Tariff System Research Articles

Comparison of Incentive Policies for Renewable Energy in an Oligopolistic Market with Price-Responsive Demand

This article compares different incentive policies to encourage the development of renewable energy (RE). These incentive policies (carbon tax, feed-in tariff, premium payment and quota system) are modeled in a simplified radial power network, using price-responsive demand. Most results are derived assuming an oligopolistic Cournot competitive framework and that the costs of subsidies are covered by the government (i.e., customers do not directly pay back for the subsidies). We compare the different RE incentive schemes at different congestion levels in terms of energy prices, RE generation, CO2 emissions, and social welfare. We find that the effectiveness of the different incentive schemes varies significantly depending on the market structure assumed, the costs of renewable energy, and the subsidy recovery method considered. Subsidy policies (FIT and premium payments) are more cost effective in reducing CO2 emissions than those policies that apply penalties or taxes, when assuming oligopoly competition and that customers do not directly pay back for the subsidies. Quota and carbon tax policies are more cost effective when assuming that either a perfectly competitive electricity market takes place or customers directly pay back for the subsidies. Additionally, we show that, in the feed-in tariff system, there is an interaction among incentive levels for renewable energy technologies. Given a certain feed-in tariff price to be set for a particular renewable technology, this price influences the optimal feed-in tariff price to be set for another technology.

Conditions for the Cost Effective Combination of Emissions Trading and Renewable Energy Support Policies

This paper makes a case for using cost effectiveness (as opposed to efficiency) as key criterion when designing support policies for electricity generation from renewable energy sources in coexistence with an emissions trading scheme. Using the EU ETS and the German feed-in tariff system as examples, arguments against a stand-alone ETS are presented and necessary conditions for cost-effective support to RES-E in a deep decarbonization context are synthesized.

A Club to Beat down the Tariff: The Political Economy of Tax Swaps and the Interest Group Origins of the 16th Amendment

Historical interpretations of the 16th Amendment usually attribute its genesis to a progressive intellectual movement aimed at addressing growing wealth inequality and the claimed excesses of 19th century “laissez-faire.” This article presents an alternative theory rooted in an interest group explanation of the income tax movement. Drawing upon an implicit recognition of Tullock’s dual-rent characteristic of the tariff, a group of mostly Democratic free-traders pursued a “tax swap” at the constitutional level in a conscious attempt to undermine protectionist rent extraction during the Payne-Aldrich Tariff revision of 1909. Though neglected in a historical literature that is overwhelmingly disposed to the progressive interpretation, the “tax swap” strategy is extensively referenced in the legislative history of the income tax movement. Empirical evidence from the stock market further validates this alternative thesis. Publicly traded import-competing firms are shown to have been acutely sensitive to the income tax’s advance through Congress, whereas firms with little political investment in the protective tariff system were not. These findings call for a revision of conventional accounts of the income tax’s origins and alter our understanding of its political economy on a constitutional level, particularly with respect to its unanticipated effects on the federal tax base and subsequent deployment as a revenue extraction device.

Economic impacts of Japan\u2019s renewable energy sector and the feed-in tariff system: using an input\u2013output table to analyze a next-generation energy system

We construct an input–output table to analyze a next-generation energy system. Based on this table, we estimate the effect of using renewable energy on Japan’s economic structure as well as the feed-in tariff’s contribution to the cost structure. The results clearly show that, induced by demand, existing power generation options and the production of existing passenger vehicles would be reduced and replaced by electric vehicles (EVs), plug-in hybrid vehicles (PHVs), and the renewable energy sector. Furthermore, the demand for production in the supply chain of these sectors would change. While the feed-in tariff seems to benefit the overall Japanese economy, the benefits are not divided equally among the sectors because the positive effect of the feed-in tariff system is greater than the negative effect in energy and energy-intensive industries, while the negative effect is greater in the service sectors, on which the cost of the feed-in tariff system is levied. However, renewable-energy-induced service activities, such as research and business services, are becoming more pervasive. Therefore, this inequality may be resolved in the long term and could be assisted by policies that accelerate this change.

