Essays on Energy Economics and Industrial Organization

The dissertation consists of three chapters related to the low-price guarantee marketing strategy and energy efficiency analysis. The low-price guarantee is a marketing strategy in which firms promise to charge consumers the lowest price among their competitors. Chapter 1 addresses the research question "Does a Low-Price Guarantee Induce Lower Prices'' by looking into the retail gasoline industry in Quebec where there was a major branded firm which started a low-price guarantee back in 1996. Chapter 2 does a consumer welfare analysis of low-price guarantees to drive police indications and offers a new explanation of the firms' incentives to adopt a low-price guarantee. Chapter 3 develops the energy performance indicators (EPIs) to measure energy efficiency of the manufacturing plants in pulp, paper and paperboard industry.

Chapter 1 revisits the traditional view that a low-price guarantee results in higher prices by facilitating collusion. Using accurate market definitions and station-level data from the retail gasoline industry in Quebec, I conducted a descriptive analysis based on stations and price zones to compare the price and sales movement before and after the guarantee was adopted. I find that, contrary to the traditional view, the stores that offered the guarantee significantly decreased their prices and increased their sales. I also build a difference-in-difference model to quantify the decrease in posted price of the stores that offered the guarantee to be 0.7 cents per liter. While this change is significant, I do not find the response in comeptitors' prices to be significant. The sales of the stores that offered the guarantee increased significantly while the competitors' sales decreased significantly. However, the significance vanishes if I use the station clustered standard errors. Comparing my observations and the predictions of different theories of modeling low-price guarantees, I conclude the empirical evidence here supports that the low-price guarantee is a simple commitment device and induces lower prices.

Chapter 2 conducts a consumer welfare analysis of low-price guarantees to address the antitrust concerns and potential regulations from the government; explains the firms' potential incentives to adopt a low-price guarantee. Using station-level data from the retail gasoline industry in Quebec, I estimated consumers' demand of gasoline by a structural model with spatial competition incorporating the low-price guarantee as a commitment device, which allows firms to pre-commit to charge the lowest price among their competitors. The counterfactual analysis under the Bertrand competition setting shows that the stores that offered the guarantee attracted a lot more consumers and decreased their posted price by 0.6 cents per liter. Although the matching stores suffered a decrease in profits from gasoline sales, they are incentivized to adopt the low-price guarantee to attract more consumers to visit the store likely increasing profits at attached convenience stores. Firms have strong incentives to adopt a low-price guarantee on the product that their consumers are most price-sensitive about, while earning a profit from the products that are not covered in the guarantee. I estimate that consumers earn about 0.3% more surplus when the low-price guarantee is in place, which suggests that the authorities should not be concerned and regulate low-price guarantees. In Appendix B, I also propose an empirical model to look into how low-price guarantees would change consumer search behavior and whether consumer search plays an important role in estimating consumer surplus accurately.

Chapter 3, joint with Gale Boyd, describes work with the pulp, paper, and paperboard (PP&PB) industry to provide a plant-level indicator of energy efficiency for facilities that produce various types of paper products in the United States. Organizations that implement strategic energy management programs undertake a set of activities that, if carried out properly, have the potential to deliver sustained energy savings. Energy performance benchmarking is a key activity of strategic energy management and one way to enable companies to set energy efficiency targets for manufacturing facilities. The opportunity to assess plant energy performance through a comparison with similar plants in its industry is a highly desirable and strategic method of benchmarking for industrial energy managers. However, access to energy performance data for conducting industry benchmarking is usually unavailable to most industrial energy managers. The U.S. Environmental Protection Agency (EPA), through its ENERGY STAR program, seeks to overcome this barrier through the development of manufacturing sector-based plant energy performance indicators (EPIs) that encourage U.S. industries to use energy more efficiently. In the development of the energy performance indicator tools, consideration is given to the role that performance-based indicators play in motivating change; the steps necessary for indicator development, from interacting with an industry in securing adequate data for the indicator; and actual application and use of an indicator when complete. How indicators are employed in EPA’s efforts to encourage industries to voluntarily improve their use of energy is discussed as well. The chapter describes the data and statistical methods used to construct the EPI for plants within selected segments of the pulp, paper, and paperboard industry: specifically pulp mills and integrated paper & paperboard mills. The individual equations are presented, as are the instructions for using those equations as implemented in an associated Microsoft Excel-based spreadsheet tool.

