Efficiency in Deregulated Electricity Markets: Offer Cost Minimization vs. Payment Cost Minimization Auction

This study of the wholesale electricity market compares the efficiency performance of the auction mechanism currently in place in U.S. markets with the performance of a proposed mechanism. The analysis highlights the importance of considering strategic behavior when comparing different institutional systems. We find that in concentrated markets, neither auction mechanism can guarantee an efficient allocation. The advantage of the current mechanism increases with increased price competition if market demand is perfectly inelastic. However, if market demand has some responsiveness to price, the superiority of the current auction with respect to efficiency is not that obvious. We present a case where the proposed auction outperforms the current mechanism on efficiency even if all offers reflect true production costs. We also find that a market designer might face a choice problem with a tradeoff between lower electricity cost and production efficiency. Some implications for social welfare are discussed as well.

Simple-Offer vs. Complex-Offer Auctions in Deregulated Electricity Markets

In my recent experimental research of wholesale electricity auctions, I discovered that the complex structure of the offers leaves a lot of room for strategic behavior, which consequently leads to anti- competitive and inefficient outcomes in the market. A specific feature of these complex-offer auctions is that the sellers submit not only the quantities and the minimum prices at which they are willing to sell, but also the start-up fees that are designed to reimburse the fixed start-up costs of the generation plants. In this paper, using the experimental method I compare the performance of two complex-offer auctions (COAs) against the performance of a simple-offer auction (SOA), in which the sellers have to recover all their generation costs --- fixed and variable ---through a uniform market-clearing price. I find that the SOA significantly reduces consumer prices and lowers price volatility. It mitigates anti-competitive effects that are present in the COAs and achieves allocative efficiency more quickly.

Total Factor Productivity, Human Capital and Outward Orientation: Differences by Stage of Ddevelopment and Geographic Regions

Do openness and human capital accumulation promote economic growth? While intuition argues yes, the existing empirical evidence provides mixed support for such assertions. We examine Cobb-Douglas production function specifications for a 30-year panel of 83 countries representing all regions of the world and all income groups. We estimate and compare labor and capital elasticities of output per worker across each of several income and geographic groups, finding significant differences in production technology. Then we estimate the total factor productivity series for each classification. Using determinants of total factor productivity that include, among many others, human capital, openness, and distortion of domestic prices relative to world prices, we find significant differences in results between the overall sample and sub-samples of countries. In particular, a policy of outward orientation may or may not promote growth in specific country groups. even if geared to reducing price distortion and increasing openness. Human capital plays a smaller role in enhancing growth through total factor productivity.

Phytoplankton production, photosynthetic (P vs E) parameters, and particulate organic carbon and nitrogen within distinct water masses of eastern Australian coastal and shelf waters between 29 °S and 36 °S during spring 2010

The present dataset is part of an interdisciplinary project carried out on board the RV Southern Surveyor off New South Wales (Australia) from the 15th to the 31st October 2010. The main objective of the research voyage was to evaluate how the East Australian Current (EAC) affects the optical, chemical, physical, and biological water properties of the continental shelf and slope off the NSW coast.

Myanmar Sugar SMEs: History, Technology, Location and Government Policy

Small and medium enterprises (SMEs) engaged in sugar processing in Myanmar appeared in the last decade of the socialist era. An acute sugar deficit, restricted trade in white sugar, and high demand from the conventional dairy business led to the growth of sugar SMEs by appropriate blending of semi-finished products (syrup) in the fields, which were then processed in vacuum pans and centrifugals to obtain white sugar. This became a tradable commodity and sugar SMEs grew in clusters in big cities. They are family-owned businesses. However, they lack the bagasse-based power generation. In recent years, large modern sugar factories operated by private and military companies have emerged as key players. The current shortage of fuel feedstock and competition for raw materials have become driving forces that shift sugar SMEs from market-oriented to raw material-oriented locations. Internal competition among key players made sugar price highly volatile, too. Being placed on a level playing field, the whole industry should be upgraded in terms of price and quality to become export-oriented.

The Technology Gap and the Growth of the Firm: A Case Study of China's Mobile-phone Handset Industry

We have examined the way in which local Chinese firms confronted with a technology gap have achieved growth, using the Chinese handset industry as a case study. Chinese local firms have lacked technology, and have therefore turned to outside firms for development, design, and manufacturing, while they themselves have focused on sales and marketing, using their advantage of familiarity with the Chinese market. Consequently, by establishing a growth condition in which their selection of boundaries counterbalances the technology gap they have been able to expand their market share in comparison with foreign firms.

