The evolution of electricity demand and the role for demand side participation, in buildings and transport

This paper explores the possible evolution of UK electricity demand as we move along three potential transition pathways to a low carbon economy in 2050.The shift away from fossil fuels through the electrification of demand is discussed, particularly through the uptake of heat pumps and electric vehicles in the domestic and passenger transport sectors. Developments in the way people and institutions may use energy along each of the pathways are also considered and provide a rationale for the quantification of future annual electricity demands in various broad sectors. The paper then presents detailed modelling of hourly balancing of these demands in the context of potential low carbon generation mixes associated with the three pathways. In all cases, hourly balancing is shown to be a significant challenge. To minimise the need for conventional generation to operate with very low capacity factors, a variety of demand side participation measures are modelled and shown to provide significant benefits. Lastly, projections of greenhouse gas emissions from the UK and the imports of fossil fuels to the UK for each of the three pathways are presented.

High-resolution global climate simulations with the ECMWF model in Project Athena: experimental design, model climate, and seasonal forecast skill

The sensitivity to the horizontal resolution of the climate, anthropogenic climate change, and seasonal predictive skill of the ECMWF model has been studied as part of Project Athena—an international collaboration formed to test the hypothesis that substantial progress in simulating and predicting climate can be achieved if mesoscale and subsynoptic atmospheric phenomena are more realistically represented in climate models. In this study the experiments carried out with the ECMWF model (atmosphere only) are described in detail. Here, the focus is on the tropics and the Northern Hemisphere extratropics during boreal winter. The resolutions considered in Project Athena for the ECMWF model are T159 (126 km), T511 (39 km), T1279 (16 km), and T2047 (10 km). It was found that increasing horizontal resolution improves the tropical precipitation, the tropical atmospheric circulation, the frequency of occurrence of Euro-Atlantic blocking, and the representation of extratropical cyclones in large parts of the Northern Hemisphere extratropics. All of these improvements come from the increase in resolution from T159 to T511 with relatively small changes for further resolution increases to T1279 and T2047, although it should be noted that results from this very highest resolution are from a previously untested model version. Problems in simulating the Madden–Julian oscillation remain unchanged for all resolutions tested. There is some evidence that increasing horizontal resolution to T1279 leads to moderate increases in seasonal forecast skill during boreal winter in the tropics and Northern Hemisphere extratropics. Sensitivity experiments are discussed, which helps to foster a better understanding of some of the resolution dependence found for the ECMWF model in Project Athena

‘Nudging’ energy users: regulatory measures to address the risk of aggregate peak demand in European electricity markets

For decades regulators in the energy sector have focused on facilitating the maximisation of energy supply in order to meet demand through liberalisation and removal of market barriers. The debate on climate change has emphasised a new type of risk in the balance between energy demand and supply: excessively high energy demand brings about significantly negative environmental and economic impacts. This is because if a vast number of users is consuming electricity at the same time, energy suppliers have to activate dirty old power plants with higher greenhouse gas emissions and higher system costs. The creation of a Europe-wide electricity market requires a systematic investigation into the risk of aggregate peak demand. This paper draws on the e-Living Time-Use Survey database to assess the risk of aggregate peak residential electricity demand for European energy markets. Findings highlight in which countries and for what activities the risk of aggregate peak demand is greater. The discussion highlights which approaches energy regulators have started considering to convince users about the risks of consuming too much energy during peak times. These include ‘nudging’ approaches such as the roll-out of smart meters, incentives for shifting the timing of energy consumption, differentiated time-of-use tariffs, regulatory financial incentives and consumption data sharing at the community level.

The impact of price promotions on producer strategies in markets with large product heterogeneity

Although current research indicates that increasing the number of options has negative effects on the cognitive ability of consumers, little understanding has been given to the consequences on producers and their strategic behavior. This article tests whether a large portfolio of products is beneficial to producers by observing UK consumer response to price promotions. The article shows that discounts induce mainly segment switching (74% of the total impact), with a limited effect on stockpiling (26%) and no impact on purchase incidence. Consequently, consumers prefer to “follow the discount” rather than purchase multiple units of the same wine. This result seems to explain the current structure of the market, and suggests that discounts may conflict with segment loyalty, a situation that disfavors producers, particularly in very populated segments. Results also casts doubts on the economic sustainability of competition based on an intense product differentiation in the wine sector.