A methodology for building energy modelling and calibration in warm climates

PEDRINI, Aldomar; WESTPHAL, F. S.; LAMBERT, R.. A methodology for building energy modelling and calibration in warm climates. Building And Environment, Australia, n. 37, p.903-912, 2002. Disponível em: . Acesso em: 04 out. 2010.

What kind of expertise is needed for low energy construction

The construction industry is responsible for 40% of European Union (EU) end-use emissions but addressing this is problematic, as evident from the performance gap between design intention and on-site energy performance. There is a lack of the expertise needed for low energy construction (LEC) in the UK as the complex work processes involved require ‘energy literacy’ of all construction occupations, high qualification levels, broad occupational profiles, integrated teamworking, and good communication . This research identifies the obstacles to meeting these requirements, the nature of the expertise needed to break down occupational divisions and bridge those interfaces where the main heat losses occur, and the transition pathway implied. Obstacles include a decline in the level, breadth and quality of construction vocational education and training (VET), the lack of a learning infrastructure on sites, and a fragmented employment structure. To overcome these and develop enhanced understanding of LEC requires a transformation of the existing structure of VET provision and construction employment and a new curriculum based on a broader concept of agency and backed by rigorous enforcement of standards. This can be achieved through a radical transition pathway rather than market-based solutions to a low carbon future for the construction sector.

Survery and simulation of energy use in the European building stock

the work towards increased energy efficiency. In order to plan and perform effective energy renovation of the buildings, it is necessary to have adequate information on the current status of the buildings in terms of architectural features and energy needs. Unfortunately, the official statistics do not include all of the needed information for the whole building stock.   This paper aims to fill the gaps in the statistics by gathering data from studies, projects and national energy agencies, and by calibrating TRNSYS models against the existing data to complete missing energy demand data, for countries with similar climate, through simulation. The survey was limited to residential and office buildings in the EU member states (before July 2013). This work was carried out as part of the EU FP7 project iNSPiRe.   The building stock survey revealed over 70% of the residential and office floor area is concentrated in the six most populated countries. The total energy consumption in the residential sector is 14 times that of the office sector. In the residential sector, single family houses represent 60% of the heated floor area, albeit with different share in the different countries, indicating that retrofit solutions cannot be focused only on multi-family houses.   The simulation results indicate that residential buildings in central and southern European countries are not always heated to 20 °C, but are kept at a lower temperature during at least part of the day. Improving the energy performance of these houses through renovation could allow the occupants to increase the room temperature and improve their thermal comfort, even though the potential for energy savings would then be reduced.

A methodology for building energy modelling and calibration in warm climates

PEDRINI, Aldomar; WESTPHAL, F. S.; LAMBERT, R.. A methodology for building energy modelling and calibration in warm climates. Building And Environment, Australia, n. 37, p.903-912, 2002. Disponível em: . Acesso em: 04 out. 2010.

Nano-Engineering of Densely Packed Electrochemical Energy Storage Architectures by Atomic Layer Deposition

Nanostructures are highly attractive for future electrical energy storage devices because they enable large surface area and short ion transport time through thin electrode layers for high power devices. Significant enhancement in power density of batteries has been achieved by nano-engineered structures, particularly anode and cathode nanostructures spatially separated far apart by a porous membrane and/or a defined electrolyte region. A self-aligned nanostructured battery fully confined within a single nanopore presents a powerful platform to determine the rate performance and cyclability limits of nanostructured storage devices. Atomic layer deposition (ALD) has enabled us to create and evaluate such structures, comprised of nanotubular electrodes and electrolyte confined within anodic aluminum oxide (AAO) nanopores. The V2O5- V2O5 symmetric nanopore battery displays exceptional power-energy performance and cyclability when tested as a massively parallel device (~2billion/cm2), each with ~1m3 volume (~1fL). Cycled between 0.2V and 1.8V, this full cell has capacity retention of 95% at 5C rate and 46% at 150C, with more than 1000 charge/discharge cycles. These results demonstrate the promise of ultrasmall, self-aligned/regular, densely packed nanobattery structures as a testbed to study ionics and electrodics at the nanoscale with various geometrical modifications and as a building block for high performance energy storage systems[1, 2]. Further increase of full cell output potential is also demonstrated in asymmetric full cell configurations with various low voltage anode materials. The asymmetric full cell nanopore batteries, comprised of V2O5 as cathode and prelithiated SnO2 or anatase phase TiO2 as anode, with integrated nanotubular metal current collectors underneath each nanotubular storage electrode, also enabled by ALD. By controlling the amount of lithium ion prelithiated into SnO2 anode, we can tune full cell output voltage in the range of 0.3V and 3V. This asymmetric nanopore battery array displays exceptional rate performance and cyclability. When cycled between 1V and 3V, it has capacity retention of approximately 73% at 200C rate compared to 1C, with only 2% capacity loss after more than 500 charge/discharge cycles. With increased full cell output potential, the asymmetric V2O5-SnO2 nanopore battery shows significantly improved energy and power density. This configuration presents a more realistic test - through its asymmetric (vs symmetric) configuration – of performance and cyclability in nanoconfined environment. This dissertation covers (1) Ultra small electrochemical storage platform design and fabrication, (2) Electron and ion transport in nanostructured electrodes inside a half cell configuration, (3) Ion transport between anode and cathode in confined nanochannels in symmetric full cells, (4) Scale up energy and power density with geometry optimization and low voltage anode materials in asymmetric full cell configurations. As a supplement, selective growth of ALD to improve graphene conductance will also be discussed[3]. References: 1. Liu, C., et al., (Invited) A Rational Design for Batteries at Nanoscale by Atomic Layer Deposition. ECS Transactions, 2015. 69(7): p. 23-30. 2. Liu, C.Y., et al., An all-in-one nanopore battery array. Nature Nanotechnology, 2014. 9(12): p. 1031-1039. 3. Liu, C., et al., Improving Graphene Conductivity through Selective Atomic Layer Deposition. ECS Transactions, 2015. 69(7): p. 133-138.

