Nuclear Capacity Auctions

We propose nuclear capacity auctions as a means to improve the incentives for investing in nuclear power. A properly designed auction would (i) allocate the license to the most efficient bidder; (ii) sell the license if and only if new nuclear power was socially optimal. In particular, capacity auctions open the market for large-scale entry by outside firms. Requiring licensees to sell a share of capacity as virtual power plant contracts increases auction efficiency by softening incumbent producers incentive to bid for market power. Our motivating example is Swedens recent decision to allow new nuclear power to replace old reactors

Arctic shipping and polar seaways

Climate change in the Arctic triggered a series of discourses about the opening-up of a previously unreachable region. Navigation remains however difficult in the Arctic, transits are still very limited, as sea-ice still is a major constraint. How did the development policies of both the North West Passage and the Northern Sea Route unfold ? What are the recent trends in Arctic shipping ?

Smart energy solutions in the EU: State of play and measuring progress

The European energy system is undergoing, and will continue to in the future, a transition towards a more sustainable energy system. An important part of this will be the deployment of smart energy solutions in the household sector, including smart meters, controls, appliances, and their integration in home networks. This study is in support of the Commission's work related to smart energy solutions in the framework of the SET plan, in particular in understanding methods to develop indicators that can be used to measure progress under the Declaration of Intent for the Action 3.1 on Initiative for Smart solutions for energy consumers. First, 'smart energy solutions’ are defined and the type of technologies that this includes are detailed. Once the scope has been established, existing indicators that are able to monitor the levels of deployment of such technologies will be reviewed. This includes indicators being proposed or used by international and Member State level energy agencies and other organisations. It is not intended that this study will comprehensively assess the actual deployment of smart energy solutions across all EU Member States. Instead, selected countries who are more advanced in the deployment of such technologies are considered in more detail. These include France, Switzerland, Ireland, UK, and Sweden. Finally, we review estimates of the potential of demand response in Europe to achieve goals related to energy efficiency, cost savings, and renewable energy penetration

Market Power and Joint Ownership: Evidence from Nuclear Plants in Sweden

This paper presents an empirical test of the anticompetitive effects of joint ownership, by examining the operation of three nuclear plants in Sweden. Since maintenance is the main conduit explaining the variation in output, I formulate a model of intertemporal choice in which firms choose how to allocate a given amount of maintenance within each year. Using data on production and bidding curves on the day-ahead market, I test the model against data given three behavioral assumptions: Unilateral profit maximization; joint profit maximization; and a social planner. Modeling for joint profit maximization best matches data, indicating that joint ownership has facilitated coordination of maintenance decisions. Terminating the joint ownership and modeling for unilateral profit maximization would lead to a 5 percent decrease in prices and a 6 percent decrease in system production costs. I identify positive supply shocks in the form of inflow to the hydro power reservoirs as important determinants of the incentives to exercise market power. Therefore, the mechanisms discussed in this paper should be of relevance also in other electricity markets where the share of intermittent production is increasing. As a motivation for the structural exercise, I use a difference-in-differences estimator to identify a shift in the allocation of maintenance towards the winter season (when demand and prices are peaking) at the time of the introduction of the joint ownership. This is in line with the results from the structural model, as the ability to influence the price is also higher during the winter season