Effectiveness of Public Financial Support in an Electricity Transmission Project between Iceland and the UK

The feasibility of the project called IceLink is now being examined, which entails laying 800–1,200 MW high-voltage direct current (HVDC) submarine cables over 1,000 km and transmitting over 5 TWh per annum. This project will meet the growing demand in Europe for electricity derived from renewable energy sources, though there exists a relatively high degree of potential risks (e.g., financial risk due to the lingering affect of the financial crisis). This study aims to examine the effectiveness of public financial support for the project by using a quantitative analysis as well as discussing public financial support as a possible measure to fill the viability gap. The simulation results imply that the project is unfeasible unless there is public financial support. In the light of the public nature of the project and its promotion of green power, public financial support may be acceptable. It can thus be said that public financial support will be effective for this project. Also, the sensitivity analysis results show break-even points for three major parameters:—WACC, wholesale power price, and CAPEX—to NPV. Furthermore, the corresponding public financial supports—concessional loans provided by public financial institutions, applying for the feed-in tariff (FiT) system in the UK, and receiving a government subsidy for initial investment—are discussed as potential measures to fill the viability gap. In order to have a feasible project, it is essential to introduce one or more effective measures of public financial support.

The challenges of municipal solid waste management systems provided by public-private partnerships in mature tourist destinations: The case of Mallorca

This article analyzes the influence of tourism on the municipal solid waste management (MSWM) system taking as reference the case study of Mallorca, an internationally renowned destination. The characteristics of tourism such as seasonality and land scarcity, set interesting challenges to public-private partnerships related to MSWM system. The analysis of Mallorca’s experience shows that land endowment strongly influences the choice of treatment technologies in tourism destinations. Furthermore, tourism seasonality significantly affects management costs which should be considered on PPP contracts. Finally, the tariff system in this kind of environmental PPPs in tourist destinations still need to improve to promote waste minimization and recycling.

Estimation of the Heating Time of Small-Scale Buildings Using Dynamic Models

Most buildings are not continuously occupied, such as office buildings, schools, churches and many residential buildings. Maintaining comfortable conditions only during the occupied periods reduces the energy costs. This can be done by lowering the temperature as much as possible during unoccupied periods and at nights and then raising the temperature for occupation. More energy can be saved by using this method. The estimation of the time taken for the temperature increase is important in determining the optimal time for switching the heating equipment on. A dynamic model for single-zone buildings is developed for estimating the heating time, and the model is validated using four case studies with real measurements. The model computes the heating time with an error of less than 3%. It can also be used to obtain a rough prediction of the space heating energy use. Further, it was observed that starting the heating at the right time returns the lowest energy cost with the introduction of usage-based energy tariff systems. The model is quick in predicting the results, and hence, physics-based models can play an influential role in building system control with advanced control strategies.

Cost reduction incentives in electricity markets with overlapping regulations

Recent research has documented some potential unintended consequences of so called “overlapping regulations” in electricity markets. A primary example of these overlapping regulations are the emissions trading scheme and the various renewable energy (RE) support mechanisms currently employed in the EU to enforce a “green quota”. One common RE support mechanism is a system of premium feed-in tariffs. Under such a system, RE producers receive subsidies that are typically “generation cost based” but there is an expectation that as technological improvements in the RE production chain reduce costs, the subsidies will be eliminated as RE installations become competitive with fossil fuel producers. Therefore, one important component of the study of overlapping regulations is the analysis of the cost reduction incentives facing RE producers. To this end, we employ an example based on a stylized partial equilibrium model of a closed, competitive electricity market operated under both an emissions trading scheme and a green quota implemented via a system of premium feed-in tariffs. We demonstrate that there will always be one RE producer that has an incentive to both pad its own costs and attempt to disadvantage its rivals by increasing their costs. Moreover, we show that the total RE resource cost of meeting the emissions target and green quota are unaffected by cost reductions by RE producers. However, cost reduction incentives can be restored if the subsidies remain fixed for a “reasonable” period of time and the green quota is eliminated.

移動平均制御を用いたSVCによる配電系統の自動電圧制御

Recent years, installation of Photovoltaic (PV) system to power system is active by the environmental problem, feed in tariff system and decrement of initial investment cost. Now, the distribution system is already controlled by the existing voltage controller. However, voltage deviation is caused by high penetration of PV. In order to reduce the effect of PV power fluctuation, the Static Var Compensator (SVC) is planning to install in distribution system. SVC offers a high-speed voltage control. But there is a possibility SVC cannot operate effectively by the difference of a working speed between SVC and existing voltage controllers. So the installation of effectively SVC is required to operate cooperatively with existing voltage controllers. In this research, the automatic voltage control technique of the distribution system by SVC which used the moving average control is proposed. Since the setting value of SVC is updated by the moving average, compared with the conventional SVC control technique, an effective and efficient voltage control is given by the proposed the automatic voltage control technique of SVC.