The rise and fall in the price of food, fuel and manufactured goods : interdependency between prices and technology determining comparative advantages and development paths

Green innovation, which enables us to extract energy from food crops, caused a food shortage in 2008. Countries suffering severe damage started to reconsider their agricultural policy with the aim of becoming more autonomous. The food price hike of the time looks like a reversal of the celebrated Singer-Prebisch thesis proposed in the 1950s. This paper examines the consequences of this trend on the comparative advantages and development strategies of developing countries. For that purpose, first, trends and short-run fluctuations in the prices of fuel and bio-energy crops are investigated. It is shown that the price series of fuels and the crops are synchronized only after the fuel extracting technology came into effect. Second, the reversal of the Singer-Prebisch thesis is underpinned by the generic form of an endogenous growth model developed by Rebelo (1991). It is shown that as an economy grows, appreciation of the non-reproducible, such as mineral resources and raw labor, over the reproducible, such as capital goods, is the norm rather than an anomaly. Third, the consequences of the food price hike and underlying capital accumulation on the development strategies of labor-abundant and low-income countries are explored. It is concluded that the impact of the food price hikes on the alteration of a development strategy is only incremental, without reinforcement from raw-labor-saving innovation. A case study of inventions by JUKI Corporation, a world-leader in the sewing machine market exemplifies the fact that, of all the major inventions the company have made, raw-labor-saving inventions have not dominated, although JUKI's machines are sold to one of the most raw-labor-intensive industries.

Energy efficiency standard and labeling program and consumer welfare : a case of the air conditioner market in China

Improving energy efficiency is an unarguable emergent issue in developing economies and an energy efficiency standard and labeling program is an ideal mechanism to achieve this target. However, there is concern regarding whether the consumers will choose the highly energy efficient appliances because of its high price in consequence of the high cost. This paper estimates how the consumer responds to introduction of the energy efficiency standard and labeling program in China. To quantify evaluation by consumers, we estimated their consumer surplus and the benefits of products based on the estimated parameters of demand function. We found the following points. First, evaluation of energy efficiency labeling by the consumer is not monotonically correlated with the number of grades. The highest efficiency label (Label 1) is not evaluated to be no less higher than labels 2 and 3, and is sometimes lower than the least energy efficient label (Label UI). This goes against the design of policy intervention. Second, several governmental policies affects in mixed directions: the subsidies for energy saving policies to the highest degree of the labels contribute to expanding consumer welfare as the program was designed. However, the replacement for new appliances policies decreased the welfare.

Upper Limb Portable Motion Analysis System Based on Inertial Technology for Neurorehabilitation Purposes

Here an inertial sensor-based monitoring system for measuring and analyzing upper limb movements is presented. The final goal is the integration of this motion-tracking device within a portable rehabilitation system for brain injury patients. A set of four inertial sensors mounted on a special garment worn by the patient provides the quaternions representing the patient upper limb’s orientation in space. A kinematic model is built to estimate 3D upper limb motion for accurate therapeutic evaluation. The human upper limb is represented as a kinematic chain of rigid bodies with three joints and six degrees of freedom. Validation of the system has been performed by co-registration of movements with a commercial optoelectronic tracking system. Successful results are shown that exhibit a high correlation among signals provided by both devices and obtained at the Institut Guttmann Neurorehabilitation Hospital.

The role of a firm's absorptive capacity and the technology transfer process in clusters: How effective are technology centres in low-tech clusters?

This paper analyses how the internal resources of small- and medium-sized enterprises determine access (learning processes) to technology centres (TCs) or industrial research institutes (innovation infrastructure) in traditional low-tech clusters. These interactions basically represent traded (market-based) transactions, which constitute important sources of knowledge in clusters. The paper addresses the role of TCs in low-tech clusters, and uses semi-structured interviews with 80 firms in a manufacturing cluster. The results point out that producer–user interactions are the most frequent; thus, the higher the sector knowledge-intensive base, the more likely the utilization of the available research infrastructure becomes. Conversely, the sectors with less knowledge-intensive structures, i.e. less absorptive capacity (AC), present weak linkages to TCs, as they frequently prefer to interact with suppliers, who act as transceivers of knowledge. Therefore, not all the firms in a cluster can fully exploit the available research infrastructure, and their AC moderates this engagement. In addition, the existence of TCs is not sufficient since the active role of a firm's search strategies to undertake interactions and conduct openness to available sources of knowledge is also needed. The study has implications for policymakers and academia.

The human side of social technology for climate change mitigation and human development: the case of "efficient stoves" in Brazil

Carbon management has gradually gained attention within the overall environmental management and corporate social responsibility agendas. The clean development mechanism, from Kyoto Protocol, was envisioned as connecting carbon market and sustainable development objectives in developing countries. Previous research has shown that this potential is rarely being achieved. The paper explores how the incorporation of the human side into carbon management reinforces its contribution to generate human development in local communities and to improve the company's image. A case study of a Brazilian company is presented, with the results of the application of an analytical model that incorporates the human side and human development. The selected project is an "efficient stoves" programme. "Efficient stoves" are recognised in Brazil as social technologies. Results suggest that the fact that social technologies value the human side of the technology plays a key role when it comes to analysing the co-benefits of the project implementation.