Assessing the impact of occupant behaviour on the electricity consumption for lighting and small power in office buildings

Lighting and small power will typically account for more than half of the total electricity consumption in an office building. Significant variations in electricity used by different tenants suggest that occupants can have a significant impact on the electricity demand for these end-uses. Yet current modelling techniques fail to represent the interaction between occupant and the building environment in a realistic manner. Understanding the impact of such behaviours is crucial to improve the methodology behind current energy modelling techniques, aiming to minimise the significant gap between predicted and in-use performance of buildings. A better understanding of the impact of occupant behaviour on electricity consumption can also inform appropriate energy saving strategies focused on behavioural change. This paper reports on a study aiming to assess the intent of occupants to switch off lighting and appliances when not in use in office buildings. Based on the Theory of Planned Behaviour, the assessment takes the form of a questionnaire and investigates three predictors to behaviour individually: 1) behavioural attitude; 2) subjective norms; 3) perceived behavioural control. The paper details the development of the assessment procedure and discusses preliminary findings from the study. The questionnaire results are compared against electricity consumption data for individual zones within a multi-tenanted office building. Initial results demonstrate a statistically significant correlation between perceived behavioural control and energy consumption for lighting and small power

The 2010-2011 drought in the Horn of Africa in ECMWF reanalysis and seasonal forecast products

This study evaluates the use of European Centre for Medium-Range Weather Forecasts (ECMWF) products in monitoring and forecasting drought conditions during the recent 2010–2011 drought in the Horn of Africa (HoA). The region was affected by a precipitation deficit in both the October–December 2010 and March–May 2011 rainy seasons. These anomalies were captured by the ERA-Interim reanalysis (ERAI), despite its limitations in representing the March–May interannual variability. Soil moisture anomalies of ERAI also identified the onset of the drought condition early in October 2010 with a persistent drought still present in September 2011. This signal was also evident in normalized difference vegetation index (NDVI) remote sensing data. The precipitation deficit in October–December 2010 was associated with a strong La Niña event. The ECMWF seasonal forecasts for the October–December 2010 season predicted the La Niña event from June 2010 onwards. The forecasts also predicted a below-average October–December rainfall, from July 2010 onwards. The subsequent March–May rainfall anomaly was only captured by the new ECWMF seasonal forecast system in the forecasts starting in March 2011. Our analysis shows that a recent (since 1999) drying in the region during the March–May season is captured by the new ECMWF seasonal forecast system and is consistent with recently published results. The HoA region and its population are highly vulnerable to future droughts, thus global monitoring and forecasting of drought, such as that presented here, will become increasingly important in the future. Copyright © 2012 Royal Meteorological Society

Futures basis, inventory and commodity price volatility: an empirical analysis

We employ a large dataset of physical inventory data on 21 different commodities for the period 1993–2011 to empirically analyze the behavior of commodity prices and their volatility as predicted by the theory of storage. We examine two main issues. First, we analyze the relationship between inventory and the shape of the forward curve. Low (high) inventory is associated with forward curves in backwardation (contango), as the theory of storage predicts. Second, we show that price volatility is a decreasing function of inventory for the majority of commodities in our sample. This effect is more pronounced in backwardated markets. Our findings are robust with respect to alternative inventory measures and over the recent commodity price boom.

A review of the costs and benefits of demand response for electricity in the UK

The recent policy discussion in the UK on the economic case for demand response (DR) calls for a reflection on available evidence regarding its costs and benefits. Existing studies tend to consider the size of investments and returns of certain forms of DR in isolation and do not consider economic welfare effects. From review of existing studies, policy documents, and some simple modelling of benefits of DR in providing reserve for unforeseen events, we demonstrate that the economic case for DR in UK electricity markets is positive. Consideration of economic welfare gains is provided.