Methodological Aspect of the Logistics Technologies Formation in Reforming Processes on the Railways

Reforming processes of a railway transport based on those positive tendencies, which were recently observed in the transport market. They are caused by competitive rising of all railways in CIS countries and Baltic States. Experience of the countries with developed economy shows us, that reforming processes should be lead with receiving possibility system-wide effect from the individual interconnected subsystems functioning (units of rail transport) like unified system.Systematic approach to the justification the process of reform and development of the railway sector provides the formation of a dynamic model of the individual transport units, consisting of a single organizational – technological structure. This enables the system to be generally aimed at achieving the objectives of its functioning. So, such structure can be considered a major transport system for which is characterized by new properties and characteristics and all separate rail divisions acquire the status of system elements.In order to improve the quality characteristics of the transport process and the efficiency of cargo service, solving management task and logistic system rationalization of the goods delivery can be carried out the basis of multi-criteria methods, taking into account conservation approach. General industry logistic system should consist of the railways, their units, some large railway stations in conjunction with the relevant subsystems cargo. In process of the logistic system centers formation appears a question of managing their organizational structure. In our opinion one of the main factors which must be taken into account in shaping the organizational structure of logistics centers is an opportunity to achieve a high service level with taking in account availability of internal and external constraints.Modern conditions needs to formalize the functioning of large dynamic rail system from the system approach position, which is directed on system-wide optimization (synergistic) effect and takes into account the complex of all participants interests in the transportation process. One of the main limits for this system is a providing of the resources cost reduction (rolling stock, amount of cargo on the route to the consumer, staff etc.) for an assimilation given traffic volumes.From the logistics view point customers needs main services connected with transportation, storage, loading and unloading, warehousing, order processing, inventory management, herewith, services are seen as interrelated and interactive. On the other hand, in this complex are especially important logistics service indicators (service quality, compliance is “just in time”, etc.). Herewith logistic system should take on additional functions, which are accompany transportation, such as packaging, labeling, sorting goods, transportation design, determining the optimal transportation options, control over the movement of goods in transit.To do this, you first need to ensure the absolute safety of cargo; offer the full range of transport services; simplification of goods carriage and tariff system; reducing the delivery time; creation of a powerful and modern information network; clear interaction organization with a motor companies or obtaining of own one for delivery ensuring.

Modelling a BMS-based automobile liability rating system: The Serbian case

In this paper the authors examine the viability of applying a bonusmalus system in establishing automobile liability premium rates. They have developed an optimal tariff system which reflects the equivalence principle between the amounts of the premiums and the reported losses of individual policyholders. Based on past incidents of the policyholders, a homogeneous distribution of the risk classes and an improved insurance rating have been obtained. The developed model was tested with the negative binomial distribution and the expected value principle on a sample of 98,978 policyholders in Serbia. As a result, the set tariff system has been financially balanced, i.e. a balance was struck between the cost amounts of total premiums among policyholders and the cost amount of expected future claims. It has been proven that, in the process of modelling the automobile liability rating system based on the frequency of claims, it is optimal to use sophisticated distribution models such as the negative binomial distribution.

Demand Management Methods for the Environment Oriented Hybrid Traffic System to be Implemented in Istanbul

