The effect of price regulation on energy imbalances: A Difference in Differences design

Clò, Stefano; Fumagalli, Elena

doi:10.1016/j.eneco.2019.05.008

Cited by 34 publications

(16 citation statements)

References 19 publications

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“…The difference-in-difference (DID) model, which was proposed by Ashenfelter and Card [18] for the first time and has received widespread attention from sociologists, is an effective method to assess the effectiveness of policies. The DID model has also been widely used for evaluation of policies in recent years [12,[19][20][21][22]. Therefore, we employed the DID model to assess the policy effect of China's carbon emission trading on reducing CEICL.…”

Section: Methodsmentioning

confidence: 99%

Impact and Acting Path of Carbon Emission Trading on Carbon Emission Intensity of Construction Land: Evidence from Pilot Areas in China

Dong

Song

2020

Sustainability

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Recently, the environmental and resource crisis caused by excessive energy consumption has aroused great concern worldwide. China is a major country of energy consumption and carbon emissions, and has attempted to build a carbon emission trading market to reduce carbon emissions. This practice helps to promote the carbon trading projects for both regional carbon emission reduction and sustainable development in the pilot areas, as well as having important theoretical and practical significance for the further improvement of carbon emission trading policies. In this study, we first used the difference-in-difference (DID) model to evaluate the impact of carbon emission trading on the carbon emission intensity of construction land (CEICL). The results showed that the carbon emission trading policy can significantly reduce CEICL in the pilot areas. Furthermore, we adopted the quantile regression model to explore the mechanism and acting path of carbon emission trading on CEICL. The results show that the increase in carbon trading volume (CTV) can effectively reduce the CEICL. However, a high carbon trading price (CTP) tends to reduce the suppressing effect of carbon emission trading on CEICL. Additionally, carbon emission trading also affects CEICL through the indirect acting paths of industrial structure and energy intensity. Finally, we propose to promote regional low-carbon development from the perspective of developing a carbon emission trading market nationwide, rationalizing the carbon quota and trading price mechanism, optimizing the regional industrial structure, and improving the energy consumption structure.

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Section: Methodsmentioning

confidence: 99%

Impact and Acting Path of Carbon Emission Trading on Carbon Emission Intensity of Construction Land: Evidence from Pilot Areas in China

Dong

Song

2020

Sustainability

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“…Clo and Fumagalli [26], in their study on the Italian shift of the settlement rules of consumption sites from a "single" to a "dual" pricing scheme, arrived at the same conclusion on the effectiveness of "dual pricing" in reducing the system imbalances.…”

Section: Benchmarking the Economic Value Of The Imbalance Of "Relevanmentioning

confidence: 79%

“…The simplest rule revision could be to shift from the "single" to the "dual" pricing schemes so that, as was demonstrated in [21,26], the best forecasts would be more probably rewarded and the market arbitrage actions would be strongly reduced.…”

Section: Proposed Revision To the Dispatching Market Regulatory Framementioning

confidence: 99%

“…It is worth noting that the mean imbalance price is similar to the mean day-ahead price but the range of variability is much wider, reaching values up to 1000 EUR/MWh for the critical upward regulation hour. It is important to specify that the imbalance cost borne by "relevant" UPs allowed to provide ancillary services (BSO) is defined by the "dual pricing" market scheme in which the imbalance price depends on both the zonal and UP imbalance signs (dual), this scheme is well explained in [21,26]. In contrast with the "single pricing", this rule cannot produce revenues for balancing system operators.…”

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confidence: 99%

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The Value of PV Power Forecast and the Paradox of the “Single Pricing” Scheme: The Italian Case Study

et al. 2020

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One of the major problem of photovoltaic grid integration is limiting the solar-induced imbalances since these can undermine the security and stability of the electrical system. Improving the forecast accuracy of photovoltaic generation is becoming essential to allow a massive solar penetration. In particular, improving the forecast accuracy of large solar farms’ generation is important both for the producers/traders to minimize the imbalance costs and for the transmission system operators to ensure stability. In this article, we provide a benchmark for the day-ahead forecast accuracy of utility scale photovoltaic (PV) plants in 1325 locations spanning the country of Italy. We then use these benchmarked forecasts and real energy prices to compute the economic value of the forecast accuracy and accuracy improvement in the context of the Italian energy market’s regulatory framework. Through this study, we further point out several important criticisms of the Italian “single pricing” system that brings paradoxical and counterproductive effects regarding the need to reduce the imbalance volumes. Finally, we propose a new market-pricing rule and innovative actions to overcome the undesired effects of the current dispatching regulations.

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“…Moser and Voena in 2012 demonstrated, through the difference in differences method, that certain developing countries have implemented compulsory licensing without the consent of foreign patent owners, i.e., allowing domestic firms to produce with foreign patents ultimately promotes domestic inventions [29]. Stefano Clòa and Elena Fumagalli studied the causal effect of imbalanced price regulations on the volume of the energy imbalances by using a quasi-experimental change data in regulation in the Italian power system through the difference in differences model [30]. Based on this, we propose to scientifically and effectively evaluate the pilot construction of Climate Resilient Cities in China using the difference in differences model.…”

Section: Literature Reviewmentioning

confidence: 99%

Assessment of the Construction of a Climate Resilient City: An Empirical Study Based on the Difference in Differences Model

Liang

2021

IJERPH

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Facing climate risks has become a common problem for mankind and a topic of great importance for the Chinese government. To thoroughly implement the overall requirements for the construction of an ecological civilization and effectively improve the capacity of cities to adapt to climate change, China launched the pilot construction of “Climate Resilient Cities” in 2017. In this paper, 16 prefecture level cities in Anhui Province of China were selected as the research objects, and the multi-level grey system evaluation method was used to measure the climate resilience of these regions. We used the difference in differences method to evaluate the effect of the pilot policy of “Climate Resilient Cities.” The pilot policies of the “Climate Resilient Cities” showed a significant contribution to the regional climate resilience, and, after isolating the impact of other factors on the regional climate resilience, the pilot policies of the “Climate Resilient Cities” increased the climate resilience of the pilot cities by four percentage points. The pilot policies of the “Climate Resilient Cities” had a significant contribution to the urban infrastructure development and ecological space optimization, as well as non-significant impacts to the urban water security, emergency management capacity-building, and science and technology innovation initiatives.

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The effect of price regulation on energy imbalances: A Difference in Differences design

Cited by 34 publications

References 19 publications

Impact and Acting Path of Carbon Emission Trading on Carbon Emission Intensity of Construction Land: Evidence from Pilot Areas in China

Impact and Acting Path of Carbon Emission Trading on Carbon Emission Intensity of Construction Land: Evidence from Pilot Areas in China

The Value of PV Power Forecast and the Paradox of the “Single Pricing” Scheme: The Italian Case Study

Assessment of the Construction of a Climate Resilient City: An Empirical Study Based on the Difference in Differences Model

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