Fatty acid composition of cooked chicken meat and chicken meat products as influenced by price range at retail

The primary objective was to determine fatty acid composition of skinless chicken breast and leg meat portions and chicken burgers and nuggets from the economy price range, standard price range (both conventional intensive rearing) and the organic range from four leading supermarkets. Few significant differences in the SFA, MUFA and PUFA composition of breast and leg meat portions were found among price ranges, and supermarket had no effect. No significant differences in fatty acid concentrations of economy and standard chicken burgers were found, whereas economy chicken nuggets had higher C16:1, C18:1 cis, C18:1 trans and C18:3 n-3 concentrations than had standard ones. Overall, processed chicken products had much higher fat contents and SFA than had whole meat. Long chain n-3 fatty acids had considerably lower concentrations in processed products than in whole meat. Overall there was no evidence that organic chicken breast or leg meat had a more favourable fatty acid composition than had meat from conventionally reared birds.

‘What Price Solidarity? Nuclear Dependence in NATO, 1949-1967’

Archive-based study of the dependence of NATO member states on the USA as nuclear guarantor, and the problems this entailed.

Revenue-neutral tax policy under price uncertainty

The firm's response to revenue-neutral taxation is investigated under price uncertainty. Revenue-neutral policies adjust simultaneously the marginal tax rate and the level of exemptions while keeping expected tax receipts constant. Nonincreasing absolute risk aversion is sufficient to sign the firm's response: a reduction in the marginal rate causes the firm to contract output. Implications are established for the equilibrium level of treasury receipts.

Revenue-neutral tax policies under price uncertainty: reply

In their comment on my 1990 article, Yeh, Suwanakul, and Mai extend my analysis-which focused attention exclusively on firm output-to allow for simultaneous endogeneity of price, aggregate output, and numbers of firms. They show that, with downward- sloping demand, industry output adjusts positively to revenue-neutral changes in the marginal rate of taxation. This result is significant for two reasons. First, we are more often interested in predictions about aggregate phenomena than we are in predictions about individual firms. Indeed, firm-level predictions are frequently irrefutable since firm data are often unavailable. Second, the authors derive their result under a set of conditions that appear to be more general than those invoked in my 1990 article. In particular, they circumvent the need to invoke specific assumptions about the nature of firms' aversions toward risk. I consider this a useful extension and I appreciate the careful scrutiny of my paper.

Budget constrained tax policy under price uncertainty: implications for supply control

Tax policies that constrain net transfers between the farm sector and the fisc are modeled under price uncertainty. Increasing the level of tax on profits causes the firm to expand output. Implications are derived for supply control and the distributions of profits and net receipts at the fisc.

Enhanced seasonal forecast skill following stratospheric sudden warmings

Advances in seasonal forecasting have brought widespread socio-economic benefits. However, seasonal forecast skill in the extratropics is relatively modest, prompting the seasonal forecasting community to search for additional sources of predictability. For over a decade it has been suggested that knowledge of the state of the stratosphere can act as a source of enhanced seasonal predictability; long-lived circulation anomalies in the lower stratosphere that follow stratospheric sudden warmings are associated with circulation anomalies in the troposphere that can last up to two months. Here, we show by performing retrospective ensemble model forecasts that such enhanced predictability can be realized in a dynamical seasonal forecast system with a good representation of the stratosphere. When initialized at the onset date of stratospheric sudden warmings, the model forecasts faithfully reproduce the observed mean tropospheric conditions in the months following the stratospheric sudden warmings. Compared with an equivalent set of forecasts that are not initialized during stratospheric sudden warmings, we document enhanced forecast skill for atmospheric circulation patterns, surface temperatures over northern Russia and eastern Canada and North Atlantic precipitation. We suggest that seasonal forecast systems initialized during stratospheric sudden warmings are likely to yield significantly greater forecast skill in some regions.

The potential inefficiency of using marketing margins in applied commodity price analysis, forecasting and risk management

This paper examines the implications of using marketing margins in applied commodity price analysis. The marketing-margin concept has a long and distinguished history, but it has caused considerable controversy. This is particularly the case in the context of analyzing the distribution of research gains in multi-stage production systems. We derive optimal tax schemes for raising revenues to finance research and promotion in a downstream market, derive the rules for efficient allocation of the funds, and compare the rules with an without the marketing-margin assumption. Applying the methodology to quarterly time series on the Australian beef-cattle sector and, with several caveats, we conclude that, during the period 1978:2 - 1988:4, the Australian Meat and Livestock Corporation optimally allocated research resources.