Urban transportation problem -a major issue for all metropolises- must be mitigated using “sustainable” solutions, and to this end, new methods must be developed via “Transportation Demand Management Systems”. In this context, «effective management of transport demands and efficient use of the existing transport infrastructure » has been established as a strategy that envisages a change of understanding and approach to sort out Istanbul's transport problem.The rapidly growing rate of private car ownership is one of the main reasons for the transportation problems in our city. According to the Turkish Statistical Institute, around 25% of all cars in the country are registered in Istanbul. In addition, data from Energy Market Regulatory Authority of Turkey (EPDK) suggest that around 18% of total fuel consumption in our country takes place in Istanbul. Such high prevalence of vehicle ownership has major social and economic implications while elevated levels of fuel consumption and the associated emissions make dire impacts on the environment. The foregoing study examines the practices that could be introduced to remedy the problem of intensive traffic which has enormous implications not only worldwide but particularly in Istanbul -our largest metropolis- by using urban solutions, congestion charges applied in most European countries as a means for effective management of traffic, and the practice of low emission zones which prioritizes environmental consciousness. In this context, it presents a number of comparative analyses on the practices in various countries. After reviewing these analyses in terms of the specific needs of Istanbul, the study provides a recommendation for a hybrid model involving “Low Emission Based Congestion Charging” which brings together congestion charges and environmental restrictions of the traffic demand management system planned to be implemented.What's more, traffic congestion in Istanbul is most severely experienced on the bridges which function as intercontinental connections. The main reason for that is –once again- the high rate of private vehicle ownership and inefficient use of vehicles. As a solution to this problem, introduction of a “high occupancy vehicle” practice is recommended to ensure transportation of more people rather than more vehicles in the traffic. In this framework, the study presents a recommendation for new tariff system for traffic density management based on the results of a density analysis over bridge crossings, and it provides and innovative and hybrid method for demand management with “high occupancy vehicles practice to be implemented along with alternative fares charged for bridge crossings”. Introduction of these practices would ensure effective traffic management, and provide for a reduction on emission levels by supporting the elevation of occupancy rates of private vehicles, which is expected to eventually decrease the number of vehicles in traffic. Furthermore, it is anticipated that public transport would be encouraged by ensuring public transport prioritization in the fares; and enhanced punctuality of public transport vehicles would make a major contribution for sustainable transport.The study also explores the political and legal implications associated with the implementation of the recommended practices.Last but not least, introduction of such practices in cities must be promoted through “Basic Principles of the European Union's Environmental Policy” and “Air Quality Framework Directive”. All these practices would provide for an environmentalist outlook on behalf of our country, and as the prerequisites of a livable city, these practices would facilitate the harmonization of our country with the relevant standards as part of the process of joining the European Union.

Who Uses Freeways and Who Pays for Them?: Model-Based Analysis of Distribution Effects of Toll Tariff Systems in Germany

The introduction of a car toll on German freeways is a current political discussion and raises several questions, including whether particular car owner groups are financially disadvantaged by certain toll tariff systems. Analyses of this issue require a detailed knowledge of the frequency and intensity of freeway usage across the car fleet from a longitudinal perspective. Because such data were not available for Germany, this study developed an approach that extended a microscopic data set of car trips for a 1-year period by modeling the highway usage of those trips. The resulting annual toll expenses for every car in the sample were evaluated for three toll tariff systems: an annual fee, combinations of tariffs for different periods, and a tariff that depended on the vehicle miles traveled (VMT). The analyses illustrated that the toll expenses per car varied greatly between the systems. Car owners with low annual mileages were financially disadvantaged by the annual sticker toll tariff. Comparisons of toll expenses and the socioeconomic aspects of car owners and car characteristics showed similar results. Car owners with a low income and retired or unemployed persons would benefit notably from the VMT toll.

Economic determinants of wine consumption in Thailand

The focus of the study is economic (income), substitution and price effects. To limit effects in sociodemographic changes, the data spans the recent period of 2007 to 2014. The study finds using correlations and regressions to obtain the elasticities, that local wine is an inferior good, imported wine is a luxury good, imported wine and beer are substitutes, demand for local wine is fairly price sensitive (elastic), and demand for imported wine is not sensitive to price increases (inelastic). The research also analyses policy implications based on the elasticities for reducing alcohol consumption, switching consumers between wine and beer for health reasons, increasing government revenues and protecting local wineries. This study finds that the current tariff system on imported wines does not help local producers but is intended for interests in the beer industry and/or a source of government revenue.

Impact of Time Relay for Changing of the Tariff on Commercial Losses at Mechanical Meters

Abstract: Relying on numerous visits of the customers in the field as part of the regular activities to verify the time relays, a numerous disproportions are found in electricity consumption with low and high tariff and this has given indications that Kosovo Energy Corporation (KEK) could be damaged in the field of financial terms. As a result, in this area which was allegedly manipulated easily and not regulated properly, in April 2011 is scheduled the plan of activities to be expired in detail. Summary of actions and analysis in this document is intended to put in writing the situation in the field, analysis and recommendations on how to regulate this problem together with the analysis of benefits from these activities in the form of analytical studies. The main goal of this research is to increase the efficiency of operations for real electricity billing and real cost according to the setting of realistic tariff system approved by ERO (Energy Regulatory Office).