An early-stage design decision-support tool for selecting building assemblies to minimise a building's life cycle energy demand

The significant effects of the building industry on the natural environment are well documented and improving the environmental performance of buildings is an on-going challenge. This is particularly the case for projects with restrictive budgets and timelines and because many existing environmental assessment tools are designed to be used too late in the design process. The use of tools during the early design stages may assist in achieving greater improvements in a building’s environmental performance. However, user-friendly tools with the ability to comprehensively compare environmental information between various building assemblies and materials, which can be easily adopted during the early design stages of a project, are not readily available. This paper presents the progress to date in developing a tool which supports building designers in identifying and selecting preferred building assemblies with the aim of minimising a building’s life cycle energy demand. The tool is based on comprehensive energy performance data for a broad range of building assemblies across all Australian climate zones. Allowing for adjustments to a set of pre-defined and user-defined assemblies the designer is able to see how assemblies perform in relation to each other. This provides valuable information to support decision-making relating to minimising the life cycle energy demand of buildings.

Energy-efficient tall buildings design strategies: a holistic approach

The number of tall buildings is increasing as a result of the advances in construction technologies and the rising land prices. These buildings are characterised by their high energy consumption compared to other building types as they rely intensively on mechanical HVAC systems due to the extreme weather conditions associated with the increase in height. However, they present a great opportunity for energy savings. In recent years, it has been noticed the increasing interest in geometry and form of tall buildings, as a result of the evolution of parametric modelling and 3D visualisation tools, on the expense of the environmental aspect. This paper discusses factors affecting the energy consumption in the tall buildings. Through an extensive analysis of Literature, active and passive energy efficient strategies adopted in tall building at various building stages are identified. In addition, the role of architectural design parameters, such as building form, orientation and envelope on the tall building energy performance are highlighted. Finally, a set of guidelines and environmental design strategies to be considered in different phases in order to achieve energy-efficient tall buildings are proposed. These strategies have been categorised into four stages namely early design, conceptualisation, and documentation and operational. A 3D modelling approach was used to visualise and illustrate the proposed strategies in different stages.

The next step in energy rating: the international ETTV method vs. BCA Section-J glazing calculator

The most important prevention in minimizing energy transfer in commercial buildings is the treatment of glazing in the building facade. In a commercial building, while the impacts of roof, walls and floors on the overall heating and cooling loads of the building have low effects, glazing is likely to be the most important factor. This paper investigates the BCA Section-J glazing calculator and the ETTV (Envelope Thermal Transfer Value) methods and tries to look for differences as well as similarities in calculation of building envelopes energy performance. For this investigation, a hypothetical high-rise commercial building in Melbourne, Australia is considered when evaluating the energy performance of the envelope through these two methods. Both methods consider the U-Value of glass and wall materials as well as Solar Heat Gain Coefficient (SHGC) and Shading Coefficient (SC) of the glass. Findings in this research project indicate differences and significant discrepancies between the BCA Section-J and ETTV methods in evaluating the energy performance of commercial building façades. Issues of calculation weaknesses are identified with the lack of air leakage and infiltration of a particular façade design or window to wall ratio (WWR). Suggestions have been made where improvement to the overall energy calculation through facades of a commercial building is needed.

