeneration units (CUs) in district heating boiler houses. The main requirement to do it is the equality of the CUs’ heat capacity and the heat capacity of the boilers that are going to be replaced.
 Because the fuel (natural gas) consumption increases due to such replacement, it is necessary to determine the conditions, taking into account the constant growth of energy carriers’ prices, under which the transition to cogeneration technologies in the heat supply system will be feasible, i.е. the project will make a profit and ensure the reasonable payback period. For this purpose, the relationships between the profitability of the project, the economic indicators of the equipment included in the cogeneration unit, and the price of energy carriers are suggested. An analysis performed with the help of these relationships showed that the cogeneration unit of the same thermal capacity as the boiler (or boilers), which is going to be replaced, in comparison with CU installed on the basis of a generating unit definitely requires an increase in fuel consumption, and the profit, determined as the difference between income from generated electricity sales and fuel purchase costs, becomes dependent on the prices of natural gas and electricity, as well as the cost-effectiveness of the equipment for cogeneration. With certain combinations of these parameters, the cogeneration unit, installed on the basis of heat generation, may not be profitable, but unprofitable. Moreover, as natural gas price increases and electricity tariff remains fixed, CUs, designed as profitable, may become unprofitable. These conditions are considered in the article. Relationships between the CU’s parameters and tariffs for the natural gas and electricity, which determine the area of profitable work of the cogeneration unit, are obtained. Given the current prices for energy carriers, the design of the CU based on the communal heat supply comes to the selection of the equipment that ensures the profitability of the installation that is sufficient for the recoupment of capital investments within 2-3 years. At the same time, the acceptable limits of the possible increase in the gas/electricity tariffs ratio should be determined.
 The main conclusion: the cogeneration unit based on district heat supply with a positive economic effect can be installed only if certain economic and technological conditions, which must be taken into account when designing it, are observed.

The impact of natural gas price control in China: A computable general equilibrium approach

This paper depicts the natural gas price control behavior of the Chinese government in an imperfect competition market structure using a static CGE model. It simulates the effect of changes in natural gas price control policy on carbon emission, and the economic effects in view of demand side and supply side. Based on the above, we also analyze the carbon emission mechanism from economic and energy structure perspective. The results show that: an increase in natural gas price can reduce carbon emission, or tends to cause a long-term decline in the surplus profit rate of the natural gas industry. Moreover, the increase in natural gas price may raise the CPI, and reduce actual GDP and residents’ welfare. On the contrary, a decrease in natural gas price may reduce CPI and enhance resident welfare. However, the long-term actual GDP will not increase, but carbon emission will increase and the surplus profit rate of the natural gas industry may reduce in the short term and increase in the long term. On the other hand, Both increase and decrease in natural gas prices may result in a decrease of the actual GDP level in the long term. The elimination of price control in natural gas supply may increase actual GDP and residents’ welfare and reduce CPI. Meanwhile, it may increase carbon emissions and improve the profitability of the natural gas industry.

Natural gas price effects in China based on the CGE model

Natural gas is a clean energy source with many benefits and its proportion in the energy consumption structure in China has been gradually increasing over the recent years. Since the price of natural gas in China has been controlled and maintained at a relatively low level by the government, reforming the natural gas industry in China has been the matter of much attention in light of its macroeconomic effects on the overall economy. Using the Computable General Equilibrium model and the 2012 Social Accounting Matrix, the results show increases in natural gas prices lead to an increase in the consumer price index (CPI) and lead to reductions in GDP. The chemical industry sector is strongly influenced by a natural gas price increase. Furthermore, chemical fertilizer manufacturing industry and chemical products’ manufacturing have very significant effects in China. Therefore the government may gradually establish and improve the management of natural gas price to avoid negative effects, and implement a differential price as the industries exhibit different levels of resistance in response to natural gas price changes.

How far is mitigation of Russian gas dependency possible through energy efficiency and renewable policies assuming different gas market structures?

This paper presents the results of a coordinated modelling assessment that incorporates European energy efficiency and renewable policies with two potential gas market scenarios. First, the impact of EU energy efficiency and renewable policies on natural gas demand is calculated using the PRIMES model 2014 Baseline projection, the Fraunhofer ISI Low Policy Intensity Energy Efficiency scenario, and the Green-X model for renewable deployment. Next, the effect of these policies on the natural gas markets is assessed, using the European Gas Market Model. The model tests scenarios for different positions on long-term gas contracts with Russia assuming different stages of European gas infrastructure development. The findings show that dependency on Russian natural gas can be reduced to low levels without triggering a significant increase in natural gas prices for any single EU member country. In an extreme scenario whereby energy efficiency savings, higher renewable energy sources deployment and the assumed positive gas market developments take place simultaneously, gas cost savings can reach as high as 37%. Benefits arise not only in the most recent round of EU Member States (12 MS) targeted in the study, but are visible across most EU gas markets. This underlines the interlinkages of the whole EU gas market, and the results suggest that security of gas supply is not only a challenge for new Member States, but in the broader European markets.

Co-firing coal with wood pellets for U.S. electricity generation: A real options analysis

In contrast to EU, U.S. electric utilities are not employing the bioenergy technology of co-firing wood pellets with coal. This difference in employment patterns is explored within a real options analysis (ROA) for possible U.S. utilization of wood pellets, considering fuel-price series from 2009 to 2014. For analysis, these series are divided into two sub-periods based on different market conditions: Infancy (2009–2011) and Substitution (2012–2014). ROA indicates co-firing wood pellets with coal is feasible considering adoption during wood pellets' infancy, under low discount rates, and long power-plant lifespans. A portfolio effect of employing multiple fuels underlies this result. However, co-firing is not currently economically feasible. The different adoption decisions are likely a consequence of recent cheap and abundant U.S. natural gas. For co-fired wood pellets to be feasible, government incentives and/or a market increase in natural gas prices appear necessary.