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EU-ETS and Nordic Electricity: A CVAR Analysis

Harrison Fell

Year: 2010
Volume: Volume 31
Number: Number 2
DOI: 10.5547/ISSN0195-6574-EJ-Vol31-No2-1
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Abstract:
A cointegrated vector autoregressive (CVAR) model is estimated to determine the dynamic relationship between Nordic wholesale electricity prices and EU emissions trading scheme (EU-ETS) CO2 allowance prices. An impulse response analysis reveals that electricity prices have large short-term responses to CO2 price shocks, but that this response dampens over time. Using hourly Nordic electricity spot market prices, I find that the value of short-term response of electricity prices to a shock in CO2 prices in off-peak hours is consistent with expected values for near complete pass-through of CO2 emission costs when coal-generated power is at the margin. Likewise, the estimates reveal that peak hour electricity price responses to CO2 price shocks are as expected for a market that has near complete pass-through of CO2 emission costs when natural gas-generated power is at the margin. These results further suggest the Nordic electricity market is pricing as a competitive market.



Carbon content of electricity futures in Phase II of the EU ETS

Harrison Fell, Beat Hintermann, and Herman Vollebergh

Year: 2015
Volume: Volume 36
Number: Number 4
DOI: 10.5547/01956574.36.4.hfel
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Abstract:
We estimate the relationship between electricity, fuel and carbonpricesinGermany, France, the Netherlands, the Nord Pool market and Spain, using one-year futures for base and peakload prices for the years 2008-2011, corresponding to physical settlement during the second market phase of the EU ETS. We employ a series of estimation methods that allow for an increasing interactionbetweenelectricityand input prices on the one hand, and between electricity markets on the other. The results vary by country due to different generation portfolios. Overall, we find that (a) carbon costs are passed through fully in most countries; (b) under some model specifications, cost pass-through is higher during peakload than during baseload for France, Germany and the Netherlands; and (c) the results are sensitive to the degree of cross-commodity and cross-market interaction allowed.



Information Searching in the Residential Solar PV Market

Jacquelyn Pless, Harrison Fell, and Ben Sigrin

Year: 2020
Volume: Volume 41
Number: Number 4
DOI: 10.5547/01956574.41.4.jple
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Abstract:
This paper examines the consumer information search behavior of households in San Diego County with solar photovoltaic (PV) systems. We focus on whether solar PV households financing the technology through third-party ownership (TPO) versus host-ownership (HO), which is equivalent to leasing or buying goods in other markets, have heterogeneous preferences as reflected by information search. Conditional on adoption, we find that TPO households tend to seek more information on home modifications required for solar installation whereas HO households seek more information on the financial returns of solar investments. These preferences may be correlated with the consumption of other goods and services, and thus, if used to inform marketing strategies, our results could help reduce solar PV customer acquisition costs and accelerate technology diffusion. They also have indirect implications for marketing goods and services in other contexts where consumers exhibit similar preferences.





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