The first renewable forward market mechanisms in the Iberian Electricity Market

A description of the first renewable forward market mechanisms in the Iberian Electricity Market is provided. A contract for difference mechanism is available in Spain since March 2011between the last resort suppliers and the special regime (renewables and cogeneration) settling the price differences between the equilibrium price of the forward regulated auctions for the last resort supply and the spot price of the corresponding delivery period. Regulated auctions of baseload futures of the Portuguese zone in which the Portuguese last resort supplier sells the special regime production exist since December 2011. The experience gained from renewables auctions in Latin America could be used in the Iberian Electricity market, complementing these first market mechanisms. Introduction of renewable auctions at least for the most mature technologies (i.e. wind) in Spain and Portugal providing a fair price for the renewable generation will be of utmost importance in the short term to diminish the tariff deficit caused by the massive deployment of the feed-in-tariff scheme. Liquidity in the forward markets will also increase as a result of the entry of renewable generation companies intending to maximize their profits due to gradual suppression of feed in tariff schemes.

Renewable energies Driven by Feed-on Tariffs. Photovoltaic vs Wind Energy Development in Spain

Although others regulations regarding feed-in tariffs for photovoltaics (PV) existed in Spain previously, the one that meant a paradigm change was the introduction in 2007 of law R.D.661/2007 which established a feed-in tariff of 41,75 cents/kWh if the installed capacity was greater than 100KWp and 44,04 cents/kWh if it was smaller. The high level of the subsidies together with the lack of a limit for the total installed capacity originates the well-known Spanish photovoltaic boom. In September 2008 the installed PV capacity accounted for 3.2GWp (while the official objective stated in the national renewable roadmap was only 400MWp). To avoid this situation a new law, R.D. 1578/2008, was proclaimed which established a decreasing feed-in tariff of 32 cents/kWh (for ground installations) and 34 cents/kWh (for rooftops) and it limited the annual installed capacity to 500MWp. Although it was successful in limiting the PV subsidies total costs, the successive and sudden changes in regulations resulted very harmful to the local PV industry. In this article, the strong influence of feed-in tariff in the development of PV installed capacity and market evolution in Spain will be analyzed in detail. In addition, a comparison with other subsidized technologies which installed capacity has had a smoother evolution, as wind energy, will be presented.

The NACIR Project: New Applications for CPV'S: A fast way to improve reliability and Technology progress

The main goal of this proposal is to join together the owners of the most advanced CPV technology, with respect to the state of the art, in order to research from its leading position new applications for CPV systems. In addition to opening up new markets, it will unveil possible sources of failure in new environments outside Europe, in order to assure component reliability. The proposed project will also try to improve the current technology of the industrial partners (ISOFOTON and CONCENTRIX) by accelerating the learning curve that CPV must follow in order to reach the competitive market, and lowering the cost under the current flat panel PV significantly within 3-4 years. The use of CPV systems in remote areas, together with harsher radiation, ambient and infrastructure conditions will help to increase the rate of progress of this technology. In addition, the ISFOC s contribution, which brings together seven power plants from seven CPV technologies up to 3 MWpeak, will allow creating the most complete database of components and systems performance to be generated as well as the effects of radiation and meteorology on systems operations. Finally, regarding the new applications for CPV subject, the project will use a CPV system sized 25 kWp in a stand-alone station in Egypt (NWRC) for the first time for water pumping and irrigation purposes. In a similar way ISOFOTON will connect up to 25 kWp CPV to the Moroccan ONE utility grid. From the research content point of view of this project, which is directly addressed by the scope of the call, the cooperative research between UPM, FhG-ISE and the two companies will be favoured by the fact that all are progressing in similar directions: developing two-stage optics CPV systems. In addition to these technology improvements the UPM is very interested in developing a new concept of module, recently patented, which will fulfil all required characteristics of a good CPV with less components and reducing cost.

Progress on the development of a technology for silicon purification

The polysilicon market is experiencing tremendous changes due to the strong demand from Photovoltaics (PV), which has by far surpassed the demand from Microelectronics. The need of solar silicon has induced a large increase in capacity, which has now given a scenario of oversupply, reducing the polysilicon price to levels that put a strong pressure on the cost structure of the producers. The paper reports on the R&D efforts carried out in the field of solar silicon purification via the chlorosilane route by a private-public consortium that is building a pilot plant of 50-100 tonnes/year, that will synthesize trichlorosilane, purify it and deposit ultrapure silicon in an industrial-size Siemens type reactor. It has also capabilities for ingot growth and material characterization. A couple of examples of the progress so far are given, the first one related to the recycling scheme of chlorinated compounds, and the second to the minimization of radiation losses in the CVD deposition process, which account for a relevant part of the total energy consumption. In summary, the paper gives details on the technology being developed in our pilot plant, which offers a unique platform for field-testing of innovative approaches that can lead to a cost reduction of solar silicon produced via the chlorosilane route.