A Method of Preparing Future Hourly Weather Data for the Study of Global Warming Impact on the Built Environment

The dynamic interaction between building systems and external climate is extremely complex, involving a large number of difficult-to-predict variables. In order to study the impact of global warming on the built environment, the use of building simulation techniques together with forecast weather data are often necessary. Since all building simulation programs require hourly meteorological input data for their thermal comfort and energy evaluation, the provision of suitable weather data becomes critical. Based on a review of the existing weather data generation models, this paper presents an effective method to generate approximate future hourly weather data suitable for the study of the impact of global warming. Depending on the level of information available for the prediction of future weather condition, it is shown that either the method of retaining to current level, constant offset method or diurnal modelling method may be used to generate the future hourly variation of an individual weather parameter. An example of the application of this method to the different global warming scenarios in Australia is presented. Since there is no reliable projection of possible change in air humidity, solar radiation or wind characters, as a first approximation, these parameters have been assumed to remain at the current level. A sensitivity test of their impact on the building energy performance shows that there is generally a good linear relationship between building cooling load and the changes of weather variables of solar radiation, relative humidity or wind speed.

Public awareness of ‘green’ residential property – an empirical survey based on data from New Zealand and Germany

Over the last few years more stringent environmental laws (e.g. the German “Energie¬ein-sparverordnung ENEV” - Energy Performance of Buildings Directive) and soaring energy prices has increased the need for the real estate industry to react and participate in overall energy reduction through efficient house construction and design, as well as upgrading the existing housing stock to be more energy efficient. Therefore the Property Economics Group at Queensland University of Technology in Australia and Nuertingen-Geislingen University in Germany are carrying out research in relation to sustainable housing construction and public awareness of “green” residential property. Part of this research is to gain an understanding of the level of knowledge and importance of these issues to the house buyer and to determine the importance of sustainable housing to the general public. The paper compares data from two different empirical studies; one of studies analyzes the situation in New Zealand, the other is focused on Germany.

Adaptation to global warming by changing internal loads of buildings

Global warming can have a significant impact on the building thermal environment and energy performance. Because greenhouse gas concentrations are still continuing to increase, this warming process will continue and may accelerate. Adaptation to global warming is therefore emerging as one of the key requirements for buildings. This requires all the existing and new buildings not only to perform and operate satisfactorily in the new environment but also to satisfy the environmental performance criteria of sustainability. Through a parametric study using the building simulation technique, this paper investigates the adaptation potential of changing the building internal load densities to the future global warming. Case studies for office buildings in major Australian capital cities are presented. Based on the results of parametric study, possible adaptation strategies are also proposed and evaluated.

Sensitivity of building zones to potential global warming

As global warming entails new conditions for the built environment, the thermal and energy performance of existing buildings, which are designed based on current weather data, may become unclear and remain a great concern. Through building computer simulation and qualitative analysis of the weighted factor for the outdoor temperature impact on building energy and thermal performance, this paper investigates the sensitivity of different office building zoning to the potential global warming. A standard office building type is examined for all eight capital cities in Australia. Results show that comparing the middle and top floors, except for cool climate (i.e. Hobart), the ground floor appears to be the most sensitive to the effect of global warming and has the highest tendency for a overheating problem. From the analysis of the responses of different zone orientations to the outdoor air temperature increase, it is also found that there are widely varied responses between zone orientations, with South zone (in the southern hemisphere) being the most sensitive. With an increased external air temperature, the variation between different floors or zone orientations will become more significant, up to 53 percent increase of overheating hours in Darwin and 47 percent increase of cooling load in Hobart.

An investigation of building physical properties selection to combat global warming

Global warming can have a significant impact on building energy performance and indoor thermal environment, as well as the health and productivity of people living and working inside them. Through the building simulation technique, this paper investigates the adaptation potential of different selections of building physical properties to increased outdoor temperature in Australia. It is found that overall, an office building with lower insulation level, smaller window to wall ratio and/or a glass type with lower shading coefficient, and lower internal load density will have the effect of lowering building cooling load and total energy use, and therefore have a better potential to adapt to the warming external climate. Compared with clear glass, it is shown that the use of reflective glass for the sample building with WWR being 0.5 reduces the building cooling load by more than 12%. A lower internal load can also have a significant impact on the reduction of building cooling load, as well as the building energy use. Through the comparison of results between current and future weather scenarios, it is found that the patterns found in the current weather scenario also exist in the future weather scenarios, but to a smaller extent.