Informatics Solutions for Smart Metering Systems Integration

In this paper different aspects regarding smart metering systems integration have been depicted. Smart metering systems, renewable energy sources integration and advanced tariff systems implementation require informatics solution that could automatically collect and process data, forecast the behavior of electricity consumers, analyze trends regarding electricity prices, optimize the consumption of consumers, provide friendly interfaces, etc. They are advanced technologies that represent solutions for insufficient conventional primary energy sources, gas emissions, dependency on energy sources located outside European Union and issues related to energy efficiency. This paper mainly describes several informatics solutions correlated with operational requirements for smart metering system and our proposal for simplified architecture of smart metering systems, with three distinct levels (base level, middle level and top level) and load profile calculation methods.

Incentives for cost reduction and cost padding in electricity markets with overlapping “green” regulations

We examine overlapping regulations in electricity markets. Using an example based on a stylized model of a competitive energy market, we study cost-reduction and cost-padding incentives by “green-energy” producers in an electricity market employing an emissions tax and the simultaneous use of a green quota for the generation portfolio and a fair rate-of-return constraint implemented via a system of feed-in tariffs. We show inter alia that when subsidies are phased out, exploitation of the green technologies full cost-reduction potential is a Nash Equilibrium but emissions will increase. In addition, green-energy producers can engage in collusive cost padding to increase profits even as they satisfy the policymaker's desired green quota.

Modelling the optimum thermal store and biomass boiler size for a small communal heating scheme

This paper presents a study of biomass boiler and thermal store optimisation for a small communal heating scheme. Poor system sizing has been identified by the Carbon Trust and CIBSE as affecting the performance of biomass heating systems, and a review of installations under the Renewable Heat Incentive has shown that typically systems have low utilisation and are less efficient than expected. Thermal store sizing affects the boiler efficiency and a literature review has highlighted that there is little research directly addressing the subject of optimisation of a thermal store for biomass heating systems. This paper studied the problem using a transient simulation of a heating system to establish the boiler and thermal store size that gave minimum energy consumption and the optimum life cycle cost for the range of options. The model demonstrated that for the systems assessed, the smallest boiler that met the design day average load used the least energy and larger thermal stores achieved greater seasonal efficiency. However the Renewable Heat Incentive tariff structure encourages oversized boilers with low utilisation and this gives rise to low seasonal efficiencies. Practical application: This paper looks into the role of thermal stores in improving biomass boiler efficiency. It also discusses the impact on efficiency that results from decisions to oversize biomass boilers in an attempt to maximise Renewable Heat Incentive income. The conclusions will be relevant to designers of biomass systems who are weighing up the implications of different boiler outputs and heat stores with regard to overall system performance. It may also interest operators who are investigating system performance and policy makers who are looking at how the tariff system could be affecting boiler size and performance.

Factor analysis of the electricity cost for retailers of petroleum products

The main factors of the electricity cost for retailers of petroleum products are defined. The features of the three tariff system of metering and electricity accounting and payment are investigated. It is compared the electricity cost for filling station calculated for single and differentiated tariff. An influence of seasonal fluctuations in electricity consumption at a filling station for a year is analyzed

The impact of residential photovoltaic power on electricity sales revenues in Cape Town, South Africa

In South Africa, electricity is provided as a public service by municipalities. The combination of (a) rising electricity rates, (b) decreasing photovoltaic technology costs, and (c) a progressive tariff system (under which wealthier households support low tariff rates for indigent residents) leads to incentives for high-income households to cover part of their electricity demand by self-produced photovoltaic (solar) electricity. This development is simulated with hourly load profiles and radiation data, and an optimization model for a case study in Cape Town through the year 2030. Results indicate that the majority of higher-income residents are incentivized to invest in photovoltaic power production by 2020 and additionally use home battery systems by 2028. This leads to a steadily increasing gap between revenues and expenditure needs in the budget of the municipality. The budget gap can be reduced by replacing the energy-based tariff with a revenue-neutral fixed network-connection fee implementation of which is particularly effective in reducing incentives to invest in storage.